The Fiscal Year Ended March 2020

We will continue to contribute to
local communities, society, and conservationof the global environment bysolving water and environmental issues.
The METAWATER Group’s Corporate Philosophy

Continue,to make it sustainable.
We continue to be sincere in what we do.
We work on problems earnestly andstrive to provide solutions.
We continue to collaborate with our partners.
We respect our partners and work to achieve withdiverse knowledges, technologies and cultures.
We continue to innovate for the future.
We experiment in new ideas and take challenges.
To make sustainable what is truly important.

Issuing the “METAWATER REPORT 2021”
As a company engaged in water and environmental infrastructure, the METAWATER Group will actively engage inenvironmental conservation and other social contribution activities in cooperation with local communities as acorporate citizen, thereby contributing to the realization of a sustainable society and the global environment. We haveissued this report to communicate the entire picture of our group in an easy-to-understand manner. Besides our
corporate philosophy and main business activities, it offers comprehensive and concise information about ouractivities including the following: Financial information such as changes in performance and our Midterm Business
Plan as we look to achieve our long-term vision; and CSR activities not listed in the financial statements andnon-financial information such as social contribution activities as a part of CSR activities.
■ Period in the scope of reporting
The performance for FY2019 (fiscal year ending March 2020) is the main scope for this report. However, someevents in this report may have occurred before or after this period.
■ Reference guidelines• ISO26000 (International Standard of Social Responsibility issued in November 2010)• Ministry of Environment: Environmental Reporting Guidelines (Version 2018)• International Integrated Reporting Council (IIRC): International Integrated Reporting Frameworks• GRI Sustainability Reporting Guideline• United Nations Global Compact• Guidance for Collaborative Value Creation, Ministry of Economy, Trade and Industry

1

Contents
Our aimOur path to growth

Our sustainability

Data section

1

Corporate mission

11

Midterm Business Plan

31

METAWATER Group’s ESG

57

Financial Information

3

Our history

13

Message from the CFO

33

Environment

87

Corporate Information

5

Our businesses and vision

15

Performance highlights

39

Social7

Top management’s message

17

Business highlights

49

Governance21

Introduction to business operations

29

Sustainable business model

Glossary
EPC
O&M
PPP

PFI
DBO
DB

Design and construction of facilities and equipment
Operation and maintenance of facilities and equipment
A concept referring to an approach allowing the private sector to participate in projects related to public services offeringin a wider sense. Improvement of efficiency and quality of services are sought by making positive use of private funds,
technologies, know-how and management skills.
Comprehensive implementation of facility design, construction, maintenance, repair, etc., utilizing the capital andknow-how of private businesses.
An approach using the know-how of private businesses to comprehensively implement facility design, construction,
maintenance, repair, etc
An approach using the know-how of private businesses to comprehensively implement facility design and construction.

SPC
PFI Act
Concession
WOODAP
ABW
WBC

2Companies whose purpose is to run specific business operations
An act related to the promotion of public facility improvement, etc. by making positive use of funding from the private
sector and so forth.
An approach granting operating rights of public facilities that collect usage fees to a private business while the public
entity maintains ownership.
Concepts for design, construction, operation, and maintenance centered around quick recovery in the event of a disaster
ABW (Activity Based Working): A work style in which workers can freely choose the time and place where they work
according to the content of their job.
Water Business Cloud（WBC）：METAWATER’s unique information and communications platform for real-time sharing of
information and the analysis and utilization of collected information

Our history

Apr.

Launched a new businesscalled Water Business Cloud(WBC) to support the water
and wastewater business

Oct.

Established a representative
office in Hanoi, Vietnam

May.

Installed small ceramic
membrane water purificationequipment in Ishinomaki,
Miyagi, to support emergency
water generation

Aug.

Introduced MBR*1 equipment toOfunato, Iwate, as part ofefforts to support
reconstruction after the Great
East Japan Earthquake

Jul.

Acquired the environment
business of Kurimoto Technos
aimed at strengthening andexpanding the resource andenvironment busines

Aug. Sep.

Held first “METAWATER
Mission Uchimizu”

Undertook capital increase of
System IO Co., a subsidiary of
Nihon Suido Consultants Co., Ltd.

Established METAWATER TECH Co., Ltd.
engaging in maintenance and managementof water and wastewater facilities

Formed capital and businessalliance by undertaking
third-party allocation of sharesof Rood Wit Blauw Holding
B.V. in the Netherlands
Started providing “Smart Field
Service,” a water and sewage
infrastructure management
service, in collaboration with
Fujitsu Ltd.

Received the 2014 Nikkei Global Environmental
Technology Award for Excellence for our“simultaneous nitrification and denitrification
treatment system,” developed via joint
research with the Tokyo Metropolitan
Government's Bureau of Sewerage and Tokyo
Metropolitan Sewerage Service Corporation

Dec.

Sep.

METAWATER SERVICE Co.,
Ltd. took over the sewage
works business of the CHUGAIRO Group

2014

Nov.

Launched the reconstruction of
Kawai Purification Plant, Japan’s
first PFI project covering therenewal of the entire purification
plant and its operation andmanagement (Yokohama City,
Kanagawa Prefecture)

2013
Sep.

Established the Europe
Representative Office inGermany (relocated to theNetherlands in 2014)

Established a representative
office in Phnom Penh, Cambodia

Launched the “Takizawa Water
Purification Plant Renovation
Project” (Aizuwakamatsu,
Fukushima), a water facilities
renovation project covering water
intake to faucets

Oct.

2011

Launched the “Development andOperation of Sludge Treatment Facilities
for Toyokawa Water Purification Center,”the first sewage project in Japan using
the RO scheme*2 (Aichi Prefecture)

2012● Net sales exceeded JPY

100.0 billion

Established the JSWE-METAWATERBest Paper Award with the Japan
Society on Water Environment(JSWE) for the purpose of fosteringresearchers in the field of water andthe environment and vitalizing
academic societies

Launched the effluent treatment
facility reconstruction project forthe seafood processing complex in
Onagawa-cho, the first
financially-independent-type PFI
project in plant management inJapan (Onagawa-cho, Miyagi)

Aug.

2010

Relocated the Head Office from
Toranomon, Minato-ku, Tokyo to
Kanda-sudacho, Chiyoda-ku,
Tokyo

HyBrid Chemical Co., Ltd. in thechemical business wasestablished based on joint
investment between asubsidiary of the Tsukishima
Kikai Group and METAWATERSERVICE Co., Ltd.

Jun.

2009
Apr.

Apr.

2008

METAWATER USA, INC. wasestablished in the United States
as the METAWATER Group’s
first overseas subsidiaryApr.

As a result of integration of
mechanical and electric technologies,
the water reuse system combining
ceramic membrane and ozone
treatment (Shibaura Water
Reclamation Center, Tokyo) andmulti-layer fluidized incinerator
contributing to reducing greenhousegas emissions (south sludge plant inTokyo) commenced operations

Jan.

The METAWATER Group was established as a comprehensive
engineering enterprise engaged in the water and environment fields bya merger between the water and environment operating subsidiariesof the NGK Group and Fuji Electric Group.

Dec.

Establishment of METAWATER Group

Apr.

2008 Apr.

Delivered first mobile ceramic
membrane water purificationequipment to African countries(Republic of Malawi, Republicof Kenya, Republic of Togo)

Apr.

Apr.

Contributing to solutions for various
social issues in the water andenvironmental fields

The “Omuta and Arao Joint
Water Treatment Plant (Ariake
Water Treatment Plant)”
commenced operation as a
Design, Build and Operate (DBO)
project for rehabilitation of awater treatment plant by two
adjacent municipal authorities
across a prefectural border

Business allianceand collaboration
Nihon Genryo Co., Ltd.
Suido Kiko Kaisha, Ltd.
● Kokusai Kogyo Co., Ltd.
● PWNT B.V. (the Netherlands)● Listed on the First Section of

the Tokyo Stock Exchange
Business allianceand collaboration

●
●

3

●
●

HORIBA, Ltd.
Nagaoka International Corporation

Our aim

Began leasing “Container
Package Ceramic Mobiles(CPCMs),” packaged ceramic
membrane filtration equipment
for water supply business
operators
Signed agreement toimplement “Kumamoto
Prefecture Ariake/Yatsushiro
industrial waterworks
operation project,” Japan's first
concession for industrial watersupplyFirst “Pre-treated Trickling
Filtration” (PTF) unit, a type ofsewage treatment system fordeveloping markets, began
operation in Vietnam

Acquired all shares of Rood Wit
Blauw Holding B.V. of theNetherlands

Announced new corporate
philosophy, “Continue, tomake it sustainable.”

Jan.

2020

Nov.

Dec.

10th anniversary

Nov.

Oct.

Received order for thecomprehensive managementbusiness with facilities
improvement of the Ofunato
Purification Center comprehensive
management business withfacilities improvement,
maintenance, and management to
the private sector(Ofunato City, Iwate Prefecture)

2019

Drone

Formulated the “Midterm
Business Plan 2020”

Apr. Jun.

Created the “Island” satellite
space as part of work style reforms

Made Wigen Companies, Inc.
(USA) a wholly owned
subsidiary, in order to expand
business in North America

Oct.

Dec.

Acquired ISO 55001 (asset
management system)
certification

Formed capital and businessalliance by accepting newshares of SkySeeker Co., Ltd.
through a third-party allotment

Began operation of sludge
recycling facility as part of“Area-wide Sewage Sludge
Recycling Project in northern
district of Akita Prefecture,”
which will contribute tocreating a recycling-oriented
society while also pursing“business continuity” and a“contribution to the local
community”

Sep.

Sep.

The TBS Radio program“METAWATER Presents
Mizuoto Sketch” began airing

Established the “Facility
Operator Training Center” inanticipation of further
comprehensiveness and wider
area management in the water
and wastewater business

Signed naming rights
agreement with Nagoya City
Sewerage Science Museum

Apr.

Apr.

Kitakyushu Water Service, Co.,
Ltd.*4 invested by Kitakyushu
City, METAWATER, and others
commenced business

NTT DATA

Acquired treasury stock andconducted tender offer fortreasury stock

2018
Mar.

Mar.

Won the top award in the
Water Technology Company of
the Year section at the Global
Water Awards 2015

Nov.

2017

●

Oct.

Apr.

Commenced operation ofceramic membrane filtrationwater treatment plant in the
United States (Basin Creek
Water Treatment Plant in
Montana), the first delivery for
the METAWATER Group2016

Business allianceand collaboration

Began operation of Singapore's
first ceramic membrane filtrationwater treatment plant, the “Choa
ChuKang Water Treatment Plant”

Concluded an agreement for anaming rights partner for the
Aichi Sewerage Science
Museum2015

Concluded first businessagreement for development
and operation of recycling
center (Gotemba Oyama Kouiki
Gyousei Kumiai Recycling
Center) under the PFI scheme

Held opening ceremony for“Comprehensive outsourcingof privately contracted
services, including watersupply services” inFukuchiyama City

Sep.

Mar.

Arao Water Service*3
represented by METAWATER
commenced business based on
an agreement for comprehensive
consignment of Arao City waterbusiness with Arao, Kumamoto

Opened representative officein Singapore

Apr.

Converted a U.S.
water-treatment engineering
company, Aqua-Aerobic
Systems, Inc., and its
subsidiary into wholly-owned
subsidiaries

Data section

Feb.

Apr.

Feb.

Concluded a contract on the“Water Source eco-project”(W-eco’p) with Yokohama
Waterworks Bureau

Our sustainability

Jan.

Jan.

Jan.

Ozone generating systemcommenced operation at the
Wylie Water Treatment Plant in
Texas, one of the world’s largest
water treatment plants

Our path to growth

Disposed of treasury stock by
third-party allotment andretired treasury stock

2021*1 MBR: Membrane Bioreactor. Membrane separation active sludge method*2 RO system: RO stands for Rehabilitate Operate. It is a scheme to upgrade and repair the facilities and then engage in operation and management*3 A special purpose company that operates a water supply business and other services under a comprehensive consignment contract in Arao, Kumamoto Prefecture*4 Third-sector company responsible water-related operations across a wide area in Kitakyushu City, northern Kyushu, and overseas

4Our businesses and vision

Toward sustainable water and environmental infrastructure
We are contributing to the development of sustainable water and environmental infrastructure by developing
four businesses: “Operation and Maintenance (O&M),” “Public-Private Partnerships (PPP),” “Engineering,
Procurement and Construction (EPC),” and “Overseas operations” across three business areas both in Japan

Resource recycling facilities

and overseas: “water treatment plants,” “sewage treatment plants,” and “resource recycling facilities.”

Water treatment plants

Sewage treatment plants

Local communities
Homes, parks, and offices
Plants and power stations
Recycling

Noncombustible
waste
Supply water・
industrial water

Rainwater /Domestic wastewater

Discharge

Reusedwater

Resources

Water intake

Water source forest conservation activities
METAWATER
Group

＋

NPOs

＋

Local
governments

Infrastructure development activities in the areas of waterworks, sewage works, and the resource environment
METAWATER Group＋

Local governments

5＋

Local companies＋

Local companies

Our aim

Our path to growth

Our sustainability

Data section

In addition to business activities aimed at the development, rehabilitation, and maintenance of water and environmental infrastructure, through CSR activities such as water and environmental conservation,awareness-raising, and disaster recovery support, we aim to continue contributing to the conservation of local communities, society and the global environment while increasing corporate value.
Business Environment and Social Issues
Financial difficulties at local governments and shortages of engineers as
a result of population decline● Decrease in the number of local government employees and aging ofexisting facilities and equipment● Measures to protect against natural disasters such as major earthquakes,
typhoons, and torrential rains● Advancement of public-private partnerships (including concessions)●Contributing to society andthe global environment and to SDGs

Overseas

Domestic【North America】Use of reclaimed wastewater tosecure water resources, aging facilities,
and rising population【Europe】Stricter environmental regulations and aging facilities【Asia】Increasing the coverage of water and sewerage facilities

Through our business and CSR activities, the METAWATER Group will not only improve
corporate value, but also contribute to the sustainable development of local communities
and society as well as the preservation of the global environment. Additionally, by taking thebusiness characteristics and social responsibilities of the Group into consideration, we willcontribute to the achievement of the following three of the 17 SDGs.

Our business modelManagement resources

Business platform supporting water and environmental infrastructure

As of March 31, 2021

Total assets
Equity ratio

131.2billion yen
40.6%

Human capital

Water treatment
plantsConsolidated number of employees 3,340peopleIntellectual capital
Number of patents held

760 in Japan

Approx.

We will continue to contribute to local communities,
society, and conservation of the global environment bysolving water and environmental issues.

Financial capital

Sewage treatment Resource recycling
plantsfacilities

METAWATER’s strengths
Electrical
technologies

Mechanicaltechnologies

O&M know-how+ ICT

Social and related capitalGroup companies Seven companies in JapanSix companies overseas

Number of facilities whose operation andmaintenance are consigned to us*1
Approx.

100 facilities in Japan• Ceramic Membrane
Filtration System• High-speed
filtration system• Ozone treatment system*1 Number of waterworks facilities (including PFI and DBO),
wastewater treatment facilities,and resource environment
facilities being operated and maintained

Number of public-private partnership(PPP) projects consigned*2

34 projects / 72projects in total in Japan• Power receiving and• Introduction of AI andtransforming equipment
ICT technologies• Monitoring and• Efficient O&M
control equipment• Fuel cells

Business Structure

P21

Engineering, procurement, andconstruction (EPC) business

Operation and maintenance(O&M) business

Overseas business

Public-private partnership (PPP)
business*2 Based on the Company's data ofMarch 31, 2021

Number of facilities andequipment designed/constructed
More than

2,000 locations in Japan

Management
Midterm Business Plan 2023 / Long-term visionvisionCorporatephilosophy

P11

Increasing corporate value
Citizens<Business performance,
environmental value, and social value>

Local
governments

Partners

Environmental initiatives

Localcommunities

Environmental contribution throughbusiness activities● Promotion of environmental
conservation activities●

P33

Business activities
Establishment of a unique framework forfurther comprehensiveness andwider area management● Provision of solution technologies
centered on electromechanical fusion

6

Social initiatives
Social contribution throughbusiness activities● Further promotion ofwork style reform

●

●

P39

P17・P29

Strengthening corporate governance
P49

Continue, to make it sustainable.

Shareholders
andinvestors

Employees

Top management’s message

COVID-19 is wreaking havoc around the world.
The METAWATER Group will continue toprovide water supply and sewage works services,which are a cornerstone of public health.

Kenji Yamaguchi
President and Representative Director
After starting his career in a sales department, he served in positions including
Executive General Manager of the Business Strategy Division overseeing
the business strategy and research and development divisions.
Appointed as President and Representative Director in June 2021

7

Our aim

Our path to growth

Our sustainability

Data section

In the Japanese water and sewage market, the decrease in project income at
local governments due to depopulation and other factors, a clear shortage oftechnicians, and the aging of facilities and equipment built during the period of
rapid economic growth are pressing issues. These have been compounded bycountermeasures against natural disasters such as major earthquakes, typhoons,and torrential rains.

In addition, as COVID-19 continues to wreak havoc around the world, the role ofwater supply and sewage works, which are a cornerstone of public health, isbecoming increasingly important. In anticipation of the age of “living with
COVID-19” and the “post-COVID-19 age,” the METAWATER Group must continue
taking measures to prevent the spread of infection and to maintain importantwater supply and sewage works infrastructure.

On the other hand, in the overseas water supply and sewage market, in
advanced countries such as Europe and the United States, the use of reclaimed
wastewater to secure water resources in the United States, and measures tocomply with stricter environmental regulations in Europe are among the priority
issues in each region. Furthermore, in emerging markets in Asia and elsewhere,
demand for water supply and sewage works infrastructure is increasing as aresult of rising demand for water resulting from population growth.

In April 2008, the METAWATER Group was established as the firstcomprehensive engineering enterprise in Japan engaged in the water andenvironmental fields. Since then, we have worked as a corporate group engaged
in the social infrastructure indispensable to industries and people’s lives,promoting the fusion of mechanical technology, electrical technology, ICT, andoperation and maintenance know-how, mainly to develop our water, sewage,
and resource environment (waste recycling) businesses.

Under these circumstances, in Japan, efforts are being made to expand the useof Public-Private Partnerships (PPPs) that utilize private sector funds,
technologies and expertise, based partly on the enforcement of the PFI Act andrevisions to the Water Supply Act, and to strengthen national land. It is expectedthat new business opportunities and business models will be created against a
backdrop of technological innovation, including AI and the IoT. Overseas, too, theneed for advanced filtration technology and energy-saving and energy-creating
technology is expected to increase.

We will continue to make sincere efforts to become a corporate group that canbe entrusted with social infrastructure with peace of mind, and contribute to themaintenance of water and environmental infrastructure, which is essential topeople's lives, based on the track record that we have steadily accumulated, ourexpertise in operation and maintenance utilizing ICT, and our number one
products and systems. We will also contribute to the United Nations’“Sustainable Development Goals (SDGs)” through both business and CSR
activities.

8Top management’s message

Establishing a foundation for growth to realize our long-term vision

Summary of “Midterm Business Plan 2020”

The business environment surrounding the METAWATER Group is undergoing major

During the period of the “Midterm Business Plan 2020” (April 2018 to March 2021), thechanges, including the rehabilitation of aging facilities and equipment, countermeasuresagainst frequent natural disasters, and the spread of COVID-19.

METAWATER Group worked to strengthen our corporate structure and bolster the Engineering,
Procurement and Construction (EPC) and Operation and Maintenance (O&M) businesses, which

In order to respond to these changes and contribute to the maintenance of water andare foundation fields, while also focusing on expanding the PPP and overseas businesses, which

environmental infrastructure, the METAWATER Group has set forth its mid- to long-term
vision as follows: “(1) No. 1 company to work with,” “(2) No. 1 for technology and service,”are growth fields.
In the fiscal year ended March 2021, the company recorded its highest ever orders received andand “(3) No. 1 company to work for.” As a foothold toward becoming a renowned company
around the world, in the fiscal year ending March 2028, which will mark the 20-yearorder backlog, thanks partly to the strong performance of the EPC business and an increase inoperation and maintenance (O&M) contracts over a period of several years. In terms of sales, theanniversary of our founding, we aim to achieve consolidated sales of 200 billion yen,approximately double those at the time of our establishment.

EPC and overseas businesses both performance well, and performance in the PPP business was
also robust. As a result, the company successfully achieved its key numerical targets, even after
excluding one-time factors such as the sale of shares contributed to a retirement benefit trust.

■ Achievement of the mid- to long-term vision and positioning of the■ “Midterm Business Plan 2020” Results“Midterm Business Plan 2020 and 2023”
Net sales (Left Axis)

Net Sales
200bn yen (billion yen)

Operating income (Right Axis)(billion yen)

200

Strengthening Corporate Structure Establish foundation for growth

150

Previous
Midterm Business Plan
2020

FYE 3/’19
ResultFYE 3/’20
ResultFYE 3/’21
ResultFYE 3/’21
Forecast*1

ChangeOrders Received

123.8 billion yen

125.0 billion yen

159.1 billion yen

140.0 billion yen＋19.1 billion yen

Net Sales

117.3 billion yen

128.7 billion yen

133.4 billion yen

130.0 billion yen＋3.4 billion yen

9.1 billion yen

9.1 billion yen＋0 billion yen(6.8 %)(7.0 %)(−0.2 %)

10.9 billion yen

10.5 billion yen＋4 billion yen(8.1 %)(8.1 %)(＋0.0 %)

−3 billion yen

20

About 2x thelevel of thefounding

Midterm Business Plan
2023

(Consolidated)(including M&A)

15

Foothold to a
Global Company

100Core Business base*2

10

Orders received
145 billion yen
Net sales
140 billion yen

50

Operating Income(% of Sales)

FYE
3/'09

FYE
3/'16

FYE
3/'17

FYE
3/'18

FYE
3/'19

FYE
3/'20

FYE
3/'21

FYE
3/'22

FYE
3/'23

FYE
3/'24

FYE
3/'25

FYE
3/'26

8.2 billion yen(6.5 %)(6.4 %)

5

Operating income
10 billion yen
0

7.6 billion yen

FYE
3/'27

Net Income

FYE
3/'28

0

ROE

* Non-consolidated net sales and operating income up to FYE 3/’11; consolidated net sales and operating income from FYE3/’12* For FYE 3/'21, operating income is based on the Core Business, which excludes one-time factors such as one-time amortization of
actuarial gains and losses due to the sale of shares in the retirement benefit trust.

5.2 billion yen

5.7 billion yen

6.5 billion yen

6.8 billion yen

9.1 %10.5 %

12.7 %

10.0 %＋2.7 %*1 Figures were revised in accordance with the October 2020 earnings forecast revision*2 Core business basis: Operating income excluding one-time factors such as one-time amortization of actuarial gains and losses due to the sale ofshares in the retirement benefit trust9Our aim

Our path to growth

Our sustainability

Data section

The results of the main key measures are as follows.

Strategic development investments

Promoted ESG as an infrastructure company■ Established “Facility Operator Training Center,”Training center for
facility operators“Knowledge Center,” and“Common Parts Center” = Created mass benefit

Operation and maintenance

WOODAP

Procurement

Training the operators
responsible for equipment
operation in each region

Knowledge center

Centralization of
procurement and supplyof repair parts, etc.

(High flow rate of ceramic membranes,
solid-liquid separation for final sedimentation,
flow turbine power generation, etc.)

Operation

ment, and adopted energy-saving equipment■ Certified as a “Grade 3 Eruboshi company” by the Ministry of Health, Labour andSupporting the accumulation, sharing,and handing down of project operations knowledge
for the different entities in each region

management system corresponding to “wider
area management +further comprehensiveness”■ Advocated METAWATER’s proprietary“WOODAP” as an approach for prioritizing
tasks in the workplace in the event of disaster■ Completed development of development models■ Improved systems related to water quality improvement, such as wastewater treat-

Supply center forparts

Welfare as an initiative to promote the active participation of women■ Promoted work style reform・Established a satellite office・ABW introduced at Western Japan Office・Introduced job return system
・Introduced four-day workweek system
・Shortened prescribed working hours
・Reviewed accumulated leave■ Addressed Corporate GovernanceWestern Japan Ofﬁce
Code (CG Code)・Established the Nomination and CompensationAdvisory Committee
・(Scheduled) introduction of performance-linked compensation system, etc.
■ Stabilized pension assets through sales of shares in the retirement benefit trust■ Increased capital efficiency by acquiring 4.2 million shares of treasury stock■ Began leasing business for “Container Package Ceramic Mobiles (CPCMs)”■ Acquired credit rating of “A” from Rating and Investment Information, Inc. (R&I) as
part of efforts to diversify funding

People / Information / Goods
An ICT platform for sharing
information in real time, as
well as for analyzing andutilizing collected information

Facility A

Facility D
Facility B

Facility C

Concept image of mass benefit management systemcorresponding to “wider area management +further comprehensiveness”

Business strategy
PPP business・Received commission for “Kumamoto Ariake/Yatsushiro
industrial waterworks operation project,” Japan's first
concession project for industrial water supply
・Obtained preferential negotiation rights for the “Miyagi
Prefecture public-private partnership for integrated operationof drinking, industrial and sewage water”

Overseas business
Acquired all shares of FUCHS (Germany), Wigen (USA),and RWB (the Netherlands), creating foundations forbusinesses in Europe and the United States

EPC business
Won commissions for large projects (eight incinerators)

O&M business
Maintained stable orders and sales and secured earnings

10Midterm Business Plan
Outline of Midterm Business Plan
In April 2021, the METAWATER Group formulated the ““Midterm Business Plan 2023” (April 2021
to March 2024) in order to further promote initiatives to achieve its mid- to long-term vision.

Goals of the“Midterm
Business Plan
2023”

In the “Midterm Business Plan 2023,” we will focus on the three key issues of: “enhancement offoundation field and expansion of growth field,” “R&D investment expansion," and “sustainable
ESG initiatives,” with the aim of establishing a foundation for growth. In the final fiscal year
ending March 2024, we will make company-wide efforts to achieve orders received of 145.0(Consolidated)

FYE 3/’24 (Forecast)

FYE 3/’24 (Targets)

Orders Received

135.0 billion yen

145.0 billion yen

Net Sales

135.0 billion yen

140.0 billion yen

Operating Income

8.5 billion yen

10.0 billion yen

Net Income

5.8 billion yen

7.0 billion yen

ROE

10.0% or more

10.0% or morebillion yen, net sales of 140.0 billion yen, and operating income of 10.0 billion yen.
② Expansion of growth fields

Key measures in the “Midterm Business Plan”
1

In the PPP business, which is expected to see an increase in the number of large-scale projects
that include design, construction, operation, maintenance and management, we will strengthen
our regional strategies by leveraging our track record and know-how and create new businessmodels in preparation for future progress in Public-Private Partnerships. Additionally, in overseas
businesses, we will continue to position Europe and the United States as strategic areas andpromote further business expansion by deepening cooperation among group companies in Europe
and the United States.

Enhancement of foundation fields and expansion of growth fields

The METAWATER Group will strengthen and expand its businesses, positioning the EPC andO&M businesses as foundation fields and the PPP and overseas businesses as growth fields.
Plant engineering business

Service solution businessCore areas

Reinforcement ofdomestic EPC business

Reinforcement ofdomestic O&M business

Growth areas

Reinforcement and expansion ofoverseas business foundations

Expansion ofdomestic PPP business

Plant engineering business segment

Service solution business segment(Concept image showing change in net sales)① Enhance foundation fields(Concept image showing change in net sales)(billion yen)(billion yen)

100

100

In the EPC business, we will work to further increase orders and improve profitability by estab-

Overseaslishing engineering methods that utilize IT and AI, improving design quality, and strengthening
cost competitiveness to respond to future demand for rehabilitation and large-scale projects. In
the O&M business, in addition to stable growth through continued orders from existing plants,
we will strive to acquire new plants and new businesses by utilizing IT tools and strengthening
sales expansion efforts for WBC (Water Business Cloud).*1

50

50

PPP

EPC
O&M
0

0
FYE 3/’21

FYE 3/’24 (Forecast)Higher sales are expected in both the EPC andoverseas businesses*1 Abbreviation for “Water Business Cloud.” METAWATER’s unique information and communications technology for real-time sharing of information andthe analysis and utilization of collected information.

11

FYE 3/’21

FYE 3/’24 (Forecast)

Net sales are expected to increase in the PPP business and decline
in the O&M business as a result of lower recycling sales

Our aim

2

Our path to growth

Our sustainability

R&D investment expansion

3

Data section

Sustainable ESG initiatives

The METAWATER Group will expand its investment in research and development in order to

In addition to making social contributions through its business activities as a company providing

address needs in areas such as future demand for facility rehabilitation and the further development of Public-Private Partnerships.
① Further reinforcing strong fields

social infrastructure, the METAWATER Group, as a corporate citizen, will aggressively reduce its
environmental impact and engage in community contribution activities, thereby contributing to

We will continue to invest aggressively in R&D in the fields of incineration, water treatment, andmonitoring and control systems, which are strengths of the METAWATER Group, with the aim ofwork style reforms promoted by the government, we will proactively work to create opportunities
for women to play an active role in the company, and to realize work styles that are not restricted

capturing future rehabilitation demand.

by age or location, and thus realize a variety of work styles for our employees.

② Creating integrated mechanical and electric technologies

On the other hand, in terms of corporate governance, we aim to earn the trust of and achieve
highly transparent management through active dialogue with our stakeholders to achievesustainable growth and enhance corporate value over the medium to long term.

the United Nations’ "Sustainable Development Goals (SDGs).”*2 Furthermore, in response to the

The METAWATER Group possesses both machinery and electrical technologies in the water andenvironmental businesses, and will strengthen its competitiveness by continuously creatingproducts and systems that take advantage of its superiority.
③ Creating value by utilizing the information chain
The METAWATER Group will create new value by linking on-site operation and maintenancemanagement information, plant monitoring and control systems, and the Water Business Cloud(WBC) to improve the efficiency of maintenance management, optimize management, andprovide disaster-resistant systems and services.

SDGs the METAWATER Group is focusing on

Citizen’s life and industries
Water /
wastewater pipes

Changes in amount of R&D investment
Midterm
Business Plan
2020

(billion yen)

6

Water source forest
Water treatment plant

Sewage treatment plant

Midterm
Business Plan
2023
Water circulation

Business partners

Development of products andcommercialization

4

METAWATER Group

Local companies
Citizens / Local governments

2
Fundamental development*2 Sustainable Development Goals (SDGs)
Adopted by the United Nations in 2015 with the aim of achieving a better and sustainable world by 2030.
The SDGs consist of 17 Goals and 169 Targets to achieve those goals.

0
FYE 3/’16〜
FYE 3/’18

FYE 3/’19〜
FYE 3/’21

FYE 3/’22〜
FYE 3/’24

12

Message from the CFO

The METAWATER Group aims to increase corporate
value while maintai ning financial soundness andpursuing an optimal balance between capital efficiency
and shareholder returns.

