ORGANOGROUPREPORT
2022

The Organo Group leverages the technologies
it has cultivated through long experience
with water treatment to contributeto the industries that create the future,and to the development of societal infrastructure.

The Organo Group aims to contribute to theindustries that create the future and to thedevelopment of societal infrastructure as acomprehensive water treatment engineering
company that leverages the leading-edge
technologies it has cultivated through longexperience with water treatment. The Organo
Group Report, published since 2020, provides
a wide variety of information about the Group,
including the current business environment
and financial conditions as well as future
management strategies.
Recently, the Company has promoted therealization of a sustainable society andmanagement that enhances sustainability as acorporate group. In this report, we will inform
our stakeholders of the Organo Group’s
current efforts to boldly addressenvironmental, social, and governance issues.

Water is a precious asset, shared by all life forms on the planet.
It has been Organo’s central theme throughout its history, and the Company continues to pursue a deeper
understanding of water and to nurture water-related technologies.
Organo brings the powerful benefits of this life-sustaining resource to the development of societal
infrastructure, to leading-edge industry, and to daily life. As a comprehensive water treatment engineering
company, we will contribute to coexisting and living in harmony with the beautiful global environment.

Management
Philosophy

Organo serves as a valuable partner company by leveraging its leading-edge technologies
cultivated through long experience with water treatment, by contributing to the industries
that create the future, and by playing a key role in the development of societal infrastructure.

Long-Term
Management
VisionAt Organo, we seek to expand our business through high value-added separation andpurification as well as analysis and manufacturing technologies, and by providing products
and services that promote the creation of value and which resolve the challenges that
confront industry and society.
We proactively contribute to a better tomorrow by cultivating people today who will improveupon the way things were done yesterday, as a company where all employees are energetic
and passionate about their work.

About the Organo Group
Report 2022

Masayuki Yamada
Representative Director and President
President and Executive Officer

Contents
Introduction

Message from the Director in
Charge of Financial Strategy

44

1Strengths of the Organo Group3

Message from the Director in
Charge of R&D and Engineering 23

History of the Organo Group

9

Business Overview

25

 ater Treatment Engineering
W
Business Unit27

 erformance Products
P
Business Unit

Consolidated Statement of
Income/Consolidated Statement54
of Comprehensive Income

29 onsolidated Statement ofC
Shareholders’ Equity

55

 onsolidated Statement ofC
Cash Flows

56

Growth Strategies of theOrgano Group
Value Creation Process11Value Provided through Organo
Group Products and Technology 13
Message from the President

15

Medium-Term Management Plan 19

1

Society21

 anagement Philosophy/
M
Long-Term Management Vision

ORGANO Group Report 2022

Sustainability and the Organo
Group

Corporate Data
Financial/Nonfinancial Information 51
Consolidated Balance Sheet

53

Sustainability Management

31

Company Information

Corporate Governance

57

35

Network

Environment

58

41

Editorial policy
Since 2020, the Organo Group has published the “Organo Group Report”(integrated report), which reports on the financial and nonfinancial
activities of the Group. The goal is to provide our shareholders, investors,
and other stakeholders with a better understanding of our efforts toimprove corporate value over the medium to long term by offering an
integrated view of our financial data, management strategies, the businessenvironment, and environmental, social, and governance (ESG) issues.
This report describes our newly established Sustainability Policy ofOrgano Corporation and material issues. We will continue to enhance theReport so that it will be a useful tool for dialogue with our stakeholders.
EcoCrysta, PURIC, PURELITE, α, ORGANO FILTER, ORTORIA, ORTOPIA J Cloud,SUPER DESALINER, ORCHASER, SAN-KAN-OH, ORBRAID, STRATA, SGX, H-DAF,
ORSMART, and AGSOR, which appear in this document, are trademarks or registeredtrademarks of Organo Corporation.

Reference guidelines“Guidance for Collaborative Value Creation” by Japan’s
Ministry of Economy, Trade and Industry“Environmental Reporting Guidelines” (2018 Edition) by
Japan’s Ministry of the Environment
ISO 26000:2010 Guidance on Social Responsibility
Global Reporting Initiative (GRI) Sustainability ReportingStandards
Disclaimer regarding forward-looking statements
Forward-looking statements included in this report containassumptions and expectations and are based on
information available at the time of publication, and involverisks and uncertainties. Please note that actual performance
may vary materially from forecasts owing to changes invarious factors impacting the Company’s business.

ORGANO Group Report 2022

2

Total Engineering

INTRODUCTION

Strengths of the Organo Group1for producing ultrapure water with the extremely high level of purity demanded by the semiconductor industry, systems for supplying industrial process water required across a broad range of industries, and systems for treating

Comprehensive Water Treatment Engineering Company
Leveraging its separation and purification, analysis, and manufacturing technologies, Organo offers a wide range of products that can reliably provide high-quality treated water in a variety of fields. These products include systems
various types of wastewater generated by households and at factories.
In addition, as a comprehensive water treatment engineering company, we have built a technology and service structure that can meet almost all customer requests related to water treatment from industrial process water towastewater. Organo’s strength lies in its ability to provide comprehensive proposals which combine long-term stable operation guarantees, efficient running and operational support proposals, and the establishment of a service
structure for maintenance and supplying expendable items.

Sales andplanning

Development

Design andpurchasing

On-siteconstruction

As a comprehensive water treatment engineering company, Organo provides total support for development, planning, designing,
construction, maintenance, and analysis from ultrapure water purification to wastewater treatment. Our solutions encompass
everything from laboratory use to large-capacity systems for plants, large-scale and small- and medium-sized water treatment
systems in various fields, and water treatment chemicals and other products.

Water quality

Capacity

Applications

Comprehensive structure

Support for everything fromthe purification of pure andultrapure industrial processwater to wastewater,
recovery, and recycling

From a single drop tolarge-scale plants

Support for fields ranging
from societal infrastructure,such as power plants andwater supply and sewage, tomanufacturing and testing
and research centers

Comprehensive support
including development,planning, design,
construction, maintenance,
and analysis

Analysis

Renovation
proposals

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ORGANO Group Report 2022

Periodic
inspections

Operational
support

DeliveryReplacementof expendable
items

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4

Technology

INTRODUCTION2

How separation and purification technologies contribute to society
Strengths of the Organo Group

Separation and Purification
Systems and Technologies
While Organo’s technologies are used in a variety of applications, fromultrapure water to wastewater and for various solvents and chemicalsolutions, they share the ability to separate and remove unwanted
substances and to purify useful substances.
The key to accomplishing this efficiently and at a more advanced level isthe application of optimal systems that combine the operations
necessary for the target substance. Water-related needs have increased
together with industrial development, creating the necessity forhigh-quality water in large volumes. The quality of water required differs
by application. Organo incorporates the latest technologies, optimizes
them as systems, and designs them individually for each customer. The
separation and purification technologies are applied in a wide range offields, including the production of pure and ultrapure water, various types
of water treatment, and the refinement of raw materials for sugar and theJapanese distilled spirit, shochu.
Familiar products such as smartphones, LCD TVs, computers, cameras,
metal products, beverages, and medicines cannot be produced withoutwater. From clear, ultrapure water used to clean fine semiconductors andelectronic circuits to raw water that is safe and free of impurities, water is
indispensable in manufacturing.
Organo’s strength lies in its separation and purification technologies,
focused on water treatment, that have been handed down fromgeneration to generation for more than 70 years and are expanding
beyond existing fields to new applications.

Improvement
in semiconductor
miniaturization
function andyield
Ultrapure

Removalwater
productionof substances
technologies
from a distilled
Removalspirit thatunwantedcause people ofsubstances
to feel sick from potablealcohol

Sweetener

ORGANO Group Report 2022

Maintenanceand advancementof waterinfrastructure
Water supply
and sewage
treatment

Stableoperationof power
Wastewater infrastructure
systems for

Separation power plants
andSmall andpurification medium-sized Increase

production
Raretechnologies
sugar
production
Small watersoftener and(bleaching)

purification
technologies

Improvement inquality of kitchens,vending machines,
and coffee
machines• Improvementof water quality• Improvement oftreatment efficiency
Water• Reduction in labor
treatment• Extension ofchemicals
useful life5

= Contribution to resolving social issues(contribution to daily life and industry)= Products and technologies

Recoveryof valuable
resources

general-purpose in added
pure water
value ofsystems
testing andPure water
systems forsterilization

research toward
key industry
development

Maintenanceof quality inpharmaceuticalmanufacturing

Recovery andrecycling offluorinerare metals

Promotion ofenergy conservation
through effective
recovery of heat
Recoveryfrom lowof water heattemperature(energy)
water

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6

Research and Development

INTRODUCTION

Strengths of the Organo Group

Insatiable Quest for Water
Water is a common resource given to the planet earth and shared by all3

humankind. One whose true potential remains largely unexplored. As aleader in comprehensive water engineering, Organo continues its relentlessquest for the “creation of value from water.”
The Organo Group’s R&D Center, with its well-equipped facilities andexperienced research staff, is dedicated to cultivating fundamental
technologies for a wide variety of water treatment, establishing advanced
analytical technologies, and developing high-precision separation andpurification technologies. In addition, we are working to solve various
problems and create new value to realize a sustainable society throughcomprehensive engineering research and development while we also
consider the needs of industry and the environment.

Developing World’s-First Technologies
As semiconductor product miniaturization advances, the purity of ultrapure
water is required to be even higher, and the technology to remove impurities
such as fine particles, as well as the analytical technology to check them,needs to be even more sophisticated.
Using our proprietary membrane, we have developed the world’s first
technology to measure fine particles as small as 10nm (one hundred millionthof a meter). Using the newly developed
membrane and filtration technology
and continuous automatic observation
technology, we have made possible theanalysis of 10nm fine particles,
contributing to the improvement of thequality and yield (non-defective rate) ofsemiconductor products.

7

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8

History

2014
INTRODUCTION

History of the Organo Group

2003
Expandedoverseas business
Enhanced service
solutionsTechnology Cultivated Over 70-Plus Years
Since its founding in 1946, Organo has been meeting the needs for water required in industry and daily life.
The history of the Organo Group is also the history of expanding the value of water and its possibilities.
Beginning with the development of a heat-free water distillation system for hospitals, research centers, andother facilities, Organo has been involved in a wide range of water treatment systems and technologies. This
includes treatment systems for pure water and wastewater in various industries, water treatment systems forwater supply and sewage and power plants, and ultrapure water systems for the manufacturing ofsemiconductors and other devices in the electronics industry. Organo plays a role in supporting thedevelopment of industry and daily life in Japan and overseas.

42005
Full-scale launch ofcomprehensive service
solutions

1984

1991

Expanded into
pharmaceuticalmanufacturing field

Expanded deliveries forsemiconductors

Founded1959

Developed small pure water system(heat-free water distillation system)

Expanded into
water supply andsewage field

1953
Expanded into special sugar
liquid refining field

1954
Launched water
treatmentchemicals
business

DeliveredJapan’s firstlarge-scale purewater system

1940

1950

Delivered Japan’s firstultrapure water
system for electronics
industry

1960

Startup9

1986

Launched ORSMART
RO, energy-saving
solutions for RO
membrane treatment
facilities

Established Organo(Vietnam) Co., Ltd.

Launched
food
productbusiness

2013

Established joint venture
enterprise PT Lautan
Organo Water (Indonesia)

2015

2003
Established Organo(Suzhou) Water
Treatment Co., Ltd.

Completedlarge-scalewater
treatment
facility for
power plant

1970

2020

2010

Completed Central ResearchLaboratory (Toda)

1966

1957

Formulated new
management philosophy
and long-term vision

2021

Established R&D Center(Sagamihara)

1959

2018

Launched energysaving service
solutions featuring
ORBRAID Seriescooling water
treatment agent

2005

1946

1951

Launched energy-saving
service solutions using
water heat utilization
system1986
Established Organo(Malaysia) (currently
Organo (Asia) Sdn. Bhd.)

1980

Growth2005

1989

Established Organo(Thailand) Co., Ltd.

1990

2000
Maturity

Established Organo
Technology Co., Ltd.
(Taiwan)2010

Established joint venture
enterprise Murugappa Organo
Water Solutions Private
Limited (India) (Terminated thejoint venture in 2021)

2021
Established Organo USA Inc.

2020

Note: The graph indicates the changes in net sales.

Leap

Founding of Japan Organo Co., Ltd.

Becoming a Comprehensive Water Treatment Engineering Company

Innovation and Creation

Further Growth through Expansion of Business Domains and Regions

The Company was founded in Suwa, Nagano Prefecture in
1946. Japan Organo was established as the country’s firstcompany to sell ion exchange equipment as its main
product. In response to requests from industry in the wake ofpost-war reconstruction and the rebuilding of the Japanese
economy, the Company focused on research anddevelopment of equipment and forged a track record infields such as water treatment and sugar refining.

We completed the world’s first continuous pure water production system anddeveloped Japan’s first pulse bed sugar liquid decolorizing equipment. As
awareness of pollution issues continued to heighten, the Company developed water
treatment equipment for nuclear power plants, commercialized a full-scale ultrapure
water production system, compiled achievements in the areas of public sewage
facilities and corporate wastewater treatment, and made great strides toward
becoming a comprehensive water treatment engineering company.

In 1988, we established a management policy of “Innovation andCreation” to revamp and revitalize our corporate culture,established overseas subsidiaries, and strengthened ourbusiness for the pharmaceutical industry. Moreover, we madesteady progress in resolving management issues, such as
expanding our business domains, establishing a cooperative
structure as a group, and restructuring our organization tobolster technological development.

In 2018, we revised our management philosophy. We formulated
a long-term management vision that conveys our intent tocontribute to the development of industry and the resolution ofsocial issues by expanding the leading-edge technologies
cultivated through our experience with water treatment into areas
other than water and expanding our operational sphere. We willcontribute to the realization of an affluent and sustainable society
through the creation of water value.

ORGANO Group Report 2022

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Growth Strategies of the Organo Group

Value Creation Process

While keeping the Water Treatment Engineering Business Unit at the core, Organo will further expand its role by leveraging its separation and purification, analysis, andmanufacturing technologies. It will also expand the scope and regions of its businesses, including those beyond water, and constantly provide products and services that
promote the creation of value and resolve the challenges that confront industry and society.

Management Philosophy
Organo serves as a valuable partner company by leveraging its leading-edge technologies cultivated through long experience with water treatment,by contributing to the industries that create the future, and by playing a key role in the development of societal infrastructure.
Social issues

Material issues

Globalsustainable
development
and growth

Achieve continuous business growth- Responding to climatechange- Declining populations
in developed countries- Advancements intechnology

1 Contribute to asustainable global
environment- Deepening of
globalization- Growing populations
and urbanization in
emerging countries

Financial foundation
Equity¥75,836 million

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ORGANO Group Report 2022

Performance
Products
Business Unit

Iwaki Factory, Tsukuba Factory
Organo Food Tech Corporation(Food Products Division)
HOSTEC (Performance Products
Business Unit)

Long-Term Management Plan ORGANO 2030

Network

Social value- Providing water required in industry
and daily life
- Developing technologies for
reducing environmental impact(energy-saving and recycling
technologies)- Contributing to technologicalinnovation (electronics industry, life
sciences and energy)- Creating new added value (providing
ICT-based services)

Production bases

Establishing a business foundation

Value provided

Customer value

Production technology capabilities

2 Provide high value-

Contributing toa sustainable society

Number of employees

3 Strengthen

governance andensure compliance

2,476
Domestic andoverseas sites

where diverse
human resources
can play an active
and rewarding role

Medium-Term Management Plan 2022–2024[FY2024 Goals] Net sales: ¥140 billion, Operating profit: ¥14 billion

69(Organo and Organo Plant
Service Corporation)
Overseas: 20 (seven countries)

4 Create a workplace- Further exploration ofadvanced medical
technologies- Developing medical
structures in emerging
countries- Implementing infection
prevention measures

Water Treatment
Engineering
Business Unit

Total shareholder’sequity ratio

Domestic:

Advancementand developmentof medical andhealthtechnologies

Business model

58.1%

added products andservices by leveraging
technologicalcapabilities

Development
and growth inemerging anddeveloping
countries

Management resources

Advanced
separation andpurification
technologies

Shareholder value- Stable ROE of 10% or more- Continuously increase shareholder
returns

R&D
R&D expenses

5 Strengthen supply

chain management¥2,146 million
Number of R&D personnel

158
Number of patents andutility models (Japan)

735

Comprehensive
water treatment
engineering

Proprietarystrengths

Extensive
experience inindustry anddaily life

Employee value- Fulfilling place to work; energetic
company- Achieve diversity

Corporate governance

ORGANO Group Report 202212

Growth Strategies of the Organo Group

Value Provided through Organo Group Products and Technology
In the series of processes from water intake to usage to discharge, Organo plays a role in supporting
industry and daily life. This is where our strengths in differentiated technologies for separation, purification,
analysis, and production—as well as optimization of systems that enhance the value and function ofwater—are utilized in the production of pure and ultrapure water, wastewater treatment, water recycling, andrecovery of useful constituents from wastewater.
While fulfilling our desired role of contributing both to environmental conservation and economic
development, we will build a small water reclamation circulation loop that encompasses daily life andindustry within the larger global water cycle, while effectively using water. For example, while developing
water treatment technologies for advanced technologies in the evolving fields of semiconductors andpharmaceuticals, we believe that our mission is to provide solutions to combat climate change and achieve
the Sustainable Development Goals (SDGs) with the aim of realizing a sustainable society.
Taking full advantage of the cutting-edge technology we have cultivated through long experience with water
treatment, Organo will continue to serve as a valuable partner company by tackling various issues
concerning water and the environment, by contributing to the industries that create the future, and by
playing a key role in the development of societal infrastructure.