Masayuki Nakagawa
Executive Officer
Executive General Manager,
Financial Planning Office,Corporate Strategy Planning Division

Funding position that fluctuates significantly during theearn the funds necessary for our annual business activities from

Initiatives to diversify funding

fiscal year
As the METAWATER Group’s main customers are local

April to May and fully spend them over the course of a year.
Therefore, looking at daily cash flows from February toGiven factors such as the expansion of the PPP business, anincrease in long-term projects, and our continued R&D

governments in Japan, approximately 60% of annual sales
are concentrated in the fourth quarter, with accounts
receivable - trade in excess of 70.0 billion yen recorded on
the balance sheet at the end of the year.
The balance of cash and deposits peaks between April andMay, as these accounts receivable - trade are collected.
Subsequently, we make monthly payments required for ourbusiness activities, including payments for parts and materials
as construction progresses. In other words, the idea is that weMarch, there are some difficult spots in which short-term
spot borrowing is used to cover payments to suppliers thathave accumulated toward the end of the fiscal year in March.
This situation is not apparent from our balance sheet, whichshows the financial position of the company at the end ofeach quarter, nor on the statement of cash flows, whichshows the flow of funds during the business period. It can beconsidered a unique feature of the company, with sales tolocal governments making up a large portion of the whole.

investment to further strengthen the company’s businesses, I
am keenly aware of the need for stable funding in future.
As part of our efforts to diversify and stabilize our funding in
response to the expansion of our business platform, and to
improve our creditworthiness to external parties, the METAWATER Group acquired an issuer credit rating from Rating
and Investment Information, Inc. (R&I) in December 2020. We
received a high rating, thanks to the positive evaluation of thestability of our businesses and our solid financial base.

Trends in quarterly sales and operating income

Changes in cash and deposits, and accounts receivable - trade (non-consolidated)

Sales trends (Left Axis)(billion yen)(billion yen)

800

200
60%

600

160%

10%

15%

15%

Accounts receivable - trade(billion yen)

800
700
600
500

50

400
300
200

0

0
△200

150
100

400
200

Cash and deposits

Operating income (Right Axis)

△30%

△25%

1Q

2Q

△5%

0
△50

3Q

100

4Q

4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3
FYE 3/ ’19
FYE 3/ ’20

13Type of rating

RatingRating outlook

Issuer rating

A

StableOur aim

Our path to growth

Our sustainability

Data section

Financial soundness is essential for transactions with

Purchase of treasury stock and sale of shares in theViews on shareholder returns

local governments.
In Japan, construction companies that undertake public works

retirement benefit trust
In December 2019, the company repurchased 4.2 million

The METAWATER Group’s basic policy is to continue toreturn profits to shareholders in line with business conditions

projects for local governments are required to pass a “businessevaluation,” in which the company’s “business conditions,”

shares of its own stock held by NGK INSULATORS, LTD. andwhile securing internal reserves for future growth invest-“business size,” “technical capabilities,” and other “review items(social qualities, etc.)” are scored, evaluated, and graded.
For this reason, it is important for that the METAWATER Group,
whose customers include local governments throughout Japan,
maintain financial soundness while also pursuing the optimalbalance between capital efficiency and shareholder returns.
I believe it is important that we continuously aim to improve
corporate value, with an target of an equity ratio of at least 40%
and ROE of at least 10% as management indicators.

Fuji Electric Co., Ltd., which I believe contributed to returning
profits to shareholders and enhancing capital efficiency,
while also further strengthening corporate governance.
In October 2020, the company also sold shares in theretirement benefit trust and transferred them to stable assets
such as cash. As a result, we stabilized pension assets that
had been affected by fluctuations in the prices of specificshares, and carried out one-time amortization of “unrecognized actuarial gains and losses,” which had been deferredannually and amortized over multiple years.

ments, stable growth, and responses to changes in thebusiness environment, and to pay dividends twice a year, as
an interim and year-end dividend.
Dividends are determined after taking into consideration
factors such as changes in stock prices, dividend yields, anddividend payout ratios (around 30%). We sincerely hope wecan continue to enjoy the support of our shareholders andinvestors.

Balance between ROE and equity ratio (forecast for FY ending March 2022)

Key financial strategies

Dividends per share

Equity ratio

(%)

ROE

50
45

43.1

44.6

44.4
41.4

10

9.5

10.5

FYE
3/’17

FYE
3/’18

FYE
3/’19

FYE
3/’20

1 Repurchase of own shares
2 Stock split

October 2020 / 2-for-1 stock split (issued sharesfollowing stock split: 51,847,000 shares)

3 Sale of deemed strategically held

October 2020 / Increased operating income due to

Disposal of treasury stock by
4 third-party allotment

January 2021 / Allocated 88,500 shares of treasury
stock to the Employee Shareholding Association

5 Cancellation of treasury stock

January 2021 / Canceled 88,500 shares oftreasury stock

6 Credit rating obtained

December 2020 / Issuer rating of “A” assigned
by R&I

shares held in the retirement benefit trust one-time amortization of unrecognized gains and losses

12.7

7.3

5
0

9.1

Remarks
December 2019 / Acquired 4.2 million of own sharesfrom two major shareholders

40.6

40

15

Details of implementation

FYE
3/’21

FYE
3/’22

（Forecast）

14

(yen)

80*

80
60

71
58

58

58

62

40
20
0

FYE
FYE
FYE
FYE
FYE
3/’16
3/’17
3/’18
3/’19
3/’20
* Does not take into account the stock split on October 1, 2020 (2-for-1 split)

FYE
3/’21

Performance highlights

Highlights of consolidated financial results
Sales composition (FY ended March 2020)
Service solution
business

56.9

Sales / Orders received
Plant engineeringbusiness

76.5

billionyen

1,334(hundred million yen)

Sales

Sales

133.4 billionyen(hundred million yen)Orders received

1,591

1,600

1,196
1,117
1,109

1,316
1,173

1,238

1,287

1,334

1,250

100

10

80
60

400

63

7

65

60
50

6

57
52

47
4.2

40

39

4.9
4.4

4.4
3.5

30

’18/ 3’19/ 3’20/ 3

3

20

2

10

1
0

’17/ 3’18/ 3’19/ 3’20/ 3’21/ 30(hundred million yen)
2,000

150.50’18/ 380’21/ 3

1,693

1,600

1,200

115.76’20/ 3

169.3 billion
yen

1,359
120

’19/ 3

Order backlog

200

1,424

1,386

’19/ 3’20/ 3

1,152

99.73

91.48

800

75.83

40

0

4
2

(yen)

160

400

0

0

’17/ 3’18/ 3’19/ 3’20/ 3’21/ 3’17/ 3’18/ 3* The company carried out a 2-for-1 stock split of its common stock on October 1, 2020. Accordingly, the calculation of net assets per share and net income per share is based on the assumption that the stock split was carried out at the beginning of the previous fiscal year.

15

8
6

6.4

5.7

’17/ 3’21/ 3150.50 yen

Current earnings per share＊

5
4

6.5

6.1

8.1

0

0

Net profit margin（%）

Current profit attributable to owners of parent

70

67

20

’17/ 3(hundred million yen)

82

76

40

Current profit
Current profit attributable to owners of parent /attributable to 6.5 billionyenownersof parent
Net profit margin

Operating profit margin (%)

Operating profit

12

800

57.3 %

10.9 billion
yen

109

billionyen

1,200

42.7 %

Operating profit

120

2,000

billionyen

Operating profit
Operating profit margin’21/ 3Our aim

Our path to growth

Our sustainability

Data section

Consolidated non-financial highlights
Total assets / Net assets /Capital adequacy ratio(hundred million yen)

Total assets

Total assets

131.2 billion
yen

Capital adequacy ratio（%）

Net assets

2,000

50

43.1

44.6

44.4

1,600

1,200

1,210

1,230

1,326

40.6

41.4

1,312

1,195

40

334.0 people

Number of employees

3,500

3,340
2,889

2,961

2,977

3,082

3.0
2.5

2,500
30

(non-consolidated)（%）(persons)

3,000

Percentage of employees with disabilities 2.48 %

2.0

2.22

2.36

2.30

’18/3

’19/ 3

2.41

2.48

2,000
1.5

20

800

400

523

550

590

496

534

1,500
1.0

1,000
10

0.5

500
0

0

’17/ 3’18/ 3’19/ 3’20/ 3

1,223.53 yen

Book value per share＊00’21/ 3’17/ 3’18/3’19/ 3’20/ 3’17/ 3’21/ 3

Number of employees taking childcare leave 20 people*100% rate of returning to work after taking childcare leave(yen)(persons)

1,500

30

1,200

900

1,005.71 1,059.01

1,135.83 1,138.03

1,223.53

FemaleNumber of participants in social contribution activities
Number of social contribution activities(persons)

Male

120

114
1,541

1,500

20

1,147
15
10

5

7

’18/ 3’19/ 3’20/ 3’21/ 3’17/ 3

’18/3

16

65

’19/ 34

6

4’20/ 3’21/ 3

90

1,275
70

50
634

500

6
1

65

1,181

16
8

0

’17/ 3

1,000

19

12

600

0

634 people
50 activities

Number of social contribution activities (activities)

Number of participants in social contribution activities

25

25

5

’21/ 3

2,000

20

300

’20/ 3Self-imposed restrictions on activities inorder to prevent the spread of COVID-19

0’17/ 3’18/3’19/ 3’20/ 3’21/ 360300Business highlights

Promoting development of products, technologies, and solutions for medium- to long-term growth
The METAWATER Group is working on solutions for a new generation, integrating our Group's strengths in mechanical and electrical technologies, joint research, open innovation withpartners, etc., with the goal of more advanced technological development that will help sustain infrastructure and improve operational efficiency.

Water

Solving the problem of musty odor at waterworks

Ozone / accelerated oxidation process (AOP) system

General water purification treatment process with ozone / accelerated oxidation process system
Coagulation~Sedimentation~Sand filtration

As a result of the effects of climate change in recent years, highly concentrated musty odors occurring overa longer period of time have been reported at water resources for waterworks, and they have also beenreported as occurring during periods when water temperatures are low.
The ozone / accelerated oxidation process (AOP) system is a treatment technology that combines ozone
treatment with hydrogen peroxide, and has been attracting attention as a new solution to musty odors.
By properly controlling the injection of ozone and hydrogen peroxide, we have succeeded in decomposing
highly concentrated musty odor, maintaining treatment efficiency at low water temperatures, suppressing
the production of bromic acid as a by-product, and reducing the load on the activated carbon in the later partof the system.

Coagulant

Receivingtank

Ozone / accelerated oxidation process system
Hydrogen peroxide

Mixingtank Floc forming
tank

Sedimentation tank

Filtration
tank

Ozone
Retention
contact tanktank

Activated carbon
absorption tank

Efficient decomposition of musty odor
Inhibits bromic acid formation

Water

Rebuilding water purification facilities using advanced wastewater treatment facilities
General system for effectively utilizing existing advanced wastewater treatment facilities

High-grade water purification ceramic membrane system

Coagulant
Current
treatment
High-grade water purification
membrane treatment

As the time approaches for the rehabilitation of solid-liquid separation facilities in water purification
facilities with sophisticated water treatment capabilities, there is a need for water purification
technology that can effectively use the advanced wastewater treatment facilities owned.
The Ceramic Membrane Filtration System is excellent in terms of its low membrane rupture risk, lowpower usage, long life, chemical resistance, etc. It is a technology that responds suitably to water
demand via the operation or stopping of each membrane filtration unit.
By combining this system with existing advanced wastewater treatment facilities, it is possible to save
space and rebuild water purification facilities while utilizing existing facilities.

17

Replacement

Drift type tankUtilization of existing
facilities

Chemicalprecipitation tank

Replacement

Utilization of existing
facilities

Filtration tankCoagulant

Turbidity detention tank

Absorption and stabilization of changes
in raw water turbidity● Stabilization of ozone injection rate●

Intermediate ozone
catalytic tankHigh flow rate
Ceramic membrane
filtration

Ozone
catalytictankGranularactivatedcarbonabsorptiontankOur aim

SewageOur path to growth

Our sustainability

Data section

Achieved power savings of approximately 40% while maintaining the safety of fluidized bed incinerators

Flow turbine system
The flow turbine system supplies air for combustion to the incinerator by rotating a turbocharger using heatfrom waste incineration heat instead of a fluidizing air blower. When biosolids are incinerated, the fluidizing
air blower, which feeds air into the furnace, consumes a lot of electric power, but the introduction of thissystem will reduce the power consumption of the entire incinerator facility by approximately 40%, even if
the fluidizing air blower is stopped.
In addition, since the only change from conventional incinerators is the method of supplying air for
combustion, the pressure of the incinerator remains the same and power can be saved while maintaining thesafety of the fluidized bed incinerator.

AI・ICT

Before introduction
Dehydrated
sludgeAfter introduction

Fluidizing
air blower
To exhaust gas
treatment facility(to air preheater)

Fluidized bed
incinerator

Hazard alarm system
In the construction industry, safety is always taken into consideration to prevent accidents during field work.
Sometimes, even if we are careful during field work, there is a risk that we find ourselves near dangerous
places such as openings and charging parts without noticing, which may lead to unexpected accidents.
To prevent such unexpected events, we have developed and put into operation a “hazard alarm system.”
Beacons are installed in advance in places where workers must be aware of danger. If a worker approaches
a dangerous place while working, he or she is alerted by a warning and vibration on his or her smartphone.
In addition, identifying dangerous places in advance has a deterrent effect by increasing awareness.
Beacons
Image of work on site

TurbineExhaust air

Airpreheater

Improve occupational safety with cutting-edge technology

18

Compressed air
Turbocharger

Air
preheater

Fluidized bed
incinerator

Turbocharger

Dehydrated
sludge(to incinerator)

To exhaust gas
treatment facility

Compressor

High-temperaturecompressed air(from air preheater)

Atmosphere

Business highlights

B-DASH Project *ICT echnology

Implementing physical asset management based on operation and maintenance amid the ever-increasing number of aging facilities

Demonstration project for continued physical asset management realization system technology in a cloud environment(FY2018 B-DASH Project)

We will achieve efficient and continuous physical asset management by efficiently collecting,organizing, storing, and leveraging operation and maintenance data from daily operations using ICT(cloud systems), including data from inspections of facilities and equipment in sewage works facilities.

Outline of demonstration
Amid the ever-increasing number of aging facilities, the METAWATER Group must effectively
manage its physical assets. Therefore, we have demonstrated that efficient and continuous
physical asset management can be realized by efficiently collecting, organizing, storing, andleverage operation and maintenance data in daily operations at sewage works facilities
using ICT (cloud systems).

Characteristics of this technology
With our three component technologies (see below) formed in a cloud environment, operationand maintenance data generated through day-to-day operations are used to prepare various
plans, thereby achieving efficient and continued physical asset management. Guidelines were
formulated in March 2021 by the National Institute for Land and Infrastructure Management.
1* nnovative sewage system technology demonstration project sponsored by MLIT

Source data collection and organization

Efficiently collect and organize (store) operations and maintenance data centrally in the cloud,regardless of location constraints
2

Real-time evaluation and visualization

Using the collected and organized operations and maintenance data, automatically calculate thedegree of soundness and visualize necessary information for physical asset management
3

Performance degradation simulation

Create models predicting long-term changes in equipment operating performance and introduce aprobabilistic distribution for future equipment performance to help determine optimal timing of measures
Demonstrators

Joint research group organized by METAWATER Co., Ltd.,
Ikeda municipal government, Ena municipal government

Demonstration areas Sewage Treatment Plant in Ikeda City, Osaka,
Water Purification Center in Ena City, Gifu,
and five other facilities

Organization/
StorageCollection

Demonstration coverage

1 Source data collection/

Cloud serverorganization

Use

System registry Library

Achieving effective
and continuous
stock management

Organization/
Storage

Uniquecode

Collection
RegularinspectionUse

2 Real-time evaluation and

3 Performance degradation

visualization

ReportingSpecialRepair failures Investigation
etc

simulation

Evaluation items

Current

Degradation prediction model, etc.
Degree ofsoundness Past
5

New

Treatment equipment, etc.

3

Evaluation of degree of soundness
Preparation of stock
management plan

Facility A
Facility B
Facility C

Effects of introduction
Existing technology

After application of this technology

Total expenses

Total expenses =Maintenance expenses for the existing registry system+ 5 years of daily management and inspection expenses+ One-time physical asset management plan expenses

Total expenses = Initial system development expenses+ 5 years of cloud system usage fees
+ 5 years of daily management and inspection expenses+ One-time physical asset management plan expenses

Available data

Present
Futureprojection

2

Also takes into1 account factorsthat degrade functionality

Time

Cost reduction effect from introductionof this technology
Daily inspection expenses

Total expenses

4

Expenses associated with formulation of physical asset management plan

Development and maintenance operational expenses

Physicalasset management
plan expenses
Systemmaintenanceexpenses

System maintenance expenses

Physicalasset management
plan expenses
Cloud system usage fees

Daily management and inspection expenses

1 yearNew
technology

2 years 3 years 4 years 5 years
Number of years elapsed

Demonstration years FY2018 - FY2019

19

Daily management and inspection expenses
1 year

2 years 3 years 4 years 5 years
Number of years elapsed

Existing technology

After applicationof this technology

Our aim

Our path to growth

Our sustainability

Data section

COVID-19 countermeasures at operation and maintenance sites(Example from METAWATER SERVICE Co., Ltd.)METAWATER SERVICE Co., Ltd. has implemented a variety of measures to prevent infection under an overarching policy as follows: “Water supply
and sewage works systems are essential for public health to prevent the spread of COVID-19, and we will work to maintain ‘water and environmental
infrastructure,’ which is essential for people's lives.”
Going forward, METAWATER SERVICE Co., Ltd. will maintain the optimal measures according to the situation, taking into account government policies
trends in new infections, and other factors.
1 Establishment of response division for on-site response

4 Formulation of site response policies

METAWATER SERVICE has established a COVID-19 emergency response division (the “Head Office response
division”) within its Head Office, as well as a separate response division (the “site response division”) for contracted
business sites, in order to respond appropriately to the needs of each site. An Executive General Manager ofa business division at METAWATER SERVICE is in charge of the site response division, and instructions arecommunicated to each business site through the General Managers of the administrative departments for threeareas nationwide. The site response division also has a secretariat, through which it cooperates with the Head Office
response division..

In order to swiftly respond and give instructions to sites, and to prevent the spread of infection and maintainlifelines, we have established a basic policy for on-site responses and are spreading awareness of this policy
among our customers and other external parties. The policy is mainly a summary of countermeasures related to“enhanced infection prevention,” “measures for responding to potential infections among employees,” and “sitemeasures when infections occur.”
Under “enhanced infection prevention,” directions are provided for the strict observance of cough etiquetteand handwashing, room ventilation, the prohibition of meetings for large numbers of people in principle, thecancellation of meetings that include food and drink, etc. In “measures for responding to potential infections
among employees,” basic related information is summarized and a flow of criteria for taking action has been
prepared. “Site measures when infections occur” stipulates that the continuation of operations at facilities will beprioritized, and that efforts will be made to create work systems that focus on priority operations.

2 Role of site response division
The site response division has three roles. One is to provide instructions to contracted business sites on measures
to prevent infection and to monitor their situation. Its other two roles are to engage in deliberations concerninga response and provide directions in the event that infections arise. These roles are classified into two cases:
when one or more infections occur among the employees of the contracted business site, and when one or more
infections occur among the customers or business personnel of the contracted business site.

 tipulation of measures to be taken after operation and maintenance work at
5 S
contracted business sites

In operation and maintenance work at contracted business sites, measures for workers and protective equipment
after work are stipulated in detail for each facility, in accordance with the type of operation and details of the work.
Workers’ tasks include patrols and other daily inspections, periodic inspections and cleaning of the inside of tanks,etc., delivery of chemicals, removal of biosolids, and central monitoring. Measures specified and implemented after
each type of task include washing the face, washing the hands, gargling, bathing, disinfecting hands and fingers, airshowers, changing of clothes for each operation, etc.
In addition, workers wear various types of protective equipment when working. There is a wide variety of protective
equipment, including helmets, safety shoes, raincoats, and safety glasses. We take measures appropriate for eachtype of protective equipment after tasks are completed, including cleaning and disposing of them.
Furthermore, each contracted business site has its own facilities as well as required operations and tasks. Therefore,
the post-operation measures are also regulated according to their respective contracted business sites.

3 Establishment of preliminary implementation policy to prevent infection at sites
In consideration of the spread of COVID-19 nationwide, we have established a policy of implementing measuresin advance at contracted business sites, as part of efforts to prevent infections at sites. The provisions of thispolicy include: “operation reduction plans and team structures,” “entry controls/route isolation,” “3 conditions forpreventing infection,” and “disinfection of protective equipment.”
Under “operation reduction plans and team structures,” the minimum operations required for the operation andmaintenance of contracted business sites are identified, and operational systems are analyzed.
Under “entry controls/route isolation,” access to central monitoring rooms is restricted, operational routes are
deployed in which monitors and other employees do not come into contact, the break room for monitors is isolated
and its use is staggered, and the disinfection of numerous contact areas is strictly enforced. “3 conditions forpreventing infection” prevents closed spaces, crowds, and close working conditions, while “disinfection ofprotective equipment” includes methods for disinfecting protective equipment after use.

20

Introduction to business operations ｜ Plant Engineering Division

We will pursue the further optimization of design, procurement,
and construction.
METAWATER is a unique corporation with expertise in both mechanical and electric technologies. We design and construct eco-friendly
plants incorporating energy-saving, energy-creation technologies, etc. using electric technologies that maximize our unique mechanicaltechnologies and capabilities. Combining mechanical and electric technologies and product development expertise, we are working torealize a decarbonized society and contribute to the SDGs.
Currently, the water supply and sewerage industry faces serious issues related to a shortage of engineers and aging facilities. In the future,
the business environment appears likely to undergo more significant changes, including the expansion of Public-Private Partnership (PPP)
projects, the evolution and expansion of the IoT and AI, and progress in work style reform.
In order to respond to the needs of society and customers in accordance with such changes, it will be essential that we transformengineering and rationalize and streamline operations. By pursuing the optimal design, procurement, and construction, the Plant Engineering
Division will bring about new value and thus contribute to achieving a sustainable society.

Noboru Okuda

SDGs being promoted

Midterm Business Plan 2020

Plant Engineering Division

Under the “Midterm Business Plan 2020,” as part of the development of No. 1 products (water droplet products), we have promoted thedevelopment of products with excellent features, such as products with advanced environmental performance and products with extremely
low costs over their lifecycle. In the drinking water field, METAWATER has developed a high-grade water purification ceramic membrane
system, which is the number one system in Japan among ozone and coagulation pretreatment membrane systems in terms of treatment
capacity, and an ozone / accelerated oxidation process (AOP) system, which is the number one system for controlling ozone injection and iscapable of suppressing by-products (bromic acid). Additionally, in the sewage field, in response to the trend toward a decarbonized society,
METAWATER has actively developed various power generation technologies that recover and utilize waste heat from sludge incinerationand digestion gas generated in
the sewage treatment process,and introduced high-speed
Filtration cassette
filtration systems and final
filters in wastewater treatment.
TreatedThrough these methods, we havewastewater(filtrate)
constructed sustainable plants
Inflow
sewagethat make use of downsizing
To aeration tanktechnologies to meet the needs ofFrom wastewatera social environment with a fallingpump
population and super-aging society.
Installation into existing final sedimentation tank(concept image)High-speed filtration system

Director, Senior Executive Officer
Executive General Manager,
Plant Engineering Division

Final filter

21

Implementing leading-edge technologies, including
advanced water-quality improvement technologies,
energy-saving technologies, and clean energy power
generation for degraded water purification plants andsewage treatment plants enables stable supplies ofsafe and clean water of sufficient quality and capacity
through plant construction.
Constructing sustainable plants with downsizedtechnologies in response to a social environment withfalling populations and super-aging societies
Constructing sustainable plants with downsizedtechnologies in response to a social environment withfalling populations and super-aging societies
Engaging in disaster rehabilitation work centered on
the coast of the Tohoku Region and contributing tobuilding sustainable local communities by improving
the water environment

Our aim

Our path to growth

Challenges and Initiatives for“Midterm Business Plan 2023”
The Plant Engineering Division will strengthen and enhance theefficiency of the domestic EPC business, in a continuation of
measures implemented under the “Midterm Business Plan 2020,”
as an organization that plays a key role in a fundamental part of thecompany's businesses.
[Future Initiatives]● ‌We aim to improve the efficiency of engineering by centralizing various types of
information and data used in the EPC business value chain through the use of IT and AI.
● By‌ actively introducing and utilizing cutting-edge engineering methods, we willfurther promote more rational, more sophisticated, and higher quality operations.

Our strengths and challenges in
expanding plant engineering
Strengths• E ngineering capabilities utilizing differentiated products and technologies in
the fields of machinery, electricity, and electromechanical fusion‒M achinery: C eramic Membrane Filtration Systems, ozone treatment
systems, high-speed filtration, flow turbines, etc.
‒ E lectricity: Monitoring and control systems from small to large scale,environmentally friendly electrical equipment, etc.
‒ E lectromechanical fusion: Multi-layer fluidized incinerators, advanced wastewater treatment
systems for sewage aeration tanks utilizing AI and ICT, etc.
• A bility to offer technologies that have solved customer challenges and diverse needs‒ A bility to propose efficient and effective technologies that integrate
machinery and electric equipment, etc.
‒ Ability to make proposals related to the integration and abolition of sewage treatment
plants and treatment processes in accordance with regional characteristics, such aschanges in water volume due to aging and population decline, etc.
• E xtensive experience and track record in supplying machinery and electric
equipment to many water treatment plants and sewage treatment plants

Our sustainability

Data section

Project Topics
Proposing a new system for the sustainable provision of safe and secure water

Development and launch of “CPCM,” compact and mobile water purification equipment
At domestic water utilities, issues such as aging facilities, lack of financial resources, and shortages of engineers are expected to become more
apparent in the future. As they look to resolve these issues, the needs of water utilities are also diversifying, including promoting wider area
management, downsizing, and disaster response measures.
In order to meet these needs and to provide safe and secure water in future, we have developed the “Container Package Ceramic Mobile (CPCM),”a compact packaged version of a Ceramic Membrane Filtration System, and have begun providing it on a lease basis.
Expected use cases for leased CPCMs
・Rehabilitation of small-scale water treatment plants
・Temporary facilities when rehabilitating water treatment plants
・Downsizing of water treatment plants
・Extending service life at the time of consolidation and closure of water treatment
plants and responding to changes in water volume
・Emergency water purification equipment for use in the event of a disasterContainer Package Ceramic Membrane Filtration System

The Ceramic Membrane Filtration System is the company’s proprietary technology that uses aunique ceramic membrane to remove turbidity, bacteria, cryptosporidium, and other protozoa fromraw tap water, such as river water and well water. This purification equipment thus produces
clear and safe water for tap water. CPCMs are more compact and easier to move, relocate, andinstall, while retaining the characteristic ability of ceramic membrane to track fluctuations in water
volume in a manner resistant to changes in turbidity. This service is provided on a lease basis, andwe will offer it as a new system for enabling the sustainable use of safe water.
Water utilities formerly purchased water purification facilities, but by leasing them, they can use
them when necessary and flatten out their budgets, while also enjoying such benefits as peace ofmind because maintenance services are included in contracts.

Operation is easy as it is fully automatedPossibility of increased use
Challenges• P romoting development in order to create value in a way that utilizes
the information chain•W e will further strengthen our ability to offer solutions for adecarbonized society by strengthening our disaster response capabilities
and developing energy-saving and energy-creating technologies.

METAWATER ceramic membranes are highly durable and can be used for 20 years or more. After delivery to a domestic water utility, theceramic membrane itself can still be used even when the equipment is due for rehabilitation.
The METAWATER Group believes that the ability to move and relocate water purification facilities, which are part of the social infrastructure,by packaging them has the potential to act as a new scheme that contributes to achieving sustainable social infrastructure that transcends
municipal and national boundaries, through the provision of this equipment at low prices to small-scale water utilities and emerging markets
that are struggling with financial shortages after its use by water utilities for a certain period of time.
The METAWATER Group aims to continue to sustainably provide safe and secure water to all people through this service.

22

Introduction to business operations ｜ Service Solution Division

We will continue to offer reliable technologies and services that contribute to thestability and sustainability of water and environmental infrastructure.
The Service Solution Division is engaged in business activities that include inspection, repair, operation, and maintenance of mechanicaland electric equipment of domestic water supply and sewage works facilities, as well as design, construction, operation, and maintenanceof waste treatment facilities (bulk waste, incombustible waste, and recyclable waste). Given a domestic water and wastewater businessfacing degradation of facilities and equipment, high expectations are placed upon the utilization of the expertise and utilization of privatecompanies as local governments are facing issues including financial squeezes and shortages of engineers and staff to operate andmaintain facilities.
The Service Solution Division provides services through networks run by 34 operating bases across the country. As a company that is always
stays close to our customers, we provide support in areas such as responding to emergencies, including breakdowns and other problems,and for consultation services related to the operation and maintenance of facilities and equipment.

Midterm Business Plan 2020

SDGs being promoted

Service Solution DivisionDuring the “Midterm Business Plan 2020,” the Service Solution Division performed well in terms of sales.
Both machinery and electrical equipment achieved results in line with targets. In particular, the Resource &Environment Business Division posted record performance in FY2020 thanks to strong EPC volumes.
In addition, we are developing a system for comprehensive operation management at the Head Officein response to the rapid increase in the number of facilities under operation and maintenance in recent
years. We are also building a stable supply system for specialists capable of handling projects nationwide.
Through these efforts, we will continue to operate our division as a stable foundational business of thecompany. The company has been promoting work style reforms in order to achieve a “safe and comfortableworking environment” for all employees. However, if
we look particularly at the way employees work onsites, we can see that there are still many challenges
ahead. Going forward, we will continue to workon work style reforms at sites aimed at quality
improvement, such as creating a system for constantcommunication within the division using ICT tools, andincorporating remote support for ensuring workers’
safety and from a technical perspective.

‌Contributing
to generating and supplying safe and clean water by maintaining
the functions of clean water treatment equipment and devices
Contributing to stable operations by maintaining the functions of sewage
treatment equipment and devices (maintenance of discharged water
quality)
Supporting innovations and energy-saving maintenance operations
by offering new technologies and new services, such as automatedunmanned operation
Services for WBC-based and SaaS-type operations (providing softwareand software operating system environment through a network)
Design and operation of waste treatment facilities with functions attached whichenable local residents to address the importance of reducing and recycling waste,
and supporting their education and encouragement
Reinforcing the service solution business through partnerships with local
companies

On-site inspection

23

Executive Officer
Executive General Manager,
Service Solution Division

Hiroyuki Nakano

Our aim

Our path to growth

Challenges and Initiatives for“Midterm Business Plan 2023”

Our sustainability

Data section

Project Topics

Under the “Midterm Business Plan 2023,” we will aim to further expand new
businesses through methods including utilizing ICT tools and expanding Water
Business Cloud (WBC) sales, in addition to stable growth through continued
orders for existing facilities.
In addition, we will continue to actively promote the strengthening ofpartnerships with local governments and regional companies through proposals
for projects aimed at improving core facilities by extending the life of aging
waste treatment facilities instead of closing them, etc.
In addition, even under the influence of COVID-19, which has been ongoing since
FY2020, it is important that we maintain water supply and sewage facilities,
waste treatment facilities, and other infrastructure, and we must continue to
implement maintenance inspections and repairs to ensure the stable operationand maintenance of facilities. From the viewpoint of measures to prevent the
spread of COVID-19, even as compliance with various regulations and restrictions
is required, the METAWATER Group will make efforts to play an important rolein maintaining social infrastructure by taking advantage of its strengths, such ascommunity-based services centered on business sites and the WBC.

Emergency restoration and repair of Taira Water Treatment Plant related to disaster recovery

Our strengths and challenges in
expanding service solution

On the day after the disaster, employees went to the site and started the primary response

Strengths•U tilizing our expertise and experience in maintenance and inspection, repair, andfault handling of machinery and electrical equipment that we have cultivated overmany years in the water and wastewater sector, we will respond to a variety ofissues by providing community-based services tailored to our customers.

Challenges• R ecruitment of business-ready human resources and strengthening thedevelopment of young human resources•U tilization of ICT tools to ensure workers’ safety and provide remote technicalsupport, promotion of work style reform for employees working in the field, andachievement of a balance between working conditions and motivation• F urther strengthening support and recovery between local communities andbranch operators in the event of disasters, weather fluctuations, and otheremergencies in recent years

Resumption of water supply within nine days of disaster and full-scale restoration in about three months
On October 12, 2019, heavy rain caused by Typhoon Hagibis flooded the Taira Water
Treatment Plant (treatment capacity: 62,340 m3/day; water supply population: approximately
100,000), a core water treatment plant in Iwaki City, Fukushima Prefecture, causing
approximately 45,000 households in Iwaki City to lose their water supply.
On the day after the disaster, METAWATER employees went to the site and started aninvestigation aimed at restoration. At the same time, we established an in-house backup
system on a company-wide scale and resumed water supply nine days after the disaster as a
primary response. We achieved full recovery in a short period of about three months.

Submerged Taira Water Treatment Plant
immediately after the disaster

Outline of emergency restoration and repair of Taira Water Treatment Plant related to disaster recovery
Project name : E mergency restoration and repair of the Taira Water Treatment Plant related todisaster recovery (power receiving and transforming, and instrumentation equipment)
Project period : October 2019 to March 2020
Address : 53 Teramae, Taira Shimohirakubo, Iwaki City, Fukushima

There were two steps to restore water supply as quickly as possible. The primary response was todetermine which equipment in the water treatment plant was submerged and which was not, and torestart the water supply using the equipment available. Team members who arrived at the site fromthe second day after the disaster checked more than 250 items of equipment and performed repairs by
combining the available equipment. As a result of the primary response that enabled us to quickly andaccurately assess the situation at the site, we were able to supply tap water in nine days, which was
originally expected to take one month.

The entire company worked together to achieve early and complete recovery
After our primary response, we proceeded with full-scale restoration as the next step. It was necessary
to combine old and new equipment with different specifications, such as the manufacturer, size, andconnection method, and trial and error was required. Amid the complicated mix of construction workers
and machinery from different manufacturers, our comprehensive capabilities proved essential for
identifying both machinery and electric equipment, and quickly carrying out all restoration work, fromplant engineering to after-sales services. In response to this difficult work, METAWATER made concerted
efforts throughout the company as a whole, ranging from sales to procurement, engineering, design, andservices. As a result, on January 24, 2020, approximately three months after the disaster, we completed
the replacement of all submerged devices, and the Taira Water Treatment Plant was quickly andcompletely restored.

24

Inside of submerged dry well

Restoration work

Inspecting all switchboards and checking
available equipment

Restoration work while drying asubmerged electric room with fansIntroduction to business operations ｜ International Business Division

METAWATER will accelerate the localization of our business andcontribute to solving the world's water environment problems.
The International Business Division will expand its business by focusing on North America and Europe, where environmental regulations are
becoming stricter, and Asia and other countries around the world, where market expansion is expected due to the increasing penetrationof water and sewage systems. We will also accelerate the localization of our business in each region. The environment surrounding the
global water business is changing at a remarkable pace, and as customer demand becomes increasingly diverse, locally produced water
resources for local consumption are becoming more important than ever. METAWATER Group will continue to strengthen cooperation withpartner companies and deliver products and technologies optimized to meet local demand and environmental changes, aiming to become adependable presence in each region.

Executive Officer
Executive General Manager ofInternational Business Division

Ken Akikawa

International Business Division

Midterm Business Plan 2020
‌In North America, Aqua Aerobic Systems, Inc. (AAS) had astrong presence with its differentiated technologies, crossmedia filters, aerobic granule sewage treatment technology(AquaNereda® ), etc., and secured stable revenue. In addition,
we have been progressively promoting our proprietary water
treatment technologies, such as ozone generation systems
and ceramic membrane filtration systems, through AAS.
Furthermore, Wigen Companies, Inc., which joined our groupin April 2020, enables us to handle more advanced water
treatment processes using membrane filtration technologies
such as reverse osmosis and ion exchange technologies.
We will continue to strengthen our presence in the potablewater reuse market, particularly in the southwestern UnitedStates, and expand our activities in prospective markets suchas new demand in the water and wastewater sector andprivate sector.
● ‌In Europe, we strengthened our business foundation byacquiring all shares of Rood Wit Blauw Holding B.V. in
the Netherlands in November 2020. Together with groupcompanies Mecana in Switzerland, FUCHS in Germany, and●SDGs being promoted
PWNT in the Netherlands, with which we have a strategic
alliance, we will promote business expansion in the European
region by fully utilizing the resources of each company.
● ‌In Asia, we delivered the first unit of a new sewage
treatment system for developing countries, the Pre-treated
Trickling filter system (PTF system), to Hoi An City in Vietnam.
And we will continue to focus on developing our proprietary
technologies suited to local needs. In addition, we will
utilize our representative offices in Hanoi, Phnom Penh, andSingapore to enhance the efficiency of our market analysis
from a local viewpoint in order to steadily expand water
environment business in the growing market of Asia.
● ‌In addition, we sold a total of 25 units of mobile ceramic
membrane filtration equipment to countries in Africa andSoutheast Asia to improve access to safe water and toprovide emergency measures in the event of natural disasters
such as floods and droughts.

25

Sale of sewage treatment systems,
potable water reuse systems, and water
purification systems in North America
Development of ceramic membrane
filtration technology in cooperation withoverseas companies
Implementing Advanced Energy Saving
Wastewater Treatment Systems in Asia
Expanding sales of Mobile Ceramic
Membrane Filtration Equipment
Creating jobs and providing education
through local companies, representative
offices, and projects in local areas

Our aim

Our path to growth

Challenges and Initiatives for“Midterm Business Plan 2023”
With the threat of the spread of the new coronavirus still unsettled,
it is more important than ever to accelerate localization in order tostrengthen and expand our international business. We will continue
to seek new partners in various regions, engage in dialogues withcustomers around the world, and create new value by sincerely
addressing new water environment issues faced by each region,
utilizing the collective strengths of the METAWATER Group.
METAWATER will continue to contribute to the realization of asustainable society by quickly detecting changes in the world's everchanging water environment and continuing to provide solutions.

Our sustainability

Data section

Project Topics
Accelerating Localization of Businesses with M&A Activities

Rood Wit Blauw Holding B.V.
Rood Wit Blauw Holding B.V. (RWB) provides various types of water treatment
systems throughout Europe, including the Netherlands, Germany, Belgium,
Norway, Sweden, the United Kingdom, and Spain. RWB is an engineering
company that is particularly well experienced in METAWATER's technologies,
having delivered ceramic membrane filtration systems to more than 10 locations.
Rood Wit Blauw Holding B.V.

RWB

Location : Almelo, the Netherlands(near the German border at the eastern end of the Netherlands)

Our strengths and challenges in
expanding international business
Strengths• E xperience and achievements in the Japanese water andwastewater treatment market over many years, as well as
proprietary technologies such as ceramic membrane filtration andozone generation system developed and sophisticated in Japan• T he ability to make proposals and develop products based on
the proprietary technologies in response to changes in laws andregulations and the external environment in each country.
• L ocalized group subsidiaries with a proven performance and ahigh level of trust from the business sector in their respective
countries.

Challenges• In addition to the current business areas centered on Europe,
North America, and Asia, expanding into other areas will further
contribute to global environmental conservation.
• In the ever-changing global water environment market,
consider participation in the running of water and wastewater
management businesses outside Japan from a medium- to longterm perspective.

Establishment : November 2001
Director and Chairman : Ken Akikawa
President and CEO : André Reigersman
Main Business Activities : E ngineering, services, etc. related to water andwastewater treatment

Amsterdam
Netherlands
Belgium

DortmundGermany

FranceNew Applications of Ceramic Membrane engineered by RWB
Digestate treatment
Biomass plants use livestock manure and organic
waste to generate electricity. During this process
a waste stream, called digestate, is produced. To
reduce the environmental impact, RWB engineered asolution to treat this digested stream. The treatment
process does contain 3 major steps: separating thedigestate with a screw press, removing solids out of
the liquid fraction via ceramic membrane filtrationand extract all valuable fertilizers (N and K) troughreverse osmosis.

Ceramic membrane

ReverseosmosisDigestate

Water

Screw press
Fertilizer（P）

26

Fertilizer（N + K）

Introduction to business operations ｜ Public Private Partnership Division

We will address issues related to the sustainability of water and wastewaterbusinesses and contribute to solutions.
It is becoming increasingly important to prepare for and respond to the increase in localized rainfall and other natural disasters, as well as
any accompanying damage. In addition, the environment surrounding water has been changing rapidly in recent years, including the roles ofself-help, mutual assistance, and public assistance being reconsidered owing to a shortage of public funds caused by population decline.
Many private companies have been involved in the development of domestic water and wastewater businesses, but now private companies
must also address the difficult circumstances directly faced by the industry. In order to overcome this situation, the government has made it
clear that it will promote Public-Private Partnership (PPP) projects through various legislative measures.
PPP projects are widely used across Japan, not just in the water sector. Additionally, opportunities for collaboration, such as joint projects
with companies in other industries, are also increasing.

Midterm Business Plan 2020

PPP BusinessIn the “Midterm Business Plan 2020,” the Public Private Partnership
Division achieved results generally in line with targets.
In terms of expanding the scope of our business, in 2020,
METAWATER received a new commission in the Kyushu area forthe “Kumamoto Ariake/Yatsushiro industrial waterworks operation
project,” Japan’s first concession project for industrial watersupply. In the same Kumamoto Prefecture area, we succeededin maintaining a commission for the “Arao City waterworks
business (Stage 2).” Our aim is to create economies of scale bywinning contracts for management and operation from water
intake to faucets over a wide area, and combining this with thedevelopment and operation of the “Ariake Water Treatment Plant”(Omuta (Fukuoka) and Arao (Kumamoto) Joint Water Treatment
Plant), which we received a commission for as a Design, Build andOperate (DBO) project.
In terms of existing projects, we are participating in seven DBO
projects, as well as comprehensive consignment operations forwater supply businesses in Nakatsugawa City and Gero City,
both in Gifu Prefecture. METAWATER is evolving into a company
that offers total solutions, as the scope of operations that weSenior Executive Officer
Executive General Manager,
Public Private Partnership Division

Masashi Sakai

SDGs being promoted
manage expands, including our support for business operations
such as management and planning, which were overseen by
local governments and businesses, as well as our involvement inmanaging the collection systems of water and sewage works.
As the scope of our operations expands, we are accelerating
efforts to deepen asset management and develop business
continuity methods for use in the event of disaster. These efforts
will contribute to the expansion of our businesses.

Disaster response training
conducted in the Kyushu region
Implemented by combining
online and real participation27‌
Activities
ranging from design andconstruction to operation and maintenanceof water treatment plants, including
mechanical and electric equipment.
We propose appropriate solutions tailoredto local government issues, such as
the transfer of technology and financial
deterioration in the water and sewage
business. A number of our unique valueadded services for PPP projects are also
proposed.
Execution of a Business Continuity Plan
(BCP) in the event of a natural disaster suchas water supply activities following the
Kumamoto Earthquakes in April 2016.

Our aim

Our path to growth

Challenges and Initiatives for“Midterm Business Plan 2023”
By monitoring and supporting commissioned projects remotely while taking a broad view of theentire project, we will identify common issues for each project and achieve savings in labor andstreamlined operations, as well as greater management efficiency. In addition, we will optimize
life-cycle costs by establishing methods for physical asset management and promote innovationin operational management, while also generating the benefit of ensuring business sustainability
for customers and simultaneously improving the profitability of the company’s businesses.
We also utilize operational expertise we have accumulated in previous projects when forming
business proposals (planning work) for other projects, enabling us to strengthen competitiveness,secure appropriate gross profit, and ensure stable operation after receiving commissions.
METAWATER will actively work to meet the increasingly diversified needs of customers throughin-house development and alliances, including responding to collection system operations that
go beyond the scope of the company’s existing operations, as well as wider area management
and joint projects, streamlining through integrated management with other businesses, andcollaboration with local companies.

Our strengths and challenges in
expanding PPP business
Strengths• Industry leader in terms of number of PPP projects participated in and track record of
long-term operation (continued for approximately 20 years)• Identification of risks in detail and establishment of risk hedging techniques• E stablishment of a high-speed recovery system using WOODAP• P rogress made in establishing a PDCA cycle in which expertise on matters such as the“planning of improvement measures,” based on consultations with customers after“identifying areas for improvement” in commissioned projects, is reflected in “project
proposals” for other projects

Challenges• C ontinual development of human resources for PPP projects, which require different
skills to other fields• S ecuring local human resources and the building of networks to expand businesses
rooted in local communities• S trengthening of systems to provide smooth support to sites in the event of emergency• Establishment of on-site systems that are sustainable even during the COVID-19 pandemic

Our sustainability

Data section

Project Topics
Japan's first concession project for industrial water supply

Launched “Kumamoto Prefecture Ariake/Yatsushiro industrial waterworks operation project”
We began this project in April 2021 as the first industrial
waterworks business in Japan to be operated under the public
facility management concession system.
Business operations from water intake to water supply for
the Ariake Industrial Water Supply Service and the Yatsushiro
Industrial Water Supply Service operated by the Kumamoto
Prefectural Government’s Public Enterprises Bureau are to be
implemented collectively as a concession by a special purpose
company (SPC) represented by METAWATER.

Ariake Water Treatment Plant
Omuta and Arao Joint Water Treatment Plant
development and operation project

Kikuchi River

Arao City“Arao City waterworks business (Stage 2)”commissioned area

Tamana City
Kumamoto
City

Uenohara Water Treatment Plant

Shirashima Water
Treatment Plant

Water treatment plant in “Kumamoto Prefecture Ariake/
Yatsushiro industrial waterworks operation project”

Yatsushiro City

Outline of Kumamoto Prefecture Ariake/Yatsushiro
industrial waterworks operation project
Project method: Public facility management concession system
Projects covered: Ariake Industrial Water Supply Service andYatsushiro Industrial Water Supply Service
Project period: April 1, 2021 to March 31, 2041 (20-year period)
Project operator: Water Circle Kumamoto Corporation

Commencement ceremony

We aim to stabilize the quality ofservice and create economies ofscale through collaboration among
commissioned projects, including
producing tap water (Ariake Water
Treatment Plant) using industrial
water (Uenohara Water Treatment
Plant) as the raw water.

Comprehensive outsourcing to the private sector in order to maintain and improve water services“Arao City waterworks business (Stage 2)”
The METAWATER Group has been entrusted with “Stage 1” of this project since 2016, and has
engaged in operations including customer support, the operation and maintenance (O&M) of
waterworks facilities, waterworks facility construction, and crisis management based on BCM.*1
In Stage 2, the scope of performance standardization*2 was expanded compared with Stage 1.
We will utilize the main initiatives and results of Stage 1 to continue contributing to the operationof waterworks in Arao City as a business with roots in the local community.
Overview of Arao City waterworks business (Stage 2)
Project period: April 1, 2021 to March 31, 2026
Business operations covered:(1) Administrative and planning support; (2) Management support; (3) Sales;(4) Design and construction; (5) Maintenance and inspection; (6) Crisis management

28

Counter services in Arao City
*1 BCM: BCM (Business Continuity Management) refers
to management aimed at ensuring comprehensive
business continuity, including continuous improvement
activities such as the formulation, introduction,
operation, and review of BCPs (Business Continuity
Plans) related to the continuity of corporate businesses
in the event of emergency.
*2 Performance standardization: A shift fromconventional “specification orders” (a system in which
the contractee clearly specifies the details of the order,
the implementation method, etc.) to a system in which
the required standards to be achieved are clarified
while the processes and methods are left to operators.

Sustainable business model
As the number of comprehensive and wide-ranging business projects increases, METAWATER is implementing its own measures tobuild sustainable business models in various regions

1 To stably supply safer and better quality water.

Completed water treatment plant that reflects METAWATER’s original concept of "WOODAP"

Aoki Water Treatment Plant/DBO Project, Mitsuke City, Niigata Prefecture
A new water treatment plant in Mitsuke City, Niigata, for which a groupof companies represented by METAWATER was commissioned under the“Aoki Water Treatment Plant Rehabilitation Project,” was completed andstarted operation in March 2021. In this project, the METAWATER Grouphas been comprehensively entrusted with the full rehabilitation of the
Aoki Water Treatment Plant, which is a core water treatment plant in
Mitsuke City, and with its operation and maintenance after completion.
When rehabilitating the Aoki Water Treatment Plant, we launched a fullscale rehabilitation project in response to the aging of the old facility andthe recent rise in raw water turbidity. It was also necessary to construct
a new water treatment plant in a limited space adjacent to the old one.
The ceramic membrane filtration method was adopted as the optimum
treatment method for the conditions, because it has excellent spacesaving qualities, is easy to manage and operate, and allows for stable
operation even when the turbidity of raw water fluctuates.
“Mitsuke Water Frontier Co., Ltd.,” a special-purpose company

Ceramic Membrane Filtration System

Approximately half the numberof filtrate tank sampling pumps
installed compared with traditional
methods, thanks to WOODAP

Exterior of Aoki Water Treatment Plant

represented by METAWATER, is in charge of the operation andmaintenance of the new water treatment plant. Because the METAWATER
Group is involved in a comprehensive range of activities from design andconstruction to management and operation, we have also introduced
METAWATER’s unique “WOODAP” philosophy.

Advantages of Aoki Water Treatment Plant
At the Aoki Water Treatment Plant, we aimed to construct a facility thatis easy to manage for on-site operation and maintenance personnel andeasy to restore in the event of an unforeseen situation.
● The water treatment plant uses a large number of pumps, but by
arranging the different types of pump as much as possible, we have
improved the efficiency of operation and maintenance, and made quick
restoration possible by swapping parts between pumps in the event ofan emergency. This also helped to limit construction costs by reducing
the number of spare machines installed.
● I ntroduction of Water Business Cloud (WBC) offered by METAWATER.
We have created a system that enables on-site operation andmaintenance staff and those involved in design and construction to
identify the status of equipment, and share information and respond
immediately in the event of an emergency.
● Designed
based on the concept of WOODAP, a unique METAWATER
method. By collecting the wisdom of many people involved in operationand maintenance, including people from local companies, we were able
to reduce the amount of equipment and materials used, making thisfacility even more conducive to reducing environmental impact.

29

Outline of Aoki Water Treatment Plant Rehabilitation Project
Operator: METAWATER Group
Participating companies:
METAWATER Co., Ltd. (representative company)
Chuou Sekkei Engineering Co., Ltd. (design)
KAJIMA CORPORATION (civil engineering and construction)
METAWATER SERVICE Co., Ltd. (operation and maintenance)
Ryokusui-Kougyou Corporation (operation and maintenance)
JESK HORIUCHI CO., LTD. (operation and maintenance)
Project period:[Design and construction period]
September 9, 2016 - March 31, 2021 (4 years and 8 months)[Operation and maintenance period]
April 1, 2021 - March 31, 2041 (20 years)
Project method: DBO method (Design, Build and Operate)
Facility outline: [Planned maximum daily water supply] 23,000m3/day[Water treatment method] ceramic membrane filtration method

The METAWATER Group, local companies, etc. will perform operation andmaintenance.
A large variety of different types of knowledge was successfully reflected in thedesign of the facility thanks to the “circle of wisdom” created by the related parties.

Our aim

Our path to growth

Our sustainability

Data section

2 Expanding the introduction of systems for preventing
the spread of fires at recycling facilities

External view of
Gifu City Tobu Clean Center
large waste treatment facility

Tobu Clean Center large waste treatment facility in Gifu City, Gifu Prefecture
There is no end to fires and explosions caused by collected garbage
at domestic solid waste recycling and treatment facilities. However,
the main cause of fires is believed to have changed from spray cansand lighters, as was once the case, to lithium-ion batteries (LIBs).
LIBs are small in size and come in a wide variety of different types,
and are also contained in various products. For these reasons, there
is a limit to how much they can be sorted and removed throughcollection, manual sorting, etc. In addition, LIBs that remains among
waste during the treatment process may become hot or ignite
as a result of impact from high-speed rotary crushers and otherequipment. In this way, LIBs have become a source of fire, and there
are an increasing number of cases of fires spreading to surrounding
combustible waste, and resulting in damage to equipment and fires
at facilities. In addition, the most important measures to prevent the
spread of fire are the early detection of fire sources by fire and heat
detectors, and the sprinkling of water to extinguish fires. However,there are cases where LIB fires cannot be extinguished effectively
even if the source of the fire is detected.
In response, the company acquired a patented technology (Patent
No. 6148910) that, upon discovery of a fire, closes the fire damper
immediately after the conveyor and securely extinguishes the firewithin a submerged chute. Four facilities utilizing this technology
are already operating. We have also newly introduced a system thatutilizes this technology at the “Gifu City Tobu Clean Center large
waste treatment facility,” which began service on March 28, 2021.
A significant theme of this facility was the effective recovery of
resources and the prevention of fires in the facility and the spreadof fires. As such, METAWATER planned fire dampers and submerged
buckets (see diagram). In this system, fire dampers are installedin the chute section immediately after the crush conveyor in therear stage of the high-speed rotary crusher to extinguish the fireby submergence. At the same time as the fire dampers and fire
extinguishing sprinklers are activated, the crushed material conveyor
is operated in reverse, and the crushed material, which may containfire sources, is guided to a special submerged bucket, thereby
ensuring fires are reliably extinguished. The fire damper is driven
by an air cylinder and closes instantly to prevent fire from beingtransported. Therefore, operation can be resumed in a short timeafter confirmation that the fire has been extinguished.
The company also plans to introduce this technology at threeprojects currently under construction. In future, we will also propose
this technology at planned facilities to ensure that recycling andtreatment facilities are operated in a way that is safe, secure, andstable.

High-speed rotary crusher
Refuse craneNoncombustible large waste
Coarsecrusher

ReceivinghopperStorage pit

30

Aluminumseparator

Feed conveyor

Iron and aluminum forming machine

Flow diagram for Tobu Clean Center large waste treatment facility in Gifu City

Magnetic separator

Crushedmaterial
conveyor

Feed conveyor

Fire damper
ResiduestoragehopperSubmerged bucket

METAWATER Group’s ESG

Environment

Aiming at sustainable growth of corporate value
Major activities

SocialBased on a vibrant corporate culture, the METAWATER Group believes that its
responsibility is to remain a fair and sincere company as a good corporate citizen,
contributing to the sustainable development of society and the global environment throughits business activities.
To that end, we are working to solve social issues related to ESG (Environment/Social/
Governance) by identifying the important issues from the perspective of the SDGs basedon the expectations of our stakeholders and changes in social and business environments.
In particular, we will reaffirm the importance of our mission as a water and environmental
infrastructure company, and we will aim not just to reduce our environmental impact, but also set
environmental KPIs in our businesses and visualize the results. We will strive to ensure that weearnestly do what is needed in order to contribute to the sustainable growth of society.

Vibrant
corporate climate

Basic CSR
CSR through business activities

Contribution to society andthe earth through water andthe environment
Sustainable development of society
and the global environment

Identifying important issues (materialities) from the perspective of SDGs
We have positioned Goal 6 of the SDGs as our top-priority materiality, while also aiming to achieve Goal 11 through strategic promotion of Goal 17.
Goal 6 of the SDGs is an essential materiality to maintain social activities, and for humans to live safely and with dignity.
The METAWATER Group believes that achieving Goal 6 can lead to other issues being solved as well.
Prioritization of important issues■E nvironmental contribution ■ S ocialImportance to stakeholders

Governancecontribution throughthrough business activities
business activities■P romotion of environmental ■ F urther promotion of work styleconservation activities
reform■S
 trengthening of governance■E stablishment of a unique framework for further comprehensiveness and wider

area management■P rovision of solution technologies centered on electromechanical fusion

Importance to the METAWATER Group31

Our aim

Our path to growth

Our sustainability

Data section

METAWATER Group’s ESG activities
Important themes

ESG Topics

METAWATER’s major initiatives

Water-supply area■

Natural resources

Ceramic Membrane Filtration System reduces waste and saves energy
Sewage area■

Water treatment systems reduce river and sea pollution in wet weather■

No. 1 market share for diffuser equipment, with significantly reduced power consumption

Environment

Waste recycling facility

P.33

Climate change■

Wastewater sludge fuel system that converts waste into fuel■Recycling and treatment systems that contribute to highly efficient and safe recycling■

Promoting the reduction of paper use and office power consumption

Our offices“People are
our greatest asset”
QualitySocialPartnerships

P.39

Social contribution

Expanding and promoting the use of satellite offices and promoting teleworking from the perspective ofpreventing the spread of COVID-19■ Promoting work-style reforms, developing abilities to support individual employees, and promoting diversity
■

■

■

Ensuring the quality of products and services provided■

Strengthening relationships with partner companies and promoting CSR procurement

Community contribution and environmental conservation activities in cooperation with local
governments, environmental awareness activities for the next generation of children, international
support, and disaster recovery and reconstruction suppor■ Water source forest preservation and environmental conservation efforts■

Corporate GovernanceRisk management
Governance
P.49

 ealth and safety management from both a face-to-face and remote aspect, so that employees canHwork happily and enthusiastically■

Assuring management transparency■

Forming Compliance Working Group and implementing compliance education■

Improving information security measures■

Strengthening Business Continuity Management (BCM) activities■

Implementation of internal controls

Compliance

32

Round-table discussion on SDGs

Held an event to discuss SDGs withgeneral participants
As a company with a key responsibility in terms of social
infrastructure, the METAWATER Group aims to contribute to thesustainable development (sustainability) of society and the global
environment.
As part of these efforts, in October 2020 (29th), we held an eventat the Manseibashi Head Office in cooperation with “Newswitch”
by the Nikkan Kogyo Shimbun (The Daily Industrial News), in
which CSR and sustainability consultant Naomi Inoue was invited
as a guest to discuss SDGs initiatives and ideas with ordinary
business people and students.
The event centered mainly around dialogue, and the venue
and remote sites received questions from approximately 60
participants in real time and saw an exchange of frank opinions.
Although there were some harsh opinions such as “‘No one is left
behind’ is a challenging goal,” based on the current situation in
Sierra Leone (West Africa), many discussions were held, which inturn empowered the METAWATER Group to continue its activities
focusing on SDGs.
In the future, we intend
to continue to actively
establish opportunities forexchanging opinions and
SDG-related initiatives.

Environment

We are positively engaged in technological development that contributes to environmental preservation and reducing environmental burdens, while promoting theactive use of natural energy sources and the development and introduction of energy-saving and energy-creation technologies.

Contributing to the maintenance of water and environmental infrastructure through our businesses
The environment surrounding water changes day
by day, and issues vary by country and region. In
recent years, plastic waste has also become a major
environmental problem.
Since our founding by NGK INSULATORS, LTD.
and Fuji Electric Co., Ltd., METAWATER has been
involved in a variety of technological development
activities as a company supporting water andenvironmental infrastructure for over 50 years.
After the company was founded in 2008, inheriting
the DNA of our two predecessors, changes in thenatural environment, such as accelerated global
warming, intensified climate change, and frequent
storms and floods, have also continued to grow at anaccelerated pace.
As a company that supports the sustainability ofwater and environmental infrastructure, METAWATER
will continue to develop technologies that meet thedemands of the times.

Treatment processes and technologies for water treatment plants, sewage treatment plants, and waste recycling facilities
Water treatment plants

Ozone technology

Water

Water treatment technology
Water intake
facility

Receivingtank
Adjust waterlevel and volume

Chemicalmixing tank

Remove colorand smellFilter andclean water

Sterilize

Store purified
waterStore water tosend to homes

Advanced wastewater
treatment equipment

Filtration
tank

Disinfection
systemFiltrate
tank

Water
distribution tank

Sedimentationtank

Supplywater

Mix in flocculant Sink and separate
lump sand and soil

Thickening
systemSludgedischarge Reduce moisture insludge discharge

River

Reuse as horticulturalsoil and cement

Dehydrator
Squeeze out
more moisture

To town

Maintenance and operations management for water and sewage facilities

Sewage treatment plants

Discharge

Water treatment technology

Sterilize and disinfectwith chlorine, etc.

Sink clumps of
microorganisms

Decompose dirt throughthe work of microorganisms

Sink minutewaste

Sink andremove sand and waste

Disinfection
tank

Final
sedimentation tank

AerationtankPrimary
sedimentation tankGritchamber

SludgeThermal manipulation
technology
Disposalandeffective use

Facilities for productionof fuel from sludge
Incinerate

Experimental plant

33

Sludgedehydration technology
Sludgedehydrator

Digestionequipment

Further compact
Reduces the amountthe moistureof sludge andinto a semi-solid state
extracts biogas

Sludgethickener
Reduce moisturein sludge

To sewage treatment
plant throughWastewater
sewer pipes

Waste recycling
facilities
Resource
environment technology
Separation and recycling of plastics,
incombustible materials, etc.

Our aim

Our path to growth

Our sustainability

Data section

Changes in the development of new technology (2007 to 2020)
METAWATER established2007

Technology
Water
treatment plants(water supply field)

Water purification
technology

2008(Year)

2009

2010

2011

2012

Development of new technology
through electromechanical fusion
Japan’s largest ceramic membrane
filtration water treatment plants

2013

First delivery of UV disinfection equipment

Developed glass lining type ozone
generation tubes

Water treatment
technology

First delivery of high-speed sewage treatment
First delivery of sewage water reuse systemsystems for wet weather
First delivery of multi-wing vertical-axis agitator(sewage field)

Sewage treatment plants

B-DASH Project*(Breakthrough by Dynamic.
Approach in Sewage
High Technology projectby Ministry of Land,
Infrastructure, Transport andTourism)

Waste
recyclingfacilities

Resource environment
technology＊ B-DASH Project

2018

2019

2020

First delivery of RB flash mixer for water treatment plants
Introduction of high flow rate ceramic membrane system with application of acid CEB (Katsurazawa)

Developed high air-concentration both side cooling ozone generation tubes
First delivery of new diffuser plate for ozone
Pre-treated Trickling Filtration (PTF)

High-speed filtration technology using floating media

Simultaneous nitrification and denitrification treatment (deep tank type)

Anammox treatment technology

First delivery of high performance digester mixer
First delivery of post-injection dual-liquid type belt press dehydrator
First delivery of fluidized
carbonizing furnace

Joint research into circulationtype multi-layer incineration

Delivery of world's firstgasification furnaceFirst delivery of kiln type (external heat)carbonizing furnaceFirst delivery of dual heat source binary generator[FY2015] Water management technologies for urban areas
subjected to local downpours[FY2011] Energy management system using
intensive solid-liquid separation technology[FY2017] Technology increasing the processing capacityof final sedimentation tanks[FY2013] Innovative wastewater sludge energy conversion system that
optimizes overall dehydration, combustion, and power generation[FY2014] Non-aeration circulationwater treatment technology
First delivery of waste plastic
specific gravity difference sorter

2017

First delivery of LED UV disinfection equipment

Phosphorus recovery fromincinerator ash (2006)
First delivery of multi-layer
fluidized incinerator

2016

Development of technologies to respond toclimate change and the environment

First delivery of mobile Ceramic
Membrane Filtration Equipment

Began verification of
sewage reuse system

Thermal manipulation
technology

2015

Development of new technologies for reuse andrecycling of resources, as well as higher functionality

Ozone technology

Sludge dehydration
technology

2014[FY2019] Advanced treatment technology through ICT and AI
control of single tank nitrification and denitrification process

First delivery of fire spread prevention technology (Patent No. 6148910)
First delivery of new counter-current trommel sorter

First delivery of improved counter-current trommel sorter
First delivery of compact high-speed rotary vertical crusher

Abbreviation of Breakthrough by Dynamic Approach in Sewage High Technology Project. By accelerating research, development and commercialization of new technologies, efficiency of energy use and reduction of life cycle costs in the wastewater business are promoted. It is ademonstration project that has been implemented by MLIT since FY2011 to support overseas development of the water business. Consignees installed a full-scale plant in their sewage treatment plants and demonstrated cost reductions, reductions in greenhouse gas emissions, etc.