Our technologies and products

Maintaining quality in pharmaceutical manufacturing

Pharmaceutical water production and supply system

Our SDG contributions
We contribute to the stable supply of safe, high-quality
pharmaceuticals by providing delivery and maintenanceof our water treatment facilities for pharmaceuticalmanufacture to companies manufacturing applicable
treatments and vaccines for developing countries.** For diseases that fall under SDG targets 3.3 and 3.4.

Water treatment system

Organo Grouptechnology andproducts

Energy-saving service solutions
Maintaining and advancing water infrastructure

Water supply and sewage treatment facilities
Increasing added value of testing and research toward key industry development

Standard pure and ultrapure water production systems
Improving water quality and treatment efficiency, reducing labor, extending useful life

Water treatment chemicals and services

We contribute to reductions in customer energy usage
by actively adopting energy-saving systems for ourwater treatment facilities and providing energy-saving
products and services.

We contribute to maintaining sustainable infrastructure
by delivering water supply and sewage treatment
facilities.

Goal for FY2030• Total CO2 emissions reduction volume: 32,000 t-CO2

We contribute to the stable supply of safe, high-quality
pharmaceuticals and energy savings by providing purified waterproduction and supply systems, ultrafiltration (UF) water production
and supply systems, and water for injection (WFI) production andsupply systems. These systems take into consideration the latest
regulations, while maintaining stable quality with a facility
configuration that mainly uses domestically produced products.

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ORGANO Group Report 2022

We educate stakeholders (excluding customers) on
water environment conservation technologies.

We contribute to a reduction of sludge generated fromexisting wastewater facilities by using a system tooptimize the amount of added organic coagulants andconcentrated solutions.
Goal for FY2030• Total sludge reduction volume: 10,000 t

Case
study

Pharmaceutical water production and supply system* The target is only water recovered and treated using ourwastewater treatment and recovery facilities.

We contribute to reductions in customer CO2 emissions
by actively adopting energy-saving systems for ourwater treatment facilities and providing energy-saving
products and services.

Water treatment chemicals and services

Maintaining quality in pharmaceutical manufacturing

We contribute to more efficient use of water in theindustrial sector by reducing the volume of industrial
water used for manufacturing by our customers throughthe use of our wastewater treatment facilities.

Goal for FY2030• Total recovered and reused water volume: 250 million m3

Contributing to a reduction in waste

Case
study

* Wastewater to be treated is river and sewage effluent discharged
outside customers’ plants.

Goal for FY2030• Total wastewater volume: 60 million m3

Reducing environmental impact and improving water utilization

Contributing to a reduction in energy consumption

Our wastewater treatment facilities reduce substances
contained in industrial wastewater to levels at or below
the standards set by each country, contributing to thecreation of safely treated water.

Cooling water energy-saving service solution

ORSMART CW
This service solution maintains heat exchange efficiency by monitoring theLeaving Temperature Difference and the fouling index of the refrigerator andheat exchanger, and automatically controlling the amount of cooling water
treatment agent injected.* This reduces the amount of power consumed by
the refrigerator, as well as the total cost and CO2 emission volume.

PWG Series refined water production system

DWV Series water for injection production system* Leaving Temperature Difference (LTD): Fouling index of refrigerator(LTD (°C) = Refrigerant condensing temperature − coolant outlet temperature)

Organodedicatedcloud

IoT infrastructure
Proprietary AI

Rule setting

Obtain heatexchanger andcoolant conditions
in real time

Chemicalconcentration

Condition-based operation

Heat exchanger
temperature

Operation
optimizing
instruction

Conductivity

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Growth Strategies of the Organo Group

Message from the President
Review of FY2021 and Progress of the Medium-Term Management Plan

We are expanding awarenessof Organo being the go-to
Japanese brand forwater treatment globally,to the rest of Asia and beyond.

Masayuki Yamada
Representative Director and President
President and Executive Officer

Record Performance Buoyed by Favorable Market Conditions
In fiscal 2021, we set records in orders received,
net sales, and profits amidst active capital
investment in the electronics industry in Japan andoverseas, particularly in semiconductors. The
consolidated net sales of the Group exceeded¥100 billion for the first time in fiscal 2020, andsales continued to grow in fiscal 2021, with
operating profit surpassing ¥10 billion for the firsttime.
In terms of overseas expansion, we established
Organo USA, Inc. in 2021 to support large projects
in the United States for major customers. In
addition, we opened the Global Engineering Center(GEC) in Vietnam to strengthen our engineering
structure in response to increasing demand for
future water treatment plants. GEC employs
dozens of young engineers, each very talented,
that together represent a powerful force. We haveplans to further increase the number of engineersand expand our functionality. Meanwhile, several
local technical staff from the Engineering Center of
ASEAN in Thailand have been assigned to Japan to
be involved in design operations.
To promote data utilization as part of our mediumterm management plan, we are promoting digitaltechnology literacy education for all employees.
Although we are seeing some results withimproving operational efficiency through digitaltransformation (DX) and developing service
solutions for our customers, work remains to be
done. We must continue to increase sales anddesign operational efficiency using digitaltechnology, together with a restructuring of ouroperational system.

Future-Focused Approach and Management Issues

Assuming the Role of President
In fiscal year 2022, I was appointed President ofOrgano Corporation. As president, my goal is tosow seeds and plant seedlings for future growth. In
addition to defensive measures to tackle various
issues while expanding the strengths of theCompany built by our predecessors, we also needto adopt an offensive stance that looks toward
future growth at Organo. This approach is a newchallenge for us.
Our Long-Term Management Vision, the thrust ofwhich is changing yesterday’s ways today for abetter tomorrow, is easier said than done. There isa certain amount of anxiety about changing theway things have always been done in the way wework, and we can expect a certain degree of
temporary disruption in the process of making thetransition. Moreover, attempting new ventures and

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ORGANO Group Report 2022

business models requires energy and is always
accompanied by the risk of failure. However, wecannot continue to evolve simply by continuing todo things the way we always have. We cannot
succeed if we fear trial and error and failure.
At Organo, we are working to develop newtechnologies, services, and products to achievesavings in energy, resources, and labor based on
advanced technology related to water, the mostessential resource for human life and a variety ofindustries. We are confident that we have thepotential to grow significantly on a global scale.
With the aim of realizing this potential, I will workwith our board members and employees to boldly
challenge ourselves to take new steps, change
ourselves, and change the way we do things.

The main theme of fiscal 2022 is DX. Led by the
Operation Improvement and Digital Transformation
Departments, we are continuing to accelerate ourefforts to improve operational efficiency byleveraging digital technology. Currently, the profit
opportunities of the Organo Group are shifting fromconventional plant construction to postconstruction maintenance, and we have launched asubscription-based business model contracting
plant operations and facility management—
including replacement of consumables—on amonthly basis for major customers. The
development and provision of new service
solutions using digital technology for thesebusinesses is a key initiative that directly affects
the profit margin and competitiveness of orders.
In terms of human resources, we are working to
improve the workplace environment to securetalented staff and improve our employees’ digital
literacy. As part of our efforts to create a more
comfortable workplace, for instance, we plan todevelop our business infrastructure with an eye
toward expanding telework.
The overseas sales ratio of the Organo Group isalready approaching 40%, and about 40% of staff
members are local employees of overseas groupcompanies. In light of this, utilization of our global
human resources has become a key topic.
Developing a training system for locally hiredengineers and establishing career paths that allow
local subsidiaries to participate in management are
essential initiatives for the growth of our businessin each country in which we operate.
With regard to overseas business, while the Greater
China market including China and Taiwan accounts
for a majority of revenue, in recent years, theelectronics industry has been growing in Southeast
Asia as well, led by Malaysia. In addition to the
U.S., where we opened a base of operations in
2021, we want to reinforce our geographic portfolioof overseas operations—including India, Europe,and the Middle East—into the future.

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Growth Strategies of the Organo Group

Promoting Sustainability
Sustainability and the Organo GroupThe basis of Organo’s sustainability efforts is ourcontribution to environmental preservation,
primarily by improving water quality and preventing
global warming using the advanced technologies of
our Group. To meet that end, we will continue toundertake R&D focused on environmentally-friendly
products and services including water purification
and reuse and recovery of valuable resources fromwastewater.
With the effects of climate change becoming
suddenly more apparent in recent years, it is clearthat issues surrounding water resources will
become even more critical. Meanwhile, theelectronics industry, which uses large volumes ofwater and generates considerable amounts ofwastewater, is the most important market for our
Water Treatment Engineering business, and waterreuse is a key topic for Organo. In addition,
because chemicals are used in water treatment, weare also focused on developing new services andtechnologies for solutions that contribute to saving
resources and labor, such as through the
optimization of the volume of chemical solutions
used while employing sensors to monitor thecondition of wastewater and preventing excess
chemical solution usage.
We offer technology to collect, refine, and reuse
valuable resources such as fluorine in wastewater,

and we expect demand for this technology to grow.
Looking at environmental preservation andresource conservation, the need to recycle organic
solvents such as isopropyl alcohol—used in thesemiconductor industry—continues to grow. At the
R&D Center in Sagamihara, Kanagawa, we haveopened an experimental facility to further develop
advanced ultrapure water manufacturing
technology and a research facility where we canrefine our organic solvent purification technology.
We are also actively developing and employing awide variety of environmental technologies,
including new areas such as the development offood ingredients made from vegetable proteins, forwhich demand is seen growing.
As the above initiatives demonstrate, the Organo
Group’s business itself is in line with the essence of
the SDGs and contributes to preserving theenvironment. Organo will continue to respond to
the needs of society not only with its mainstay
Plant business but also with wide ranging service
solutions, as it focuses on conserving resources,
energy, and labor—key global issues today.
At its most elemental level, the foundation ofbusiness is to identify issues in the world as needs
and to respond to them, so it is only natural forcompanies to tackle sustainability. Furthermore,business opportunities lie in how we respond tothese issues.

and health, it is zero work fatalities; and for
ensuring a diverse workforce and rewarding
workplace, it is the rate of participation in training.
However, rather than simply being tied to or
obsessed with a fixed number, it is important todetermine more practical and meaningful KPIs, theachievement of which will bring positive results to

the Organo Group’s business activities. By working
incrementally toward that goal, the Company will
become better as a foundation for business and wewill continue to grow. We are conducting active
discussions to determine these essential KPIs.

To Our Stakeholders
Currently, the robust semiconductor-related
business is driving our performance, but it isimportant to develop technology and new ideas
while this favorable business climate prevails. To
achieve this, we are exerting more effort in R&D
and facilitating internal communication to fully
explore discussions more regarding what weshould do, rather than simply what we’re capableof. Moreover, we will work on further reforms at
Organo, including improving operational efficiency
while fostering an environment that encourages
employees to accept new challenges.
As the foundation for these reforms, we arepromoting practical approaches to training humanresources and ensuring sustainability. At the sametime, we are focusing on providing products andservices that thoroughly meet customer needs andare environmentally friendly, and cultivating aworkplace environment where employees canthrive and be active. Through these initiatives, wewill strive to earn higher evaluations from themarket and our investors while actively promoting
initiatives for stakeholders.
The Organo Group’s goal is to become a corporategroup that is recognized as a global brand for its
products, technology, and services in both thewater treatment and environmental technology
domains. Although we currently have active
subsidiaries in China, Taiwan, Southeast Asia, andthe U.S., we intend to further our global expansion,and the development of overseas business offers
us great opportunities for continued growth. In
Japan, we have established the brand image ofOrgano as the go-to in wastewater treatment, andwe will continue to take on new challenges toexpand that recognition and brand on a global
scale.

Establishing a Sustainability Policy and Identifying Material Issues
Based on these ideas, in December 2021, theCompany established the Sustainability Committee
and the Sustainability Implementation Meeting, animplementation organization made up of General
Managers of each division and executives, with aworking group organized under them. In June
2022, the Organo Group formulated a sustainability
policy for the Organo Group, and identified material
issues to be tackled over the long term. We
identified five specific issues: 1) Contributing to
the sustainability of the global environment; 2)Providing high value-added products andservices by leveraging technological capabilities

17

ORGANO Group Report 2022

(material issues for achieving continuous businessgrowth); 3) Strengthening governance andensuring compliance; 4) Creating a workplace
where diverse human resources can play active
and rewarding roles; and 5) Strengthening supply
chain management (material issues forestablishing a business infrastructure).
To promote activities in line with each material
issue, we must first determine the key performanceindicators (KPI). For environmental issues, forinstance, the KPI is expected to be CO2 emissions;for providing products and services, it is thenumber of cases per year; for occupational safety18

Growth Strategies of the Organo Group

Medium-Term Management Plan
Medium-Term Management Plan 2022–2024

Overview of the Organo Group in FY2021
We received multiple orders for large-scale projects in Japan and overseas in the key electronics sector, the Service
Solutions Business grew in the general industrial and electric power/water supply and sewage fields, and the
Performance Products Business Unit contributed with its water treatment chemicals and compact pure water
systems, which showed continued steady sales due to brisk customer business activities. As a result, orders
received reached ¥135.6 billion, net sales amounted to ¥112.0 billion, and operating profit totaled ¥10.8 billion. These
all exceeded the initial plan, and represented record highs. ROE stood at 12.9%, surpassing the establishedmedium-term benchmark of 8.0% or better for the fourth consecutive year.

Key Business Fields

Electronics industry

Overview by Business Field
We received orders for large-scale projects in Japan and Taiwan as well as in China and the U.S. Organo achieved

Electronics

steady progress in construction work overall and sales increased despite a shortage of raw materials supply for

Industrycertain projects disrupting the supply chain.

Industrial Field
Electric Power/
Water Supply

Growth has been steady mainly in Japan such as with equipment renewal demand and the Service Solutions

Sales of compact pure water systems for medical and research institutions recovered, and sales of the new PURIC

Products

Trends in net sales, operating profit, and ROE■Net sales■Operating profit / Operating profit ratio
ROE

125.0

• Establishment of the foundation for digital service solutions• Development of the global solution structure andimprovement of quality

R&D

Water treatment chemicals

Functional materials• Expansion of development investment to 2.5% of
net sales• Next-generation ultrapure water systems for theelectronics industry• Creation of new business with advanced
separation and purification technology• Enhancement of sensing and digital technologies• Expansion of open innovation• Expansion of package-type service
menu combining water treatment
chemicals, equipment, and IoT• Robust development of local
partners and expansion ofoverseas business• Establishment and maintenance of
global supply chains• Development of differentiatedfunctional materials and creation ofbusiness models that generatesocial value

140.0

1500
150.0

140.0

130.0

96.5
12.9

9.5

[9.5%]FY202010.6

10.8[9.7%]

11.7[9.4%]

10.4
12.5[9.6%]

41.3

10.7

41.9

14.0

ORGANO Group Report 2022

FY2022

FY2023

100.6

19.3

18.2
45.6
43.3

58.2

Undertaking of
ESG/SDG initiatives

Ensuring of safety
and compliance

Promotion of datautilization

Development andutilization of humanresources

Major Initiatives for Medium-Term Management Plan

FY20240

FY2019

Electronics
Industry

In addition to receiving orders for and delivering large-scale projects both domestically and abroad, we are working
to invest in large owned-facility contracts (approximately ¥25 billion by the fiscal year ending March 2025),
develop a business system in the U.S., construct an R&D system in Taiwan, and strengthen our solutions
system in China.

[+39.9%]Strengthening
Overseas
Structures

Along with strengthening systems in the U.S., Taiwan, and China targeting the electronics industry, we areendeavoring to strengthen overseas partnerships and undertaking M&As to enhance our global supply chain offunctional materials such as ion exchange resins and water treatment membranes, as well as our overseas sales
network of water treatment chemicals and other performance products.

55.0

Promoting
Digitalization

In addition to concentrating domestic and overseas group resources and providing automated operations andremote monitoring services, we are accelerating the creation of digital service solutions, including proposals formore efficient and energy-saving equipment using sensing technology.

Sustainability
Services

We are accelerating the development and provision of technologies, products, and services that combine
economic value for customers with social value such as energy conservation and decarbonization, including
water recycling technologies such as closed systems and systems that recover valuable resources from wastewaterand effluents.