34

Environment

Main environmental technology
Water purification technology

Safe water purification system effective even in the face of climate change

Ceramic Membrane Filtration System
Our Ceramic Membrane Filtration System boasts the No. 1 market share in Japan for water treatment plants
utilizing membrane filtration systems. The risk of membrane breakage is extremely low, it can be installed in small
spaces, and it can also remove protozoa, allowing for safe filtered water.
Thanks to its exceptionally long life, there is a minimal frequency of membrane replacement. In fact, the first unitof this system was delivered over 20 years ago, and it continues to operate to this day without having had theceramic membrane replaced yet. Additionally, it is expected to be used as ceramic materials after use, leading toa significant reduction in waste.
Finally, only a low amount of pressure is required to filter raw water, and filtration using differences in water levelis possible as well, reducing the power needed by pumps, etc., and saving energy.
Ceramic membrane<Delivery results> Volume of water processed (cumulative)(m3/day)■ Japan1,500,000

A mobile water treatment plant that is also active in times of disaster■ Overseas

Mobile Ceramic Membrane Filtration Equipment

1,200,000

900,000

600,000

300,000

0

2016

2017

2018

2019

2020 (Fiscal year)

This simplified Ceramic Membrane Filtration System, mounted on a truck, is easy tooperate and maintain. Since it is mobile, it can be operated even in areas where there
are no skilled engineers. In areas that do not yet have water piping laid, the truck can
be moved to various water sources, such as lakes, rivers, and wells, allowing thatwater to be processed and used as safe drinking water.
Water transferred using piping requires a lot of energy, but since
this system can move on its own, it contributes to a reduction intransportation energy.
The system can also be used in the event of a disaster such as anearthquake or heavy rain, thanks to the features of the ceramic
membrane that enables stable filtration of even high turbidity raw
water.

35

Mobile Ceramic Membrane
Filtration Equipment

Our aim

Water treatment technology

Our path to growth

Our sustainability

Data section

Water treatment systems that reduce river and sea pollution in wet weather

High speed CSO filtration system
Combined sewer systems discharge simply treated wastewater and untreated sewage into
public waters such as rivers when it rains, which adversely affects the quality of water andpublic health. As such, with the 2004 amendment of the Sewerage Act enforcement order,
measures to improve combined overflows are being promoted throughout the country. This
includes the start of the "combined sewer system urgent improvement project", which has
the aims of (1) reducing pollutant loads, (2) ensuring public health and safety, and (3) reducing
refuse.
This system filters simply treated water and untreated sewage at high speeds using ouruniquely developed special small filter, which is only about 7.5 mm. By installing it in the
primary sedimentation tank of a sewage treatment plant or relay lift station, it can filter out
floatable solids and pollutants such as oil balls and plastics at a rate of up to 1,000 m/day.
Additionally, existing primary sedimentation tanks can be remodeled and set. Since it is easy
to operate and maintain, it has been adopted as one measure for improving combined overflow
in Japan, contributing to environmental conservation measures regarding public water areas.

Water treatment technology<Delivery results> Design treated water volum (cumulative)(m3/day)

6,000,000
5,000,000
3,000,000
4,000,000
3,000,000
2,000,000
1,000,000
0

2016

2017

2018

2019

2020 (Fiscal year)

System with the No. 1 market share, featuring significantly reduced power consumption

High integration configuration air diffusion system
The sewer system collecting and treating domestic wastewater uses 0.7% of Japan's
total electricity consumption (equivalent to the annual electricity consumption of 2.11
million households). Approximately 50% of this is electricity used to treat sewage insidewastewater treatment plants. When treating wastewater, microorganisms decompose
the pollutants in the sewage, and the microorganisms then sink together with the fine
impurities to remove the pollutants. A large amount of air needs to be blown (diffused) into
the wastewater in order to activate the microorganisms.
METAWATER has developed a system capable of diffusing ultra-fine air by applying ceramic
technology, achieving a high oxygen transfer efficiency. In addition, by reducing the pressure
loss when air is blown, the amount of power required can be reduced by about 30%
compared to the conventional system.
The system is maintenance-free and has long-lasting performance, earning it the No. 1
market share in Japan.

<Delivery results> Target water volume (cumulative)(m3/day)

5,000,000

4,000,000

3,000,000

2,000,000

1,000,000

0

2016

36

2017

2018

2019

2020 (Fiscal year)

Environment

Main environmental technology
Thermal manipulation technology

Thermal manipulation technology that converts waste into fuelWastewater sludge fuel system<Delivery results> Treated capacity (cumulative)(t/day)As a general rule, sewage sludge in urban areas is dehydrated to reduce the amountof moisture present and then incinerated. The ash generated from the incineration iseffectively used as a raw material for cement, etc.
METAWATER's "wastewater sludge fuel system" is a technology that produces fuel (carbon)
by steaming and incinerating sewage sludge. The fuel produced is valuable and can be sold,and is effectively used as an alternative fuel source to coal in thermal power plants, etc.
There are high expectations for wastewater sludge fuel to be a new effective use of sewage
sludge.

1,000

800

600

400

200

Wastewater sludge fuel

0

2016

Resource environment technology

2017

2018

2019

2020 (Fiscal year)

Improved plastic sorting efficiency and accuracy

Domestic waste recycling system
The amount of waste plastics generated in Japan is said to be over 9 million tons a year,
accounting for approx. 2% of all waste. Waste plastics are subject to import restrictions bycountries such as China, and marine pollution, etc., caused by microplastics has attracted
attention as a major social and environmental problem. In addition to reducing emissions,the importance of recycling resources is also becoming more important. However, in order torecycle waste plastics, in addition to the manual removal of refuse required, lightweight items
such as plastic bags, and heavy items such as detergent bottles, need to be separated.
For many years, the METAWATER Group has been developing equipment that improves
efficiency and accuracy in manual sorting work by utilizing differences in specific gravity inorder to improve the recycling rate of plastics.
Since the risk of explosions or fires caused by contamination of items such as spray cans andlithium batteries is increasing at crushing and sorting facilities, we are also contributing tofacility safety through the development of a system that prevents the spread of fires (Patent
No. 6148910 obtained June 2017), detecting and extinguishing them quickly in the event of an
accident. As of FY2020, approximately 300 of our domestic waste recycling systems have beendelivered.

<Delivery results> Treated capacity (cumulative)(t/5H)

800
700
600
500
400
300
200
100
0

2016

37

2017

2018

2019

2020 (Fiscal year)

Our aim

Our path to growth

Our sustainability

Data section

Activities for reducing environmental burdens
Promoting energy-saving measures

Initiatives regarding industrial waste

METAWATER has set a goal of “a 1% reduction compared to the previous year” with regard to office power
consumption and is actively implementing office lighting reduction activities, etc. In particular, the Head Officeand Western Japan Office have adopted “ABW (Activity-Based Working)”* to ensure efficient operations,thus contributing to power savings. In addition, we are implementing various initiatives to reduce electricity
consumption, such as encouraging employees to leave work on time in conjunction with work style reforms(introduction of telecommuting, four-day workweek, etc.) and turning off PC monitors when employees step awayfrom their desk in conjunction with information security measures. As a result, our electricity usage in FY2020
decreased by 2.0% compared to the previous year, and greenhouse gas emissions were also reduced by 9.3%.

Although the amount of industrial waste generated by our business activities (office and domestic constructionwork) varies each fiscal year depending on the type of construction work and the number of projects undertaken,
a certain amount of waste is generated due to the nature of the business. To fulfill our responsibilities as a
producer of waste, we are strengthening our management of industrial waste processing through ongoingdepartmental education, working to ensure that industrial waste is properly disposed of.
In addition, in order to promote the reuse of the industrial waste that has been created, we outsource thedisposal to industrial waste treatment companies that have recycling facilities. The recycling rate of theindustrial waste that we primarily create, such as debris, sludge, and mixed waste, is 94.2%.

＊ABW(Activity Based Working): o rk styles that enable workers to freely choose the time and place they work according to job contents

Power usage (office)Changes in industrial waste emissions (by type <within Japan>)■ Power usage(1,000 kWh)

4,000

3,787

3,644

3,582

2,242

3,393

● CO2 conversion(t CO2)

18,314
2,100■ Scrap glass, etc.

■ Wood scrap■ Other

17,333
13,513Emissions

1,909■ Mixed waste, etc.

■ Waste plastics

15,000CO2 conversion

Power usage

1,900

2,000

■ Sludge■ Metal scrap

20,000

3,326

3,000

■ Rubble

(t)

2,300

11,797
9,851

10,000

1,848
1,000

1,716

2017

2018

2019

5,000

1,500

0

1,556

0
2016

1,700

2020 (Fiscal year)

2016

2017

2018

2019

2020

(Fiscal year)

Promoting paperless work environment and purchasing eco-friendly items

Promoting the adoption of electronic manifests

Since FY2013, METAWATER has abolished the paper-based distribution of meeting materials at executive
meetings, instead shifting to the use of tablets to view materials. This meeting format has already been adopted
by other general meetings, and the entire company is promoting paperless meetings. Additionally, with regard
to office supplies, we specified 12 items for green purchasing, and successfully increased the rate of green
purchasing of those items to 94%. Nearly 100% of the paper we use internally is also certified by the Forest
Stewardship Council.

By selecting companies that support electronic manifests, we are, as a producer of waste, making the status ofindustrial waste processing visible, and continually strengthening monitoring through an advance application for
the use of a paper-based manifest. Depending on local conditions, in some cases we had to use a company only
handling paper manifests. However, in FY2020, the adoption rate was 98.9%, a 1.6% increase from the previous
year (nationwide adoption rate of electronic manifests: 65%). We will continue working to increase the adoption
rate of electronic manifests while paying attention to local conditions.

38

Aiming to become the best company at which to work
“Work style reform” promoted by
the METAWATER Group

Continuous promotion of “work style reform”
key to becoming the No. 1 company to work for

Aiming to be the No. 1 company to work for, the METAWATER Group’s “work stylereform” is an initiative that enables both the company and individuals to grow while
responding to changes in social values and diversifying work styles. The METAWATER
Group is developing a variety of work environments in order to enable a variety ofwork styles, as we move away from the traditional custom of working in the sameplace at the same time.

As a result of our efforts to date, our employees' working attitudes and work styles
have changed greatly, including the way they approach their work, communication,
meeting styles, and how they use their time.
The spread of COVID-19 has dramatically changed the working environment in society
at large, but the basic policy of our company's work style reform remains unchanged.
In fact, we believe that this situation has led us to move in the direction targeted by
our work style reforms at a faster pace than expected.
Even after COVID-19 recedes, we will not revert to old work styles, but will further
accelerate this initiative in order to achieve a variety of work styles.

39

Our aim

Our path to growth

Work style reform isthe cornerstone ofcorporate competitivenessOur sustainability

As a water and environmental infrastructure company, it is our belief that work style reform is indispensable for the sustainable growth of theGroup, as we position human resources as the key to corporate competitiveness. In order to become a company full of active, diverse humanresources, we are creating an environment and culture that enables more diverse work, and where each employee can find what work stylereforms work best for them. In recognizing these various work styles, we are also working to reform awareness of mutual respect.

Reforming work styles and creating opportunities fora diverse range of human resources

Establishment of teleworking
The METAWATER Group introduced a “teleworking system” in 2019. Since then, we have been developing theinternal infrastructure for remote work, such as an online conferencing system and cloud computing, and distributing
mobile tools to facilitate smooth remote access to the corporate network. As a result, almost all employees working
at Head Office, sales offices, business sites, and other offices can use teleworking. This initiative has generated
results, including telework utilization rates that exceed 70% in some divisions, as of June 2021.

The METAWATER Group has promoted a variety of measures to improve the working environment, including the“introduction of a telework system,” “establishment of a satellite office,” “introduction of four-day workweeks,”“revised office layouts based on ABW methods,” and “reduction prescribed working hours by 30 minutes,”
as concrete measures to reform the way people work. Through these measures, the METAWATER Group isfostering a corporate culture that recognizes the increasing diversity of work styles. As a next step, in order toactually achieve the idea of “work styles not tied to any location” from the viewpoint of diversifying where our
employees work, we began “enhancing our satellite offices in the Greater Tokyo Area” and “ending assignments
away from family” in FY2020.

NagoyaIslandOsaka
IslandData section

Tachikawa
IslandHino
IslandEnding assignments away from family
The METAWATER Group has strongly promoted the use of teleworking as we aim to promote work styles thatare not restricted by time and place, and from the perspective of preventing the spread of COVID-19. At thesame time, we ended assignments away from the family, mainly among senior employees. As a result, by 2020,
there were 130 people on assignments away from their families, compared with 300 in 2017. Additionally, in
response to changes in people’s sense of values toward work, such as the increasing popularity of the idea of“work-life balance,” the METAWATER Group has been working to create a workplace environment where people
can continue to work energetically while also spending more time with their families. As such, as of May 2021,
we decreased the number of employees on assignments away from their families even further, to 100 people.
Ultimately, we aim to have “zero employees on assignments away from their families,” and will continue tophase out assignments away from employees’ families.

SendaiIslandNumber of employees on assignments away from family

SaitamaIsland(people)350
300

Funabashi
IslandKobe
Island

300

250
200

Yokohama
IslandArao
IslandChita
IslandManseibashi
Island

150

130

100

Nakatsugawa
Island

100

50
0

2017

2020

2021
(As of May)

40

(Year)

Social

Initiatives for supporting

individual
achievement

People are the greatest asset of the METAWATER Group, and so the development of their skills is positioned as one of our most important management
themes. This is because they are the greatest source of management resources and corporate value. In accordance with the HR philosophy of "supporting
personnel who desire to develop themselves, providing them with opportunities to develop competency", we are creating a culture of self-learning,building an environment that respects employee individuality and allows them to effectively develop their abilities and potential autonomously.

Ability development system diagram
By rank
Officers

Nomination Optional(2 to 3 years withthe company)

New
employees

Follow-up
training
New employee
training

Various courses based on specialty

Junior employees

Implementation at each workplace /dispatch to external seminars

Mid- to
BP/SP Promotional
senior- leveltraining

Individual WGs ofAbility Development Committee

Manager training
Promotional training

Internal/external group training /correspondence course

General General Manager
training
Managers
Managers

Annual training expenses per METAWATER Group employee areapproximately 60,000 yen, which is higher than the average among
listed companies. We also offer multiple training programs for a wide
range of employees, from new employees to managers. We will continue
to provide training programs that contribute to the improvement of
employees' abilities while further enhancing employee education andtraining expenses.

Specialized
Workplace By specialty
by job type

Officer training

Elective training

A variety of training programs are held withthe aim of identifying roles and developing
skills in accordance with employees' growthstages.
In addition to training by rank and nomination,
we support the growth of each employee
through elective training focused around theidea of autonomous and voluntary learning.

Enhancement of employee education and training expenses

Approx.

60,000 yen

Follow-up training for mid-career employees
To ensure that mid-career employees
firmly take root, we help them confirm andunderstand workplace conditions (individual
counseling) and conduct compliance-related
education necessary for our company
employees (internal control, human rights
awareness, information security, etc.).
Individual counseling helps with mental carefor mid-career employees, who can be prone
to stress due to environmental changes.

Encouraging employees to participate in a wide range of training programs
METAWATER provides group training andonline training, and is working to create
an environment where employees actively
participate in training, including providing awide range of training programs.
For example, our “elective training” covers
over 200 programs that employees can freely
choose from and participate in. In FY2020,
a total of approximately 960 employees
participated across all training programs.

Budget for training
expenses per employee

Number of employees receiving elective training(people)

1,000
950
900

Example follow-up training curriculum for mid-career employees
Content

Orientation

Individuals

Breaking the ice

Secretariat

Mental health courses and individual counselingCounselor

Outline of employee invention regulations

Intellectual Property
Department

CSR Course I (Internal Control, Social Contribution, ESG)CSR Promotion
Department

Act, Unfair Competition Prevention Act, Anti-gang Act, Political Funds
Control Act)

800

Compliance Course I (Human Rights Awareness)

750

Compliance Course II (Act on the Protection of Personal
2016

2017

2018

2019

2020

Information, Information Security)(Year)

Basics of our accounting system

41

Secretariat

Self-introduction

CSR Course II (Antimonopoly Act, National Public Service Ethics
850

Instructor

Legal
Department
Personnel andLabor Department
IT Planning
Department
Financial
Planning OfficeOur aim

Our path to growth

To be a company where

everyone can work
enthusiastically

Our sustainability

We promote diversity based on the belief that the abilities of various employees with diverse personalities will lead to the growth of the Group.
In addition to expanding the system to accommodate a variety of human resources, we are implementing measures such as creating rewarding
environments where employees can improve their careers.

Promoting diverse work styles

Increasing the rate at which employees take maternity andchildcare leave and the rate of returning to work

The METAWATER Group is implementing a variety of measures to enable a variety of work styles.
In FY2020, we relaxed leave requirements, such as shortening prescribed working hours by 30 minutes (from 7
hours and 45 minutes to 7 hours and 15 minutes), granting annual paid leave by the hour, and raising the limit on
accumulated leave (from 35 days to 100 days). In addition, we were an industry pioneer in introducing a four-day
workweek. Along with the spread of COVID-19, we are also encouraging the active use of teleworking and satellite
offices, and the frequency of use by employees has increased dramatically.
In addition, we have established systems to improve employees life-work balance,* such as our childcare leavesystem and shortened working hours for employees raising children. Furthermore, we believe it is important tocreate an environment where all employees can work comfortably regardless of gender. As such, we are working to
improve work clothes for women at work sites and develop dressing rooms and washrooms exclusively for women.

One of the results of our efforts to create a pleasant workplace for our employees is that the rate of employees taking maternity
and childcare leave has been increasing year by year, and the rate of employees returning to work has reached 100%.
Many employees use the leave system multiple times, taking leave not once, but two or three times.
In addition, the number of male employees taking childcare is also increasing. By 2020, 17 male employees had taken childcare
leave, with an average of 41.5 days taken and a maximum of 336 days taken.

Creating opportunities for senior employees to play an active role
We will improve working conditions for employees
aged 60 and older in a phased process over a threeyear period beginning in FY2021, in order to create
more opportunities for senior human resources,
who will make up a significant proportion of ourworkforce in future. As one specific measure in thisarea, we have introduced a “super field supervisor
system” with the aim of securing excellent onsite representatives, in the face of a shortageof supervising engineers, an issue that even the
METAWATER Group is facing. We have also begun
an initiative to provide General Manager-levelworking conditions for persons tasked with on-site
supervision under this system.

* We use the unique term “life-work balance” based on the belief that “having a fulfilling life leads to better work performance.”

Supporting the active participation of female employees
The METAWATER Group has actively engaged in the
recruitment of women, whether they are new graduates or
mid-career employees. As a result, the percentage of womenamong new hires has more than doubled over the past five
years and is steadily increasing.
Furthermore, in March 2020, the company was certified as a
Grade 3 “Eruboshi company,” the highest rank, in the Ministerof Health, Labour and Welfare’s certification system, which is
given to companies undertaking outstanding efforts to promotewomen’s participation. We will continue our efforts to create
an environment in which female employees can play activeroles.

Data section

Review of the working conditions for those
aged 60 and older
Phased working condition improvement period
（%）

100

At the age of 60

Current standard

New standard

New standard

New standard

100%

100%

80

60%

60

70%

80%

40
20
0
Before reaching mandatory
retirement age

2020

2021

2022

2023 (Fiscal year)

Breakdown of increasingly diversified workforce“Eruboshi (Grade 3)”

The METAWATER Group’s ratio of employees
by region is shown on the right. The results
are due to an increase in the number ofoverseas group companies through M&A andother means.

42

Japan 87%

United States 8%3%Netherlands
1%
Switzerland
1%
Germany
0.1%
Vietnam
Cambodia 0.1%

SocialBecoming a company where employees with disabilities can play an active role
One of our efforts to promote diversity is to create an environment where people with disabilities
can play an active role. At the METAWATER Group, employees with disabilities are engaged in awide range of activities, taking up responsibility for various tasks in numerous departments. Every
morning, instructors (vocational life instructors for persons with disabilities) check the health ofeach member at the morning meeting and during exercise periods, and deciding upon their work
assignments for the day while taking their condition into consideration.
The recent work converting internal documents to PDFs has contributed to the promotion of
telecommuting, one of our work style reforms. Positive feedback results in expanded requests forwork and more opportunities for active participation in the company.

Initiatives forpromotingbetter healthCommon internal work
Creating business cards for employees; sorting, collecting, and distributinginternal mail; preparing meeting and training rooms; lending out projectors
and other equipment; managing and sending out company-wide catalogs; etc.
Department work
Converting internal documents to PDFs; organizing and filing expense slips;
aggregating and digitizing handwritten questionnaires; creating various
materials; sending out purchase orders; etc.

Ratio of employees with disabilities
(%)

2.6
2.5

2.36

2.4
2.3
2.2

2.22

2.41

2.48

2.30

2.1
2.0

2016

2017

2018

2019

2020 (Fiscal year)

We believe that people are our greatest asset, and as such the METAWATER Group has established various support systems for the mental
and physical health of employees and their families. It is our belief that promoting the good health of each employee leads to improvements incorporate vitality, and so we will continue promoting health management.

Health management system

Improving health awareness

The METAWATER Group has established health management centers at our head office, as well as
in Nagoya, Osaka, and other offices. This allows professional physicians, psychological counselors,and dedicated health management staff to follow up with employees promptly and whenever it isneeded. We conduct individual interviews and give health-related guidance throughout the year so that
employees themselves can maintain and improve their health.

With the declining birthrate, aging population, and a shortage of labor, it will
become more common in society to continue working regardless of age if there isan opportunity to play an active role, and health management from an early age
will become more important than ever. The METAWATER Group carries out “healthcare activities” and gives “health advice” with the aim of ensuring that employees
can continue to work healthily and enthusiastically. In “health-care activities,”
we planned and implemented various activities tailored to each employee's job
characteristics and situation, such as holding walking events in which individuals
can participate, providing effective training information in a teleworking
environment, and providing health education by age and job type.
In addition, in normal years, “health advice” is provided by health management
traveling around the country and talking one-on-one with employees. However,taking into consideration the spread of COVID-19 and associated behavioral
restrictions, health management staff actively utilized remote consultations in
FY2020 to promote health management and prevent physical and mental healthproblems. As a result, 600 employees used this service, approximately four times
the number that use it in a normal year.

Mental health careIIn order to prevent mental health issues from arising, we have e-learning classes such as “line careeducation” for employees in management positions and “self-care education” for all employees.
Our work-style reforms also include working to reduce commuting stress and improve “life-workbalance”*. We will continue to promote various mental health care initiatives in conjunction with ourwork-style reforms.
* We use the unique term “life-work balance” based on the belief that “having a fulfilling life leads to better work performance.”

43

Our aim

Our path to growth

Safety and hygiene
initiatives

Our sustainability

The METAWATER Group strives to create a workplace environment where employees and all related parties can work safely, based on thephilosophy, “No one will get injured or injure others.”

Promotion of safety at construction sites■

Site operation based on coordination between the METAWATER Group and subcontractors

At construction sites, a construction policy meeting and construction review meeting are held to thoroughly examine safety measuresand conduct risk assessment at the planning stage. In addition, when new workers enter the site, an awareness meeting is held,
where actual workers take steps to ensure complete awareness of such measures. On the day before work starts, a pre-work foremen
meeting is held, and on the day work starts, a morning meeting, lunch meeting, and danger prediction training are held. The work is
broken down into a series of procedures, and the execution of the plan is confirmed, thereby ensuring that sites are safe.

■

Average for all industries (FY2019 actual)

1.95

0.09

METAWATER (FY2020 actual)

1.18

0.01

Operation of licensing system

The METAWATER Group encourages the managers of subcontractors involved in construction to attend
lectures held by the METAWATER Group and issues licenses to those who complete the lectures. In
these courses, participants learn about the “local occupational health and safety guidelines,” as wellas the content and method of preparation of relevant documents, etc., at METAWATER. Furthermore,this license must be renewed every three years and thus contributes to creating a safe workplaceenvironment at sites by ensuring that participants always learn and practice the latest safety systems.

METAWATER construction site occurrence of industrial accidents
Frequency rate Severity rate

Evaluation and reconstruction of safety management systems by safety consultants

The METAWATER Group engages the services of external safety consultants. In addition to participating in site patrols and safety
training, by having external safety consultants participate in the evaluation and reconstruction of safety systems from a third-party
perspective, METAWATER is establishing and implementing cutting-edge safety systems as a facility management company.

The METAWATER Group is implementing a variety of initiatives with safety as the top priority.
■

Data section

Frequency rate: Represents the frequency of accidents(Number of deaths and injuries per million hours worked)
Severity rate: Represents the severity of accidents(Number of working days lost per million hours worked)

Number of “seminars for subcontractor
construction supervisors” in 2020

Held at five venues in Tokyo, Osaka, Nagoya, Sendai, and Fukuoka
54 participating companies, 147 participants, and 647 participants in total since 2018

*Ministry of Health, Labour and Welfare figures■

Promoting safe driving management of vehicles for commercial use
Awarded a “Silver Prize” as an excellent safe driving business entity from the Japan Safe Driving Center

Establishment and operation of “Local occupational health and safety guidelines”

In addition to related laws and regulations, etc., we have also established original “Local occupational healthand safety guidelines,” which fully incorporate the experience of the METAWATER Group. It is revised every year
as a key safety resource for the METAWATER Group, and is used at sites.
■■

Online participation in local safety management

From the viewpoint of preventing the spread of COVID-19, opportunities
to visit sites are decreasing. The METAWATER Group promotes online
inspections and conferences, and has put in place a system that enables
business sites to participate in various on-site meetings, training sessions,etc. We have also begun providing video training on “Field health and safety
guidelines.” As a result of these efforts, we have achieved even greater
results than before, even amid the continued spread of COVID-19.

Operation of in-house driver’s license system

The METAWATER Group has established its own in-house driver’s license system forcommercial vehicle drivers. This certification is based on the results of safe driving. In
FY2020, 1,200 employees obtained the certification, which has helped promote safe driving.
■

Implementation of special training from the driver's perspective

At the METAWATER Group, detailed driving training is provided for driving managers(managers of divisions with drivers) as a form of specialized training. Furthermore, based on
the content of this education, a system has been established in which the driving manager
gives guidance to each driver in accordance with the actual conditions of various driving
environments, such as day and night, urban areas, mountain roads, and highways.

Local occupational health andsafety guidelines (video version)

44

Awarded a “Silver Prize”
from the Japan Safe Driving
Center for our excellent safe
driving record

SocialQuality initiatives
ー Quality targets ー
The METAWATER Group’s basic quality policy is to ensure the optimallevel of quality for customer satisfaction in all of its products andservices, and we aim to continue to provide not only customer satisfaction
but also inspiration.

Zero serious accidents

Continual quality improvement

In order to achieve these quality targets, it is important that we prevent quality accidents in advance. To this end, the
METAWATER Group is promoting “skill improvement activities to prevent equipment accidents.”

Prevention of equipment accidents through “skill
improvement activities to prevent equipment accidents”

Poster to raise internal awareness of
the “Campaign to look closely at work sites”

In order to prevent and even eliminate serious accidents, the METAWATER Group
implements (recurrence prevention measures), learning from past accidents at eachstage of its business processes, and strives for continuous improvement.

We aim to enhance our on-site capabilities by ensuring that workers check theseposters each time they work.

■

From the department in charge

Operation processes for plant construction
Basic design

Detailed design

Procurement

Production

Inspection

In addition to safety rules, the fostering of “people who think
before acting” through voluntary activities is essential for the
METAWATER Group as we monitors water and environmental
infrastructure over the long term. It is important for each andevery employee responsible for safety to take the initiative inmaking steady efforts to reduce risks and carry out field work
based on a common understanding.
We will continue our efforts to understand the feasibility of thework, pause for a moment if there is any doubt, share ideas,
and observe facilities with a safety-first approach based on our
technical capabilities and flexible thinking.

Field adjustment

Implementation of recurrence prevention measures

In the service department, we implement “skill improvement activities to prevent equipment accidents.” These are voluntary bottom-up
activities carried out by site staff. This helps to ensure that workers absorb practical skills based on a sense of conditions at sites that is
unique to these voluntary activities.
Specifically, we are implementing unique activities such as “Campaign to look closely at work sites,” “Sharing of failures and near-missincidents,” “Video case studies,” and “Plant hazard prediction activities.”*
All service personnel across a broad range of ages, from young employees to veterans, participate in these activities to share skills acrossdivisions and boundaries within the METAWATER Group. By working as a team with members from different sites that we do not normally
have contact with, we can not only understand the necessity of preventing equipment accidents, but also have the opportunity to becomeaware of the skills and knowledge that we lack, for example by discovering that the perception of risks and countermeasures is different.
As a result, there has been a decrease in the number of equipment accidents in the departments concerned.
Since 2020, we have continued our activities while making effective use of online meetings, etc. We will continue these skill improvement
activities as we aim to maintain and improve quality in future.

Poster to raise internal awareness of
the “Campaign to look closely at work sites”* Plant hazard prediction activities: Activities to learn about past accidents and “near-miss incidents” in the form of questions and answers
about “Where in the plant is the risk of equipment accidents and how should we respond?”45

Our aim

Our path to growth

Our sustainability

Data section

CSR procurement
The METAWATER Group promotes procurement operations based on three basic policies: promoting transparent
procurement, strengthening partner relationships with suppliers, and promoting CSR procurement.

Promotion of transparent procurement– 98 new suppliers

Enhancing paperless
operations through EDI*

The "Inquiries about purchasing and dealings" form isposted on our corporate website, and we provide fair andequitable entry opportunities to all business partners.
We launch new transactions with around 100 companies
every year. The number of new corporate business
partners in FY2020 was 98.

The METAWATER Group promotes the implementationof EDI. In addition to improving the accuracy andefficiency of procurement operations, we are promoting
implementation of EDI with the understanding andcooperation of business partners to work on becoming
paperless, reducing our impact on the environment.
Introduction of EDI began with development-related
and in-house equipment orders, and as of FY2020
approximately 53% of orders were through EDI.
This made the paper used traditionally in order forms,
invoices, etc., unnecessary, leading to a reduction of
approximately 30,000 sheets. Like us, our suppliers havealso eliminated invoices and envelopes, leading to apaperless environment.
We will continue expanding the scope of transactions
and applications for EDI, aiming to further improve
operating efficiency and reduce our environmental
burden.

Business negotiations*EDI: Electronic Data Interchange, a framework supporting electronic business transactions

46

Promotion of green procurement
The METAWATER Group is promoting the procurement of ecofriendly office supplies (products with socially recognized ecofriendly marks such as the Eco Mark and Green Mark).
Efforts were strengthened for 12 frequently used items inparticular, including copy paper, business cards, and highlighters,
which were designated as green procurement promotion items.
In FY2020, the green procurement rate for these items reachedapproximately 94%. We will continue efforts to improve thegreen procurement rate throughout the entire company.

Legal compliance
We actively promote participation in social insurance forconstruction work, etc. Enrollment in insurance, etc., isthoroughly enforced by ensuring notifications are sent to
suppliers, providing instructions for clarifying statutory welfare
expenses in estimates, exchanging opinions with individual
visits, and more.and more.

Thorough enforcement of internal education
We hold study sessions on the “Act against Delay in Payment
of Subcontract Proceeds, Etc. to Subcontractors” for all
employees in charge of purchasing, ensuring thoroughcompliance and promoting understanding.
We also offer e-learning courses for other employees tostrengthen compliance throughout the company.

SocialSocial contribution
ー METAWATER's policy on social contribution activities ー
The METAWATER Group handles "water", a natural resource indispensable for life. As a waterand environmental infrastructure company, protecting the water cycle is our mission. We
are promoting social contribution activities so that people from all walks of life can gain anunderstanding of the importance of water and the environment.
We aim to contribute to society and the global environment through both business activities
related to “water” and the “environment” and our activities to contribute to society.

The METAWATER Group's social contribution activities contribute to the realization of asustainable society by solving social issues through water and the environment.
METAWATER's guidelines on social contribution activities● We will improve water-related environmental improvement activities and water and environmental awareness activities● We will value cooperation and collaborations with various stakeholders.
● We will foster awareness for voluntary employee participation.

Education / Public education

Contribution to local community

We are making use of technologies, knowledge, and other qualities related to“water” and the “environment” that we have cultivated through our businesses
to provide children, who will lead the next generation, with opportunities to learn
about environmental conservation, etc. In FY2020, in order to prevent the spreadof COVID-19, original video teaching materials were introduced, and school visitswere conducted after thorough infection control measures were taken.

■■

Held “Mission Uchimizu 2020” online■

The annual “Mission Uchimizu” has previously been held in front of the Head
Office building in Chiyoda-ku, Tokyo, along with local residents. In 2020, theevent was held online to prevent the spread of COVID-19. Each participant
performed uchimizu (water sprinkling), and photos of the event were sharedon the METAWATER website. As in other years, we urged participants to use
recycled water for uchimizu, and people were in good spirits as they took part.

Original video teaching material
Created “Mae-chan and Tah-kun Classroom”
・Water recirculation lesson
・Ceramic filtration experiment lesson

Conducted company-wide blood
donation activities

Every year, the METAWATER Group partners with
the Japanese Red Cross Society to conduct blood
donation activities at Head Office and each businesssite. We are also expanding these activities,
including encouraging all employees to donate
blood at the nearest blood donation center or blood
donation bus.

・Sand filtration experiment lesson
・Water treatment plant lesson

Uchimizu opening ceremony(in front of Head Office)Original video “water
treatment plant lesson”* “Mae-chan and Tah-kun Classroom”
URL https://www.metawater.co.jp/movie_class/Showing the “sand filtration experimentlesson” and “ceramic filtration experimentlesson” videos at a school visit to anelementary school

Participation by families
and other individuals

Poster announcing“Mission Uchimizu”

47

Blood donation siteat Head Office

Poster calling for company-wide
blood donation

Our aim

Our path to growth

Our sustainability

Data section

SDG initiatives
ー METAWATER Group’s top-priority materiality ーAs an international goal for a sustainable and better world by 2030, the METAWATER Group aims to contribute to the
Sustainable Development Goals (SDGs) adopted at the United Nations (UN) summit in September 2015. The SDGs consist of
17 Goals and 169 Targets (criteria for success) to achieve those goals. The METAWATER Group has positioned Goal 6 “Clean
Water and Sanitation,” Goal 11 “Sustainable Cities and Communities,” and Goal 17 “Partnerships for the Goals” as its threemost important challenges and is working on a variety of related measures.

Launch of SAT

SAT measures to increase internal awarenessThe “SDGs Ambassador Team (SAT)” was formed byyoung employees for the purpose of planning, drafting,and implementing various measures related to thepromotion of SDGs, increasing awareness of the SDGs
internally, and disseminating relevant information bothinternally and externally. The activities of the SAT areplanned out for the next three years. In the first year,
the SAT plans to increase awareness of the SDGs within
the company. In the second year, the SAT will further
increase awareness of the SDGs within the company
while also preparing for external public relations
activities. In the third year, the SAT plans to implement
various internal and external measures as a collection of
its achievements. Through these three years of activities,
we will raise the recognition of companies that are
actively working on SDGs outside the company, andwill make this a pillar that establishes our position as aleading company in the SDGs.

Soon after the SAT was launched, we held study sessions based on
workshops held by the media at schools and other locations. In addition toregular meetings held once a month, the SAT also held presentations on
SDGs within members’ respective departments from November to January,
and from February to March, we created posters to raise awareness of
SDGs within the company and created a special website for the SDGs.
Posters have been put up in noticeable locations at METAWATER Group
offices, sales offices, and worksites, in an effort to increase awarenessthroughout the company. The special website for the SDGs provides
an overview of the SDGs, as well as information on SAT activities, the

METAWATER Group’s efforts, and other information. In March 2021, theSAT participated in an in-house round-table discussion on CSR and theSDGs, discussing the current situation in the METAWATER Group, future
initiatives, and the future activities of the SAT. We also conducted a quizand survey on SDGs in order to identify the degree to which awarenessof the SDGs has spread within the company as a result of past activities.
In future, the SAT will continue to hold regular monthly meetings, as wellas acting as ambassadors to offer presentations on the SDGs, events,
etc., with the aim of further promoting awareness of the SDGs within thecompany.

SDGs special website

Posters to raise awareness of SDGs within the company displayed at each office,sales office, and worksite

48

Toward ‘27, 6th round-tablediscussion: “What is CSR?”

Governance

The METAWATER Group is strengthening the entire group’s risk management structure including information security. In addition, we are committed to promoting Business Continuation Management(BCM) as an entire group to continue business operations even in the event of various unforeseen situations.

Corporate governance
Basic concept of corporate governanceApproaches to improve corporate governanceSo that we can grow sustainably with society, we arecommitted to improving our internal control based on
our corporate mission. We are aiming to be a group
trusted by society through our continuous contribution
to it while meeting the expectations of our stakeholders
including customers, local communities, shareholders
and investors. To realize this aim, we are engaged in
improving the following aspects of corporate governance.

1

Response to Corporate Governance CodeMETAWATER was listed on the First Section of the Tokyo Stock Exchange
Market in December 2014. As the CG Code was established in June 1,
2015, the group implemented the measures stated on the right. We arecommitted to moving forward with corporate governance also in future.
November 2015●●

2. Promotion of compliance and reinforcement of internal control
functions are realized to establish an organization that cansustainably enhance corporate value.
3. We disclose information in a fair, objective and appropriatemanner and at an appropriate timing. Further, we
communicate proactively with our stakeholders.

June 2016●

Added one independent director (outside director)O ne independent director (outside director) was
added
● H
 eld a meeting by independent outside director●

November 2018
November 2018

●

●

●

April 2021
As a basic policy of the METAWATER Group based on the rules of the “Corporate Governance Code”(hereinafter “CG Code”) stipulated by the Tokyo Stock Exchange, the Group established the “Basic
Policy on Corporate Governance” (hereinafter “CG Basic Policy”), and disclosed the policy on thecorporate website.
https://www.metawater.co.jp/csr/responsibility/pdf/governance.pdf

D isclosed evaluation on effectiveness of the Boardof Directors*in compliance with CG Code (Rule 4-11-3)

June 2017●

June 2021

Composition of directors and auditors

Ratio of independent outside officers
Female

75 %

42 %

14 %

Auditors

Total ofDirectors andAuditors

3 out of 7 directors are
independent outside directors(1 female director)

3 out of 4 auditors are
independent outside auditors

6 out of 11 officers are
independent officers

The METAWATER Group has established criteria for the independenceof outside officers in the CG Basic Policy, and has designated threeoutside directors and three outside auditors who meet these standards
as independent officers and submitted notification of their appointment to
the Tokyo Stock Exchange.

“Basic Policy on Corporate Governance” revisedin accordance with partial revision of CG codeE stablished Nomination and Renumeration
Advisory CommitteeA mended the “Policies Concerning Decisions on
the Content of Compensation, etc. for Individual
Directors”
Introduced share remuneration plan withrestriction on transfer for directors and executive
officers* Complies with CG Code (Supplementary Principle 4.2.1)

All principles of CG Code revised in June 2018 are implemented.

49

54 %

Directors

E stablished “Basic Policy on Corporate
Governance”*in compliance with CG Code (Rule 4-8)

1. The Board of Directors and the Board of Auditors are arranged
and independent directors are designated to reinforce theorganization for supervising our business with the purpose ofcreating corporate management with excellent reliability andtransparency.

2

48th ordinary general meeting of shareholders

Our aim

Our path to growth

Our sustainability

Data section

Corporate governance organization
METAWATER Group opts for an arrangement of a Board of Auditors as an organization
design based on the Companies Act. The Board of Directors makes important decisions
related to management and supervises business execution. At the same time, auditors
and the Board of Auditors independent from the Board of Directors audit the status
of directors' execution of their duties and the like. For the purpose of strengthening
independence, objectivity, and accountability for the function of the Board of Directors
related to the nomination of candidates for directors and auditors, determining
renumeration for executive officers and directors, etc., a Nomination and Renumeration
Advisory Committee has been established under the Board of Directors. Furthermore,
METAWATER Group has introduced the Executive Officers System to acceleratemanagement-related decision-making, reinforce functions to monitor businessexecution, and clarify responsibility. Additionally, a CSR Committee has been arranged
as an organization to determine the important activities, systems, organizations, andthe like of the Group to ensure compliance with regulatory requirements and corporate
ethics. The position and role of each function are mentioned below.
Board of Directors Meeting
The Board of Directors meetings, held on a monthly basis and also as needed,
function to supervise management and decision-making. The Board of
Directors is comprised of seven members including three outside directors. The
status of business execution by directors, including the representative director,
is monitored by auditors, where, as a basic rule, four auditors attend the Boardof Directors meeting and express their opinions whenever necessary.
Board of Auditors Meeting
The Board of Auditors meetings are held on a monthly basis and function
to monitor management. The Board of Auditors is comprised of four
members including four outside auditors. Auditors are selected from thosewith expertise and experience regarding our business as well as in legal
and financial affairs. The Board of Auditors determines the audit policies
and scope of work for each auditor, as well as specific action plans andschedules, and monitors the status of business execution by directors.
Nomination and Renumeration Advisory Committee Meeting
The Nomination and Renumeration Advisory Committee was establishedunder the Board of Directors as a voluntary advisory body that functions

General meeting of shareholders Meeting
Report/Submission

Appointment/
Dismissal/Approval

Board of Directors Meeting
Advice/Proposals

Report/Consultation
Submission

Nomination and
Renumeration
Advisory Committee

Report/submission
Audit
Supervision/Appointment/
Removal/Approval

President andRepresentative Director
Report/Proposal

Appointment/
Dismissal/Approval

Board of Auditors Meeting

Report/Proposal

Accounting Auditor
Cooperation

ReportAuditing Office

ApprovalManagement Meeting
ReportAppointment/
Dismissal

Internal audit
Approval

CSR Committee
Business divisions/Group companies

as both a nomination committee and renumeration committee. Thesemeetings are held as necessary, deliberating on matters related tothe appointment and dismissal of directors, auditors, and executive
officers, as well as renumeration for directors, executive officers, etc., in
consultation with the Board of Directors, and also providing advice andproposals to the Board of Directors. The committee is comprised of sevenmembers total, including the Director and President, three independent
outside directors, and three independent outside auditors, with anindependent outside director selected as the chairperson.
Executive Officers System
The Executive Officers System has been introduced to acceleratemanagement-related decision-making, reinforce functions to monitor
business execution, and clarify responsibility. The executive officers arecomprised of fifteen members including four directors and executive officers.
Their term of office is one year and their appointment, reappointment, anddismissal are determined at Board of Directors meetings.

50

Management Meeting
The Management meetings consist of fifteen executive officers and, asa general rule, are held twice a month. In these meetings, reports are
given and discussions are held regarding important management-related
matters stipulated in our official competence rules. Standing auditors
attend the meeting and express opinions as necessary, monitoring thestatus of business execution by the President & Chief Executive Officer aswell as those executive officers below him.
CSR Committee Meeting
CSR Committee meetings are held twice a year, with a function of promoting
compliance and reinforcing internal control. The CSR Committee has sevensubordinate working groups under it. The committee is comprised of fifteen
members, including the chairperson and fourteen committee members.
Details of the CSR Committee's activities are reported to the Management
Meeting and Board of Directors Meeting as needed.

GovernanceCorporate governanceOutside Director’s roles
1 Provide‌
advice to promote the Company’s sustainable growth and improve medium- and long-term corporate value based on own knowledge and insights, and supervise the execution of business by the Company
2 ‌As a position that is independent from the management, receive opinions from stakeholders including minority shareholders, and appropriately reflect those opinions at Board of Directors Meetings
3 ‌Appropriately manage risks including conflicts of interest arising from the execution of business by leveraging internal and external knowledge and insights, as well as experience

Reasons for selection by individual
Name

Kaoru Aizawa

OutsideDirector

Fumiko Kosao

Tsuneo Tanai

Kimihiko Uemura
OutsideAuditorKazuo Takimoto
Taku Fukui

Attendance (attendance rate)
Board of Directors
MeetingReasons for selection

Board of Auditors
Meeting–

Mr. Aizawa held important positions, including Representative Director of Nitto Denko Corporation, and has a wealth of management experience gained through his position as an outside
officer of another company, as well as balanced and broad perspectives of industries related to the company. It is expected that he will leverage his experience and extensive knowledge
to provide advice and recommendations, mainly on the company's management plans and corporate governance, based on his own knowledge. Based on the above, the company has
judged that he has the required skill set to supervise the execution of the business of the company. Accordingly, we appointed him as an outside director of the company.

–

Ms. Kosao is well versed in corporate accounting with expertise in the area of taxation and has broad perspectives gained through her position as an outside officer of another company.
Although she has no direct management experience in a company, except as an outside officer, it is expected that she will leverage her experience and expertise to provide advice andrecommendations, mainly in relation to the company's finance, accounting, and taxation, based on her own knowledge. Based on the above, the company has judged that she has therequired skill set to supervise the execution of the business of the company. Accordingly, we appointed her as an outside director of the company.

––

Mr. Tanai held important positions, including Director of Honda Motor Co., Ltd. and Keihin Corporation, and has a wealth of management experience gained through his position as an
outside officer of another company, as well as balanced and broad perspectives of industries related to the company. It is expected that he will leverage his experience and extensive
knowledge to provide advice and recommendations, mainly on the company's management plans and overseas strategy, based on his own knowledge. Based on the above, the company
has judged that he has the required skill set to supervise the execution of the business of the company. Accordingly, we appointed him as an outside director of the company.

20/ 2013 / 13(100 %)(100 %)

20/ 2013 / 13(100 %)(100 %)––

19 / 20
meetings(95 %)

20/ 20meetings(100 %)

meetings

meetings

meetings

meetings

As a lawyer, Mr. Uemura is well versed in corporate legal affairs including the Companies Act, and has a wealth of experience gained through his position as an outside officer of anothercorporation, as well as balanced and broad perspectives of industries related to the company. We consider him to have the required skill set to supervise the execution of the business ofthe company by leveraging his experience and high level of independence, and accordingly appointed him as an outside auditor of the company.
As a certified public accountant and tax accountant, Mr. Takimoto is well versed in corporate accounting and taxation, and has a wealth of experience gained through his position as an outside officerof another corporation, as well as balanced and broad perspectives of industries related to the company. We consider him to have the required skill set to supervise the execution of the business ofthe company by leveraging his wealth of experience related to finance and accounting and high level of independence, and accordingly appointed him as an outside auditor of the company.
As a lawyer, Mr. Fukui is well versed in corporate legal affairs including the Companies Act, and has a wealth of experience gained through his position as an outside officer of another corporation, as well asbalanced and broad perspectives of industries related to the company. Although he has no direct management experience in a company, except as an outside officer, we consider him to have the required skill
set to supervise the execution of the business of the company by leveraging his experience and high level of independence, and accordingly appointed him as an outside auditor of the company.

The above six persons have been designated as independent officers based on the judgment that there is no risk of conflicts of interest with general shareholders since they satisfy
the "Criteria for Independence of Outside Officers" stipulated by the company, as well as the requirements for Independent Officers stipulated by the Tokyo Stock Exchange.
* Messrs. Tsuneo Tanai and Taku Fukui were newly elected at the 48th ordinary general meeting of shareholders held on June 22, 2021.

51

Our aim

Our path to growth

Our sustainability

Data section

Interview with Independent officer

To improve management transparency andincrease the trust of stakeholders.
Outside Auditor Kimihiko Uemura—— What are your overall impressions regarding themanagement of the Board of Directors, state of discussions, etc.?
Both the Board of Directors and the Board of Auditors makeconcerted efforts to communicate internal information to outside
officers. I can clearly feel that management is open and willing tolisten to the opinions of outside officers and utilize those views whenmanaging the company. In this context, free and frank discussions
take place, and I feel I can say that both boards are truly open. I
think one of the company’s strengths is its highly open management
where there are no reservations among employees, in a good way.
In the past year or so, we were forced to hold meetings remotely asa result of the COVID-19 pandemic, but I don't think there has been
any change to the operational situation for the two boards.
—— What are your thoughts on the role expected ofyou as an outside auditor?
I am aware that, as is often the case, outside auditors with expertiseand objective independence are expected to provide advice andmonitoring related to the management of the company and its
business operations to the management team of the company
from an objective point of view, through audits of the execution ofduties by directors from a neutral and third-party standpoint. I amaware that I must execute the roles expected of an outside auditor

with a qualification as an attorney, while exchanging information
with standing auditors in the company, and I intend to do so in an
appropriate manner. To avoid misunderstanding, I would also like topoint out that we, as auditors, must have the courage to support an
acceptable level of risk-taking.
—— How do you evaluate the METAWATER Group’s
governance from the perspective of an outside auditor?
The enhancement and strengthening of corporate governancesystems may have some elements that contradict the need to
improve management efficiency. However, they are the foundation
and basis for corporate our development as a company, so wecannot afford to neglect them. The governance systems that must
be prepared are, so to speak, constantly advancing, and if we arecareless, they may become obsolete.
I am aware that the METAWATER Group has established governancesystems that are sufficient and necessary. However, considering the
expansion of the scale of the company’s businesses and its further
expansion into overseas markets, we must constantly ask whether
this is sufficient and whether further improvements are necessary.
I would like to offer a small amount of advice and suggestions toimprove the transparency of the METAWATER Group’s management
and increase the trust of our stakeholders.

52—— What is necessary for the sustainable improvementof corporate value?
First, I think that the most important thing is to continue to maintainthe ambitious target of improving the METAWATER Group throughthe combined efforts of our senior management team and all officers
and employees working together in solidarity. The moment when
we think that this is enough and that we are satisfied is the moment
when growth will stop. A company is made by its people, and whenits people combine their abilities to achieve the same goal, I think 1+ 1 can become 3, 4, and even 5. In order to do so, it is essential that
we share the same mission.
In addition to future market trends, it is important to accurately grasp
the needs of society. It is now essential for the enhancement of ourcorporate value that we contribute to society and that our efforts arerecognized by society, including ESG initiatives, which are often seenin newspapers, magazines, and on the Internet, as well as measures
to deal with conduct risks, which have recently attracted attention.
The company’s business activities are indispensable to society, and I
intend for this to be a source of pride for me as I carry out my duties.
—— What are your future aspirations as outside auditor?
I intend to make sure that I fulfill the role expected of me as outside
auditor, as described, and exert every effort to further invigorate
and strengthen the functions of the Board of Auditors. In addition,
as a member of the METAWATER Group, I hope to contribute to thedevelopment of the company's businesses.

GovernanceManagement organization (As of end of June 2021)

OutsideOutside Director

Independent

Independent officer

Directors

Yasushi Nakamura

Kenji Yamaguchi

Akira Kato

Chairman and Representative Director

President and Representative Director

Assistance to the Chief Executive Officer
Executive General Manager, Corporate Strategy Planning Division

April 1981 Joined Fuji Electric Co., Ltd.
April 2008 Director at METAWATER
April 2014	Executive General Manager, Corporate Strategy Planning
Division at METAWATER
June 2015 Senior Executive Officer at METAWATER
June 2016 President and Representative Director at METAWATER
June 2020 Outside Director, NTT Data Intramart Corporation (current)
June 2021	Chairman and Representative Director at METAWATER (current)
Chairman and Executive Officer at METAWATER (current)

April 1987
April 2013

Joined NGK Insulators, Ltd.
Deputy Executive General Manager,
Business Strategy Division at METAWATER
April 2015 Executive General Manager, Business Strategy Division (current)
June 2015 Executive Officer at METAWATER (current)
June 2019 Director at METAWATER (current)
June 2021 President and Representative Director at METAWATER (current)
Vice President and Executive Officer at METAWATER (current)

March 1980 Joined NGK Insulators, Ltd.
June 2013 Director at METAWATER (current)
June 2015 Senior Executive Officer at METAWATER
June 2016 Executive General Manager,
Corporate Strategy Planning Division at METAWATER (current)
Chief of Export Management Office at METAWATER
April 2017 Senior Executive Officer at METAWATER
April 2019 Vice President and Executive Officer at METAWATER (current)

Noboru Okuda

Kaoru Aizawa

Fumiko Kosao

Executive General Manager, Plant Engineering Division

Independent Director of Nicca Chemical Co, Ltd.

April 1982
April 2013

April 1977
April 2003
June 2007
June 2010
June 2011

Joined Fuji Electric Co., Ltd.
Deputy Executive General Manager,
Plant Engineering Division at METAWATER
April 2014 Executive General Manager,
Service Solution Division at METAWATER
June 2015 Executive Officer at METAWATER
April 2016 Senior Executive Officer at METAWATER (current)
Executive General Manager, Plant Engineering Division (current)
June 2019 Director at METAWATER (current)

Tsuneo Tanai

OutsideIndependent

Joined Nitto Denko Corporation
Executive Officer at the company
Board Member & Executive Vice President at the company
Board Member & Senior Executive Vice President at the company
Representative Director & Senior Executive Vice President
at the company
September 2014 Advisor at NICCA CHEMICAL CO., LTD.
March 2016 Outside Director at the company (current)
June 2016 Outside Director for METAWATER (current)

Independent

Fellow at Honda Motor Co., Ltd.
Outside Director at IWASAKI ELECTRIC CO., LTD.
April 1981
June 2009
April 2011
June 2011
June 2016
June 2019
June 2021

OutsideJoined Honda Motor Co., Ltd.
Director at Honda Motor Co., Ltd.
Managing Officer and Director at Honda Motor Co., Ltd.
President & CEO and Representative Director at Keihin Corporation
Fellow at Honda Motor Co., Ltd. (current)
Outside Director at IWASAKI ELECTRIC CO., LTD. (current)
Outside Director at METAWATER (current)

53

OutsideIndependent

Licensed tax accountant, Kosao Fumiko Accountant OfficeOutside Director of CTI Engineering Co., Ltd.
Outside Director and Audit and Supervisory Committee Member at TOELL CO., LTD.
April 1973 Jointed the National Tax Agency
July 2014 Director, Nihonbashi Tax Office, Tokyo Regional Taxation Bureau
August 2015 Tax accountant, Fumiko Kosao Certified Tax Accountant Office (current)
June 2016 Outside Auditor for TOBISHIMA CORPORATIONMarch 2017 Outside Director for CTI Engineering Co., Ltd. (current)
June 2017 Outside Director for METAWATER (current)
July 2021	Outside Director and Audit and Supervisory Committee
Member at TOELL CO., LTD. (current)Our aim

Our path to growth

Our sustainability

Data section

Executive Officers
Chairman and Executive Officer

Auditors

Yasushi Nakamura Public Relations
President and Chief Executive Officer

Shigeru Hatsumata

Kimihiko Uemura

Audit and Supervisory Board Member

Partner of Midosuji Legal Profession Corporation

Vice President and Executive Officer

April 1982
April 2008

April 1987

Akira Kato

Joined Fuji Electric Co., Ltd.
Deputy Executive General Manager,
Business Development Division at METAWATER
April 2014 Deputy Executive General Manager, CSR Division at METAWATER
April 2015 Executive General Manager, CSR Promotion Office at METAWATER
June 2015 Executive Officer at METAWATER
June 2019 Audit and Supervisory Board Member at METAWATER (current)

OutsideIndependent

Registered as an attorney (Osaka Bar Association)
Joined Midosuji Law Firm
(currently Midosuji Legal Profession Corporation) (current)
June 2007 Outside Auditor for Fudo Tetra Corporation
June 2013 Outside Auditor at METAWATER (current)

Kenji Yamaguchi

Responsible for Business Execution

Assistant to Person Responsible for Business Execution / Executive General
Manager, Corporate Strategy Planning Division / Responsible for Corporate
Administration Department, Affiliates Coordination Department, and Legal
Department, Corporate Strategy Planning Division

Senior Executive Officer

Noboru Okuda

Executive General Manager, Plant Engineering Division / Responsible
for Product Center Responsible for Quality Assurance OfficeMasashi Sakai

Executive General Manager, Public Private Partnership Division

Executive Officer

Kazuo Takimoto

OutsideIndependent

Taku Fukui

OutsideIndependent

CPA and Tax Accountant of Tokyo Kudan Accounting Office

Managing Partner at Kashiwagi Sogo Law Offices

November 1978 Joined Asahi Accounting Co., Ltd.
October 1988 Opened Takimoto Accounting Office(currently Tokyo Kudan Accounting Office) (current)
June 2007 Outside Director for Vitec Co, Ltd.
June 2014 Outside Auditor at METAWATER (current)

April 1987

Registered as an attorney (Daini Tokyo Bar Association)
Joined Kashiwagi Sogo Law Offices
April 2004 Professor at Keio University Law School (Graduate School of Law) (current)
June 2005 Outside Audit & Supervisory Board Member at
Shin-Etsu Chemical Co., Ltd.
January 2009 Managing Partner at Kashiwagi Sogo Law Offices (current)
June 2017 Outside Director at Yamaha Corporation (current)
June 2021 Outside Auditor at METAWATER (current)

Eiji Nakamura

President and Representative Director, METAWATER SERVICE Co., Ltd.

Michio Fujii

Deputy Executive General Manager, Corporate Strategy Planning Division / Executive
General Manager, HR & General Affairs Planning Office, Corporate Strategy Planning
Division / Responsible for CSR Promotion Office, Corporate Strategy Planning Division /Executive General Manager, Export Control Office / Responsible for Risk Management

Masahiro Takagi

Executive General Manager, Business Strategy Division /Responsible for WBC Center

Masayuki Nakagawa

Executive General Manager, Financial Planning Office, Corporate
Strategy Planning Division / Responsible for Information Technology
Planning Department, Corporate Strategy Planning Division

Yoshito Ezure

Deputy Executive General Manager, International Business Division

Tsugio Kusano

Executive General Manager, Plant Construction Division /Responsible for Safety and Health Management Office

Susumu Kadowaki Executive General Manager, Sales & Marketing Division
Deputy Executive General Manager, Plant Construction Division /Koichi Yamaguchi Responsible for Cost Engineering Center

54

Ken Akikawa

Executive General Manager, International Business Division

Tatsuo Kato

Deputy Executive General Manager, Plant Engineering Division

Hiroyuki Nakano

Executive General Manager, Service Solution Division

Hajime Ito

Deputy Executive General Manager, Plant Engineering DivisionGovernanceRisk management and compliance
Basic concept of corporate governance
Board of Directors Meeting

With the “METAWATER Group Risk Management Rules” in place, the METAWATER Group has asystematic awareness of various risks that can affect the Group’s operations, evaluates and manages
those risks appropriately, and thereby seeks to prevent their occurrence or to reduce losses associatedwith them, while striving to improve and expand the corporate value of the Group.
Furthermore, the Risk Management Working Group has been established within the CSR Committee inan effort to improve and reinforce the corporate framework so that the Group can appropriately address
individual risks in order to meet stakeholders’ expectations.
Furthermore, in order to respond to individual risks, in addition to establishing the “METAWATER
Business Continuity Plan (BCP)”, “Compliance Rules”, and “Information Security Policies”, we havealso established regulations, standards, and manuals for responding to accidents, the environment, andsafety and health, so that we can respond quickly and accurately to various events that may occur.

Supervision

Management Meeting

ReportInstruction
Supervision

ReportCSR Committee

ReportRisk Management Sub-Committee
Instruction

Auditing Office

Audit

Divisions/Group companies

BCM activities
With a commitment to strengthening Business Continuation Management (BCM), the METAWATER Group has developed the Business Continuation
Plan (BCP), which is suitable for its business characteristics.
In FY2020, on the assumption of business continuity under the impact of COVID-19, CMT (Crisis Management Team) members provided initial
response training, held briefings, mainly remotely, for the Executive General Managers of local emergency response divisions, and incorporated a
response to COVID-19 into the BCP procedures.
From FY2021 onward, in response to variations in damage estimates, we will promote further awareness of and familiarization with BCP and
improve its effectiveness with measures including various types of training, expanding the range of persons eligible for training, and education thatutilizes video materials.
In addition, from the viewpoint of preventing the spread of COVID-19, we have established an emergency response division headed by the President,
and are implementing various measures in a flexible and ongoing manner.
In light of our social mission to provide water and environmental infrastructure, all of the METAWATER Group is working to prevent the spread of
infection in order to ensure business continuity and the safety of employees.

55

ReportInitial response training

Our aim

Our path to growth

Our sustainability

Data section

Assistant to Person Responsible for Business Execution
Executive General Manager, Corporate Strategy Planning Division
Responsible for Corporate Administration Department, Affiliates Coordination Department, and Legal Department,
Corporate Strategy Planning Division
Upgrading security countermeasures at construction and plant operation sites
The METAWATER Group is enhancing information security not only at offices, but also atInformation security training for all employees
Collective education and e-learning training is being carried out for all
employees to improve their information security knowledge. For new
employees in particular, all group companies are holding individual
workshops. We use videos and easy-to-understand examples to raiseawareness of the importance of strengthening information security.

construction sites and the operation and maintenance sites of water treatment plants andsewage treatment plants. We also conduct internal IT audits to identify issues and implement
countermeasures. In FY2020, from the viewpoint of preventing the spread of COVID-19, we
decided not to conduct the internal IT audit at sites, as we had done in past years, and insteadcollected information from discussions with each site, extracted and corrected items thatneeded improvement, and made continuous improvements. We have also created educational
videos that can be viewed remotely to deepen employees’ understanding of security, including
those at remote locations.

Information security is imperative at construction sites

Compliance
We believe that ensuring proper compliance and being widely trusted by society leads to sustainable growth of the METAWATER Group, as well as fosters ahealthy corporate culture. Based on this understanding, we have established Compliance Rules that serve as guidelines for the Corporate Charter of Conduct,
the Employees' Code of Conduct, and the compliance issues that the Group could implement and realize. In order to link these to specific action, various internal
regulations have been established, ensuring thorough compliance with laws and internal rules.
Compliance Working Group

Compliance Education

As a specialized working group under the CSR Committee, we haveestablished the Compliance Working Group, which is comprised of fivechief department managers and the Legal Division as the secretariat.
They are engaged in activities that include checking on and improving
implementation of compliance programs, studying and developing
company-wide compliance education and measures, and offering
consultation on issues received from the compliance helpline. In
response to these matters, we hold emergency and temporary meetingsin addition to regular quarterly meetings.

The METAWATER Group provides compliance education in the form ofclassroom lectures, including company-wide e-learning, education for
officers, and education for employees at different levels.
Furthermore, in previous years, lecturers visited each METAWATER officeacross Japan to provide company-wide education in the form of grouptraining sessions. In FY2020, however, from the viewpoint of preventing
the spread of COVID-19, company-wide education was discontinued, andcompany-wide e-learning and themed training videos were created anddeveloped, etc.