[+18.9%]62.0[+35.8%]

81.5

47.6

[10.0%]

36.5
FY2021

Strengthening of
the engineering
structure

23.0

112.0

100.6

11.1

Establishment of a business foundation■Performance Products ■ Service Solutions(Billions of yen, %)■PlantElectronics Industry(Billions of yen, %)

18.5

19

• Construction and maintenance of systems for R&D,
service solutions, and production• Strengthening of expansion outside of the electronics
industry in the Chinese market

Net sales by segment

112.0

FY2019Service solutions

μ got off to a strong start. Sales in the Food Products Division were essentially unchanged from the previous year.

We established an even more ambitious three-year plan with an eye toward long-term management plan ORGANO
2030, and based on a review of the previous medium-term management plan. Through the following initiatives, suchas strengthening efforts in the active electronics industry and the Service Solutions Business, we aim to achieve net
sales of ¥140 billion and operating profit of ¥14 billion for fiscal 2024. We are also working to expand the Service
Solutions and Performance Products businesses, which are stable sources of revenue.

9.9

Chinese and Taiwanese markets

Service Solutions business—and profitability improved.

In terms of water treatment chemicals, sales of various treatment agents for the electronics industry increased.

Performance[10.3%]

Growth drivers

plants owing to a concentration of resources in the electronics industry, performance was steady—mainly in thebusiness.

and Sewage

12.4

Growth regions

Despite a decrease in large-scale investment due to the COVID-19 pandemic and a downturn in sales of major

General96.5

Reliable orders and deliveries for large-scale projects (Japan, Taiwan, China, United States)
Building a competitive global value chain

39.0
FY202047.0

FY2021[+16.8%]FY2024(Final FY)

ORGANO Group Report 2022

20

Growth Strategies of the Organo Group

Message from the Director in Charge of Financial Strategy
Financial Strategy

Aiming for Both Investment for
Future Growth and Increased
Shareholder Returns

Uses and Sources of Capital

Tetsushi Honda
Director and Executive Officer
President of Corporate Management
and Planning and General Manager ofCorporate Strategy and Planning Dept.

Assessment of Current Situation
In the electronics industry, our main market, amid
continued active capital investment related to
semiconductors both in Japan and overseas, Organo
achieved record high sales and profits in the fiscal year
ended March 31, 2022, and we plan to exceed thisperformance in the fiscal year ending March 31, 2023.
Under these conditions, the Organo Group is working
to establish the structure of the Arizona, U.S. location
to which we expanded in September 2021 andstrengthen the GEC established in Vietnam. Other
endeavors include the expansion of owned-facility
water treatment services for major customers in Japan;
the development of next-generation ultrapure water
systems at a new laboratory building in our newly
completed R&D Center, and separation andpurification technology such as non-aqueous solventsand chemicals for further business growth.

Basic Policy on Financial Strategy
Our business performance is affected by the level ofcapital investment in markets including the electronics
industry, and profitability trends of ongoing projects. In
recent years, we have achieved a high level ofbusiness performance amid an active market
environment. In the past, however, we experienced
declines in sales and unit prices of orders due to thesilicon cycle and other market trends, and we also
dealt with additional costs in construction work andequipment delivery, resulting in worsening profit
margins.

21

ORGANO Group Report 2022

Progress in construction on large contracted projects
and payment collection schedules contribute to a lagof six months to a year in cash flow. Meanwhile, aspart of our Service Solutions business, we are
expanding owned-facility services under which weconstruct water treatment facilities at our customers’
plants and sites. At present, we are making progresswith cashing out facility construction expenses.
As a result, the Organo Group is working to stabilize its
earnings base by expanding the Service Solutions andPerformance Products businesses—steady sources ofrevenue—while carefully managing project earnings.
Moreover, it is important to ensure a stable, soundfinancial foundation that can withstand fluctuations incash flow, and to achieve the optimal balance between
capital efficiency and shareholder returns.
Analysis of ROE
Efficiency
× Asset turnover ×

Leverage

Profit ratio

ratio

Financialleverage

FY2021

FY2021

FY2021

FY2021

12.9%

8.2%

0.91

1.71

ROE

=

Profitability

FY2020

FY2020

FY2020

FY2020

11.1%

7.0%

0.93

1.69

FY2019FY2019FY2019FY2019

12.4%

7.4%

0.95

1.76

• Extraordinary income from sales of real estate also
contributed in FY2021• Efficiency and leverage within appropriate range, but will
work to further improve efficiency

With regard to investment for growth, we will allocate
our capital resources to building a business foundation
by strengthening the engineering structure and R&D and
by expanding water treatment chemicals and functional
materials, with the electronics industry, Chinese andTaiwanese markets, and service solutions as the key
business areas as stated in the medium-term
management plan. As for fund procurement, we willbasically use our own funds and borrowings frombanks, and will also consider procuring funds from themarket as needed, such as through corporate bonds.
We will further work to improve capital efficiency andgenerate funds by disposing of assets, selling realestate and stock holdings, reducing inventories, andenhancing operational efficiency.
Major Developments in Fiscal Year Ending March 2023
Strengthening R&D and engineering functions• Gradually increase technology researchexpenses to 2.5% of net sales (2.2% planned
for fiscal year ending March 2023)• Strengthen next-generation ultrapure water
systems at newly completed laboratorybuildings and development of new separationand purification technologies
Expanding global value chain• Promote large-scale semiconductor projects at
the Arizona, U.S. facility and strengthen the
U.S. subsidiary system established in 2021
• Promote recruiting and training at the GEC in
Vietnam• Strengthen the functional material supply chain
through measures such as increased
investment in the Tsukuba Factory
Expanding service solutions• Invest ¥25 billion by the fiscal year ending
March 2025 in the expansion of owned-facility
service solutions• Strengthen the development of sustainable
service solutions such as water recycling andrecovery of valuable resources from wastewater• Expand digital service solutions such as
automated operations and remote monitoringof equipment using ORTOPIA J Cloud

Performance trends and cash flows■Operating CF ■Investing CF ■Financing CF
EBITDA (operating profit + depreciation)(Billions of yen)
16.1

11.09
7.47
5.64

12.18

10.78

10.78

8.55

10.00

4.92

(0.15)(2.75)(1.00)FY2018FY2019(1.26)(1.52) (2.58)(5.00) (4.58)(1.80)(8.20)FY2020

FY2021

FY2022(Forecast)

Approach to Shareholder Returns
The Organo Group regards the return of profits toshareholders as one of the Company’s most importantmanagement issues. The Company’s basic policy is toprovide stable, continuous dividends, and it strives to
distribute profits while taking into account the status of
earnings. The medium-term management plan, which runs
through the fiscal year ending March 31, 2025, aims forboth an expansion of growth investment and continued
dividend increases while raising the dividend payout ratio
to 25% or higher as soon as possible. Meanwhile, we will
preferentially allocate internal reserve funds for businessand R&D investment for further growth, taking into accountthe status of funds and the level of the stock price.
In addition, we completed a four-to-one stock split
with an effective date of October 1, 2022. By reducing
the price per investment unit, we are working to createa more investment-friendly environment and broaden
the investment base to include individual investors.
Dividend trends■Ordinary dividend

Payout ratio (consolidated) (%)
23.1

21.9
18.8
16.6

13.3

18.3

26.0

18.5

28.5

(Yen)

25.0

19.9

40.0

58.0

FY2017 FY2018 FY2019 FY2020 FY2021 FY2022(Forecast)Continue to increase
dividends and achieve
a dividend payout
ratio of 25% or moreas soon as possible

Medium-Term
Management Plan

(FY2024)* Dividends per share are listed on a post share-split basis, which went into effect as of October 1, 2022.

ORGANO Group Report 2022

22

Growth Strategies of the Organo Group

Message from the Director in Charge of R&D and Engineering

Creating Value for theSociety of Tomorrowthrough Development ofAdvanced Technologies

the water and resources they use at their plants by not only
treating the wastewater but also recycling the water andrecovering valuable resources for reuse. To that end, we aredeveloping environmentally-friendly products and services
contributing to water environment conservation and global
warming prevention.
With the aim of achieving efficient and stable operations
and management of water treatment facilities, we aredeveloping digital technology in specialized departments torealize system optimization by collecting and analyzing
operation data and sharing feedback, continuously
monitoring operations, and preventive maintenance topredict the failure of equipment.

Nobuyoshi Suda
Managing Director and Executive Officer
President of R&D and Engineering

Initiatives to Accelerate Innovation

Organo’s Policy for R&D and EngineeringWith the worldwide spread of infectious disease, global
warming, and geopolitical risks, we are in an uncertainsocial climate. As such, expectations for innovations
toward achieving a sustainable society continue toincrease. In addition to the separation and purification
technologies and advanced analytical technologies thathave evolved over the more than 70 years since its
establishment, the Organo Group will promote thedevelopment of advanced technologies to contribute toa sustainable society through solutions utilizing
advanced digital technologies and by accelerating
open innovation, both in Japan and abroad.
To strengthen the foundation for realizing innovation,
we continually invest in R&D expenses such as newlaboratory buildings, augment our human resource
training program, and revitalize activities to create new
topics for innovation.

Create new businesses

EnergyFuturesociety

Biopharmaceuticals

n

tio

va

o
nn

I
Ion exchange resin
Chromatography
separation
Core
Advanced
technology
analysis

Membraneseparation

Digitalapplications

Chemicals
Biology
Solid-liquid separation
Crystallization

Functional
materials

Resource recovery

Water recovery

Strengthen and expand core businesses

23

Ultrapure
water

ORGANO Group Report 2022

Trends in R&D Expenses■R&D expenses ●R&D expenses/net sales ratio(Billions of yen)

2.7
2.2

2.3

2.3%

2.3%

2.2

2.2%
1.9%

FY2019FY2020

FY2021

FY2022 (Planned)

Initiatives for Creating New Value
Development of Differentiated Technologies
That Facilitate Expansion of Core Businesses
It is no exaggeration to say that the driving force behind theOrgano Group’s growth is the strengthening of technology
development. We are currently developing technologies tomeet the demands from the semiconductor industry—oneof our key customers—for miniaturization and higher purity.
We are also accelerating and strengthening our researchand development of next-generation ultrapure water
systems and separation and purification technologies forchemicals and solvents for the electronics industry.
Moreover, we aim to improve overall system performanceand reduce environmental impact by developing Organo’s
proprietary electrdeionization (EDI), monolithic ion exchange
resin, and water treatment chemicals as functional materials
indispensable for separation and purification systems.
Meanwhile, toward the realization of a sustainable society,there is an ever-increasing need from customers to reuse

At our R&D Center in Sagamihara City, Kanagawa
Prefecture, we constructed one laboratory building for
non-aqueous system development and another one used
for the development and testing of next-generation
ultrapure water systems to accelerate development for
the electronics industry, a key field of the medium-term
management plan. Operations started in August 2022.
Among these, the laboratory building dedicated to
non-aqueous systems is a facility for research anddevelopment of new technologies that will be essential
for the growth of our group. This encompasses therefining of electronic materials such as organic solvents
for semiconductor manufacturing—which we arepromoting as a business that applies separation andpurification technology to fields other than water
treatment—and recovery and refining technology for thesolvent (NMP: N-methylpyrrolidone) used in the
manufacturing process of rechargeable lithium-ion
batteries. Operations have started smoothly, and they are
expected to further accelerate innovation in these fields.
Moreover, we are actively promoting open innovation
with various R&D organizations both in Japan andoverseas with the goal of advancing the latest technology
and creating new value.

Next-generation ultrapure water system laboratory building

Developing Human Resources
to Create New Value
Human resource development is an essential foundation
for implementing our Long-Term Management Vision. In
the interest of further enhancing the created value ofseparation and purification, the foundation of ourtechnology, we believe that it is necessary to have not
only perspectives from our respective fields of expertise,
but also many other viewpoints, including those ofmanagement, and to incorporate future-oriented thinking.
To cultivate these perspectives, we hold Management ofTechnology (MOT) training and events to learn about thelatest research trends, and we promote activities tocreate new R&D topics.
As an example, we took the lead in implementing “future
design” in the industry through joint research with Osaka
University. This program incorporates both group work
and individual work to consider what needs to be
implemented today by raising future social issues fromthe perspective of a hypothetical future generation. Thisinitiative initially focused on mid-level employees in theTechnology Development Department, but it has now
spread to many employees as a program to help themacquire a forward-looking view.
Organo will continue to build the foundation that will
enable us to further develop the talents of our diverse
engineers with highly specialized knowledge andpromote value creation for our technology.

• Deepen specialized
knowledge• Undertake initiatives
to address
customers’ issues

Aerial view of R&D Center

Create R&D topics toprovide new value tocore technology• Future-oriented
thinking• Managerial
perspective

Provide products and services that
promote the creation of value and which
resolve the challenges that confront
industry and society

ORGANO Group Report 202224

Growth Strategies of the Organo Group

Business Overview
Organo possesses a wide variety of water treatment technologies for ultrapure water, pure water, tap water, industrial wastewater and sewage, and is developing its businesses to serve a diverse range ofcustomers. In addition, the Company has built a structure that allows it to provide comprehensive solutions by integrating all functions in-house, including product development, design, construction, sales, andpost-delivery maintenance.

Net sales¥92.7

Electronics industry

General industry

Electric power/
water supply
and sewage

58.2

22.9

11.4

billion

[63%]

[25%]

Performance Products Business Unit

Net sales ratio

82.7%

Net sales¥19.3

Plant Business

High-Speed Dissolved Air
Flotation System (H-DAF)

Service Solutions Business

Achieves four times the speedof conventional dissolved air
flotation systems
5

Strata SGX
High-performance water
purification system that offers
high quality, short regeneration
times, and shortened
construction periods

Water treatment systems
for power plants
For a stable supplyof energy
3

Membrane filtration unit
To ensure a stablesupply of safe tap
water for extended
periods

2

ORTOPIA J Cloud
Remote monitoring
system for water supply
and sewage, and water
treatment plant facilities

1

9

SAN-KAN-OH Series

Saves space, reduces
operation and maintenancelabor, and provides goodtreated water quality

10

EcoCrysta
Promoting recycling byproducing synthetic
fluorite from usedhydrofluoric acid waste

Supplying
functional water forvarious applications

Water treatment systems
for pharmaceuticals

ORGANO Group Report 2022

11

ORTORIA UC

12
5 10 12 14 15

12 13 145 6 7 8 9 11 12 14 15

2 3 155 6 7 11 12 13 14 15

SUPER DESALINER SD-HF/XP

Pharmaceuticals/cosmetics

Buildings and commercial facilities

Electronics industry

Foods/beverages

Manufacturing water andwater treatment systems

Cooling water treatment
chemicals, etc.

Cleaning water and water
treatment closed systems

Water purification
plantsThe latest pure water systemwith operational support
assistance functions using
an IoT/ICT system

Medical andresearch institutions
Analysis pure andultrapure water systems
4 15

Water supply
systemWater for power generation
turbines, various water
treatment systems

Water Treatment Engineering Business Unit
Electronics industry

General industry

Public infrastructure

Manufacturing water andwater treatment systems
5 6 7 11 12 14 15

Other

Chemicals/machinery

Aquariums, fisheries
facilities, researchfacilities, etc.

Cleaning/boiler water
and water treatment
systems
1 2 13 15

13

Thermal and nuclear power plants

6.7

Convenience stores/
restaurants

Sewage treatment
plantsCoffee machine andvending machine filters

Sewage treatment
facilities

13

Provides safe anddelicious water for
drinking water andcoffee14

Water treatment chemicals

Standard equipment and filters

Units ofimpurities Main applications

ppt(ng/L)

ppb(μg/L)

Various manufacturingindustries, buildings andcommercial facilities

Medical and research
institutions, convenience
stores/restaurants

Food/beverages, nursing carefood/health foodUltrapure waterproduction
systems(subsystem)

Ultrapure
water
Pure water,
purified water,
distilled water
Pure waterproduction systems(primary pure water)

Drinking, cooking,bathing, washing

Tap water

ORCHASER IV

Plant cooling water,
sprinkling waterppm(mg/L)

Real-time monitoring andautomatic control of thechemical concentration incooling water

Food products

Semiconductor and electronicparts manufacture (cleaning),
microanalysis, water for steam
generators in power generation
turbines, pharmaceuticalmanufacture

Chemical analysis andphysical and chemical
experiments, contact
lens cleaning

Water treatment chemicals
Various treatment chemicals
for cleaning cooling water,
wastewater, and boiler water

Performance Products Business Unit

Food processing materials
Organo provides food additives used as
raw materials for processed foods andbeverages, and provides processing
technologies for the raw materials used inhealth food products and food products fornursing care patients.

Clean

g/L

Next-generation tabletop
ultrapure water system witha host of options

Sources of tap
water andindustrial
water

Industrial water,
non-potable waterRiver water, lake water,
groundwater

PURIC
SeriesPharmaceuticals and cosmetics,
Thermal and nuclear powerfoods and beverages, mechanical plants, water supply and sewage
and chemical uses, etc.

[25%]

Water treatment technologies developed
for various fields(Water grade and applications)

Organo filters

15

Semiconductors, panels,
electronic parts, etc.

17.3%

4.9

[35%]

Organo provides compact pure water
systems used at medical and research
institutions and water purification filters
used at factories and in vending machinesand coffee machines.