56

FY2020 e-learning and company-wide education results

e-learning
education

Total of 25,331 people across 10 sessions

Financial Information

58

Financial Highlights

61

Consolidated Balance Sheets

62

Consolidated Statement of Income and Statement of Comprehensive Income

63

Consolidated Statement of Changes in Shareholders’ Equity

65

Consolidated Statement of Cash Flows

66

Notes to the Consolidated Financial Statements

57
57

Our aim

Our path to growth

Our sustainability

Data section

Continue,to make it sustainable.

Financial Highlights
Analysis on Operating Results

The Group’s business consists of two segments: Plant Engineering Business Segment
including EPC as foundation field and foreign business as growth field and Service
Solutions Business Segment including O&M as foundation field and PPP as growth field.

Descriptions and statements in relation to forward-looking projections disclosed in thisdocument reflect the judgment of the Group as of March 31, 2021.

Operating results by segment are as follows:
Operating Results Review for the Current Fiscal Year
During the fiscal year ended March 31, 2021, the Japanese economy was in a severe
situation due to the effect of COVID-19 outbreak. The global economy was also in asevere situation due to the effect of global pandemic of COVID-19. While preventive
measures against the spread of COVID-19 continued, there were signs of recovery with
the increased level of social and economic activities. However, there was a concern about
the effect the re-spread of COVID-19 might have on the economic activities.
Under such circumstances, in order to achieve the Midterm Business Plan 2020, covering
the period up to FY2020 (fiscal year ended March 31, 2021), the Group has been trying its
best to implement the priority measures: i) strategic development investment, ii) businessstrategy (enhancement of foundation field and expansion of growth field) and iii) efforts ofsustainable ESG.
The domestic business environment in which the Group operates has continued to facechallenges including a downward trend in the level of public spending, a sharp increase inlabor costs arising from shortage of human resources, and some delays in civilengineering projects and construction work.
In the overseas businesses, the Group has sought to accelerate business developments
centered around Europe and the United States, where stable market growth is expected,
and achieve further business expansion.
The operating results of the Group for the fiscal year ended March 31, 2021 are aspresented in the table below. As part of the lump-sum amortization of unrecognizedactuarial gains/losses (credit) due to the sale of shares contributed to the retirement
benefit trust, reversal was recognized in cost of sales as well as in selling, general andadministrative expenses. Further, the special service bonus was provided to employees.
The effect of those on operating income was ¥1,735 million.

Net sales
Operating income
Ordinary income
Profit attributable to owners of parent
Sales orders
Outstanding orders(Note)

Fiscal year ended Fiscal year ended
March 31, 2020 March 31, 2021
(Millions of yen) (Millions of yen)
128,723
133,355
8,223
10,863
8,132
11,053
5,677
6,542
125,011
159,124
138,639
169,307

Increase/(decrease)(Millions of yen)
4,631
2,639
2,920
864
34,112
30,667(Plant Engineering Business)
The operating results of the Plant Engineering Business are as presented in the tablebelow. The effect on operating income of the lump-sum amortization of unrecognizedactuarial gains/losses (credit) due to the sale of shares contributed to the retirement
benefit trust and of the special service bonus provided to employees was ¥980 million.
Excluding above effect, both net sales and operating income in the EPC business showeda steady growth, increasing year on year. In the international business, net sales increased
while operating income decreased year on year.
Fiscal year ended
March 31, 2020
(Millions of yen)

Fiscal year ended
March 31, 2021
(Millions of yen)

Increase/(decrease)(Millions of yen)

Net sales

72,36676,462

4,095

5.7

Operating income

3,188

5,538

2,349

73.7

Operating income (Note)

3,188

4,557

1,369

42.9

Sales orders

67,861

92,04724,185

35.6

Outstanding orders

78,542

99,025

20,48326.1(Note)

Increase/(decrease)
(%)
3.6
32.1
35.9
15.2
27.3
22.1

Wigen Companies, Inc. and Rood Wit Blauw Holding B.V. have been included in the scope of
consolidation from the fiscal year ended March 31, 2021.

58
58

Increase/(decrease)(%)

Operating income excluding the effect of lump-sum amortization of unrecognized actuarial gains/losses (credit) due to the sale of shares contributed to the retirement benefit trust and the effect of
the special service bonus provided to employees.

(Service Solutions Business)
The operating results of the Service Solutions Business are as presented in the tablebelow. The effect on operating income of the lump-sum amortization of unrecognizedactuarial gains/losses (credit) due to the sale of shares contributed to the retirement
benefit trust and of the special service bonus provided to employees was ¥754 million.
Excluding above effect, both net sales and operating income in the O&M businessdecreased year on year. In the PPP business, net sales showed a steady growth,
increasing year on year, while operating income decreased year on year.

Net sales

Fiscal year ended
March 31, 2020
(Millions of yen)

Fiscal year ended
March 31, 2021
(Millions of yen)

56,35656,893

Increase/(decrease)(Millions of yen)
536

(Cash flows from investing activities)
The funds used for investing activities was ¥3,252 million (¥1,872 million increase year toyear): ¥735 million used for purchase of property, plant and equipment and ¥2,564 million
used for acquisition of newly consolidated subsidiaries.

Increase/(decrease)(%)(Cash flows from financing activities)
The funds used for financing activities was ¥2,103 million (¥14,969 million decrease year
to year): ¥1,737 million used for payment of dividends and ¥855 million used for
repayments of PFI and other project finance loans.

1.0

Operating income

5,035

5,325

290

5.8

Operating income (Note)

5,035

4,570

(464)

(9.2)

Sales orders

57,15067,077

9,927

17.4

Outstanding orders

60,09770,281

10,18416.9(Note)(Cash flows from operating activities)
The funds generated by operating activities was ¥10,404 million (¥6,883 million increase
year to year): ¥11,053 million of income before income taxes and ¥1,247 million ofdepreciation, offsetting with ¥821 million decrease in notes and accounts payable - tradeand ¥2,527 million used for payment of income taxes.

Issues to be Addressed
In the Group’s main business in the domestic water and sewage treatment market, thefinancial difficulties of local governments and shortage of engineers have become evident,
which are attributable to the population decline. In addition, measures for facilities andequipment developed during a period of high economic growth, which are aging, as wellas natural disasters such as large earthquakes, typhoons, and torrential rains are urgent
issues. Under these circumstances, the implementation of the PFI Act and the revision of
the Water Supply Act are steadily encouraging public-private partnerships using private
funds, technology and know-how as well as efforts based on the national resilience plan.
In addition, the creation of new business opportunities and business models backed bytechnological innovations such as AI and IoT is expected in the future.
On the other hand, in the overseas water and sewage market, developed countries
mainly in Europe and the United States are faced with issues of aging facilities andequipment. In addition, other priority issues are the utilization of reused water in an effort
to secure water resources in the United States and countermeasures against thetightening of environmental regulations in Europe. While in areas including emerging Asian
countries, demand is growing for the development of a water and sewage infrastructure
in conjunction with an increase in demand for water due to the increasing population.
Going forward, the emergence of business opportunities in line with these issues andneeds of the water and sewage market of each country is expected.
In light of this business environment, the Group has developed the Midterm Business
Plan 2023, covering the period up to FY2023 (fiscal year ending March 31, 2024), as thenext stage in achieving its long-term vision.

Operating income excluding the effect of lump-sum amortization of unrecognized actuarial gains/losses (credit) due to the sale of shares contributed to the retirement benefit trust and the effect of
the special service bonus provided to employees.

Financial Position Review for the Current Fiscal Year
Total assets as of March 31, 2021 increased by ¥11,725 million compared to March 31,
2020 to ¥131,194 million.
Current assets increased by ¥7,308 million compared to March 31, 2020 to ¥109,250
million due to an increase in cash and deposits. Non-current assets increased by ¥4,416
million compared to March 31, 2020 to ¥21,944 million due to an increase in assets for
retirement benefits, goodwill and customer-related assets.
Current liabilities increased by ¥8,256 million compared to March 31, 2020 to ¥62,590
million due to an increase in accounts payable - trade and advances received. Non-current
liabilities decreased by ¥371 million compared to March 31, 2020 to ¥15,170 million due toa decrease in PFI and other project finance loans.
Total net assets increased by ¥3,840 million compared to March 31, 2020 to ¥53,432
million due to the recognition of profit attributable to owners of parent.
Cash Flow Review
The balance of cash and cash equivalents (hereinafter the “funds”) as of March 31, 2021
increased by ¥5,168 million compared to March 31, 2020 to ¥18,044 million. An analysisof the cash flows for the fiscal year ended March 31, 2021 and related commentary
thereon is presented below:

59
59

Our aim

Our path to growth

Our sustainability

Data section

Continue,to make it sustainable.

its environmental impact and engage in community contribution activities, thereby
contributing to the United Nations’ “Sustainable Development Goals (SDGs).” In
response to the work style reform promoted by the government, moreover, we will
actively work to realize a variety of work styles for our employees by creating
opportunities for women to play an active role and promoting work styles that are notbound by age or location. On the other hand, for corporate governance, we will actively
engage in dialogue with stakeholders to earn their trust and achieve highly transparent
management, aiming for sustainable growth and increases in corporate value over the
medium- to long-term.

i) Strengthen core areas and expand growth areas
The Group will strengthen and expand businesses, with the EPC and O&M businesses
positioned as core areas and the PPP and overseas businesses as growth areas.
(Strengthen core areas)
In the EPC business, in preparation for the future demand for renewal and large-scale
projects, we will strive to further increase orders received and enhancing profitability by
improving design quality and strengthening cost competitiveness through theestablishment of engineering methods utilizing IT, AI, and others. In the O&M business,moreover, in addition to stable growth through the continued orders received for the
existing stations, we will strive to acquire new stations and businesses by utilizing IT
tools and expanding sales of WBC (Water Business Cloud).
(Expand growth areas)
In the PPP business, in which large-scale projects, including design, construction,
operation, and maintenance and inspection, are expected to increase, we will strengthen
regional strategies utilizing past achievements and know-how as well as create new
business models in order to advance public-private partnerships in the future. In theoverseas businesses, moreover, we will continue positioning Europe and the UnitedStates as strategic areas, deepen cooperation among Group companies in there, andpromote further business expansion.
ii) Expand R&D investment
The Group will expand its investment in R&D to meet the future demand for renewals
and further development of public-private partnerships.
(Strengthen strong areas further)
For its strengths of the incineration, water treatment, and monitoring and control system
areas, the Group will continue to invest aggressively in R&D in an effort to capture thefuture demand for renewal.
(Create combined mechanical and electric technologies)
The Group possesses both machinery and electric technologies in the water environment
business, and will strengthen its competitiveness by continuously creating products andsystems that utilize such advantages.
(Create value through the information chain)
The Group will create new value by linking WBC, etc. with on-site operation,
maintenance and inspection information, and plant monitoring and control systems, toprovide systems and services that have strengths in improving the efficiency ofmaintenance and inspection, optimizing management, and withstanding disasters.
iii) Sustainable ESG initiatives
In addition to making social contributions through its business activities as a company
providing public infrastructure, the Group, as a corporate citizen, will aggressively reduce6060Consolidated Balance Sheets
Thousands of
U.S. dollars

Millions of yen
As of March 31,
2020

As of March 31,
2021

Thousands of
U.S. dollars

Millions of yen

As of March 31,
2021

Assets

As of March 31,
2020

As of March 31,
2021

As of March 31,
2021

Accounts payable - trade

19,801

20,585

185,936

11,603

10,903

98,482

276

540

4,877

863

7,795

Liabilities

Current assets

Current liabilities

Cash and deposits*3

13,645*3

18,777

169,605

Notes and accounts receivable - trade*3

78,109*3

78,398708,138

Electronically recorded obligations

3,209

28,985

Short-term loans payable

5,750

51,937

Current portion of PFI and other projects finance loans

*3

3,114

28,127

Income taxes payable

2,206

3,959

35,760986,812Advances received

9,011

12,664

114,388

Provision for warranties for completed construction

1,340

1,588

14,343Work in process

3,357

Supplies
Other current assets
Total current assets

4,711
*4

2,118

101,941*4

109,250

Non-current assets

Provision for loss on construction contracts

Property, plant and equipment
Buildings and structures, net

1,222

1,616

14,596

Machinery and equipment, net

1,172

1,259

11,372Tools, furniture and fixtures, net

391

776

7,009

Construction in progress

117

81

731

280

Other property, plant and equipment, net
Total property, plant and equipment

*2

3,184

*2

568

5,130

4,302

38,858445

Software in progress

499

144

302

2,727

1,671

2,421

21,867

Customer-related assets

2,506

4,125

37,259Other intangible assets

1,240

1,032

9,321

Total intangible assets

6,008

8,380

75,693

871

7,867

8,658

10,613

95,863

Total current liabilities

54,33362,590565,350

Long-term loans payable

1,539
*3

9,849

*3

1,287

11,624

8,986

81,167

Liability for retirement benefit

4,025

3,819

34,495

Other non-current liabilities

128

1,077

9,728

Total non-current liabilities

15,542

15,170137,024

69,876

77,761

702,384

Total liabilities
Net assets
Shareholders’ equity

Investments and other assets

Capital stock

11,946

11,946

107,903

Capital surplus

15,08014,999135,480

Retained earnings

37,90042,725385,918

Treasury stock(14,289)(13,988)(126,348)

Total shareholders’ equity

50,63855,683502,962

54

70

632
(10,477)

1,550

14,000

163

1,472

1,561

1,577

14,244

Assets for retirement benefits

2,172

3,185

28,768Foreign currency translation adjustment(366)(1,160)

Deferred tax assets - non-current

2,783

2,708

24,460Remeasurements of defined benefit plans(882)(1,327)(11,986)

74

75

677

(1,194)(2,417)(21,831)

8,333

9,260

83,641

Non-controlling interests

17,527

21,944

198,211

Total net assets

119,469

131,194

1,185,023

Investment securities*1, *4

1,568

579

Other current liabilities

PFI and other projects finance loans

4,507

Goodwill*3

Non-current liabilities

Intangible assets
Software855

Long-term loans receivable*4

Guarantee deposits

Other non-current assets
Total investments and other assets
Total non-current assets
Total assets

173*1, *4*4

Accumulated other comprehensive income
Valuation difference on available-for-sale securities

Total accumulated other comprehensive income

Total liabilities and net assets

61
61

148

166

1,499

49,59253,432482,630

119,469

131,194

1,185,023

Our aimaim
Our

Our pathpath toto growth
growthOur

Our sustainability
sustainability
Our

Data section
sectionData

Continue,to make it sustainable.

Consolidated Statement of Income and Statement of Comprehensive Income[Consolidated Statement of Comprehensive Income][Consolidated Statement of Income]Thousands of
U.S. dollars

Millions of yen
Fiscal year ended
March 31, 2020
Net sales

Fiscal year ended
March 31, 2021

Fiscal year ended
March 31, 2021

133,355

1,204,543

103,736

937,006

29,619267,536

18,755

169,406

8,223

10,863

98,121

Interest income

175

154

1,391

Dividends income

52

48

433

Foreign exchange gain

—

56

505

Gain on step acquisition

—

82

740

Gain on liquidation of subsidiaries and affiliates

—

174

1,571

Miscellaneous income

25

36

325

Total non-operating income

253

552

4,985

190

153

1,381

104

939

76

686

Cost of sales

128,723*1

101,846*1

Thousands of
U.S. dollars

Millions of yen
Fiscal year ended
March 31, 2020

Fiscal year ended
March 31, 2021

Fiscal year ended
March 31, 2021

5,686

6,560

59,253

Valuation difference on available-for-sale securities

4

16

144

Foreign currency translation adjustment

4

(793)

(7,162)Remeasurements of defined benefit plans

763

(445)

(4,019)(1,222)(11,037)

6,458

5,338

48,216

6,450

5,320

48,0538

18

162

Net income
Other comprehensive income

Gross profit
Selling, general and administrative expenses
Operating income

26,877*2, *4

18,653*2, *4Non-operating income:

Total other comprehensive income
Comprehensive income

Loss on valuation of investment securities
Loss on disposal of non-current assets

—
*3

68

*3

Foreign exchange loss

59

—

—

Miscellaneous loss

25

26

234

Total non-operating expenses

344

362

3,269

Ordinary income

8,132

11,053

99,837

Income before income taxes

8,132

11,053

99,837

Income taxes - current

2,355

4,228

38,189

Income taxes - deferred

91

264

2,384

Total income taxes

2,446

4,492

40,574

Net income

5,686

6,560

59,253

8

18

162

5,677

6,542

59,091

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

772

*1

(Details)
Comprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests

Non-operating expenses:
Interest expenses

*1

62
62

Consolidated Statement of Changes in Shareholders’ Equity
Fiscal year ended March 31, 2020

Fiscal year ended March 31, 2021
(Millions of yen)

(Millions of yen)

Shareholders’ equity

Balance at April 1, 2019

Shareholders’ equity

Capital stock

CapitalsurplusRetainedearnings

Treasurystock

11,94615,08033,830(0)

Total
shareholders’equity60,856

Balance at April 1, 2020

Changes during the year
(1,607)

Profit attributable to ownersof parent

5,677

Purchase of treasury stock

Total
shareholders’equity11,94615,08037,900(14,289)

50,638(14,288)

Dividends from surplus(1,737)

5,677

Profit attributable to ownersof parent

6,542(14,288)

Purchase of treasury stock
Disposal of treasury stock

—

—

4,070

(14,288)(10,218)

11,94615,08037,900(14,289)

50,638Cancellation of treasury
stock
Increase in retained earnings
due to change in the scopeof consolidation

Total
Valuation
Foreign currency Remeasurements accumulateddifference onof definedothertranslation
available-for-salebenefit planscomprehensive
adjustment
securities
income49(371)(1,645)(1,737)
6,542
(0)

(0)

69

150

219

(150)

150

—

20

20

Changes in other equity, net

Accumulated other comprehensive income

Balance at April 1, 2019

Treasurystock(1,607)

Changes in other equity, net

Balance at March 31, 2020

Retainedearnings

Changes during the year

Dividends from surplus

Total changes during the year

Capital stock

Capitalsurplus(1,967)

Noncontrollinginterests

Total net
assets142

59,031

Total changes during the year
Balance at March 31, 2021

—

(81)

4,825

300

5,044

11,94614,99942,725(13,988)

55,683

Accumulated other comprehensive income
Total
Valuation
Foreign currency Remeasurements accumulateddifference onof definedothertranslation
available-for-salebenefit planscomprehensive
adjustment
securities
incomeChanges during the year

Noncontrollinginterests

Total net
assets148

49,592

Dividends from surplus(1,607)

Profit attributable to ownersof parent

5,677

Balance at April 1, 2020

Purchase of treasury stock(14,288)

Changes during the year

779

Dividends from surplus(1,737)
6,542

Changes in other equity, net

4

4

763

772

6

54

(366)

(882)

(1,194)

Total changes during the year

4

4

763

772

6

(9,438)

Profit attributable to ownersof parent

Balance at March 31, 2020

54

(366)

(882)

(1,194)

148

49,592

Purchase of treasury stock(0)

Disposal of treasury stock

219

Cancellation of treasury
stock
Increase in retained earnings
due to change in the scopeof consolidation

63
63

—
20

Changes in other equity, net

16

(793)

(445)

(1,222)17(1,204)

Total changes during the year

16

(793)

(445)

(1,222)17

3,840

Balance at March 31, 2021

70

(1,160)(1,327)(2,417)

166

53,432Our aim

Our path to growth

Our sustainability(Thousands of U.S. dollars)
Shareholders’ equity

Balance at April 1, 2020

Capital stock

CapitalsurplusRetainedearnings

Treasury
stock

Total
shareholders’equity107,903136,211342,335(129,066)

457,393

Changes during the year
Dividends from surplus(15,689)(15,689)

Profit attributable to ownersof parent

59,09159,091

Purchase of treasury stock
Disposal of treasury stock
Cancellation of treasury
stock
Increase in retained earnings
due to change in the scopeof consolidation

(0)

(0)

623

1,354

1,978

(1,354)

1,354

—

180

180

Changes in other equity, net
Total changes during the year
Balance at March 31, 2021

—

(731)

43,582

2,709

45,560107,903

135,480

385,918(126,348)

502,962

Accumulated other comprehensive income
Total
Valuation
Foreign currency Remeasurements accumulateddifference onof definedothertranslation
available-for-salebenefit planscomprehensive
adjustment
securities
incomeBalance at April 1, 2020

487

(3,305)(7,966)(10,784)

Noncontrollinginterests

Total net
assets

1,336

447,945

Changes during the year
Dividends from surplus(15,689)

Profit attributable to ownersof parent

59,091

Purchase of treasury stock(0)

Disposal of treasury stock

1,978

Cancellation of treasury
stock
Increase in retained earnings
due to change in the scopeof consolidation
Changes in other equity, net

—
180
144

(7,162)(4,019)(11,037)

153(10,875)

Total changes during the year

144

(7,162)(4,019)(11,037)

153

34,685

Balance at March 31, 2021

632

(10,477)(11,986)(21,831)1,499

482,630

64
64

Data section

Continue,to make it sustainable.

Consolidated Statement of Cash Flows
Thousands of
U.S. dollars

Millions of yen
Fiscal year ended
March 31, 2020

Fiscal year ended
March 31, 2021

Fiscal year ended
March 31, 2021

Fiscal year ended
March 31, 2020

Cash flows from operating activities
8,132

11,053

99,837

Depreciation

1,098

1,247

11,263

Amortization of goodwill

148

193

1,743

Increase/(decrease) in liabilities for retirement benefits

(196)

(2)

(18)

(Increase)/decrease in assets for retirement benefits

(631)

79

713

(19)

274

2,474

61

291

2,628

Interest income and dividends income

(228)

(203)

(1,833)

Interest expenses

190

153

1,381

Foreign exchange (gain)/loss

59

(56)

(505)

(Gain)/loss on step acquisition

—

(82)

(740)

(Gain)/loss on liquidation of subsidiaries and affiliates

—

(174)

(1,571)

Loss on disposal of property, plant and equipment

68

76

686

Loss/(gain) on valuation of investment securities

—

109

984

(Increase)/decrease in notes and accounts receivable(Increase)/decrease in inventory(1,859)

111

1,002

605

(717)

(6,476)

Increase/(decrease) in notes and accounts payable - trade

5,169

(821)

(7,415)

Increase/(decrease) in advances received(7,073)

3,597

32,490

Other cash flows from operating activities
SubtotalInterest and dividends income received
Interest expenses paid

501

(2,240)(20,233)

6,027

12,890116,430

228

203

1,833

(196)

(161)

(1,454)

Income taxes paid

(2,537)(2,527)(22,825)

Fiscal year ended
March 31, 2021

Net cash provided by operating activities

3,521

10,404

93,975

Net (increase)/decrease in time deposits

23

36

325

Purchase of property, plant and equipment

(600)

(735)

(6,638)Purchase of intangible assets

(179)

30

270

Purchase of investment securities

(223)

(293)

(2,646)

Acquisition of newly consolidated subsidiaries(426)(2,564)(23,159)

Liquidation of subsidiaries and affiliates

—

330

2,980

Payments of loans receivable

(2)

(9)

(81)

Collection of loans receivable

27

24

216

Other cash flows from investing activities

0

(72)

(650)

(1,380)(3,252)(29,374)*2

Proceeds from short-term loans payable

—

258

2,330

Repayments of short-term loans payable

(330)

(283)

(2,556)

Repayments of PFI and other projects finance loans

(844)

(855)

(7,722)

Disposal of treasury stock

—

219

1,978

Purchase of treasury stock(14,288)(0)(0)

Cash dividends paid

(1,607)(1,737)(15,689)

Cash dividends paid to non-controlling interests

(1)

(1)

(9)

Other cash flows from financing activities

—

295

2,664

(17,072)(2,103)(18,995)

11

119

1,074

(14,920)

5,168

46,68027,796

12,876116,303

18,044

162,984

Net cash used in financing activities
Effect of exchange rate change on cash and cash equivalents
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at April 1
Cash and cash equivalents at March 31

Cash flows from investing activities

Net cash used in investing activities

Fiscal year ended
March 31, 2021

Cash flows from financing activities

Income before income taxes

Increase/(decrease) in provision for warranties for completed
construction
Increase/(decrease) in provision for loss on construction
contracts

Thousands of
U.S. dollars

Millions of yen

65
65

*1

12,876*1

Our aim

Our path to growth

Our sustainability

Data section

Continue,to make it sustainable.

[Notes to Consolidated Financial Statements]

reported as a component of accumulated other comprehensive income. The cost of securities(Basis of Presentation)sold is calculated using the moving average method.

The accompanying consolidated financial statements of METAWATER Co., Ltd. (the “Company”) and

Available-for-sale securities without market value

consolidated subsidiaries are prepared on the basis of accounting principles generally accepted in Japan, which

Available-for-sale securities without market value are stated at cost using the moving averageare different in certain respects as to the application and disclosure requirements of International Financial

method.

Reporting Standards, and are compiled from the consolidated financial statements prepared by the Company(2) Inventory

as required by the Financial Instruments and Exchange Act of Japan.

1) Supplies

Certain amounts in the prior year’s financial statements have been reclassified to conform to the current year’s

Supplies are stated at cost using the weighted average method. (Balance sheet amounts arepresentation.

written down on the basis of any decreased profitability.)
2) Work in process(Presentation of Amounts in the Consolidated Financial Statements)

Work in process is stated at cost using the individual identification method.

The yen amounts are truncated at millions and U.S. dollar amounts are rounded off in thousands. The total
Japanese yen and U.S. dollar amounts shown in the financial statements do not necessarily agree with the(3) Derivatives

sum of the individual amounts. U.S. dollar amounts presented in the financial statements are included solely

Derivatives are stated at fair value.

for convenience. The rate of ¥110.71 to US$1.00, prevailing on March 31, 2021, has been used for translation
into U.S. dollar amounts in the financial statements. The inclusion of such amounts should not be construed as2.

a representation that Japanese yen amounts have been or could in the future be converted into U.S. dollars at

Method of depreciation and amortization(1) Property, plant and equipmentthat or any other rate.

Depreciation of property, plant and equipment is mainly computed by the declining-balance method(Principles of Consolidation)over the applicable useful lives. However, the buildings acquired on and after April 1, 1998

The accompanying consolidated financial statements include the accounts of the Company and any significant(excluding accompanying facilities) and the accompanying facilities and structures acquired on andcompanies controlled directly or indirectly by the Company.

after April 1, 2016 are depreciated by the straight-line method.

Investments in companies over which the Company exercises significant influence in terms of their operating

Useful lives of assets are principally as follows:

and financial policies have been accounted for by the equity method.

Buildings and structures:

2 to 50 years

As of March 31, 2021, the numbers of consolidated subsidiaries were 16 (10 in 2020). Wigen Companies, Inc.

Machinery and equipment:

2 to 17 years

and Rood Wit Blauw Holding B.V. are among those newly added to the scope of consolidation from the fiscal(2) Intangible assets

year ended March 31, 2021 following the acquisition of shares in them. In addition, the number of affiliatedcompanies which have been accounted for by the equity method as of March 31, 2021 was two. Non-

Intangible assets are amortized by the straight-line method. Computer software for internal use isconsolidated subsidiaries whose combined assets, net sales, profit and retained earnings are not significant inamortized by the straight-line method over the estimated useful life of 5 years. Customer-related

the related consolidated totals, have not been consolidated with the Company. Investments in non-assets are amortized by the straight-line method over the estimated useful life of 17 to 19 years.

consolidated subsidiaries and affiliated companies which have immaterial effect on the consolidated financial
3.

statements are accounted for at cost without applying the equity method of accounting. METAWATER USA,

Accounting standard for significant allowances and provisions(1) Allowance for doubtful accounts

INC. and 12 other subsidiaries are consolidated using their financial statements as of their fiscal year end,
which falls on December 31 and necessary adjustments are made to their financial statements to reflect any

To provide for potential loss on receivables, the Company provides an allowance for the expectedsignificant transactions from January 1 to March 31. All significant intercompany balances and transactions

amount of irrecoverable receivables. Allowances for ordinary debt are computed based on thehave been eliminated in consolidation.

historical rate of default. For certain debts, such as those where recovery is doubtful, the Company
considers the likelihood of recovery on an individual basis and records an allowance for the amountof debt expected to be unrecoverable. Allowance for doubtful accounts was not recorded at the end(Summary of Significant Accounting Policies)of the fiscal year ended March 31, 2021.

1. Valuation standard and methods for significant assets(1) Securities
1)Available-for-sale securities(2) Provision for warranties for completed construction

Available-for-sale securities with market value

The Company records provision for warranties for completed construction based on the estimated

Available-for-sale securities with market value are stated at fair value based on the market priceamount of future warranties for construction revenue in order to provide for costs of free-of-charge

as of the end of the accounting period. Any unrealized gain or loss, net of applicable taxes isrepair under defect liability for contract construction.

66
66

(3) Hedging policy(3) Provision for loss on construction contracts
In order to provide for potential loss on construction contracts, the Company records provision forInterest rate swaps are used on some of loans payable from financial institutions to avoid risks

loss on construction contracts at an estimated amount of loss on contracts undelivered at the end

resulting from interest rate fluctuation.

of the fiscal year, loss of which are expected to be incurred and such expected amount of loss can(4) Method for evaluating hedging effectivenessbe reasonably estimated.

The evaluation of hedging effectiveness is omitted for interest rate swaps as the requirements for4.

short-cut method are met.

Accounting method for retirement benefits(1) Method of allocating projected retirement benefit obligation
8.

In calculating the retirement benefit obligation, the benefit formula basis is used to allocate the

The amortization method and amortization period of goodwill
Goodwill is amortized by the straight-line method over a period of 10 or 15 years.

projected retirement benefit obligation to the estimated periods of service of the eligible employees
until the end of the fiscal year.
9.

Cash and cash equivalents in the consolidated statement of cash flows
Cash and cash equivalents consist of cash at hand, demand deposits at banks, and highly liquid(2) Method for amortizing actuarial gain or loss and prior service cost
Prior service cost is amortized as incurred by the straight-line method over a period not exceeding

short-term investments with negligible risk of fluctuation in value and maturities of three months or

the estimated average remaining service period of employees (10 to 14 years) at the time ofless.

occurrence.
10.

Actuarial gain or loss is amortized from the fiscal year following the year in which the gain or loss

Consumption tax
Consumption tax and local consumption tax are excluded from respective transaction amounts.

is recognized, amortized by the straight-line method over a period not exceeding the averageremaining service period of the employees (10 to 14 years) at the time of occurrence.

(Significant Accounting Estimates)
5.

Recognition of construction revenue by applying the percentage-of-completion method

Recognition for revenue and cost

1.

For long-term construction contracts whose outcome can be estimated reliably, the percentage-of-Amounts recorded on the consolidated financial statements for the fiscal year ended March 31, 2021

completion method is adopted. The stage of completion of a contract is determined by the

Net sales (construction revenue): ¥33,448 million (US$302,122 thousand)percentage of the cost incurred to date to the estimated total cost. When the outcome of the

Balance in accounts receivable (balance in accounts receivable from construction contracts):

construction contracts cannot be estimated reliably, the completed-contract method is adopted.

¥18,453 million (US$166,678 thousand)(Note) Among the construction contracts accounted for by the percentage-of-completion method,

6.

Foreign currency translation

the above amounts represent construction constracts that are incomplete and/or undelivered

Monetary receivables and payables in foreign currencies are translated into yen using the spot

as of the end of the fiscal year ended March 31, 2021. (Completed and delivered construction
contracts are not included.)exchange rates on the consolidated balance sheet date, and translation adjustments are recorded as
2.

gains or losses. For foreign subsidiaries assets and liabilities are translated into yen using the spot

Other information that contributes to the understanding of users of consolidated financial statements(1) Calculation method

exchange rates on the consolidated balance sheet date; revenues and expenses are translated into
yen using the average exchange rates during the period; and translation adjustments are included in

The Group adopts the percentage-of-completion method as the accounting standard for revenue of

foreign currency translation adjustment under net assets.

construction contracts whose outcome can be estimated reliably. The stage of completion of acontract is determined by the percentage of the cost incurred to date to the estimated total cost.

7.

Revenue in accordance with the percentage-of-completion method is measured based on the stage

Hedge accountingof completion of construction contracts. The stage of completion is determined based on the(1) Hedge accounting method
As interest rate swaps meet the requirements for short-cut method, the accounting is applied toproportion of the cost incurred by the end of the fiscal year against the estimated total cost ofthem.

construction.

(2) Hedging instruments and hedged items(2) Key assumptions

Hedging instruments: Interest rate swaps

The total cost of construction is estimated by accumulating objective prices in detail, such as

Hedged items: Interest on loans payable

estimates obtained from external parties and internally approved standard unit prices. The
estimated total cost of construction is a key assumption, because the estimation involves certain
assumptions based on the professional knowledge and experience of construction work.

67
67

Our aim

Our path to growth

Our sustainability

Data section

Continue,to make it sustainable.

value of financial instruments, and released the “Accounting Standard for Fair Value Measurement,” etc.

(3) Impact on the consolidated financial statements for the following fiscal year
Since construction work generally continues for a long-term period, a construction contract may

The ASBJ’s basic policy of developing accounting standards for fair value measurement is to basicallychange during the course of construction, and material costs and labor costs may fluctuate. In such

adopt all provisions of IFRS 13 in order to improve comparability of financial statements between

cases, changes in the percentage of completion of construction associated with changes in theJapanese companies and foreign companies by using a uniform calculation method. The policy also

estimated total cost of construction may have an impact on the revenue to be recognized on theprovides that alternative accounting treatments may be additionally adopted for individual items inconsolidated financial statements for the following fiscal year.

consideration of the current Japanese practices, to the extent that such alternative treatments do notsignificantly impair comparability of financial statements.

(Unapplied Accounting Standards, etc.)(2) Scheduled date of application- Accounting Standards Board of Japan (ASBJ) Statement No. 29 “Accounting Standard for Revenue Recognition”

They are scheduled to be applied from the beginning of the fiscal year ending March 31, 2022.

(March 31, 2020)- ASBJ Guidance No. 30 “Implementation Guidance on Accounting Standard for Revenue Recognition” (March(3) Impact of application of the accounting standards, etc.

26, 2021)

The impact of application of the “Accounting Standard for Fair Value Measurement,” etc., on the
consolidated financial statements has not currently been determined.

(1) Outline
A comprehensive accounting standard on revenue recognition. Revenue is recognized by applying the(Changes in Presentation)

following five steps.
Step 1: Identify the contract with a customer

Application of the “Accounting Standard for Disclosure of Accounting Estimates”

Step 2: Identify performance obligations in the contract

The Company has applied the ASBJ Statement No. 31 “Accounting Standard for Disclosure of Accounting

Step 3: Determine the transaction price

Estimates” (March 31, 2020) from the fiscal year ended March 31, 2021, and stated notes on significant

Step 4: Allocate the transaction price to the performance obligations in the contract

accounting estimates in the consolidated financial statements.

Step 5: Recognize revenue when (or as) the performance obligations are satisfied

However, these notes do not provide matters regarding the previous fiscal year in accordance with thetransitional treatment provided for in the proviso of Paragraph 11 of this Accounting Standard.

(2) Scheduled date of application
They are scheduled to be applied from the beginning of the fiscal year ending March 31, 2022.
(3) Impact of application of the accounting standard, etc.
The impact of application is under evaluation at the time of preparing the consolidated financial
statements.
-ASBJ Statement No. 30 “Accounting Standard for Fair Value Measurement” (July 4, 2019)-ASBJ Statement No. 9 “Accounting Standard for Measurement of Inventories” (July 4, 2019)-ASBJ Statement No. 10 “Accounting Standard for Financial Instruments” (July 4, 2019)-ASBJ Guidance No. 31 “Implementation Guidance on Accounting Standard for Fair Value Measurement” (July4, 2019)-ASBJ Guidance No. 19 “Implementation Guidance on Disclosures about Fair Value of Financial Instruments”(March 31, 2020)(1) Outline
The International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB) of
the United States have provided almost identical, detailed guidance on fair value measurement (for theInternational Financial Reporting Standards (IFRS), IFRS 13 “Fair Value Measurement,” and for U.S.
GAAP, the Accounting Standards Codification Topic 820 “Fair Value Measurement”). In light of thesecircumstances, the ASBJ has taken initiatives to ensure consistency of Japanese accounting standards
with international accounting standards regarding principally the guidance and disclosure of the fair

68
68

(Notes to Consolidated Balance Sheets)*1.

The following assets are pledged as security for PFI and other project finance loans to subsidiaries andaffiliated companies operating the PFI business (non-consolidated).

Investments in non-consolidated subsidiaries and affiliated companies are as follows:

Investment securities

*2.

*4.

As of March 31, 2020
(Millions of yen)

As of March 31, 2021
(Millions of yen)

As of March 31, 2021
(Thousands of U.S. dollars)

1,167

921

8,319

As of March 31, 2020
(Millions of yen)

As of March 31, 2021
(Millions of yen)

As of March 31, 2021
(Thousands of U.S. dollars)

Investment securities

431

280

2,529

Long-term loans receivable

169

147

1,327

601

428

3,865

Total

Accumulated depreciation of property, plant and equipment

Accumulated depreciation ofproperty, plant and equipment

As of March 31, 2020
(Millions of yen)

As of March 31, 2021
(Millions of yen)

As of March 31, 2021
(Thousands of U.S. dollars)

4,287

4,655

42,046*5.

Guarantees of indebtedness
The Company provides guarantees to the following companies for their loans payable from financial
institutions.

*3.

(1) Guarantee for loans payable“Current portion of PFI and other project finance loans” and “PFI and other project finance loans” areloans payable secured by the PFI business from financial institutions to WATER NEXT YOKOHAMA Co.,

Osaka Bioenergy Co., Ltd.

Ltd., which is a special purpose company established for the PFI business and the Company’s

As of March 31, 2020
(Millions of yen)

As of March 31, 2021
(Millions of yen)

As of March 31, 2021
(Thousands of U.S. dollars)

126

108

975

As of March 31, 2020
(Millions of yen)

As of March 31, 2021
(Millions of yen)

As of March 31, 2021
(Thousands of U.S. dollars)consolidated subsidiary, and other consolidated subsidiaries.
The amounts of assets including accounts receivable of the special purpose company corresponding to(2) Performance guarantee

the above PFI and other project finance loans are as follows:

Cash and deposits
Notes and accounts receivable trade
Total

As of March 31, 2020
(Millions of yen)

As of March 31, 2021
(Millions of yen)

As of March 31, 2021
(Thousands of U.S. dollars)

1,598

1,612

14,56011,437

10,883

13,035

12,496

Ariake Water Management Co., Ltd.

27

38

343

98,301

Aizuwakamatsu Aqua Partner Co.,
Ltd.

523

483

4,362

112,871

Sasebo Aqua Solution Co., Ltd.

226

214

1,932

The following assets eliminated in the consolidation procedures are pledged as security.

Sorami Bio Partners Co., Ltd.

63

63

569

Northern Akita Eco-resource
Management Co., Ltd.

17

17

153

As of March 31, 2020
(Millions of yen)

As of March 31, 2021
(Millions of yen)

As of March 31, 2021
(Thousands of U.S. dollars)

Ofunato Sewer Management Co.,
Ltd.

14

14

126

Investments in subsidiaries

152

152

1,372

14

14

126

Long-term loans receivable

448

409

3,694

Gotemba Oyama Eco Partners Co.,
Ltd.

601

561

5,067

WATER CIRCLE KUMAMOTO K.K.

—

270

2,438

Total

887

1,116

10,080

Total

69
69

Our aim

Our path to growth

Our sustainability

Data section

Continue,to make it sustainable.

(Notes to Consolidated Statement of Income)(Notes to Consolidated Statement of Comprehensive Income)

*1.

*1.

*2.

Provision for loss on construction contracts included in cost of sales are as follows:
Fiscal year ended March 31, 2020
(Millions of yen)

Fiscal year ended March 31, 2021
(Millions of yen)

Fiscal year ended March 31, 2021
(Thousands of U.S. dollars)

(74)

203

1,833

Fiscal year ended
March 31, 2021
(Thousands of U.S.
dollars)

225

Amount arising during the year

625

Reclassification adjustments

—

—

—

Amount before tax effect

6

25

225

Salaries and allowances

4,284

4,917

44,413Tax effect

(1)

(8)

(72)

1,484

1,797

16,2314

16

144

Retirement benefit expenses

424

(289)

(2,610)

Valuation difference on available-forsale securities

Provision for warranties
for completed construction

(16)

254

2,294

4

(793)

(7,162)

2,374

2,100

Foreign currency translation adjustment
Amount recognized during the year
Remeasurements of defined benefit plans

18,968The details of loss on disposal of non-current assets are as follows:
Fiscal year ended March 31, 2020

Fiscal year ended March 31, 2021

Loss on sales and retirement of machinery and equipment*4.

Fiscal year ended
March 31, 2021
(Thousands of U.S. dollars)

Fiscal year ended
March 31, 2021
(Millions of yen)

Bonuses

Research and development expenses*3.

Fiscal year ended
March 31, 2021
(Millions of yen)

Fiscal year ended
March 31, 2020
(Millions of yen)
Valuation difference on available-for-salesecurities

The major items and their amounts of selling, general and administrative expenses are as follows:
Fiscal year ended
March 31, 2020
(Millions of yen)

The following table presents reclassification adjustments and tax effects allocated to each component ofother comprehensive income for the years ended March 31, 2021 and 2020

Total amount of research and development expenses included in general and administrative expenses
and in production cost in the fiscal year are as follows:
Fiscal year ended March 31, 2021
(Millions of yen)

Fiscal year ended March 31, 2021
(Thousands of U.S. dollars)

2,374

2,100

18,968546

1,205

10,884553(1,846)(16,674)

Before tax effect adjustment

1,100

(641)

(5,789)Tax effects

(336)

196

1,770

763

(445)

(4,019)772(1,222)(11,037)

Remeasurements of defined benefit
plans
Total other comprehensive
incomeLoss on sales and retirement of machinery and equipment

Fiscal year ended March 31, 2020
(Millions of yen)Amount recognized during the year
Reclassification adjustments(Notes to Consolidated Statement of Changes in Shareholders’ Equity)
Fiscal year ended March 31, 2020
1. Shares issued
Type of shares
Common stock(shares)Number of shares
as of April 1, 2019

Increase

Decrease

Number of shares
as of March 31, 2020

25,923,500——

25,923,500

Number of shares
as of April 1, 2019

Increase

Decrease

Number of shares
as of March 31, 2020150

4,200,036—

4,200,186

2. Treasury stock
Type of shares
Common stock(shares)(Details of the changes)
Increase resulting from purchase of shares less than one unit: 36 shares
Purchase of treasury stock in accordance with the resolution of the Board of Directors’ meeting held on
October 29, 2019: 4,200,000 shares

70
70

3. Dividends(1) Dividends paid

3. Dividends(1) Dividends paid

Resolution

Type of shares

Total amount ofdividends(Millions of yen)

Dividend per share(Yen)

Cut-off date

Effective date

Resolution

Type of shares

Total amount ofdividends(Millions of yen)

Dividend per share(Yen)

Cut-off date

Effective date

Board of Directors’
meeting held on
May 22, 2019

Common stock

803

31.00

March 31, 2019

June 6, 2019

Board of Directors’
meeting held on
May 21, 2020

Common stock

868

40.00

March 31, 2020

June 5, 2020

Board of Directors’
meeting held on
November 12, 2019

Common stock

803

31.00

September 30,
2019

December 3, 2019

Board of Directors’
meeting held on
November 11, 2020

Common stock

868

40.00

September 30,
2020

December 2, 2020

Cut-off date

Effective date(2) Dividends whose record date falls in the fiscal year ended March 31, 2020, but whose effective date is in
the following fiscal year

Total amount ofdividends
Dividend per share(Thousands of U.S.
(U.S. dollars)
dollars)

Resolution

Type of shares

Board of Directors’
meeting held on
May 21, 2020

Common stock

7,840

0.36

March 31, 2020

June 5, 2020

Common stock

7,840

0.36

September 30,
2020

December 2, 2020

Fiscal year ended March 31, 2021

Board of Directors’
meeting held on
November 11, 2020

1. Shares issued(Note)

Type ofsharesResolution
Board of Directors’
meeting held on
May 21, 2020

Source ofdividends

Common stock Retained earnings

Type of shares
Common stock(shares)

Total amount ofdividends(Millions of yen)

Dividend pershare (Yen)

Cut-off date

868

40.00

March 31, 2020

Effective dateJune 5, 2020

Number of shares
as of April 1, 2020

Increase

Decrease

Number of shares
as of March 31, 2021

25,923,500

25,923,500

88,50051,758,500

The Company conducted a 2-for-1 split for each share of common stock on October 1, 2020. The
amounts of dividend per share in accordance with resolutions made at the Board of Directors’
meetings held on May 21, 2020 and November 11, 2020 represent the amounts before the stock
split.

(Details of the changes)(2) Dividends whose record date falls in the fiscal year ended March 31, 2021, but whose effective date is in
the following fiscal year

Increase resulting from a 2-for-1 split for each share of common stock conducted on October 1, 2020:
25,923,500 shares

Resolution

Type ofshares

Source ofdividends

Board of Directors’
meeting held on
May 20, 2021

Commonstock

Retainedearnings

Resolution

Type ofshares

Source ofdividends

Increase resulting from a 2-for-1 split for each share of common stock conducted on October 1, 2020:

Board of Directors’
meeting held on
May 20, 2021

Commonstock

Retainedearnings

4,200,216 shares(Note)

Decrease resulting from the cancellation of treasury stock conducted on January 29, 2021: 88,500
shares
2. Treasury stock
Type of shares
Common stock(shares)Number of shares
as of April 1, 2020
4,200,186

Increase
4,200,246

Decrease
177,000

Number of shares
as of March 31, 2021
8,223,432(Details of the changes)
Increase resulting from purchase of shares less than one unit: 30 shares

Decrease resulting from the disposal of treasury stock conducted on January 15, 2021: 88,500 shares

Total amount of
Dividend per
dividends
share (Yen)(Millions of yen)
870

20.00

Total amount of
Dividend per
dividends
share(Thousands of(U.S. dollars)
U.S. dollars)
7,858

0.18

Cut-off date

Effective date

March 31, 2021 June 4, 2021

Cut-off date

Effective date

March 31, 2021 June 4, 2021

The Company conducted a 2-for-1 split for each share of common stock on October 1, 2020. The
amount of dividend per share in accordance with the resolution made at the Board of Directors’

Decrease resulting from the cancellation of treasury stock conducted on January 29, 2021: 88,500

meeting held on May 20, 2021 represents the amount after the stock split.

shares71
71

Our aim

Our path to growth

Our sustainability(Notes to Consolidated Statement of Cash Flows)*1.

Time deposits with maturities ofover three months
Cash and cash equivalents*2.

Continue,to make it sustainable.

with forward foreign currency contracts where necessary.
Investment securities are mainly limited to shares of companies with which the Group has built a

Cash and cash equivalents in the consolidated statement of cash flows are reconciled to cash anddeposits in the consolidated balance sheets as follows:

Cash and deposits

Data section

business relationship. Listed stocks are exposed to risk of fluctuation in the market value, while they are

Fiscal year ended
March 31, 2021
(Thousands of U.S.
dollars)

Fiscal year ended
March 31, 2020
(Millions of yen)

Fiscal year ended
March 31, 2021
(Millions of yen)

13,645

18,777

169,605

(769)

(733)

(6,620)12,876

18,044

162,984

marked to market on a quarterly basis.
The payment terms of notes and accounts payable - trade are mostly one year or less than one year.
Although some of trade payables are denominated in foreign currencies and are exposed tocurrency fluctuation risk, they are hedged with forward foreign currency contracts where necessary.
Loans payable are mainly used for the acquisition of shares of subsidiaries, with the maximum
maturity period of 7 years after the balance sheet date. PFI and other project finance loans are intended
to raise funds for specific businesses such as the PFI business, with the maximum maturity period of 15

The breakdown of major assets and liabilities of a company that newly became a consolidated subsidiarythrough acquisition of shares
The breakdown of assets and liabilities at the beginning of consolidation associated with theconsolidation of Wigen Companies, Inc. through the acquisition of shares, and the reconciliation of theacquisition cost of shares to expenditure (net increase) for acquisition of Wigen Companies, Inc. are as
follows:(Millions of yen)

years and 8 months after the accounting period. Although some of PFI and other project finance loans
are exposed to risk of interest rate fluctuation, while they are hedged with derivatives (interest rate
swaps).
Derivatives include forward foreign currency contracts which are used to hedge currency fluctuation(Thousands of U.S. dollars)

798

7,208

risk associated with trade receivables and payables, and interest rate swaps which are used to hedge

2,194

19,817

risk of fluctuation in interest on loans payable. The evaluation of hedging effectiveness is omitted based

Goodwill

664

5,997

on the judgment that interest rate swaps meet the requirements for short-cut method.

Current liabilities(784)(7,081)

Current assets
Non-current assets

Non-current liabilities(487)(4,398)Acquisition cost of shares

2,386

21,551

Cash and cash equivalents(132)(1,192)

Balance: Expenditure for acquisition

2,253

20,3502. Fair value of financial instruments
The carrying value of financial instruments on the consolidated balance sheets as of March 31, 2021 and2020 and estimated fair value are shown in the following table. The financial instruments whose fairvalue is deemed extremely difficult to determine are not included in the table below (please see Note 2).

(Financial Instruments)
1. Overview(1) Group policy for financial instruments
The Group restricts its fund management to short-term deposits and raises funds through loans fromfinancial institutions including banks. Derivatives are used for receivables and payables arising fromtransactions associated with the actual demand, and the Group does not intend to make speculativetransactions.

(2) Type of financial instruments, related risk and risk management system
Although notes and accounts receivable - trade are exposed to customer credit risk, the Group works to
reduce such risk in accordance with credit management rules. Although trade receivables in foreign
currencies arising from overseas operations are exposed to currency fluctuation risk, they are hedged7272

As of March 31, 2020

Carrying value
Fair value
Difference(Thousands of U.S. (Thousands of U.S. (Thousands of U.S.
dollars)
dollars)
dollars)
Carrying value(Millions of yen)

Fair value(Millions of yen)

Difference(Millions of yen)

(1) Cash and deposits

13,645

13,645—(2) Notes and accounts receivable - trade78,10978,088(20)(1) Cash and deposits

169,605

169,605—(2) Notes and accounts receivable - trade708,138

707,740(388)(3) Investment securities
Available-for-sale securities

1,219

1,219

—

Total assets

878,972878,583(388)(1) Accounts payable - trade185,936

185,936—(2) Electronically recorded obligations

98,482

98,482—(3) Short-term loans payable(4) Current portion of PFI and other projects
finance loans(5) Long-term loans payable

4,877

4,877

—

7,795

7,795

—

11,624

11,932

307(6) PFI and other projects finance loans

81,16782,9281,761(3) Investment securities
Available-for-sale securities

110

110

—

Total assets

91,86591,844(20)(1) Accounts payable - trade

19,801

19,801—(2) Electronically recorded obligations

11,603

11,603—(3) Short-term loans payable

276

276

—

(4) Current portion of PFI and other projects
finance loans

855

855

—

(5) Long-term loans payable

1,539

1,560

21

(6) PFI and other projects finance loans

9,849

10,060211(7) Derivatives
Total liabilities

—

—

—

43,925

44,158233(7) Derivatives
Total liabilities(Note 1)
As of March 31, 2021——

391,979

2,068

Computation method of fair values of financial instruments and other matters concerning securities
and derivatives

Carrying value(Millions of yen)

Fair value(Millions of yen)

(1) Cash and deposits

18,777

18,777—(2) Notes and accounts receivable - trade78,39878,354

(43)

135

135

—

AssetsDifference(Millions of yen)

(1)

Cash and deposits
The fair value of cash and deposits is based on their carrying amount, since the fair value approximates
their carrying amount due to the short maturity period of the instrument.

(3) Investment securities
Available-for-sale securities—
389,901

Total assets

97,311

97,268(43)(1) Accounts payable - trade

20,585

20,585—(2) Electronically recorded obligations

10,903

10,903—

The fair value of notes and accounts receivable - trade is based on their present value calculated by

540

540

—

discounting the amount of each receivable classified by a certain period using a discount rate thatreflects the credit risk and the period until the maturity.

(3) Short-term loans payable(4) Current portion of PFI and other projects
finance loans(5) Long-term loans payable

863

863

—

1,287

1,321

34

(6) PFI and other projects finance loans

8,986

9,181

195

—

—

—

43,16643,396229(7) Derivatives
Total liabilities

(2)

(3)

Notes and accounts receivable - trade

Investment securities
The fair value of stocks is based on their prices quoted on the concerned stock exchanges.

Liabilities(1)

Accounts payable - trade, (2) Electronically recorded obligations, (3) Short-term loans payable and (4)Current portion of PFI and other project finance loans
The fair value of accounts payable - trade, electronically recorded obligations, short-term loans payable
and current portion of PFI and other project finance loans is based on their carrying amounts, since thefair value approximates their carrying amounts due to the short maturity period of the instruments.

73
73

Our aim(5)

Our path to growth

Our sustainability

Data section

Continue,to make it sustainable.

(Note 3) The redemption schedule for monetary receivables subsequent to the consolidated closing dateLong-term loans payable and (6) PFI and other project finance loans

As of March 31, 2020

The fair value of long-term loans payable and PFI and other project finance loans is computed based on
their present value calculated by discounting the aggregate value of principal and interest using thediscount rate at which a similar and new borrowing is assumed to be made.

(7)

Due in one year or
less(Millions of yen)

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

Derivatives
The fair value of interest rate swaps is based on the quoted price obtained from the counterparty

Cash and deposits

13,645———financial institution.

Notes and accounts
receivable - trade

66,676

3,857

3,802

3,773

80,322

3,857

3,802

7,546

Since interest rate swaps under short-cut method are treated together with long-term loans payable

Total

and PFI and other project finance loans that are subject to hedging, their fair value is included in the fairvalue of PFI and other project finance loans.

As of March 31, 2021
(Note 2) The amount of financial instruments recorded in the consolidated balance sheets, of which it isdeemed extremely difficult to determine the fair value.

Category
Unlisted stocks (including shares of
non-consolidated subsidiaries andaffiliated companies)

As of March 31, 2020 As of March 31, 2021
(Millions of yen)
(Millions of yen)

1,457

1,414

Due in one year or
less(Millions of yen)

As of March 31, 2021
(Thousands of U.S.
dollars)
12,772Since there is no quoted market price for the above item and it is deemed extremely difficult to

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

Cash and deposits

18,777———

Notes and accounts
receivable - trade67,518

4,121

3,755

3,002

86,296

4,121

3,755

3,002

Total

determine its fair value, the item is not included in “(3) Investment securities”.

Due in one year or Due after one year Due after five years
Due after ten years
through five years through ten years
less(Thousands of U.S.
(Thousands of U.S. (Thousands of U.S. (Thousands of U.S.
dollars)
dollars)
dollars)
dollars)
Cash and deposits

169,605———

Notes and accounts
receivable - trade609,863

37,22333,917

27,115

779,477

37,22333,917

27,115

Total

74
74

(Note 4) The repayment schedule for loans payable and PFI and other project finance loans subsequent(Securities)

to the consolidated closing date

Available-for-sale securities
As of March 31, 2020
Carrying value(Millions of yen)

Acquisition cost
(Millions of yen)

Unrealized gain (loss)(Millions of yen)

110

33

76

110

33

76

Carrying value(Millions of yen)

Acquisition cost
(Millions of yen)

Unrealized gain (loss)(Millions of yen)

135

33

102

Total

135

33

102

Category

Carrying value(Thousands of U.S.
dollars)

Acquisition cost(Thousands of U.S.
dollars)

Unrealized gain (loss)(Thousands of U.S.
dollars)

1,219

298

921

1,219

298

921

Category

As of March 31, 2020

Amounts in the consolidated balance
sheets exceeding acquisition cost:

Due in one
year or less(Millions ofyen)

Due after one
year throughfive years(Millions ofyen)

Due after five
years throughten years(Millions ofyen)

Due after ten
years throughfifteen years(Millions ofyen)

Due after
fifteen years(Millions ofyen)

Loans payable

276

1,266

272

—

—

PFI and other projects
finance loans

855

3,320

3,735

2,794

—

Total

1,131

4,587

4,007

2,794

—

StocksTotal

As of March 31, 2021
Category
Amounts in the consolidated balance
sheets exceeding acquisition cost:
Stocks

As of March 31, 2021

Due in one
year or less(Millions ofyen)

Due after one
year throughfive years(Millions ofyen)

Due after five
years throughten years(Millions ofyen)

Due after ten
years throughfifteen years(Millions ofyen)

Due after
fifteen years(Millions ofyen)

Loans payable

540

1,287

—

—

—

PFI and other projects
finance loans

863

3,265

3,675

2,045

—

Total

1,403

4,552

3,675

2,045

—

Amounts in the consolidated balance
sheets exceeding acquisition cost:
StocksDue after one
Due after fiveDue in one year
year through five years throughor lessyears
ten years(Thousands of(Thousands of (Thousands of
U.S. dollars)
U.S. dollars)
U.S. dollars)

Total

Due after ten
Due after fifteen
years throughyears
fifteen years(Thousands of(Thousands of
U.S. dollars)
U.S. dollars)

Loans payable

4,877

11,624———

PFI and other projects
finance loans

7,795

29,49133,194

18,471—

Total

12,672

41,11633,194

18,471—75
75

Our aim

Our path to growth

Our sustainability(Derivatives)

Data section

Continue,to make it sustainable.

As of March 31, 2021

1. Derivative transactions to which hedge accounting is not applied
No items to report.
Hedge accounting
methodMain hedged
items

Contract amount(Millions of yen)Interest rate swaps:
Payment on a
floating interest
rate/Receiving on
a fixed interest rateLong-term loans
payable691

553(Note)

Interest rate swaps:
Payment on a
floating interest
rate/Receiving on
a fixed interest rate

PFI and otherprojects finance
loans

9,029

8,244

(Note)

9,721

8,798

2. Derivative transactions to which hedge accounting is applied
Interest rate-related derivatives
As of March 31, 2020

Hedge accounting
methodShort-cut method
for interest rate
swaps

Type of derivativetransaction
Interest rate swaps:
Payment on a
floating interest
rate/Receiving on
a fixed interest rate
Interest rate swaps:
Payment on a
floating interest
rate/Receiving on
a fixed interest rate
Total

(Note)

Main hedged
itemsLong-term loans
payablePFI and otherprojects financeloans

Contract amount(Millions of yen)

816

Short-cut method
for interest rate
swaps

Contract amountdue after one
Fair value
year(Millions of yen)
(Millions of yen)

680

9,806

9,029

10,622

9,709(Note)

Total

Hedge accounting
method(Note)

Since interest rate swaps to which short-cut method is applied are accounted together with long-

Short-cut method
for interest rateswaps

term loans payable and PFI and other project finance loans that are subject to hedging, their fairvalue is included in the fair value of such long-term loans payable and PFI and other project financeloans.

Type of derivativetransaction

Main hedged
items

Contract amount(Thousands of
U.S. dollars)

Contract amountdue after one
year(Thousands of
U.S. dollars)

Fair value(Thousands of
U.S. dollars)Interest rate swaps:
Payment on a
floating interest
rate/Receiving on
a fixed interest rateLong-term loans
payable

6,241

4,995

(Note)

Interest rate swaps:
Payment on a
floating interest
rate/Receiving on
a fixed interest rate

PFI and otherprojects financeloans

81,55574,464(Note)

87,80579,468

Total(Note)

Contract amountdue after one
Fair value
year(Millions of yen)
(Millions of yen)Type of derivativetransaction

Since interest rate swaps to which short-cut method is applied are accounted together with longterm loans payable and PFI and other project finance loans that are subject to hedging, their fairvalue is included in the fair value of such long-term loans payable and PFI and other project financeloans.

76
76

(Retirement Benefits)
1.

(2) The changes in plan assets are as follows:

Overview of retirement benefit plans
The Company has lump-sum payment plans and a contract-type corporate pension plan as its defined
benefit plan. In addition, the Company has a defined contribution pension plan. The Company has
established a retirement benefit trust.
Plan assets at fair value at the beginning of theyear

Certain overseas consolidated subsidiaries have a defined benefit or defined contribution plan.
Certain domestic consolidated subsidiary has The Smaller Enterprise Retirement Allowance Mutual
Aid Scheme. In addition to such scheme, certain domestic consolidated subsidiary has a retirement benefit
plan under which such subsidiary pays additional retirement benefits to employees who meet theprescribed requirements upon their retirement.

2.

Defined benefit plans(3)(1) The changes in the retirement benefit obligation are as follows:

Retirement benefit obligation at the beginningof the year
Service cost

Fiscal year ended
March 31, 2020
(Millions of yen)

Fiscal year ended
March 31, 2021
(Millions of yen)

Fiscal year ended
March 31, 2021
(Thousands of U.S.
dollars)

17,163

17,396

157,131

697

695

6,277

Interest cost

157

154

1,391

Actuarial gain and loss

195

289

2,610

Retirement benefits paid

(807)

(603)

(5,446)

Other

(10)

(50)

(451)

17,396

17,881

161,512Retirement benefit obligation at the end of theyear

13,935

15,544140,402

161

171

1,544

673

1,412

12,754Contribution by the companies

1,082

665

6,006

Retirement benefits paid

(353)

(538)

(4,859)

44

(8)

(72)

15,544

17,247

155,785

The following table sets forth the funded status of the plans and the amounts recognized in the
consolidated balance sheets as of March 31, 2020 and 2021 for the Company’s and the consolidated
subsidiaries’ defined benefit plans:
As of March 31,
2020(Millions of yen)

77
77

Fiscal year ended
March 31, 2021
(Thousands of U.S.
dollars)

Expected return on plan assets

Plan assets at fair value at the end of the year

actuarial calculations.

Fiscal year ended
March 31, 2021
(Millions of yen)

Actuarial gain and loss

Other

In certain cases, the Group may also pay additional retirement benefits that are not subject to any

Fiscal year ended
March 31, 2020
(Millions of yen)

As of March 31,
2021(Millions of yen)

As of March 31,
2021(Thousands of U.S.
dollars)

Funded retirement benefit obligation

14,944

15,361

138,749

Plan assets at fair value(15,544)(17,247)(155,785)(599)(1,885)(17,026)

Unfunded retirement benefit obligation

2,452

2,519

22,753

Net amount of liabilities and assets
recognized in the consolidated balance
sheet

1,852

634

5,726

Liability for retirement benefit

4,025

3,819

34,495

Assets for retirement benefits

2,172

3,185

28,768

Net amount of liabilities and assets
recognized in the consolidated balance
sheet

1,852

634

5,726

Our
Ouraimaim

Our
Ourpathpathtotogrowth
growthOur
Oursustainability
sustainability(4) The components of retirement benefit expenses are as follows:

Data
Datasection
sectionContinue,to make it sustainable.