The latest ultrapure
water system in acompact unit

Providing safe ultrapure water
without pyrogen (exothermic
substance)

AGSOR(Aerobic granule sewage treatment
technology) Uses a downsized reaction
tank to reduce renewal cost andoperation and maintenance costs

25

8

MBR water treatment systems

Food processing materials

Standard water treatment equipment

The Company provides various water
treatment chemicals used for cooling water
treatment, boiler water treatment, andwastewater treatment at factories andcommercial facilities.

6 12 14 15

4

7.7

[40%]

Water treatment chemicals

Providing solutions to achieve
optimal operations of water
treatment facilities

7

Standard water treatment equipment

This business unit provides performance products such as standard equipment, filters, water treatment chemicals,
and food processing materials, to various manufacturing plants, retail facilities, and medical and research institutions.
Although the business has focused primarily on Japan, the Company is working to strengthen business development
overseas for Taiwan, China, and other regions with products such as compact pure water systems for medical
institutions and water treatment chemicals for the electronics industry.

Main products
6

Water treatment chemicals

billion[12%]

This business unit provides water treatment systems used at various manufacturing plants, power plants, and watersupply and sewage facilities. It undertakes business as a comprehensive water treatment engineering company
providing solutions ranging from the supply of ultrapure water – which boasts the top level of purity in the world – towater recycling and various wastewater treatment facilities that detoxify harmful wastewater.

Providing rational systems withtechnology that builds onfunctionality and reliability

Net sales ratio

Household wastewater,
sewageWater
purification
Public infrastructure

Water Treatment Engineering Business Unit

Sewagetreatment

Water
treatment
systems

Industrial wastewater
%

Dirty

ORGANO Group Report 2022

26

Growth Strategies of the Organo Group

Water Treatment Engineering Business Unit

Yasutoshi Nakayama
Managing Director and Executive Officer
President of Industrial Plant Business
Senior General Manager of Electronics Division

In the electronics industry—our primary market—and other related
sectors, medium- to long-term growth is expected in thesemiconductor and electronic component markets due to demandfor businesses utilizing new communication technologies such as
5G, as well as healthcare, education, entertainment, and DX
investment. Water treatment, which affects semiconductor
manufacturing plant product yield rates, uses equipment customized
for high purity and large volumes of water. These complex systems
must operate stably over the long term and adapt to the annual
advances being made in manufacturing processes. We are also
developing our separation and purification technologies for therefining market for solutions and solvents used in the semiconductor
manufacturing process, and for antibody drugs, which are expected
to be used as a treatment for COVID-19 infections. Organo willcontinue to propose and supply systems and services with the aimof partnering with various industries, including the chemical and foodand beverage sectors as well as infrastructure that is indispensablein people’s lives. To solve problems facing our customers andsociety and to promote initiatives to create shared value, we willcontribute to the development of technologies for addressing climatechange, using water resources more effectively, and conserving
energy through our business activities.

Major Business and Products

Outlook for Fiscal 2022
Although the outlook is obscured by the effects of Russia’s military incursion into Ukraine on international society andeconomics, and longer delivery times of parts and components causing supply chain disruptions, further growth isanticipated in the electronics industry and related sectors due to expected continued investment overseas inlarge-scale semiconductor-related equipment and relatively high levels of semiconductor investment of various types
in Japan. In the general industrial field, capital investment is recovering in Japan, and maintenance and other aspectsof the Service Solutions business remain robust, even in the electric power and water supply and sewage field. In
fiscal 2022, the Company estimates that it will achieve net sales in excess of ¥100 billion on the strength of anincrease in projects in the electronics industry in Japan and overseas. In terms of profits, amidst higher prices forparts and materials due to the depreciation of the yen, Organo will work to improve profit margins by implementing
various cost-reducing measures and making proposals to customers.

■Orders received■Net sales

Customers and Markets
Electronics
Industry

Electric Power/Water
Supply and Sewage

GeneralIndustry

Plant

Service Solutions

Pure and ultrapure waterproduction facilities
Industrial process water
treatment facilities
Wastewater treatment andrecovery facilities
Valuable material recovery
facilities
Production processingrelated facilities

Replacementof expendable Maintenance
items

Semiconductors

Power plants

Pharmaceuticals/
cosmetics

Operational Renovation andsupportreconditioning

WafersWater purification
plantsFoods/beverages

Electronic parts

Sewagetreatment plants

Machinery/
chemicalsContract water treatment
Comprehensive
maintenance contracts

Major Initiatives for Fiscal 2021
Plant Business
While effects of the pandemic lingered, we made steady progress in construction work by promoting cooperation
with overseas engineering sites and outside partners while actively leveraging various ICT technologies. In addition
to strengthening marketing activities and expanding the key electronics industry, we are promoting the constructionof a system that enables strategic business development by improving our ability to analyze markets, industries,
technology, and competitive trends in the electronics peripheral, life sciences, and infrastructure business fields. We
are also developing and launching tools such as energy-saving systems and a host of sensors and monitors.

Service Solutions Business
While promoting efforts in the electronics industry—including the development of advanced water quality analysis
technology and business for the recovery of valuable resources—we launched measures to expand our Service
Solutions business in the growing market of China. Moreover, we will also provide water treatment systems fornuclear power plants that are scheduled to restart operations, as we have a strong track record in delivering such
systems. We will provide solutions in support of the relaunch of operations and to help ensure stability thereafter.

ORGANO Group Report 2022

The Plant business performed well in terms of orders and sales as a result of steady progress with new domestic
projects and backlog projects mainly in the electronics industry as well as continued large-scale capital investment in
Taiwan, China, and elsewhere overseas. The Service Solutions business—which encompasses proposals for equipment
modification and improvement as well as maintenance, including the general industrial and electric power and watersupply and sewage fields—also enjoyed steady growth backed by efficient business operations, and sales surpassed
the previous year’s level. Organo recorded a record high in profit as a result of increased earnings on higher sales.

Orders / Net sales

Major Business

27

Financial Results for Fiscal 2021

82.4

FY2020

12.4
119.5

92.7

FY2021

Net sales by segment(Billions of yen)

149.5

116.1
76.2

Operating profit(Billions of yen)

FY2022(Forecast)

8.4

FY2020■Service solutions ■ Plant●Service solutions ratio

9.0

FY2021(Billions of yen)

68.5

FY2022(Forecast)

Net sales by industry■ Electronics industry■ General industry■ Electric power/watersupply and sewage
10.6
24.1

11.4
22.9

39.0

47.0

52.6%

49.2%

42.7%

43.3

45.6

51.0

47.6

58.2

FY2020

FY2021

FY2022(Forecast)

FY2020

FY2021(Billions of yen)
11.5
25.0

83.0

FY2022(Forecast)Business Strategies for Medium-Term Management Plan
In addition to continuing our focus on receiving orders for and delivering large-scale projects both in Japan andoverseas starting with the electronics industry, we intend to invest in large equipment-owned contracts (around ¥25
billion by the fiscal year ending March 2025), develop a business system in the U.S., improve the R&D system in
Taiwan, and strengthen our solutions system in China.
We will also accelerate the development and provision of technologies, products, and services that combine
economic value with social value, such as energy conservation and decarbonization, from the viewpoint ofsustainability in the plant operations of our customers, as well as our own.

TO P IC S

Expansion of Organo’s Overseas Business

Overseas development in China, Taiwan, the U.S., and other locations continues to show strong growth due tobooming markets. In the Water Treatment Engineering Business Unit, overseas orders accounted for more than
40% of total orders. We are proposing plant delivery for a new semiconductor plant as well as maintenanceand service solutions at Organo USA, which we established in the previous fiscal year. In the Chinese market,
the Company provides everything from plant delivery to operation support and maintenance. We are working to
expand and stabilize our business by developing and strengthening our system with 10 bases in China.

ORGANO Group Report 2022

28

Growth Strategies of the Organo Group

Performance Products Business Unit

Nobuyoshi Suda
Managing Director and Executive Officer
President of R&D and Engineering
Senior General Manager of R&D CenterIn charge of Environment, Safety and Quality
Assurance Dept., Purchasing & Logistics Dept., andPerformance Products Business

The Performance Products business provides standard water
treatment equipment, various filters, water treatment chemicals, andfunctional food materials such as food processing andflavor-enhancing materials and vegetable materials to customers inJapan and overseas. The business serves clients in a host ofindustrial fields, including the electronics industry and supply chain
companies—our key markets—as well as life science companies,
recently highlighted for their importance, and the chemical, material,
steel, transportation, and food and beverage industries. The
Performance Products Business Unit also provides functional
materials using proprietary advanced separation and purification
technology.
Recently, to provide customers with further added value, we havecontinued to launch various new differentiated products andmaterials and aim to improve after-sales services by actively
promoting DX.
We will establish a business structure that is resilient againstchanges in the external environment, and the Performance Products
business will become a stable source of earnings for the entire
Group, supplying products and services as a partner company thatprovides social value together with customers who are responsible
for the maintenance and development of society.

Financial Results for Fiscal 2021
Sales to the electronics industry, where production and investment remain robust, have been growing. Sales
increased by 7.7% year-on-year and profit was up 43.6%, partly supported by water treatment chemicals, sincecooling water treatment and wastewater treatment agent sales to the general industry, stagnant in the previous fiscal
year, have been performing well, standard water treatment equipment, as we launched new pure water equipment for
medical institutions, which have resumed their postponed plans to replace equipment, and compact ultrapure waterequipment for laboratories, and water purification filters for dispensers and other applications.
In the Food Products Division, sales did not change significantly from the previous fiscal year due to a recovery insales of food products for restaurants.

Outlook for Fiscal 2022
In addition to sales expansion in the electronics industry—where production and investment continue to be active—
water treatment chemicals, including cooling water treatment agents and wastewater treatment agents for the generalindustrial field, are also continuing to do well in the domestic market. This is in spite of stagnation in certain overseas
markets due to the lingering effects of COVID-19. We expect overall sales to surpass the previous year’s record high,mainly in the area of pure water equipment, standard water treatment equipment for laboratories, positioned as a focus
area, and water purification filters for beverage dispensers and other products. In the Food Products Division, we
expect a year-on-year increase in sales due to a recovery in sales of food products for restaurants and prepared food.
Net sales
18.2

Operating profit
19.3(Billions of yen)
20.5

Net sales by segment(Billions of yen)
2.1

1.7

Major Business

1.1

Major Business and ProductsStandard Water Treatment Equipment and Filters

Water Treatment Chemicals

Food Products

Pure and ultrapure water production systems

RO water, wastewater, cooling water, cleaning,and boiler water treatment chemicals

Food ingredients

Water purification filters
Customers and markets
Medical and research institutions

Customers and markets
Various manufacturing industries

Food processing agents
Customers and markets
Food factories, food processing industry

Beverage manufacturing

Various manufacturing industries
Food and beverage, convenience stores

Buildings and commercial facilities

Nursing care food, health food manufacturing

Major Initiatives for Fiscal 2021
Standard Water Treatment Equipment and Filters

Water Treatment Chemicals

We launched Lab Salon on our website for the laboratory
market. Lab Salon introduces our products and provides avariety of content including customer testimonials. We also
use it to host online exhibitions, and we encourage you to
explore it.

We received the Energy Conservation Grand Prize 2021 Judging
Committee Special Excellence Award for our energy conservation
service solutions, which uses three proprietary technologies to solve
the issue of increased pump power as a result of fouling, a membranedisorder, in reverse osmosis (RO) membrane water treatment systems,
which are widespread in the industrial field. These technologies
include 1) the RO membrane water treatment chemical series, 2)management of fouling related to low throughput of water andchemical injection control, and 3) a remote management system.

https://my.matterport.com/show/?m=xRvVY8iLTaa

29

Food Processing Materials

Functional Materials

We strengthened our development system of vegetable
protein materials (plant-based food) and developed
proactive promotional activities to enhance the safety andsecurity of food processing materials. We also held several
well-attended product webinars in response to the lingering
COVID-19 pandemic.

We reviewed ways to enhance productivity and adjust inventory in
response to soaring raw material prices and longer delivery times.
We also formed a task team and launched activities to further
improve product quality and stability.
We will begin implementing our plan to restructure and renew core
plants, and promote the construction of a solid business foundation.

ORGANO Group Report 2022

FY2020

FY2021

FY2022 (Forecast)

FY2020

FY2021

FY2022 (Forecast)■Food Products ■ Standard Equipment and Filters■Water Treatment Chemicals
19.3
18.2
4.9
5.0

(Billions of yen)
20.5
5.4

6.2

6.7

7.0

6.9

7.7

8.1

FY2020

FY2021

FY2022 (Forecast)Business Strategy of the Medium-Term Management Plan
In the Performance Products Business Unit, we have developed a wide range of initiatives, and we look forward toseeing improvement in profit as a result of these activities.
First, in the Japanese market, our key market, we will continue to formulate strategies to develop new businessfocusing on ESG and the SDGs, modernize our service business through the promotion of DX, and, in overseas
markets, further promote our marketing and achieve production abroad.
In the chemicals business, we will continue to expand our package-type service offering that combines water
treatment chemicals, equipment, and sensors and IoT, enhance marketing and promotion to launch new products
and access new markets, and establish new business structures in overseas markets such as Taiwan, China, and the
U.S. where the electronics industry is expanding. In the functional materials business, we are developing functional
materials, such as high-performance ion exchange resins and membranes with increased added value, and building
a stable supply structure for functional materials domestically and overseas. Meanwhile, in the Food Products
Division, we are expanding business by executing fundamental reforms of the production system and promoting
cooperation with the aim of achieving more stable profitability.

TO P IC SORSMART RO, energy-saving service solutions for RO membrane treatment facilities, earned
the Energy Conservation Grand Prize 2021 Judging Committee Special Excellence Award

We reduced power consumption and CO2 emissions of RO membrane treatment facilities by using proprietaryservice solutions combining operational support, remote monitoring, and chemicals. It is very rare for acompany to garner the award two years in a row. It represents praise for our proactive efforts in the chemicals
business to reduce our environmental impact and enhance customer value.

ORGANO Group Report 2022

30

Sustainability and the Organo Group

Sustainability Management
Sustainability Policy

Connection with Stakeholders

Together with its stakeholders, Organo aims to realize a sustainable society for the future and improve our corporate value.

Together with our stakeholders, Organo aims to realize a sustainable society
for the future and improve our corporate value

E

Leveraging its leading-edge technologies
cultivated through long experience with water
treatment, Organo provides environmentallyfriendly products and services that contributeto water environment conservation andprevention of global warming.*

GS

We promote a workplace where human rights,
diverse values, and individuality are
respected, and where every employee isgiven the opportunity to grow and play anactive role.

We emphasize dialogue and cooperation withall stakeholders, and we conduct honest andfair corporate activities.

* “Leveraging its leading-edge technologies cultivated through long experience with water treatment” refers to our pursuit of water
treatment-related separation and purification, analysis, and engineering technologies, and our provision of optimal systems and services thatmeet the needs of society through a combination of these technologies.

The Organo Group established the Sustainability Policy in June 2022.
To enhance the sustainability of the business activities of the Organo Group and contribute to achieving a sustainable
society and global environment, we are integrating our medium- and long-term management plans with this policy topromote management that links business activities to ESG initiatives.
We will provide products and services that contribute to our customers’ sustainability, water environment
conservation, and global warming prevention by solidifying the foundation of our business through thoroughcompliance and strengthened governance, and by sustainably developing cutting-edge technologies cultivatedthrough long experience with water treatment.

Sustainability Promotion System
In December 2021, the Group established theSustainability Committee as an organization toplan, propose, and implement measures topromote sustainability management. We alsoestablished the Sustainability Implementation
Meeting, which promotes specific measures
as the implementation organization of theCommittee. Progress and achievements
related to matters discussed and reviewed by
the Sustainability Committee are reported to
the Board of Directors.

31

ORGANO Group Report 2022

Board of Directors
Reporting

The Organo Group fulfills its corporate social responsibility to the five types of stakeholders with whom it is closely
connected in order to achieve sustainable growth.
Stakeholders

Organo’s role and mission

Engagement

Shareholders

Appropriate disclosure, stable and appropriate
dividends, and sustainable improvement ofcorporate value

IR activities (financial results presentations, IR
meetings), general meeting of shareholders,
Organo’s website

Customers

Provision of high-quality products that are usefulfor society at reasonable prices

Communication through sales activities

Suppliers

Fair and impartial transactions

Communication through purchasing activities

Employees

Stable employment, cultivation of humanresources, appropriate compensation, sharing of
information and issues

Employee meetings, labor-management consultations,various training programs, intranet, intra-groupannouncements, health consultation officeCommunity,society, andgovernment

Appropriate payment of taxes, stable and fair
employment, dialogue with local communities

Organo’s website, Organo Group Report

Stakeholder Engagement
Since 2020, we have livestreamed financial
results presentations, and beginning in fiscal
2021, we have been holding interactive
web-based presentations to expand direct
dialogue with our shareholders and investors.
We will continue to provide more informationand increase stakeholder engagement, andwe ask for your continued support.
Video and materials of the web-basedpresentations can be viewed from the Investor
Relations Information page of Organo’s
website (Japanese only).

https://www.organo.co.jp/ir/briefing/

Supervision and approval

Sustainability Committee
Reporting and proposal

Supervision and direction

Sustainability Implementation Meeting
Secretariat (Sustainability Group)
Business units and group companies

ORGANO Group Report 2022

32

Sustainability and the Organo Group

Sustainability Management
List of Material Issues

Material Issues
We evaluated trends in international society and social issues closely related to our business in terms of theimportance to our stakeholders and to our Company, and extracted key issues. We discussed these issues in aninternal meeting that included the Board of Directors, and identified material issues of high importance.

Assessment ofimportance

Assessment of validity

Identification ofmaterial issues

Extracted candidates for material issues from management philosophy, Long-Term Management
Vision, ORGANO 2030 (long-term management plan), medium-term management plan, businessstrategies, business environment, ESG valuation standards, GRI Standards (internationalguidelines related to sustainability)
Organized the extracted material issue candidates by “achieving continuous business growth”
and “establishment of a business foundation,” in accordance with the framework of ORGANO
2030, assessed these in terms of the importance to the Company based on the relationship withstakeholders, risks and opportunities, value of providing products and services, and contribution
to social issues, and hypothesized material issues
Assessed validity through discussions with the Sustainability Implementation Meeting andSustainability Committee and through interviews with outside experts

Board of Directors determined the material issues

Importance to stakeholders

Achieving continuous business growth1) Contribute to a sustainable global environment• Address water resource issues• Respond to climate change• Expand environmentally friendly products and services• Promote the 3Rs (Reuse, Reduce, Recycle)• Protect biodiversity
2) Leverage technological capabilities to provide highvalue-added products and services
Establishing a business foundation

Very important3) Strengthen governance and ensure compliance• Promote occupational safety and health• Respect human rights• Strengthen compliance• Strengthen risk management4) Create a workplace where diverse humanresources can play an active and rewarding role5) Strengthen supply chain management

The base enabling continued business operations
while fulfilling social responsibilities

33

ORGANO Group Report 2022

Establishing a business foundation

Items related to value creation through businessactivities and global environmental conservation
essential for daily life, industry, and business

Very important

Importance to Company

Referenceyear

Goals for
FY2030• Contribute to the preservation of healthy water
cycles and secure water resources throughwater use in industry and daily life by providing
wastewater treatment and recovery technology.

Amount of wastewater treated by newly
delivered Organo systems anddischarged by plants

2023

Total
60 million m3• Contribute to the protection of biodiversity
through corporate initiatives on material issues
including wastewater treatment, products andservices that save energy and resources, andwaste reduction.

Amount of water collected and reusedby newly delivered Organo systems

2023

Total
250 million m3

Rate of reduction of Scope 1 and 2 CO2emissions according to science-basedtarget (SBT) presentation method*1

2021

37.8%
Reduction

Rate of reduction of Scope 3 CO2emissions according to SBT
presentation method*1

2021

Under review

Volume of CO2 reduced by applying
Organo technology and products

2023

Total
32,000 t CO2

Volume of sludge reduced by applying
Organo technology and products

2023

Total
10,000 t

Continually develop and provide new technology
and services that solve customer’s sustainability
issues.

Number of developed environmentallyfriendly products and services that add
value by solving customer’ssustainability issues

2023

Two per year

• Promote
occupationalsafety andhealthImprove in-house guidance and training to ensure
safety and health in business activities with theaim of eliminating serious lost-time injuries.

Number of serious lost-time injuries*2

2022

Zero per year

• Strengthen
compliance

Maintain appropriate transactions based on fairand free competition, and promote thestrengthening of compliance to continue to be
useful to society at large.

Completion rate of compliance-related
training for subjects enrolled at the endof the previous fiscal year

2022

100%

• Respecthuman rights

Maintain and respect international standards forhuman rights, and promote initiatives on respectfor human rights to fulfill our corporate social
responsibility.

Completion rate of human-rights-related
training for subjects enrolled at the endof the previous fiscal year

2022

100%

• Strengthenriskmanagement

In order to realize our management philosophy,
we will enhance our risk management capabilities
to recognize and appropriately address risks in
our Long-Term Management Vision.

PDCA implementation rate for key risks
identified by the Company

2022

100%

Ensure diversity (in terms of standpoint andapproach) in various decision-making.

Number of females in managerial
positions (domestic group companies)

2022

50

We consider the improvement and exercising ofdiverse abilities by our employees to be a sourceof job satisfaction, and we will work to cultivate
human resources and enhance our systems toachieve this goal.

Training expense per employee(all group employees including thoseoverseas)2022¥100,000
per person

Provide a rewarding work environment where
employees are mentally and physically healthy.

Number of employees exceeding theannual legal overtime limit* Domestic group companies only

2022

Employeeswith 600 hours
per year: ZeroSupport the efforts of suppliers based on the
Organo Group Supply Chain CSR Promotion
Guidebook, and improve CSR awareness andcompliance across the group supply chain.

Number of main suppliers in compliancewith Organo Group Supply Chain CSR
Promotion Guidebook

2022

Number ofcompanies incompliance:
300 or more

• Protect
biodiversity

1) Contribute to • Respond toa sustainableclimateglobalchangeenvironment•E xpansion ofenvironmentallyfriendly products
and services• Promotion of
the 3Rs

2) Leveraging technologicalcapabilities to provide highvalue-added products andservices

Identified Material Issues

ImportantIndex (KPI)• Address water
resource
issuesAchieving continuous business growth

Identification Process
Keyword extraction

Approach

Material issue3) Strengthen
governanceand ensurecompliance4) Create a workplace where
diverse human resources canplay an active and rewardingrole5) Strengthen supply chain
management

Contribute to realizing a sustainable society by
optimizing energy usage related to businessactivities and providing products and services
that contribute to mitigating climate change.

• Reduction of the environmental burden of
corporate activities, including those of ourcustomers, through the creation,commercialization, and provision of products
and services that contribute to resource andenergy conservation.
• Promotion of the 3Rs for waste generated bycorporate activities, including those of ourcustomers, through Organo’s technology andservices.

*1: Criteria for calculating carbon dioxide emissions set forth by the Science Based Targets initiative (SBTi), an initiative requiring companies to set science-based carbon
emission reduction targets.
*2: Four or more days out of work

ORGANO Group Report 2022

34

Sustainability and the Organo Group

Governance
The Company has been engaging in efforts to enhance corporate governance that conforms to the following basic

Assessment of the Overall Effectiveness of the Board of Directors

views in order to realize fair and trustworthy management and improve management efficiency.

Basic Views on Corporate Governance

The Company conducts a survey for all Directors and Audit and Supervisory Board members every April. Based on
the results of the survey, the Board of Directors analyzes and assesses its overall effectiveness and discusses
measures to maintain and improve the function of the Board.

(1) The Company will respect the rights of shareholders and ensure equality.

Main issues

Status of response(2) The Company will take into account the benefits for a wide range of stakeholders including shareholders/• Insufficient discussions oriented toward creating
corporate value.

• The Company reviewed its long-term management plan and formulated theframework for the new long-term management plan ORGANO 2030.
• Plans were made to make matters to be reported to the Board of Directors
more appropriate, and materials were improved.
• At least one-third of the officers were Independent Outside Directors.
• The policy for determining remuneration, etc. to Directors was formulated.
• Interviews were held with the Non-Executive Directors and Outside Audit andSupervisory Board Members to confirm requests for improvements, and the
support system was strengthened by enhancing prior explanations andestablishing a secretariat for the Audit and Supervisory Board.

with these stakeholders appropriately.
 he Company will disclose the Company’s information in a timely and proper way, and ensure transparency.
(3) T(4) The Directors, Audit and Supervisory Board Members, and Executive Officers will recognize their fiduciary

FY2020investors, consumers/customers, business partners, employees and local communities, and cooperate

responsibilities, and will effectively fulfill their expected roles and duties.
(5) The Company will hold constructive dialogue with shareholders.

• Challenges in balancing explanation and discussion
time at Board of Directors meetings. Many indicatedthat materials should be focused on the main points.
• Strengthen the supervision function related to businessexecution of the Board of Directors.
• Improve transparency for the procedure of determining
remuneration, etc. for Directors. (Address reforms to
the Companies Act)• Insufficient support system for Non-Executive Directors
and Outside Audit and Supervisory Board Members.

Organo Corporate Governance Guidelines https://www.organo.co.jp/english/company/governance/guidance/

Corporate Governance Structure
General Meeting of Shareholders
Election/
Dismissal

Election/
Dismissal

SpecialCommittee(Audit and Supervisory Board)

Independent
AuditorAppointment

ReportConsultation

Consultation

ReportCooperation
Audit and Supervisory
Board Members

Management
decisionmaking/Supervision

Cooperation
Audit

Financialaudit

Cooperation

Internal Auditing Dept.

Compliance Committee
Establishment of compliance system, etc.

Sustainability Committee

Special Committee

Consideration, etc. of policies and goals
relating to sustainability

Management Meeting
Proposal of strategies/
Discussion of management agendaMonthly Business Conference
Reporting of business execution, etc.

Various departments/divisions

35

ORGANO Group Report 2022

The Audit and Supervisory Board consists of three members, twoof whom are Outside Audit and Supervisory Board members(including one female member), two of whom have appropriate
knowledge relating to finance and accounting, and two of whom
have appropriate knowledge of legal matters.
The Company established the Nomination and Remuneration Advisory
Committee as a non-statutory advisory body to the Board of Directors.
The committee reviews matters relating to the selection of officers
including the election and dismissal of Directors and Executive Officers aswell as remuneration for Directors, and reports the results to the Board of
Directors. The committee consists of four Directors, of whom the majorityof three are Independent Outside Directors, to ensure independence. In
addition, one of the Independent Outside Directors chairs the Committee.

Internal
audit

A special committee was established as a non-statutory advisory body to theBoard of Directors, and when an important transaction, etc. is conducted between
the Company and Tosoh Corporation, the controlling shareholder of the Company,or one of its subsidiaries, the Committee will deliberate on such transaction, etc.
from the standpoint of protecting the interests of minority shareholders and report
the resulting recommendation to the Board of Directors. The Committee solely
consists of three Independent Outside Directors to secure independence.

Status of response• Large number of agenda items, and insufficient
discussion of key items.

• Sufficient time for discussion was ensured by narrowing down the agenda of
the Board of Directors and providing efficient explanations, and by providing
explanations of important matters to Non-Executive Directors in advance.
• One female Outside Audit and Supervisory Board member has been appointed.
• The Company identified the skill sets that its Directors should possess in orderto achieve ORGANO 2030 and the medium-term management plan.
• The Company reviewed the criteria for selecting candidates for officers,“Qualities and Abilities Required of Directors and Officers” to clarify thestandards for determining the eligibility of candidates for Director andPresident.
• The Company established the Sustainability Committee and its subordinate
branch, the Sustainability Implementation Meeting.

• Discussions should be held to ensure that the board
as a whole is composed of a balance of knowledge,
experience, and abilities, and diversity. (Disclosureof corporate governance reports required)• Insufficient discussion on issues regarding diversity
in election of officers and executive training.
• Insufficient discussion on sustainability initiatives for
ESG, SDGs, etc.

Nomination and Remuneration Advisory Committee

Nomination andRemuneration
Advisory Committee

Representative Director
and President

Audit and Supervisory Board

FY2022

Audit

Board of Directors

Election/
Dismissal

To strengthen corporate governance, Independent Outside
Directors shall comprise at least one-third of the members of theBoard of Directors. The Company’s Board of Directors consists ofnine Directors, three of whom are Independent Outside Directors.

FY2021

Board of Directors

Corporate Governance Structure

Main issues

Main issues

Status of response• The Company needs to provide guidance on thepolicy for measures to protect minority shareholders
in conducting transactions with the controllingshareholder as a prime market listed company witha controlling shareholder. (Disclosure of corporate
governance reports required)• A special committee was established to deliberate and review important transactions
and actions that conflict with the interests of the controlling shareholder and minority
shareholders. The Company has secured the independence of this committee by having
it solely consist of Independent Outside Directors.
• There will be more opportunities for Executive Officers and General Managers to explain
and report on proposals at Board of Directors meetings, as well as new opportunities for
Executive Officers to make presentations to the members of the Board of Directors on a
topic of their choice, in an effort to develop candidates for Director.
•T he Company is in the process of holding discussions to ensure diversity on the Board of
Directors, including the selection of female candidates for Director and other measures.
• The Company is identifying key risks and creating risk scenarios, and is improving thegroup-wide risk management system by taking measures such as the establishment of
the Risk Management Office in June 2022 under Corporate Management and Planningand augmenting the staff in the Internal Auditing Dept.
• The Company is reinforcing risk management by monitoring the progress of risk
management planning of the Board of Directors and the internal meetings.
• After holding discussions with the Sustainability Committee, the Company identified
material issues in May 2022 and established the basic policy the following month. Goingforward, the Board of Directors will determine the KPIs and goals and implement
initiatives to achieve sustainability management.

• Policy on developing director candidates andmethod of development requires clarification.
• Discussions required to ensure diversity on the
Board of Directors, including the selection of female
candidates and foreigner candidates for Director.
• Risk management system needs reinforcement.
• Disclosure of sustainability initiatives required as
prime market listing requirement.

ORGANO Group Report 2022

36

Sustainability and the Organo Group

Governance

Composition of Board of Directors and Skills Matrix of Directors

Compliance

The Company believes that ensuring the diversity of the Board of Directors is useful for its deliberation to be made ina multifaceted and effective manner, and shall select in a balanced way persons with diverse knowledge, experienceand ability. Each Director has knowledge, experience and ability in the fields of management in general, businessadministration, sales, R&D, technology and industrial policy, respectively. Therefore, the Company considers theBoard of Directors to be well-balanced and well-diversified and of an appropriate size.
Name

Corporate Management/
Management Strategy

Finance/
Accounting

Legal Affairs andRisk Management

GlobalTechnology

Human Resource
Strategy

Masaki Uchikura
Masayuki Yamada

◎

◎

◎

◎

◎

◎

◎

◎

◎

Yasutoshi Nakayama◎

Nobuyoshi Suda◎

Tetsushi Honda◎

Mitsutaka Sugata◎

Motoo Nagai (Outside)◎

Keikou Terui (Outside)

◎

◎

◎

◎

Kenji Hirai (Outside)

◎

◎

◎

◎

Sales andMarketing

◎
◎

◎

◎

◎

◎

◎
◎

◎

◎

◎

◎

◎

◎

Notes: 1) Among the skills possessed by each director, skills that can be expected to demonstrate their expertise and experience are marked with a“◎” mark. 2) All directors are considered to possess ESG skills.

Remuneration for Directors and Other Officers
Basic Policy
The remuneration system for Executive Directors, in addition to the fixed remuneration (cash), encourages businessexecution in line with management policies and management targets and establishes a remuneration framework andremuneration standards which provide strong incentive for the achievement of short-term and mid- to long-term
management targets in order to achieve sustainable growth and improve the corporate value of the Group. The
remuneration system for Non-Executive Directors, including Outside Directors, shall be fixed remuneration (cash)
only, for the purpose of effectively having their supervisory and monitoring functions. The Company has establishedthe Nomination and Remuneration Advisory Committee as a non-statutory advisory body to the Board of Directors, inorder to ensure objectivity and transparency in the process of determining remuneration.
Remuneration composition ratio of executive directors
50%

25%

25%

1. Fixed

2. Short-term incentive

3. Mid- and long-term incentive* In the case of the Representative Director and President

Overview of remuneration system of executive directors
Remuneration

37

Overview

1. Fixed
remuneration• Determined according to position• Monetary remuneration

2. S hort-term
incentives
remuneration• From the perspective of clarifying the relationship between business performance and remuneration, the Company shalluse the consolidated operating income, an important management index of the Group, in performance evaluation.
• Varies in the range of 0% to 170% depending on the amount of consolidated operating profit.
• Monetary remuneration

 id- and3. M
long-term
incentives
remuneration• From the perspective of improving corporate values over the medium to long term and aligning the interests withthose of shareholders, the Company shall use the consolidated return on equity (ROE), which is an importantmanagement indicator of the Group and indicates capital efficiency, as the performance evaluation indicator.
• Varies in the range of 0% to 200% depending on the consolidated ROE• Stock-based remuneration plan using a trust

ORGANO Group Report 2022

Based on the idea that safety and compliance are necessary for the survival of the business, the Company places
priority on safety and compliance in its corporate activities, and the President delivers messages periodically, suchas during meetings for all employees.
In addition, the Company has established the Organo Group Company Code of Conduct as the basic action
guidelines to be observed by the Group’s officers and employees. In addition to Japanese and English versions, it
has prepared local company versions in Malaysia, China, Taiwan, Thailand, and Vietnam according to local
circumstances and shared them with officers and employees of the Group in Japan and overseas. The Company also
conducts a biennial survey for its officers and employees to confirm the degree of implementation and observance of
the Company Code of Conduct. The results are reported to the Board of Directors and employees in an effort tofoster compliance awareness.
The Compliance Committee, which was established as an organization for promoting compliance, formulates andimplements a compliance education plan for Group employees, investigates compliance issues and considers
corrective measures.
The Company established a whistleblowing system to ensure the effectiveness of compliance through the early
detection and correction of improper acts. And, in addition to the Company’s internal contact point, it has establishedcontact points with Audit and Supervisory Board members and external lawyers to receive reports and requests for
consultations. In addition, the Company is promoting the development of local whistleblowing hotlines overseas, and
it is launching operation of an internal whistleblowing system in Malaysia, Taiwan, Thailand, and Vietnam.