(7) The fair value of plan assets, by major category as a percentage of total plan assets are as follows:
As of March 31, 2019

Fiscal year ended
March 31, 2020
(Millions of yen)

Fiscal year ended
March 31, 2021
(Millions of yen)

Fiscal year ended
March 31, 2021
(Thousands of U.S.
dollars)

Service cost

697

695

6,277

Interest cost

157

154

1,391

Expected return on plan assets

(161)

(171)

(1,544)

Amortization of actuarial gain or loss

613

(1,772)(16,005)

Amortization of prior service cost

8

7

63

(53)

(33)

(298)

1,263

(1,120)(10,116)

Other
Retirement benefit expenses

As of March 31, 2020

Stocks

31%

16%

Bonds

33

29

General accounts

19

17

Cash and deposits

—

25

Other

17

10

Total

100

100

(Note)

Retirement benefit trust established for the corporate pension plans is included and equivalent to10.5% of total amount of plan assets as of March 31, 2020 and 9.4% as of March 31, 2021.

The long-term expected rate of return on plan assets have been determined as a result of considerationof both the portfolio allocation at present and in the future, and long-term rates of return from multiple(5) The components of remeasurements of defined benefit plans included in other comprehensive
income (before tax effect) are as follows:
Fiscal year ended
March 31, 2020
(Millions of yen)

Fiscal year ended
March 31, 2021
(Millions of yen)

Fiscal year ended
March 31, 2021
(Thousands of U.S.
dollars)

8

7

63

Actuarial gain and loss

1,091

(649)

(5,862)

Total

1,100

(641)

(5,789)Prior service cost

(6)

plan assets at present and in the future.

(8) The assumptions used in accounting for the defined benefit plans are as follows:
Fiscal year ended March 31,
2020
Discount rates
Long-term expected rates of return on plan
assetsExpected rates of salary increase

The components of remeasurements of defined benefit plans included in accumulated othercomprehensive income (before tax effect) are as follows:
As of March 31,
2020(Millions of yen)
Unrecognized prior service cost

As of March 31,
2021(Millions of yen)

As of March 31,
2021(Thousands of U.S.
dollars)7——

Unrecognized actuarial gain and loss

1,264

1,913

17,279

Total

1,272

1,913

17,27978
78

0.05–1.2%

Fiscal year ended March 31,
2021
0.2–1.2%

Mainly 1.5

Mainly 1.5

1.2–8.5

1.2–8.5

3.

Defined contribution plans(Notes)1. The valuation allowance has increased by ¥102 million (US$921 thousand). This increase mainly

Contributions of defined contribution plans for the fiscal years ended March 31, 2020 and 2021 were ¥151

consists of the additional recognition of the valuation allowance relating to the adjustment of themillion and ¥279 million (US$2,520 thousand), respectively.

carrying amount of shares of subsidiaries based on the group taxation regime in the amount of ¥52
million (US$469 thousand), the valuation allowance for loss on valuation of investment securities in
the amount of ¥32 million (US$289 thousand), and the valuation allowance for unused tax losses in(Income Taxes)

the amount of ¥16 million (US$144 thousand) at a consolidated subsidiary, METAWATER USA, INC.

1. The significant components of deferred tax assets and deferred tax liabilities

2. Amounts of unused tax losses and deferred tax assets by carryforward period
As of March 31,
2020(Millions of yen)

As of March 31,
2021(Millions of yen)

As of March 31,
2021(Thousands of U.S.
dollars)

As of March 31, 2020

Deferred tax assets:
Enterprise tax payable

189

275

2,483

Accrued bonuses

872

968

8,743

Provision for loss on construction
contracts

182

275

2,483

Provision for warranties for completed
construction

359

434

3,920

Excess of depreciation

330

287

2,592

1,425

189

1,707

Unused tax losses (Note 2)

165

178

1,607

Other

753

914

8,255

4,278

3,524

31,830

Valuation allowance for unused tax
losses (Note 2)

(160)

(319)

(2,881)

Valuation allowance for the total
amount of deductible temporary
differences

(233)

(177)

(1,598)Valuation allowance subtotal (Note 1)

(394)

(497)

(4,489)Total deferred tax assets

3,884

3,027

27,341

(858)

—

—

Customer-related assets

—

(451)

(4,073)

(362)

(438)

(3,956)

Total deferred tax liabilities(1,221)(890)(8,039)Net deferred tax assets (liabilities)

2,662

2,137

19,302

Other

165
(160)
4

As of March 31, 2021

Unused tax losses (a)Valuation allowance
Deferred tax assets

After two
After
After one
After four
years
three
One yearyear
years
After fivethroughyears
or less
throughthroughyears
three
through(Millions two years
five years (Millions
years
four yearsof yen)(Millions(Millionsof yen)(Millions (Millionsof yen)of yen)of yen)of yen)
—
—
2
0
0
176
—
—
(2)
(0)
(0)
(175)
—
—
—
—
—
1

Unused tax losses (a)Valuation allowance
Deferred tax assets

After two After three After four
After one
One year or
years
years
years
After five
year through
Total
less
through through four through fiveyears
two years(Thousands(Thousands
three years
years
years
(Thousands(Thousandsof U.S.
of U.S.
(Thousands (Thousands (Thousandsof U.S.
of U.S.
dollars)
dollars)of U.S.
of U.S.
of U.S.
dollars)
dollars)
dollars)
dollars)
dollars)
—
—
18
0
0
1,589
1,607
—
—
(18)
(0)
(0)
(1,580)(1,598)
—
—
—
—
—
9
9

Deferred tax liabilities:
Gain on contribution of securities toretirement benefit trust

Total(Millionsof yen)(a) Unused tax losses are multiplied by the effective statutory tax rate.

Liability for retirement benefit

Subtotal

Unused tax losses (a)Valuation allowance
Deferred tax assets

After two
After
After one
After four
years
three
One yearyear
years
After fivethroughyears
or less
throughthroughyears
three
through(Millions two years
five years (Millions
years
four yearsof yen)(Millions(Millionsof yen)(Millions (Millionsof yen)of yen)of yen)of yen)
—
—
—
2
3
159
—
—
—
(2)
(0)
(158)
—
—
—
—
3
1

(a) Unused tax losses are multiplied by the effective statutory tax rate.

79
79

Total
(Millionsof yen)
178
(177)
1

Our aim
2.

Our path to growth

Our sustainability

The breakdown of major items that caused differences between the effective statutory tax rate and theData section

Continue,to make it sustainable.

(5) Company name after business combination

effective income tax rate

Wigen Companies, Inc.
(6) Ratio of voting rights acquired
As of March 31, 2020

As of March 31, 2021

30.6%

30.6%

Effective statutory tax rate

100%(7) Background of selecting the acquiree
METAWATER USA, INC., the Company’s consolidated subsidiary, acquired all shares of Wigen(Adjustment)
Permanently non-deductible items such asentertainment expenses
Permanently non-taxable items such as dividends
incomeCompanies, Inc. in exchange for cash.
1.9

14.1

(0.2)

(0.9)

Per capita inhabitants’ tax

0.8

0.6

Tax credit for experiment and research expenses

(2.1)

(4.0)

Changes in valuation allowance

(0.3)

1.0

Difference in tax rates of overseas consolidated
subsidiaries

(0.4)

(0.2)

Other

(0.2)

(0.5)

2. Period of the acquiree’s business results included in the consolidated financial statements for the fiscal
year ended March 31, 2021
The fiscal year-end of the acquiree is December 31, which is three months different from the consolidated
fiscal year-end. The consolidated financial statements for the fiscal year ended March 31, 2021 include theresults of the acquiree from April 1, 2020 to December 31, 2020.

Effective income tax rate

30.1

3. Acquisition costs and the details(Millions of yen)(Thousands of U.S. dollars)

Consideration paid: cash

2,386

21,551

Acquisition costs

2,386

21,551

40.6
4. Details and amount of major acquisition-related costs
Advisory expenses and others: ¥176 million (US$1,589 thousand)
5. Amount of goodwill incurred, source, and method and period of amortization(Business Combination)(1) Amount of goodwill incurredBusiness combination by acquisitions¥664 million (US$5,997 thousand)1. Overview

Subsequent to the provisional accounting applied for the three months ended June 30, 2020, the(1) Name and business of the acquiree
Name:

Wigen Companies, Inc.

allocation of acquisition costs has been completed as of March 31, 2021, and the amount of goodwill has

Business:

Development, designing and manufacturing of water treatment equipment for membrane

been determined.
(2) Source

treatment and ion-exchange

The acquisition cost is accounted for as goodwill to the extent it exceeds the amount allocated to the(2) Major purpose of business combination

assets acquired and liabilities assumed, net.

The purpose is to acquire technology, experience and basis for distribution network in the U.S. market for(3) Method and period of amortization

recycled drinking water, as well as to expand the Group’s business in North America by utilizing the

The straight-line method over 15 years

experience related to water supply in the private sector market.
(3) Date of business combination
April 1, 2020
(4) Legal form of business combination
Stock acquisition in exchange for cash

80
80

6. Amounts and details of assets acquired and liabilities assumed on the business combination date(Millions of yen)(Thousands of U.S. dollars)

Current assets

798

7,208

Property, plant and equipment

75

677

Intangible assets

2,119

19,140Total assets

2,992

27,025784

7,081

Current liabilities[Segment Information]
1. Outline of reportable segment
The Company’s segments represent components of the Company for which separate financial information
is available and that are subject to periodical review by the board of directors in determining how to allocate
operating resources and evaluating performance.

487

4,398

The Company has established business divisions by its products and services at the corporate office,

1,271

11,480each of which operates under comprehensive domestic and overseas strategies developed for its products

Non-current liabilities
Total liabilities(Segment Information)(Note) The amounts of assets and liabilities do not include the amount of goodwill in 5. above.
7.

and services.
Therefore, the Group basically consists of two reportable segments: “Plant Engineering” and “Service

Amount allocated to intangible assets other than goodwill, as well as its details and amortization period by

Solutions”, which are based on the Company’s business divisions in consideration of similarities of types

major type
Details by major type

AmountAmortization period

Customer-related assets¥2,092 million (US$18,896 thousand)19 yearsand natures of products and services. “Plant Engineering” segment is primarily involved in design andconstruction of water and sewage treatment plants. “Service Solutions” segment is primarily involved inoperation, control and repair of water and sewage treatment plant facilities.
2. Determination of sales, income or loss, assets, liabilities and other items for each reportable segment

8. Estimated impact on the consolidated statement of income for the fiscal year ended March 31, 2021,

Accounting treatment applied to the business segment reported is generally consistent with accounting

assuming that business combination was completed as of April 1, 2020 and the calculation methods

treatment stated in “Important Matters for Basis of Preparation of Consolidated Financial Statements”.

thereof

In addition, segment income is determined based on operating income, which is consistent withThis information is not provided because the effect on the consolidated statement of income for the fiscal

operating income for the consolidated statement of income.

year ended March 31, 2021 is immaterial.
(Asset Retirement Obligations)
The Group recognizes asset retirement obligations to restore corporate offices to their original condition upon
termination of their lease contracts. However, the statement is omitted because the total amount of the asset
retirement obligations is immaterial.
Regarding some of the obligation to restore corporate offices to their original condition, the Groupestimate nonrecoverable amounts of deposits for those premises and record the portion attributable to thecurrent year as expenses, instead of recording asset retirement obligations.

81
81

Our aim

Our path to growth

Our sustainability

Data section

Continue,to make it sustainable.
(Thousands of U.S. dollars)

3. Sales, income or loss, assets, liabilities and other items by reportable segment
Reportable segments

Fiscal year ended March 31, 2020
(Millions of yen)
Reportable segments
Plant
Engineering
Business

Service
Solutions
Business

Adjustments
Consolidated(Note)

Total

Service
Solutions
Business

Total

690,651

513,892

1,204,543

—

—

—

—

—

—

690,651

513,892

1,204,543—

1,204,543

Net sales
Sales to third parties
Inter-segment sales and transfers

Net sales

Net sales

Sales to third parties
Inter-segment sales and transfers
Net sales

Adjustments
Consolidated(Note)

Plant
Engineering
Business

1,204,543

72,36656,356

128,723—

128,723

Segment income

50,02248,09898,121—

98,121

—

—

—

—

—

Segment assets

508,490

492,5211,001,011

184,003

1,185,023

72,36656,356

128,723—

128,723

Segment income

3,188

5,035

8,223

—

8,223

Segment assets

50,18753,053103,240

16,228

119,469

Depreciation

630

467

1,098

—

1,098

Capital expenditures

526

267

794

—

794

Other items

Other items

Depreciation

6,521

4,742

11,263—

11,263

Capital expenditures

9,538

5,058

14,605—

14,605(Note) The amount of corporate assets included in adjustments of segment assets is ¥20,371 million(US$184,003 thousand). The corporate assets mainly represent cash and deposits and investment
securities.

(Note) The amount of corporate assets included in adjustments of segment assets is ¥16,228 million. The
corporate assets mainly represent cash and deposits and investment securities.

[Related Information]
Fiscal year ended March 31, 2020

Fiscal year ended March 31, 2021

1. Information by products and services(Millions of yen)

A description is omitted because similar information has been disclosed under segment information.

Reportable segments
Adjustments
Consolidated(Note)

Plant
Engineering
Business

Service
Solutions
Business

Total

76,46256,893

133,355—

2. Information by region(1) Net sales

Net sales
Sales to third parties
Inter-segment sales and transfers
Net sales

A description is omitted because sales to third parties in Japan exceed 90% of net sales in the133,355

—

—

—

—

—

76,46256,893

133,355—

133,355

consolidated statement of income.

Segment income

5,538

5,325

10,863—

10,863

Segment assets

56,29554,527

110,822

20,371

131,194

722

525

1,247

—

1,247

Japan

The United States

Switzerland

Other

Total

1,056

560

1,617

—

1,617

1,327

1,421

404

30

3,184

(2) Property, plant and equipment(Millions of yen)

Other items
Depreciation
Capital expenditures

3. Information about major customers(Millions of yen)

82
82

Name of customer

Net sales

Related business segment

TOKYO METROPOLITANGOVERNMENT

17,267

Plant Engineering Business
Service Solutions BusinessFiscal year ended March 31, 2021

[Information about Impairment Loss on Non-current Assets by Reportable Segment]

1. Information by products and services

Fiscal year ended March 31, 2020

A description is omitted because similar information has been disclosed under segment information.

No items to report.

2. Information by region

Fiscal year ended March 31, 2021

(1) Net sales

No items to report.
(Millions of yen)Japan

The United States

Other

Total

119,057

11,396

2,901

133,355[Information about Amortization and Unamortized Balance of Goodwill by Reportable Segment](Thousands of U.S. dollars)
Japan

The United States

Other

Total

1,075,395

102,935

26,203

1,204,543

Fiscal year ended March 31, 2020
(Millions of yen)

(Note) Net sales are classified by country or region based on the customer’s location.

Reportable segments
Plant
Engineering
Business(2) Property, plant and equipment(Millions of yen)Japan

The United States

Switzerland

Other

Total

1,780

1,756

448

316

4,302

Amortization
Unamortized balance

Service
Solutions
Business

Total

Corporate/
Eliminations

Total

148

—

148

—

148

1,671

—

1,671

—

1,671

(Thousands of U.S. dollars)
Japan

The United States

Switzerland

Other

Total

16,07815,861

4,046

2,854

38,858

Fiscal year ended March 31, 2021
(Millions of yen)
Reportable segments
Plant
Engineering
Business

3. Information about major customers(Millions of yen)
Name of customer

Net sales

Related business segment

TOKYO METROPOLITANGOVERNMENT

19,655

Plant Engineering Business
Service Solutions Business

Amortization
Unamortized balance

Net sales

Related business segment

TOKYO METROPOLITANGOVERNMENT

177,535

Plant Engineering Business
Service Solutions Business

Total

Corporate/
Eliminations

Total

193

—

193

—

193

2,421

—

2,421

—

2,421

(Thousands of U.S. dollars)
Reportable segments(Thousands of U.S. dollars)Name of customer

Service
Solutions
Business

Plant
Engineering
Business

83
83

Service
Solutions
Business

Total

Corporate/
Eliminations

Total

Amortization

1,743

—

1,743

—

1,743

Unamortized balance

21,867—

21,867—

21,867

Our aim

Our path to growth

Our sustainability

Data section[Information about Gain on Bargain Purchase by Reportable Segment](Related Party Information)

Fiscal year ended March 31, 2020

Fiscal year ended March 31, 2020

No items to report.

1.

Continue,to make it sustainable.

Business transactions with related parties(1)Business transactions between the company filing the consolidated financial statements and related

Fiscal year ended March 31, 2021

parties

No items to report.

Unconsolidated subsidiaries and affiliated companies of the company filing the consolidated financial
statements

Category

Other
affiliate

Related party

NGK INSULATORS,
LTD.

Other
affiliate

FUJI ELECTRIC
CO., LTD.

Address

Mizuho-ku,
Nagoya-shi

Kawasaki-ku,
Kawasaki-shi

Capital stockor
contributions(Millions ofyen)

69,84947,586

Type of business

Development, manufacture,and sale of products related
to electric power, ceramics,
electronics, and process
technology, and provision ofservices related thereto

Percentage
of votingrightsholding(held) (%)(Held)
Direct 25.3

Development, manufacture,and sale of products related
to power electronics
systems, electronic devices,
food distribution and power
plant, and provision ofservices related thereto(Held)
Direct 24.4

Nature oftransaction

Transaction
amount(Millions ofyen)Account
title

Balance atthe endof year(Millions ofyen)

Purchase of
products

Purchase of
products (Note
1, 2)

958

Accounts
payable trade

797

Concurrent
holding of
positions byofficers

Purchase oftreasury stock(Note 3)

6,804—

Purchase of
products(Note 1, 2)

8,292

Accounts
payable trade

Purchase oftreasury stock(Note 3)

7,484

—

4,706

Accounts
payable trade

1,485

Accounts
764 receivable trade

671

Relationship

—

3,153

Purchase of
products

Subsidiaryof otheraffiliate

FUJI FURUKAWAENGINEERING &CONSTRUCTION
CO. LTD.

Saiwaiku,
Kawasaki
-shi

1,970

Design and execution of
construction of plantfacilities, air conditioning/
electricity/building/incidental
facilities, andtelecommunications—

Entrustment of
the Company’s
construction
contracts

Entrustmentofconstruction
contracts(Note 1, 2)

Subsidiaryof otheraffiliate

Hokkaido Fuji
Electric Co., Ltd.

Chuo-ku,
Sapporoshi

100

Sale, installation, and repairof electrical machinery andapparatus/control systems
and electronic components—

Acceptance ofconstruction
contracts ofsaid company

Acceptance ofconstruction
contracts(Note 1, 2)(Notes)1.

—

Of the amounts stated above, the transaction amount excludes consumption taxes, while thebalance at end of the fiscal year includes consumption taxes.

2.

Transaction terms and the policy to determine transaction terms
Transaction terms such as prices are determined through negotiation in each case based on aquotation as is the case with general transactions, as well as by reference to actual situation of
the market.

3.

The purchase of treasury stock was conducted through a tender offer with the purchase price of¥3,402 per share of common stock in accordance with the resolution of the Board of Directors’
meeting held on October 29, 2019.

(2)Business transactions between consolidated subsidiaries of the company filing the consolidated financial
statements and related parties
No items to report.

2.

84
84

Note concerning the parent company or significant affiliated companies
No items to report.

Fiscal year ended March 31, 2021
1.

(Per Share Information)
Fiscal year ended
March 31, 2020
(Yen)

Fiscal year ended
March 31, 2021
(Yen)

Net assets per share

1,138.03

1,223.53

11.05

Net income per share

115.76150.501.35

Business transactions with related parties(1)Business transactions between the company filing the consolidated financial statements and relatedpartiesUnconsolidated subsidiaries and affiliated companies of the company filing the consolidated financial
statements

Category

Other
affiliate

Related party

NGK INSULATORS,
LTD.

Other
affiliate

FUJI ELECTRIC
CO., LTD.

Subsidiaryof otheraffiliate

FUJI FURUKAWAENGINEERING &CONSTRUCTION
CO. LTD.

Subsidiaryof otheraffiliate

Hokkaido Fuji
Electric Co., Ltd.

(Notes)1.

(Notes)Address

Capital stockor
contributions(Millions ofyen)

Mizuho-ku,
Nagoya-shi

Development, manufacture,and sale of products related
69,849to electric power, ceramics,(US$630,918
electronics, and process
thousand)technology, and provision ofservices related thereto(Held)
Direct 24.4

Development, production,and sale of products related
to power electronics
47,586 systems energy, power(US$429,825 electronics systems
thousand) industry, electronic devices,
food distribution and power
plant, and provision ofservices related thereto(Held)
Direct 24.4

Kawasaki-ku,
Kawasaki-shi

Saiwaiku,
Kawasaki-shi

Chuo-ku,
Sapporoshi

Type of business

Percentage
of votingrightsholding(held) (%)

Relationship

Nature oftransaction

Transaction
amount(Millions ofyen)Account
title

Balance atthe endof year(Millions ofyen)

Purchase of
products

1.

Diluted net income per share is not presented as there are no diluted shares.

2.

The Company conducted a 2-for-1 split for each share of common stock on October 1, 2020.
Net assets per share and net income per share are calculated based on the assumption that thestock split was conducted at the beginning of the previous fiscal year.

3.

Purchase of
products
Concurrent
holding of
positions byofficers

Purchase of
products (Note
1, 2)

1,053
(US$9,511
thousand)Accounts
payable trade

Net income per share is calculated on the following basis.

832(US$7,515
thousand)Fiscal year ended
March 31, 2020
(Millions of yen)
Purchase of
products(Note 1, 2)

8,533(US$77,075
thousand)Accounts
payable trade

2,984(US$26,953
thousand)—

Sale, installation, and repair
100of electrical machinery and(US$903apparatus/control systems
thousand)and electronic components—

Acceptance ofconstruction
contracts ofsaid company

Acceptance ofconstruction
contracts(Note 1, 2)

1,521 Accounts(US$13,738 receivable thousand)
trade

1,120
(US$10,116
thousand)Entrustment of
the Company’s
construction
contracts

Entrustment ofconstruction
contracts(Note 1, 2)

5,404(US$48,812
thousand)Accounts
payable trade

1,646(US$14,867
thousand)Acceptance ofconstruction
contracts ofsaid company

Acceptance ofconstruction
contracts(Note 1, 2)

685 Accounts(US$6,187 receivable thousand)
trade

641
(US$5,789
thousand)Profit not attributable to commonshareholders
Profit attributable to owners of parent
related to common stock
Average number of shares outstanding
during the period (number of shares)

4.

5,677

6,542

59,091

—

—

—

5,677

6,542

59,09149,046,652

43,468,404

43,468,404

Fiscal year ended
March 31, 2020
(Millions of yen)

Of the amounts stated above, the transaction amount excludes consumption taxes, while theTransaction terms and the policy to determine transaction terms

Total net assets

Transaction terms such as prices are determined through negotiation in each case based on aquotation as is the case with general transactions, as well as by reference to actual situation of

Deduction from total net assets

the market.

(Non-controlling interests included in theabove)Net assets attributable to shares ofcommon stock(2)Business transactions between consolidated subsidiaries of the company filing the consolidated financial

Number of common stock used for
calculation of net assets per share (numberof shares)

statements and related parties
No items to report.

2.

Fiscal year ended
March 31, 2021
(Thousands of U.S.
dollars)

Net assets per share are calculated on the following basis.

balance at end of the fiscal year includes consumption taxes.
2.

Fiscal year ended
March 31, 2021
(Millions of yen)

Net income per share
Profit attributable to owners of parent

Design and execution of
construction of plant
1,970
facilities, air conditioning/(US$17,794
electricity/building/incidental
thousand)facilities, andtelecommunications

Fiscal year ended
March 31, 2021
(U.S. dollars)(Significant Subsequent Event)

Note concerning the parent company or significant affiliated companies

No items to report.

No items to report.

85
85

Fiscal year ended
March 31, 2021
(Millions of yen)

Fiscal year ended
March 31, 2021
(Thousands of U.S.
dollars)

49,59253,432482,630

148

166

1,499

(148)

(166)

(1,499)49,44353,266481,130

43,446,628

43,535,068

43,535,068

Our aim
5.

Our path to growth

Our sustainability

Data section[Supplementary Schedules][Schedule of Bonds]

Category

No items to report.

[Schedule of Loans]
Balance as ofApril 1, 2020
(Millions ofyen)

Category

Balance as ofMarch 31,2021
(Millions ofyen)

Balance as ofApril 1, 2020
(Thousandsof U.S.
dollars)

Balance as ofMarch 31,
2021
(Thousandsof U.S.
dollars)

Averageinterest rate(%)

Due date

Continue,to make it sustainable.

Due after three
Due after one year Due after two years
Due after four years
years through four
through two years through three years
through five years
years(Millions of yen)
(Millions of yen)
(Millions of yen)
(Millions of yen)

Long-term loans
payable

457

276

276

276

PFI and otherprojects finance
loans

873

885

698

807

Due after three
Due after one year Due after two years
Due after four years
years through four
through two years through three years
through five years
years(Thousands of U.S. (Thousands of U.S.
(Thousands of U.S.
(Thousands of U.S.
dollars)
dollars)
dollars)
dollars)

Short-term loans
payable

276

540

2,492

4,877

2.78

—

Category

Current portionof PFI and otherproject finance
loans

855

863

7,722

7,795

1.06

—

Long-term loans
payable

4,127

2,492

2,492

2,492

Long-term loans
payable

1,539

1,287

13,901

11,624

3.18

April 25, 2023
to January 14,
2026

PFI and otherprojects finance
loans

7,885

7,993

6,304

7,289

PFI and otherprojects finance
loans

9,849

8,986

88,962

81,167

1.16

June 22, 2026
to November
30, 2033

Total

12,52011,677113,088

105,473——(Notes)1.

[Schedule of Asset Retirement Obligations]
No items to report.

“Average interest rate” is stated at weighted average interest rate on the balance of loans
payable at the end of the fiscal year.

2.

Repayment schedule for long-term loans payable and PFI and other project finance loans(excluding current portion) per year for five years subsequent to the consolidated balance sheet
date

86
86

Corporate Information
Corporate Overview
Company Name

METAWATER Co., Ltd.

English Name

METAWATER Co., Ltd.

Main Business
Activities

Design and construction of equipment for water treatment plants,
sewage treatment plants, and waste treatment facilities;
design, manufacture, and sale of various devices; implementation of
repair work; provision of services including operation management.

Construction
Industry
Qualifications

Civil engineering work, building work, electrical work, plumbing work,
tile, brick and block work, machine and equipment installation work,
telecommunication work, water and sewage facilities work,sanitation facilities work.

Establishment

April 1, 2008

Main groupcompanies

METAWATER SERVICES Co., Ltd.*METAWATER USA, INC.*
Aqua-Aerobic Systems, Inc.*
Wigen Companies, Inc.*
Mecana Umwelttechnik GmbH*FUCHS Enprotec GmbH*
Rood Wit Blauw Holding B.V.*
METAWATER TECH Co., Ltd.
Akebono Engineering Co.
Techno Clean Hokuso Co.*
SIC Co., Ltd.
Water Next Yokohama Co., Ltd.*
Aqua Service Aichi Co.**: Scope of consolidated statemen

Chairman and
Representative Director

Kenji Yamaguchi

Number of
employee

3,340

List of bases*As of March 31, 2020, consolidated

Organization

Head Office
JR Kanda Manseibashi Bldg., 1-25 Kandasuda-cho, Chiyoda-ku, Tokyo 101-0041
TEL:+81-(0)3-6853-7300

President & Chief Executive Officer

Auditing Office

Export Control Office

CSR Promotion OfficeFinancial Planning Office

HR & General Affairs Planning Office

Corporate Strategy Planning Division

Quality Assurance Office

Safety and Health Management Office

Cost Engineering Center

Plant Construction Center

Product Center

International Business Division

Public Private Partnership Division

Resource & Environment Business Division

Customer Engineering Division

Service Solution Division

Plant Engineering Division

87

Sales & Marketing Division

Handa (Aichi), lchihara (Chiba), Chiyoda-ku (Tokyo)

WBC Center

Main sales bases
Tokyo (Headquarters), Sapporo, Sendai, Yokohama, Nagoya,
Osaka, Hiroshima, Takamatsu, Fukuoka

R&D Center

Nagoya Branch
Nagoya Prime Central Tower, 2-27-8 Meieki, Nishi-ku, Nagoya, Aichi 451-0045
TEL:+81-(0)52-884-6800

Innovation Center

Business Strategy Division

Hino Branch
3-1-30 Asahigaoka, Hino, Tokyo 191-0065		
TEL:+81-(0)42-589-6900

R&D Centers

United States, Netherlands, Switzerland, Germany, Vietnam,
Cambodia, Singapore

Overseas bases

Our aim

Our path to growth

Our sustainability

Data section

Corporate Information
Stock-related matters

Map of bases

As of March 31, 2020

Stock Exchange listingFirst section of the Tokyo Stock Exchange
Industrial Classification Electric Power and Gas. (code: 9551)

Total number of authorized shares

140,000,000 shares

Total number of issued shares

51,758,500 shares(Including 8,223,432 shares of treasury stock)

Number of shareholders

6,043

As of April 1, 2021

We have approx. 40 domestic sales and service bases
to deliver sophisticated customer services.
Headquarters
Sales/Service base

OfficeGroup company

Breakdown of shareholders
Financial institutions

Other domestic corporation

Private & Others

14.676%41.630%22.487%

Financial instruments
business operators

1.627%

Status of dominant shareholders (Top 10)
Name of shareholder

METAWATER USA, INC.

Foreign corporation

19.577%Aqua-Aerobic Systems, Inc.
Europe Representative Ofﬁce
Rood Wit Blauw Holding B.V.
FUCHS Enprotec GmbH
Mecana Umwelttechnick GmbH

Number of shares
owned(1,000 shares)

Wigen Companies, Inc.

Percentage ofshares owned(%)

NGK INSULATORS, LTD.

10,62924.42

Fuji Electric Co., Ltd.

10,60024.35

The Master Trust Bank of Japan, Ltd. (Trust account)

2,557

5.87

JP MORGAN CHASE BANK 385632

2,061

4.74

Hanoi Representative Ofﬁce

Custody Bank of Japan, Ltd. (Trust Account)

1,857

4.27

Phnom Penh Representative Ofﬁce

GOVERNMENT OF NORWAY

990

2.28

Singapore Representative Ofﬁce

The Nomura Trust and Banking Co., Ltd. (Trust account)

568

1.30

METAWATER Employee Shareholding Association

534

1.23

Custody Bank of Japan, Ltd. (Trust Account 9)

482

1.11

Custody Bank of Japan, Ltd. (Securities Investment Trust Account)

410

0.94

Group company
Liaison office* The Company holds 8,223,432 shares of treasury stock, which have been excluded from the above list of dominant shareholders.
Additionally, the percentage of shares owned is calculated excluding treasury stock.

88

“META” in the corporate name “METAWATER” is a prefix representing“transcendence” or “transformation.”
It symbolizes our desire to be a company that evolves continuously to hand down “WATER,”
an indispensable resource, to people in the future generations.
The line vertically intersecting the logo in the center represents the role of
METAWATER and its advanced technologies and products.
The deep blue on the left symbolizes “water before purification” andthe clear blue on the right represents “water after purification and regeneration.”

Corporate Characters
To symbolize our corporate identities, we have mascot characters called “Mae-chan” and “Tah-kun.”
The synergetic growth of “Mae-chan,’’ representing natural water, and “Tah-kun,” representing
purified water, symbolizes the growth and symbiosis of METAWATER with the environment.
Mae-chanTah-kun■ METAWATER Instagram official account・Account name : metawater_official
・Name
・URL

89

: metagram by METAWATER: https://www.instagram.com/metawater_official/?hl=ja

METAWATER Co., Ltd. : JR Kanda Manseibashi Bldg., 1-25 Kandasuda-cho, Chiyoda-ku, Tokyo 101-0041