Risk Management
Determining Risk and the PDCA Cycle
In executing management plans and strategies, the Board of Directors identifies major risks based on two evaluation
criteria: “possibility of occurrence” and “level of impact” extracted from various departments and divisions andGroup companies. For those major risks, the Company determines the responsible department or division,
formulates a risk management plan, and carries out risk mitigation measures based on the plan. The Board of
Directors monitors the progress of the risk management plan and provides instructions to the responsible
department or division regarding improvements, as needed. Moreover, the Internal Auditing Office evaluates theoperational status of the risk management process and risk management plan progress from an independent
viewpoint to increase the effectiveness of risk management. By continuously repeating the PDCA cycle in this way,
we increase the effectiveness of risk management.

ActionPlan

Identification and evaluation of
improvement activities and risks

Risk identification andformulation of measures• Formulation and execution of
improvement measures by thesupervising department/division• Identification, review andquantification of risks by various
departments/divisions and groupcompanies• Risk identification by the Board of
Directors• Formulation of the risk management
plan by the supervising department/
division

PDCA
cycle

Check

Do

Evaluation and monitoring of
the process and progress

Execution of the risk
management plan

• Evaluation of the operational status of
the risk management process and risk
management plan progress by theInternal Auditing Office• Monitoring by the Board of Directors• Implementation of measures andactivities by the supervising
department/division

ORGANO Group Report 2022

38

Sustainability and the Organo Group

Governance

Officers (as of June 29, 2022)
Directors

Audit and Supervisory Board Members
Masaki Uchikura

Masayuki Yamada

Yasutoshi Nakayama

Masahiko Toyoda

Wataru Higuchi

Nobuko Hanano

Director

President

Chairman of the Board of
Directors

Representative Director

Managing Director andExecutive Officer

Audit and Supervisory
Board Member(Full-time)

Outside Audit andSupervisory Board
MemberOutside Audit andSupervisory Board
MemberLawyerLawyerPresident of Industrial
Plant Business
Senior General Manager
of Electronics Division

Apr. 1982	Joined Toyo Soda Manufacturing Co., Ltd.
(currently Tosoh Corporation)
Jun. 2017	Senior Managing Director and Executive
Officer, President of Performance Products
Business of the Company
	Chairman of the Board (Representative
Director) of Organo Food Tech Corporation
	Chairman of the Board (Representative
Director) of HOSTEC
Jun. 2019	Director and President (Representative Director)
President and Executive Officer of the Company
Jun. 2022 D irector and Chairman of the Board of
Directors (current position)

Apr. 1985	Joined Toyo Soda Manufacturing Co., Ltd.
	(currently Tosoh Corporation)
Jun. 2019	Director and Executive Vice President,	General Manager of Research andDevelopment Planning, President ofSpecialty Group, and President ofEngineering Group of Tosoh Corporation
Director of the Company
Jun. 2021 S
 enior Managing Director and Executive Officer
Jun. 2022	Director and President (Representative Director)
President and Executive Officer (current
position)

Nobuyoshi Suda

Tetsushi Honda

Mitsutaka Sugata

Managing Director andExecutive Officer

Director and Executive Officer

Director

President of R&D andEngineering
Senior General Manager
of R&D Center
Apr. 1984 Joined the Company
Jan. 2013	Representative Director and General
Manager of Organo (Suzhou) Water
Treatment Co., Ltd.
Jun. 2017	Executive Officer, General Manager ofCorporate Strategy and Planning Dept.,
Corporate Management and Planning of theCompany	Chairman of Organo (Vietnam) Co., Ltd.
Jun. 2019	Director and Executive Officer, President ofCorporate Management and Planning andGeneral Manager of Corporate Strategy andPlanning Dept.
Jun. 2021	Managing Director and Executive Officer,
President of R&D and Engineering and
Senior General Manager of R&D Center(current position)

Apr. 1984 Joined the Company
Jan. 2014	Managing Director of Organo (Asia) Sdn.
Bhd.
Jun. 2016	Executive Officer of the Company
Jun. 2018	Director and Executive Officer, Deputy
President of Industrial Plant Business, andSenior General Manager of Plant DivisionJun. 2021	Managing Director and Executive Officer,
	President of Industrial Plant Business, andSenior General Manager of Electronics
Division (current position)

Apr. 1978	Joined Toyo Soda Manufacturing Co., Ltd.
	(currently Tosoh Corporation)
May 2005	Chairman and Managing Director of Tosoh
Hellas A.I.C.
May 2012	Associate Director, General Manager ofFunctional Polymers, Polymers Division of
Tosoh Corporation
Jun. 2012	Managing Director and Executive Officer,
President of Performance Products Businessof the Company
Nov. 2013	‌Chairman of the Board (Representative
Director) of HOSTEC
Jun. 2015	Outside Auditor of Plas-Tech Corporation(current position)
Audit and Supervisory Board Member(Full-time) of the Company (current position)
Jun. 2016 Outside Auditor of Taihei Chemicals Limited(current position)

Oct. 1993	Joined Deloitte Touche Tohmatsu (currently
Deloitte Touche Tohmatsu LLC)
Apr. 1997	Registered as Certified Public Accountant
Oct. 2002	Registered as Lawyer (Dai-Ichi Tokyo Bar
Association)
	Joined SEIWA KYODO LAW OFFICE (SEIWA
MEITETSU LAW OFFICE)
Oct. 2007	Partner
Jun. 2016	Outside Director (Serving as Audit andSupervisory Committee Member) of
Marubeni Construction Material Lease Co.,
Ltd. (current position)
Oct. 2018	Representative Partner of OOTEMON LAW
AND ACCOUNTING (current position)
Jun. 2019 O utside Audit and Supervisory Board
Member of the Company (current position)
Oct. 2019	Executive Officer of Advance Residence
Investment Corporation (current position)
Mar. 2022	Inspector of The Professional Golfers’
Association of Japan (current position)

Apr. 1991 Joined Nomura Research Institute, Ltd.
Oct. 2000 R
 egistered as Lawyer (Dai-Ichi Tokyo Bar
Association)
Joined KOHWA SOHGOH LAW OFFICES
Oct. 2004 Partner (current position)
Mar. 2019 O utside Audit and Supervisory Board
Member, Kanro Inc. (current position)
Apr. 2020	Auditor, Drone Service Promotion
Association (current position)
Jun. 2021 O utside Audit and Supervisory Board
Member of the Company (current position)

General Manager ofCorporate Strategy andPlanning Dept.
Apr. 1986 Joined the Company
Apr. 2012	Managing Director of Organo (Asia) Sdn.
Bhd.
Jun. 2018	Executive Officer, Senior General Manager
of Power Plant Division, Industrial Plant
Business of the Company
Jun. 2020	Executive Officer, Senior General Manager
of R&D Center, R&D and Engineering
Jun. 2021	Director and Executive Officer, President ofCorporate Management and Planning andGeneral Manager of Corporate Strategy andPlanning Dept. (current position)

Apr. 1986 J
 oined Toyo Soda Manufacturing Co., Ltd.
(currently Tosoh Corporation)
Jun. 2011 G eneral Manager of Amines, Organic
Chemicals DivisionJun. 2016 Director of Taiyo Vinyl Corporation
Jun. 2018	Manager of Planning and Development, Organic
Chemicals Division of Tosoh Corporation
Mar. 2022	Vice President, General Manager ofPurchasing & Logistics and Group Leader of
Raw Materials & Fuel Operations
Jun. 2022	Outside Director of MANAC ChemicalPartners Co., Ltd. (current position)
Vice President, Senior General Manager ofOrganic Chemicals Division and Manager ofPlanning and Business Development,
Organic Chemicals Division of Tosoh
Corporation (current position)
Director of the Company (current position)

Keikou Terui

Kenji Hirai

Outside Director

Outside Director

Outside Director

ORGANO Group Report 2022

Certified Public
Accountant

President of Corporate
Management and Planning

Motoo Nagai

Apr. 1977 Joined The Industrial Bank of Japan, Limited
Apr. 2005 E
 xecutive Officer of Mizuho Corporate Bank,
Ltd. (currently Mizuho Bank, Ltd.)
Apr. 2007 Managing Executive Officer
Apr. 2011	Deputy President and Executive Officer ofMizuho Trust & Banking Co., Ltd.
Jun. 2011	Director and Deputy President(Representative Director), Deputy President
and Executive Officer
Apr. 2014 Administrative Officer
Jun. 2014	Outside Statutory Auditor (Full-time) of
Nissan Motor Co., Ltd.
Outside Audit and Supervisory Board
Member of the Company
Jun. 2015 O utside Audit & Supervisory Board Memberof Nisshin Seifun Group Inc.
Outside Director of the Company (current position)
Jun. 2019 O utside Director of Nissan Motor Co., Ltd.
(current position)
	Outside Director of Nisshin Seifun Group
Inc. (current position)

39

President and Executive
Officer

Apr. 1979	Joined Ministry of International Trade and Industry(currently Ministry of Economy, Trade and Industry)
Jul. 2008	Deputy Minister for Technical Affairs,
Minister’s Secretariat
Jan. 2011	Director-General of Kanto Bureau of
Economy, Trade and Industry
Apr. 2012 D irector-General of Regional Economic andIndustrial Policy
Aug. 2013	President of Japan Utility Telemetering
Association (current position)
Oct. 2013	Senior Research Associate of Chemicals
Evaluation and Research Institute, Japan
Jun. 2014	Director of Union of Japanese Scientists andEngineers (current position)
Outside Director of Ube Industries, Ltd.
(currently UBE Corporation)
Mar. 2016	Outside Director of Bridgestone Corporation(current position)
Jun. 2016	Director of Chemicals Evaluation andResearch Institute, Japan utside Director of the Company (current position)
O
Aug. 2018	Director of Japan Industrial Safety
Competency Center (current position)
Jun. 2020 E
 xecutive Director of Japan Chemical Innovation
and Inspection Institute (current position)

Apr. 1981	Joined Sagami Chemical Research Center(currently Sagami Chemical ResearchInstitute)Apr. 1990	Senior Research Fellow
Apr. 1998	Senior Fellow
Jan. 2002	Vice President
Apr. 2004	Vice Chairman of the Board, President
Dec. 2018	Vice Chairman of the Board (Representative
Director), President
Apr. 2019	Vice Chairman of the Board (Representative
Director), Research Advisor
Jun. 2019 O utside Director of the Company (current
position)
Jun. 2021	Research Advisor of Sagami Chemical
Research Institute (current position)

Message from Outside Director

Leaping forward

Since before I was appointed as an Outside Director in 2019, Organo has actively worked to reform thecorporate governance system, and strengthen it by clarifying the nature of the Board of Directors and Audit
and Supervisory Board and the responsibilities and roles of the Directors and Audit and Supervisory Board
Members. As we push forward with business reforms that include streamlining workflows through workstylereforms and digitalization, new life is beginning to flow into our corporate culture and climate.
Meanwhile, supply chain disruptions amid changes in the international arena, such as trade friction between
the U.S. and China, the spread of COVID-19, and the recent Ukraine issue, has destabilized the supply ofenergy and natural resources. This has created a serious semiconductor supply shortage, in particular, in aperiod of expanding global demand, affecting the automotive, electrical, and electronics industries in various
ways. As major semiconductor manufacturers—mainly in Taiwan, where this semiconductor supply-demand
gap must be filled—established new production bases and actively worked to increase production, ourbusinesses related to supplying ultrapure water and providing wastewater treatment indispensable tosemiconductor manufacture saw record profits over the past few years, despite the issue of long working
hours needing to be addressed in certain particularly busy departments.
Meanwhile, with the acceleration of global activity toward achieving the SDGs, respond to
ESG demands, and emphasize environmental measures with a focus on decarbonization,
the needs for industry are constantly changing, and there is strong demand for innovativetechnology to realize these needs. At the same time, the IT revolution evolving in a wide
variety of fields is reminding us of the importance of providing solutions with newly addedsocial value, taking into account not only the combination of existing technologies, but also
considering diverse and segmented potential customer needs. To respond to these social
issues, it is extremely important for Organo to provide, in a timely manner, a businessmodel leveraging proprietary technology and products developed in our chemicals andfunctional materials businesses—key to our long-term business plan—as we look ahead toKenji Hirai
the future of semiconductor demand, with our sights set on sustainable development andOutside Director
enhanced corporate value.

ORGANO Group Report 2022

40

Sustainability and the Organo Group

Environment
The Organo Group’s Approach to Climate Change Issues

Environmental Philosophy
Recognizing that the preservation of the earth’s environment is of the greatest importance for every human being,
Organo contributes to human coexistence and symbiosis with Earth’s beautiful environment in every facet of its
business operations.

Basic Environmental Policy
Continuous
improvement

We will be aware of the environment surrounding
all industrial activities and continue to preserveand improve the environment through alltechnical and economic means possible.

Observance of laws
and establishment of
our own standards

We will observe laws, regulations, and agreements
concerning the environment. We will also establish
our own standards and do our best to preserve theenvironment in accordance with these standards.

Production
environment

We will strive to conserve resources and energy, tominimize waste and to recycle the waste producedin every aspect of our business activities.

Product
environment

We will develop product manufacturing technologies
that will reduce the burden on the environment.

Environmental
monitoring

We will inspect the environment within ourcompany and work to improve our environmental
preservation activities.

Comprehensive
involvement

We will educate our staff and encourage in-house
publicity concerning environmental issues to promote
understanding and awareness of the environmentand of our own basic environmental policy.

Basic Concept
Climate change is a threat to the stability of society and the environment on a global scale. As an organization heavily
involved in water resources, Organo considers it a risk it should pay close attention to. Meanwhile, the Company
recognizes the growing demand for environment-friendly products and services as a business opportunity. The Company
Code of Conduct establishes that the Organo Group “will develop environment-friendly products and technologies aswell as products and services that will help solve environmental problems.” Moreover, we set “responding to climatechange” as a material issue, and as part of our approach, we will contribute to realizing a sustainable society by
optimizing energy usage through business activities and providing products and services that contribute to mitigating
and adapting to climate change. Organo also works to support the decarbonization efforts of its customers through areduction in energy consumption in the water treatment process by improving the efficiency of water transfer, increasing
the efficiency of plant operation through the use of ICT, preventing the deterioration of heat transfer efficiency throughthe use of water treatment chemicals, and recovering and reusing the heat energy contained in wastewater.
We will contribute to the realization of a sustainable society by actively working to mitigate and adapt to climate change.

Reducing CO2 Emissions (Scope 1 and 2)

Environmental Management Structure
Environmental Conservation Promotional Structure
The Company’s policies, targets, and measures forenvironmental preservation are discussed and decided by
the company-wide Environmental Conservation
Committee. At each business site in Japan, theEnvironmental Conservation Committee establishes
policies, targets, and measures for the office based on the
Company’s targets and measures, as well as specificissues, and carries out its activities accordingly.

President

Company-wide Environmental Conservation Committee
Secretariat: Environment, Safety and Quality Assurance Dept.
Offices
Environmental Conservation Committee

Environmental Management System
Our environmental management system is based on the international standard ISO 14001. Our Tsukuba Factory,
where ion exchange resins are purified, has acquired ISO 14001 certification.

Promotion of Internal Education

41

ORGANO Group Report 2022

* Science Based Targets (SBT) are corporate greenhouse gas reduction targets consistent with
scientific findings to maintain the global temperature rise below 2°C compared to pre-industrial
temperatures.** Aggregation range: Organo, Organo Plant Service, Organo Food Tech, ORGANO Eco Tech, ORGANO
Acty, Organo (Asia), Organo (Suzhou), Organo Technology, Organo (Thailand), Organo (Vietnam), PT
Lautan Organo Water

TO P IC S

2019

2020

2021

ORSMART RO energy-saving service solutions for RO membrane treatment facilities

This energy conservation service solution employs three proprietary technologies to solve the issue of increased pump
power as a result of fouling, a membrane disorder, inRO membrane water treatment systems, which arewidespread in the industrial field. These technologies
include the RO membrane water treatment chemical
series, fouling management and chemical injection
control, and a remote management system.

Environmental Education

Number of qualified Pollution Control Managers in FY2021*

Cumulative: 200* Total of water quality-related Classes 1 to 4, air quality-related
Classes 1 to 4, and dioxin-relatedAwardsAs part of the curriculum for new employee training andengineering technology training, the Company offers
courses on pollution prevention laws and regulations. It
also encourages employees to obtain national Pollution
Control Manager certification, increasing the number ofqualified individuals. In this way, the Company is putting
its environmental philosophy into practice.

The Organo Group regards efforts to address environmental issues, including the reduction of greenhouse gas (GHG)
emissions as an important topic. To materialize the Group’s efforts to address climate change, the Sustainability
Committee has conducted discussions since December 2021.
The Committee took a broad look at reduction measures for Scope 1 and 2
emissions. This included first understanding the emissions of the overall group
Changes in CO2 emission volume
as well as energy conservation measures at facilities, improvements to thebusiness process, in-house solar power generation equipment, and(t)procurement of electricity with low GHG emission factor.
10,653
10,326
10,241
To ensure that the Group’s efforts align with the Paris Agreement, the Company
set its FY2030 target for its CO2 emissions reduction rate to 37.8%, with FY2021
as the reference year, in accordance with the SBT* method. The Company willcontinue to implement environmental management to achieve our target.

Following the award in 2020 for our energy-saving service
solutions using the ORBRAID Series of cooling water treatment
agents, ORSMART RO, our energy-saving service solutions for
RO membrane treatment facilities, earned the Judging Committee
Special Excellence Award in the product and business model
category of the FY2021 Energy Conservation Grand Prize(sponsored by the Energy Conservation Center, Japan (ECCJ) andsupported by the Ministry of Economy, Trade and Industry).

ORGANO Group Report 2022

42

Sustainability and the Organo Group

Society

Environment

Energy and Waste

Basic Stance on Human Rights

Together with its stakeholders, the Organo Group aims to realize a sustainable society. We will continue our efforts toeffectively use resources and reduce the degree of environmental impact to realize a recycling-oriented society. The
main environmental impacts of the Company’s business activities include energy use and waste discharge.
Organo Group’s environmental impact in FY2021
Unit

FY2017FY2018FY2019FY2020

FY2021

Energy consumption(crude oil equivalent)

kℓ

3,824

3,942

3,970

4,083

4,168

Recycling volume

t

377

400

548

486

554

Volume of waste generated

t

445

471

737

679

617

Water usage volumem3

488,900

516,352

542,256

539,185624,755

Wastewater volumem3

411,577

423,922434,603

461,591

538,819* Targets for calculation: Head Office, R&D Center, Tsukuba Factory, and Iwaki Factory of Organo Corporation, and Main Factory of Organo Food Tech
Corporation* The water balance does not include evaporation or sprinkling, or products brought out of or into facilities.

Energy Consumption (crude oil equivalent)
The energy consumption of Organo’s major offices for FY2021 was 4,168 kiloliters. This increased by 85 kiloliters
year on year due to robust business activity, but the usage growth rate slowed from the previous year.
The Company falls under the category of a Specified Business Operator under the Act on the Rational Use of Energy,
and the R&D Center falls under the category of Type 2 Designated Energy Management Factory. Organo will continue
to undertake energy conservation activities at all of its offices.

Recycling Volume and Volume of Waste Generated
The volume of waste generated at our major offices for FY2021 was 617 tons. This is a decrease of 62 tons year on
year.
The recycling volume at our major offices for FY2021 was 554 tons. This is an increase of 68 tons year on year.
The Company will continue to work to further reduce the volume of waste generated and improve the recycling rate
at each of the Group’s offices.

Water Usage Volume and Wastewater Volume
The water usage volume at Organo’s major offices for FY2021 was 624,755 m3, and the wastewater volume totaled
538,819 m3. The water usage volume increased by 85,570 m3, and the wastewater volume was up 77,228 m3 year on
year. The Organo Group is working to conserve water resources by effectively using water intake and maintaining
and improving the quality of wastewater around its business sites to ensure the sustainable use of water resources.

The Organo Group declares that it shall respect human rights and prohibit discrimination, and accordingly aims to act as
a company that respects individuals and diversity, without discrimination based on nationality, gender, creed, physicalcondition, or social status. Based on this foundation and as stated in Organo’s Long-Term Management Vision, theCompany is working to “proactively contribute to a better tomorrow by cultivating people today who will improve upon
the way things were done yesterday, as a company where all employees are energetic and passionate about their work.”

Initiatives Related to Human Rights Issues
The Organo Group Company Code of Conduct sets forth clear guidelines on respecting human rights, prohibiting
discrimination, and forbidding harassment. Organo continues to provide e-learning opportunities on corporate ethics,
compliance, and harassment prevention for all employees to ensure that all employees have a correct understandingof human rights and to promote workplaces where human rights are respected. Moreover, the Company identified
respect for human rights as a material issue in June 2022. Organo maintains and respects international standards forhuman rights, and we hold in the highest regard human rights of all employees working in the Group, as well as
everyone involved in its corporate activities. Furthermore, Organo promotes initiatives on respect for human rights tofulfill its corporate social responsibility.

Basic Views on Supply Chain Management
Based on its management philosophy, “Organo serves as avaluable partner company by leveraging its leading-edge
technologies cultivated through long experience with water
treatment, by contributing to the industries that create thefuture, and by playing a key role in the development ofsocietal infrastructure,” the Organo Group has established
the Organo Group Company Code of Conduct as a guidelinethat officers and employees of the entire Group must follow.
It is also carrying out group-wide CSR initiatives.

Basic Precepts of the Organo Group Company
Code of Conduct
I. Building trust by meeting the expectations ofcustomers, business partners, and stockholders
II. Ensuring a comfortable workplace where all
employees can realize their full potential
III. Contributing to the sound development of society

Basic Purchasing Concept
1. Fair and impartial transactions
When conducting purchase transactions, we clarify the transaction conditions, and evaluate the price, quality,
delivery dates, and other conditions fairly and rationally before determining a supplier.
We obtain only the information that is required from the supplier related to the purchasing activity. Information
obtained in the course of business will be properly managed and will not be disclosed or leaked to third parties
without permission, nor will it be used for purposes other than those for which it was obtained or used improperly.

2. Compliance with laws, regulations, and social norms
We will comply with the Antitrust Law, Subcontract Act, Construction Business Act, and other relevant laws
and will not abuse our dominant bargaining position, etc. to the detriment of our suppliers or contractors.
We will not use any others’ intellectual property rights without proper authorization and will not act to infringeon intellectual property rights through unauthorized use.
We do not have personal interests in our suppliers.
We will not give or receive entertainment, gifts, money, or other economic benefits to/from our customers,
suppliers, contractors, and other business partners with the aim of securing or keeping undue gains or
preferential treatment.

3. Building partnerships
We will work to build and maintain trusting relationships with our suppliers, and aim for relationships ofcoexistence and co-prosperity through mutual cooperation.
We are interested in our suppliers’ efforts to comply with laws and regulations, protect the environment, respecthuman rights, and perform other social responsibilities, and together we are working to fulfill these responsibilities.

43

ORGANO Group Report 2022

ORGANO Group Report 2022

44

Sustainability and the Organo Group

Society

CSR Procurement Initiatives
Amid interest from stakeholders on our overall business process as it relates to the creation and provision of
products and services, there was growing demand not only to promote the Organo Group’s CSR, but also topromote the CSR of the entire supply chain. As such, in May 2015, the Company formulated the Organo Group
Supply Chain CSR Promotion Guidebook (Japanese only; hereinafter referred to as the “Guidebook”). Through our
CSR activities, we deepen the common understanding with our customers.
In addition to our existing operations in Japan and other parts of Asia, in 2021, we established a subsidiary in the
United States, where demand for water treatment equipment for semiconductor manufacturing is expected to grow.
Amid this business expansion, to better align our CSR initiative standards with international standards, we revised
the Guidebook in April 2022 to include content that conforms to the code of conduct of the Responsible Business
Alliance (RBA), a business alliance that promotes social responsibility across global supply chains.
In the future, the Company will continue to implement CSR activities based on the Guidebook, and we will check thestatus of our customer’s CSR activities and provide support where needed.

Policy on the Conflict Minerals Issue
The Organo Group appropriately addresses the issue of conflict minerals which stands as an international concern. In
so doing, it promotes initiatives to eliminate the use of conflict minerals mined in the Democratic Republic of theCongo and surrounding nations and associated with human rights violations and environmental destruction. Theseminerals include coltan, cassiterite, gold, and wolframite along with their respective derivatives tantalum, tin, andtungsten.

Personal Information Protection Policy
The Organo Group may obtain personal information (personal information as established in the Act on Protection of
Personal Information (hereinafter “Personal Information Protection Act”)) for the Company’s business operations,such as names, addresses and telephone numbers. Organo will properly handle obtained personal information inaccordance with the basic policy described below.
1. Organo will comply with the Personal Information Protection Act and other relevant laws and regulations.
2. Organo will institute internal regulations on personal information to build and continuously maintain andimprove its management system for the protection of personal information.
3. Organo will handle personal information solely for the purposes specified.
4. Organo will not disclose or offer personal information to third parties except with the consent of theindividual or where permitted by laws and regulations.
5. Organo will respond sincerely to requests from individuals regarding disclosure of personal information.

Occupational Safety and HealthAs a company with a large amount of field work, we recognize the risk of serious workplace accidents. Safety is a
top-priority topic, and the Company established safety as a material issue in June 2022. It continuously promotes
initiatives that enable our group companies and business partners to work with peace of mind.
For plant installation work and handling of chemicals, Organo prepares documented instructions, performs
verification using checklists, and conducts scheduled safety patrols at construction sites and factories. The
Company’s safety patrols involve providing guidance on immediately taking corrective action with respect to safetyconcerns, and ensuring that safety education is properly conducted. Organo further strengthens safety management
practices by providing guidance on voluntary safety activities including hazard prediction prior to performing tasks,
and risk assessments. The Company also strives to create safe workplaces by posting safety newsletters to theintranet, disseminating reports on the occurrence of disasters and remedial measures, and conveying the message
that safety is its highest priority by means such as an awards program for its suppliers.

Creating Safe Workplaces
In order to ensure the safety and health of its employees
and to promote the creation of a comfortable work
environment, Organo has established a structure forsafety and health management and its role pursuant tocompany regulations on safety and health management.
The Company is committed to properly maintaining
workplace environments, preventing occupational
accidents and taking emergency measures, andconducting relevant education and training.
Organo employees undergo screening forlifestyle-related diseases every five years in conjunction
with periodic health checkups. The Company also
provides for regular consultations performed byoccupational health physicians on an elective basis.
Female spouses of employees are also eligible forhealth checkups.

6

6
5

1.72%
0%
0%
FY20190%0%
FY20200%
FY2021

Calculation methods:• Frequency rate: Number of incidents ÷ Total number of hours worked × 1 million(FY2019 and FY2020 were calculated using the total frequency rate (Number of incidents ÷ Total
number of hours worked × 1 million based on workplace accidents including injuries and illnesses
due to cases without lost workdays); this will be revised to a frequency rate going forward.)• Severity rate: Number of workdays lost ÷ Total number of hours worked × 1,000

Safety Confirmation System

All employees are eligible for annual stress level
checkups and mental health training via an e-learning
platform. Organo employees have access tocounseling provided by specialists and registerednurses through the Company’s in-house consultation
center for when they have concerns about themselves,
their colleagues, or their subordinates.

Confirming the safety of employees and their family
members is of the utmost importance in terms of theinitial response when disaster strikes. The Company has
introduced a system for sending safety confirmation
emails to employees following seismic events above acertain level of seismic intensity or natural disaster
information in order to quickly confirm their safety.

Creating Comfortable Workplace Environments
Creating Workplaces Where Human Rights are Respected

ORGANO Group Report 2022

■ Number of workplace accidents
Frequency rate of workplace accidents
Severity rate of workplace accidents

Mental Health Care

Organo provides e-learning education on corporate
ethics, compliance, and harassment prevention for all
employees in order to ensure that all employees have acorrect understanding of human rights and to promote
workplaces where human rights are respected.

45

Number, frequency rate, and severity rate of workplace accidents

Engagement with Labor Unions
The Company enters into collective bargaining
agreements with Organo’s labor union and maintains
harmonious labor-management relations. Throughregularly scheduled labor-management meetings withthe participation of top management, Organo strives todisseminate its management policies and ensure that
opinions of union members are reflected in the
Company’s management strategies and policies.

ORGANO Group Report 2022

46

Sustainability and the Organo Group

Society

Diversity Initiatives
Given that Organo’s workforce consists of a diverse range of employees possessing a variety of personalities and backgrounds,
the Company aims to develop an environment where all employees are able to fulfill their potential and realize growth.

Promoting the participation of women
As of the end of March 2022, the number of women in managerial positions in the Company was 16 (theratio of women in managerial positions was 4.3%), and the Company aims to increase this number to 30
by 2026.

Employment of people with disabilities
Organo is working to expand its employment of people with disabilities who, as of June 1, 2022,
accounted for 2.30% of the Company’s workforce.

Utilizing global human resources
As Organo expands its operations overseas, it is promoting the employment and training of global humanresources to take advantage of diverse values and experiences in different cultures.

Employing senior citizens
The Company has introduced a reemployment program whereby it is possible to rehire employees up to
the age of 65 so they can continue to work by leveraging the skills and expertise they cultivated even after
reaching the mandatory retirement age of 60.

Childcare support
The Company has introduced leave accessible to male and female employees alike aligned with theirstages in life, and a reduced working hour system for childcare that covers children up through the third
grade of elementary school.

Workstyle reforms
Organo has introduced flextime options, half-day paid leave systems and telework systems to enable
flexible and efficient work styles, and is promoting streamlining operations utilizing ICT. As part of themeasures to improve the rate of use of paid leave, Organo encourages employees to take extended
vacations by combining paid leave with summer vacation and special paid leave offered after 15 and 25
years of service.

Policy on Diversity Initiatives
The Company prescribes “Ensuring a comfortable workplace where all employees can realize their full potential” in
the Organo Group Company Code of Conduct and declares that it shall respect the human rights, diversity andindividual personalities of all employees and will not discriminate based on nationality, gender, creed, physicalcondition, or social status. Moreover, the Company believes the driving force behind sustainable growth is theinclusion of a diversity of personnel with a variety of knowledge and experience, and only through a mixing of diverse
ideas can it realize innovations to improve its corporate value. To that end, we are working on various measures
including promoting the participation of women, employing people with disabilities, utilizing global human resources,
employing senior citizens, providing childcare support, and promoting workstyle reform.

47

ORGANO Group Report 2022

Acquisition of Eruboshi Three-star Rating
Japan’s Minister of Health, Labour and Welfare has granted the Company
certification as a leading enterprise in recognition of its efforts to promotewomen’s participation and advancement in the workplace.
The Eruboshi certification is a certification system related to Japan’s Act on
Promotion of Women’s Participation and Advancement in the Workplace. It aims
to realize a society in which women are able to fully draw on their distinctive
qualities and capabilities. Evaluation is conducted based on five criteria: 1)
competitive rate at time of hiring, 2) years of service, 3) working hours, 4) ratio of
women in managerial positions, and 5) diversity of career options.
The Company was granted the certification upon having met every requirement
stipulated under the five categories.
To help enable employees to balance childcare and their careers, the Company
has introduced support systems that exceed statutory requirements andimplementing a scheme that enables employees to change career paths geared
toward career advancement. Organo has also formulated a general businessaction plan based on the Act on Promotion of Women’s Participation andAdvancement in the Workplace. It will further promote the creation of anenvironment that enables its female workforce to demonstrate their capabilities
actively in the workplace, taking into account the need for work-life balance.

Development of the Internal Environment to Ensure Diversity
Given that Organo’s workforce consists of a diverse range of employees possessing a variety of personalities andbackgrounds, the Company aims to develop an environment where all employees are able to fulfill their potential andrealize growth. The Company is implementing initiatives such as assigning female employees to the departments incharge of construction management, which previously was staffed mainly by male employees, augmenting Japanese
language education for foreign national employees, giving consideration to the company cafeteria, and establishing a
prayer room.

Work-Life Balance
To enhance the work-life balance of its employees, Organo has holiday and leave systems, leave for childbirth andchildcare, and other such systems.
Organo has established a childbirth and childcare leave system that exceeds legal requirements. Employees areguaranteed full salary during maternity leave and leave for hospital visits during pregnancy, their terms of prenatal
and postnatal leave (six weeks before and eight weeks after childbirth), and periods of childcare leave after return.
The rate of female employees with children who take childcare leave is 100%, and most employees opt to keep
working by utilizing reduced working hours for childcare. Some of Organo’s female employees have even taken on
managerial positions after having taken childcare leave, evidence of the fact that the Company offers a stableenvironment conducive to women building their careers.
Types of systems

Overview

Childcare leave

An employee may take childcare leave any time until the day prior to a child’s second birthday in order to achieve abalance between professional and family life.
The Company has also introduced a system for reduced working hours for childcare, which covers children up
through the third grade of elementary school.

Maternity leave

In addition to prenatal and postnatal leave, employees may take 15 days off in increments or consecutively if they
suffer from morning sickness or other pregnancy-related illness.

Family care
leave

Employees may take a total of 365 days’ leave when necessary for them to care for a spouse, parent, or other family
member.

ORGANO Group Report 2022

48

Sustainability and the Organo Group

Society

Promotion of Human Resource Development
Education System
We provide various educational opportunities to develop human resources.
Rank-specific training
Division supervisory
positions

Participants cultivate the ability to independently
grow by learning to take a proactive approach tocareer development.

Other

We provide rank-specific training for developing
basic social skills.

Assessment training
Management fundamental training
Mid-level career training
Mid-level leader training

Group training for new employees

Problem identification training
Third-year career training
Engineering Seminar Basic Course

Language training

Instruction and skill development training

Qualification acquisition support system

Management literacy training

Legal training

Division supervisory
positionassessment training

Correspondence courses (self-development, Organo University)

Third-year career
training
Mid-level career
training

Division supervisory
position training

Compliance education

Engineering
Seminar Basic
Course (ESB)The ESB course involves technology field-specifictraining concerning Organo’s basic technologies.
Participants are able to equip themselves for future
career opportunities by gaining extensive
knowledge on technologies that are not directly
related to their work.

Self-development

Expert positions

Global human resource development and training

Follow-up training

Follow-up training is implemented in the autumn ofthe first year of employment. In this training
program, participants gain a deeper understandingof corporate accounting as well as an overall
understanding of corporate management.

Supervisory
positions

Advisor and on-the-job training(OJT) person-in-charge education

New employee
training

Over the course of roughly six months of training,
employees learn general knowledge as a memberof society and about Organo’s technologies. During
the second half of the training, they put into
practice the technology and knowledge gained in
the first half at construction sites.

Intermediate
leadership

Overview

General skills

Types of programs

Management
functions

Main training programs

Function-specific training

Evaluator training

Organo implements rank-specific training and function-specific training to enable employees to improve their skills
and advance their careers. Moreover, the Company has introduced a system to support employees’ selfdevelopment, such as a qualification acquisition support system and Organo University, a system under whichcorrespondence courses are subsidized.

Follow-up training
New employee training
Group training for new employees, on-site training, plant training

Support Activities Related to Developing Water Environment Conservation Technology
Follow-up training

Multiple Courses for Management Positions

Organo Awards to Support Young Researchers in China

ORGANO 2030 states that our objective is to become “a company in which a diverse range of people can work
comfortably, feel motivated and grow, and achieve results.”
As one of the concrete measures to achieve this, we introduced the “Multiple courses for management positions:‘Division supervisory positions,’ ‘Expert positions,’ and ‘Supervisory positions’” in 2021.
We will continue to build a system allowing us to utilize human resources that can be expected to generate more results.

In recent years, people in China have become increasingly awareof the environment as the nation’s industry develops. In line with
this, the Chinese government has been promoting policy on water
environment conservation.
Since fiscal 2007, the Company has been conducting ascholarship program in China known as the Organo Awards forrecognizing and supporting graduate students who have achieved
outstanding research results in the field of water quality and water
environment conservation in China. The Organo Awards are
implemented in partnership with the Research Center for
Eco-Environmental Sciences of the Chinese Academy of Sciences
and Suzhou Industrial Park. Organo again solicited research topics
from graduate students based in China in fiscal 2021, and in July
2021 selected and recognized outstanding researchers in Suzhou,
China. To date, an estimated 900 or more people have taken part,and more than 350 people awarded are actively working in thewater environment field in various areas around the world.

Qualification Acquisition Support System
To support employees who learn autonomously, the Company subsidizes a portion of the cost employees incur when
acquiring one of approximately 300 different formal qualifications. This encompasses target qualifications across awide range of subject areas such as technology, linguistics, and IT, with certifications that include professional
engineer, assistant professional engineer, and pollution control manager.

Organo University (correspondence course subsidy system)
The Organo University provides the opportunity to study by featuring 173 correspondence courses across 10 fieldsof study including technology and sales courses necessary for business, as well as management skills required at
different levels of the corporate hierarchy.

49

The Organo Group actively engages in support activities related to water environment technologies and education
while also contributing to environmental conservation through its water treatment business.

ORGANO Group Report 2022

Support for Studies of Young
Researchers in Water Environment Field(Japan Society on Water Environment (JSWE)ORGANO Doctoral Research Awards)
The JSWE-ORGANO Doctoral Research Awards
were established with the aim of widely introducing
outstanding research results of graduate students in
doctoral programs and other young researchers andsupporting their development of further research in
the field of water environment. The Company
provides assistance in the form of contributions that
support the objectives of the JSWE-ORGANO
Doctoral Research Awards. In 2021, its 15th year,
research presentations, selection, and an awards
ceremony were held at the JSWE symposium in
September, and three students received awards.
Everyone awarded to date is actively working in thewater environment field in Japan or overseas.
ORGANO Group Report 2022

50

Corporate Data

Financial Information
FY2011FY2012FY2013

FY2014FY2015FY2016FY2017FY2018FY2019FY2020

FY2021

Orders (millions of yen)

68,041

60,23865,501

77,87376,48574,041

88,049103,838

104,986

94,563

135,698

Net sales (millions of yen)

68,502

66,71862,096

68,74178,71981,114

79,226

92,27396,515

100,638

112,069

Operating profit (millions of yen)

4,849

3,498

833

2,398

3,947

4,114

3,821

6,558

9,908

9,579

10,850

6.9

5.2

1.3

3.5

5.0

5.1

4.8

7.1

10.3

9.5

9.7

Ordinary income (millions of yen)

4,782

3,909

1,170

2,465

3,871

4,162

3,933

6,538

9,929

9,900

11,545

Profit attributable to owners of parent*

2,683

2,564

664

1,085

2,485

2,731

2,780

4,452

7,162

7,074

9,210

763

720

358

334

603

903

644

635

965

1,015

3,387

R&D expenses (millions of yen)

1,902

1,655

1,490

1,392

1,407

1,495

1,776

1,823

2,178

2,300

2,146

Depreciation (millions of yen)

1,190

1,159

1,065

999

950

950

972

920

1,189

1,212

1,332

Net assets (millions of yen)

43,01545,20744,25245,30846,56749,034

51,68154,79560,85767,35776,004

Total assets (millions of yen)

84,70985,30976,852

83,60994,79595,40596,036

101,257

101,448

115,011130,506

Liabilities with interest (millions of yen)

13,88814,901

10,23012,717

17,412

16,910

15,484

13,6599,740

16,005

15,628

12

12

8

8

9

11

53

73

104

114

160

Book-value per share (BPS) (yen)740.57777.05768.24786.72806.894,247.27

4,477.64

4,784.81

5,301.26

5,856.25

6,620.54

Earnings per share (EPS) (yen)

46.57

44.52

11.53

18.85

43.17

237.18241.50388.48626.05616.72802.69Equity ratio (%)

50.4

52.5

57.6

54.2

49.0

51.3

53.7

54.0

59.9

58.4

58.1

Return on equity (ROE) (%)

6.4

5.9

1.5

2.4

5.4

5.7

5.5

8.4

12.4

11.1

12.9

Return on assets (ROA) (%)

5.9

4.6

1.4

3.1

4.3

4.4

4.1

6.6

9.8

9.1

9.4

Consolidated payout ratio (%)

25.8

27.0

69.4

42.4

20.8

23.2

21.9

18.8

16.6

18.5

19.9

Operating profit ratio (%)(millions of yen)

Capital expenditures (millions of yen)

Annual dividend (yen per share)* The Company implemented a reverse stock split on October 1, 2017, consolidating five shares into one.

Nonfinancial Information
Number of employees(persons)

Average years of service■Male ■Female(years)● Average ● Male ● Female

17.0

1,200
1,000

1,090
1,051 1,072
1,018 1,023
193
175
163
153
152

16.0

15.5
15.6
866

870

888

897

897

16.6

16.0

16.2 16.2

FY2017 FY2018 FY2019 FY2020 FY2021

50
24.2

15.9

26.2

28.2

51.0

56.8

56.8

51.9

100

100

100
2.5

80

2.0

40

2.45
2.28

2.31

2.34

2.29

1.5

30
40

1.0

20

10

20

10

5

FY2017 FY2018 FY2019 FY2020 FY2021

0.5

0

0

0
FY2017 FY2018 FY2019 FY2020 FY2021

100

60
20.7

14.7

3.0
100

57.6

15

15.2

(%)

100

20

14.0

0

30

Employment rate of people with disabilities

(%)

60

25

16.0

Childcare leave return rate

(%)

16.3

15.0
14.5

200

16.1

Rate of use of paid leave*

32.3

16.7

15.7
600

(hours)

35

16.5
16.0

800

400

Average monthly hours of overtime

FY2017 FY2018 FY2019 FY2020 FY2021

0.0
FY2017 FY2018 FY2019 FY2020 FY2021

FY2017 FY2018 FY2019 FY2020 FY2021* Aggregated values from January 1 of the previous fiscal year to December 31 of the current fiscal year.
Ex.: FY2021 → Period from January 1, 2021 to December 31, 2021

51

ORGANO Group Report 2022

ORGANO Group Report 2022

52

Corporate Data

Consolidated Balance Sheet
Previous fiscal year
(March 31, 2021)(millions of yen)

Fiscal year
under review(March 31, 2022)

AssetsFiscal year
under review(March 31, 2022)

Liabilities

Current assets

Current liabilities
Trade notes andaccounts payable
Electronically recorded
obligations - operating

13,556

18,795

4,589

5,575

Short-term borrowings

14,510

9,933

Income taxes payable

2,140

1,444

Advances received

1,226

–

Contract liabilities

–

1,820

Provision for bonuses

1,442

1,477

Provision for productwarranties
Provision for loss on
construction contracts
Provision for stock-based remuneration
for directors (and other officers)

241

296

122

46

109

123

Other

2,809

3,559

Total current liabilities

40,74943,072Long-term borrowings

1,495

5,695

18,873

Deferred tax liabilities

11

53

Retirement benefit
liabilities

5,319

5,512

79

168

6,905

11,42947,65454,501

Capital stock

8,225

8,225

Capital surplus

7,508

7,508

Retained earnings

51,902

59,619

(495)

(734)

67,13974,617

301

434

–

(0)

(201)

575

(25)

208

74

1,218

143

168

Cash and deposits

12,804

20,198Notes and accounts
receivable - trade
Notes receivable trade
Electronically recordedmonetary claims - operating
Accounts receivable trade

49,517

–

–

1,703

1,598

1,862

–

25,639–25,584

Lease investment
assetsMerchandise andfinished goods

9,773

11,293

5,448

5,264

Work in progress

6,205

6,735

Raw materials andsupplies

1,223

1,456

Other

3,172

3,133

(39)

(6)

89,702

102,862

Contract assets

Allowance for doubtful
accounts
Total current assets

Fixed liabilities

Fixed assets
Tangible fixed assets
Buildings and structures

17,792

Accumulated
depreciation
Buildings andstructures (net)
Machinery, equipment
and vehicles
Accumulated
depreciation
Machinery, equipment
and vehicles (net)(12,808)(12,707)

4,983

6,166

Other

5,671

5,826

Total fixed liabilities(4,981)(5,117)

690

709

Land

12,27912,257

300

1,115

5,112

5,346

(4,391)(4,601)

720

745

Total tangible fixed
assets

18,97420,995Intangible fixed assets

1,105

1,082

1,911

2,058

Retirement benefit
assets–624

Deferred tax assets

2,977

2,369

Other

743

979

Allowance for
doubtful accounts
Total investments andother assets

(403)

(464)

Total shareholders’equityAccumulated othercomprehensive income
Valuation difference on
available-for-sale securities
Deferred gains orlosses on hedges
Foreign exchangetranslation adjustment
Accumulated adjustment
for retirement benefits
Total accumulated othercomprehensive income

5,228

5,566

Minority interests

25,30827,644

Total net assets

67,35776,004

130,506

Total liabilities and net
assets115,011130,506

Construction inprogress
Other
Accumulated
depreciation
Other (net)

Investments and otherassetsInvestment securities

Total fixed assets
Total assets

53

Previous fiscal year
(March 31, 2021)

ORGANO Group Report 2022

115,011

Total liabilities
Net assets
Shareholders’ equity

Treasury stock

Consolidated Statement of Income

Net sales
Cost of sales
Gross income
Selling, general and administrative expenses
Operating income
Non-operating profit
Interest income
Dividend income
Exchange gains
Equity method investment income
Other
Total non-operating income
Non-operating expenses
Interest expenses
Loss on valuation of derivatives
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Income from sales of fixed assets
Income from sales of investment securities
Income from sales of right to use facilities
Total extraordinary income
Extraordinary losses
Loss on sales of fixed assets
Loss on abandonment of fixed assets
Loss on valuation of investment securities
Loss on sales of right to use facilities
Loss on valuation of right to use facilities
Total extraordinary losses
Income before income taxes
Corporate, inhabitant, and business taxes
Income taxes - deferred
Total income taxes
ProfitProfit attributable to minority interests
Profit attributable to owners of parent(millions of yen)Previous fiscal year
(from April 1, 2020
to March 31, 2021)

Fiscal year under review(from April 1, 2021
to March 31, 2022)

100,638
74,311
26,326
16,746
9,579

112,069
83,55628,512
17,662
10,850

27
27
39
153
207
454

26
33
573
160
129
924

117
–
16
133
9,900

127
92
9
229
11,545

7
14
–
22

1,150
23
11
1,185

0
161
59
4
0
227
9,695
2,839
(230)
2,608
7,086
12
7,074

–
21
–
13
–
35
12,696
2,984
485
3,470
9,226
15
9,210

Consolidated Statement of Comprehensive Income
Previous fiscal year
(from April 1, 2020
to March 31, 2021)

ProfitOther comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign exchange translation adjustment
Adjustment amount for defined benefit plans
Share of other comprehensive income of entities accounted for using equity method
Total other comprehensive income
Comprehensive income
Items
Comprehensive income attributable to owners of parent
Comprehensive income attributable to minority interests(millions of yen)
Fiscal year under review(from April 1, 2021
to March 31, 2022)

7,086

9,226

155
–
(34)
500
3
624
7,711

135
(0)
809
235
(2)
1,178
10,4057,709
2

10,37133

ORGANO Group Report 2022

54

Corporate Data

Consolidated Statement of Shareholders’ Equity

Consolidated Statement of Cash Flows(millions of yen)Previous fiscal year
(from April 1, 2020 to March 31, 2021)
Balance at beginning of current period
Changes during current period
Dividends of surplus
Profit attributable to owners of parent

Shareholders’ equity
Capital stock

Capital surplus

Retained earnings

Treasury stock

Total shareholders’ equity

8,225

7,508

46,081(537)

61,277(1,254)
7,074(1,254)
7,074

Increased amount of retained earnings from increase inconsolidated subsidiaries

Acquisition of treasury stock
Disposal of treasury stock
Changes in items other than shareholders’ equity (net)Total changes during current period
Balance at end of current period

(65)
107

(65)
107

41
(495)

5,861
67,139Total accumulated
other comprehensive
incomeMinority
interests

0
–
8,225

0
7,508

5,820
51,902

Accumulated other comprehensive income
Valuation difference Foreign exchange
Accumulated
on available-fortranslation
adjustment forsale securities
adjustment
retirement benefits

Balance at beginning of current period
Changes during current period
Dividends of surplus
Profit attributable to owners of parent

143

(178)

(525)

(560)

140

60,8572
2
143(1,254)
7,074
–
(65)
107
637
6,499
67,357

Increased amount of retained earnings from increase inconsolidated subsidiaries

Acquisition of treasury stock
Disposal of treasury stock
Changes in items other than shareholders’ equity (net)Total changes during current period
Balance at end of current period

158
158
301

(23)
(23)
(201)

499
499
(25)

635
635
74

Total net assets(millions of yen)

Fiscal year under review(from April 1, 2021 to March 31, 2022)
Balance at beginning of current period
Cumulative effects of changes in accounting policies
Restated balance
Changes during current period
Dividends of surplus
Profit attributable to owners of parent

Shareholders’ equity
Capital stock

Capital surplus

Retained earnings

Treasury stock

Total shareholders’ equity

8,225

7,508

(495)

8,225

7,508

51,902
11
51,913(495)

67,13911
67,151(354)
115(1,541)
9,210
36
(354)
115

(238)
(734)

7,466
74,617

Accumulated
adjustment for
retirement benefits

Total accumulated
other comprehensive
income(1,541)
9,210
36

Increased amount of retained earnings from increase inconsolidated subsidiaries

Acquisition of treasury stock
Disposal of treasury stock
Changes in items other than shareholders’ equity (net)Total changes during current period
Balance at end of current period

8,225

7,705
59,619

7,508

Accumulated other comprehensive income
Valuation difference
Foreign exchange
Deferred gains or
on available-fortranslation
losses on hedges
sale securities
adjustment

Balance at beginning of current period
Cumulative effects of changes in accounting policies
Restated balance
Changes during current period
Dividends of surplus
Profit attributable to owners of parent

Minority
interests

301

–

(201)

(25)

74

143

301

–

(201)

(25)

74

143

67,357
11
67,36925
25
168(1,541)
9,210
36
(354)
115
1,169
8,635
76,004

Increased amount of retained earnings from increase inconsolidated subsidiaries

Acquisition of treasury stock
Disposal of treasury stock
Changes in items other than shareholders’ equity (net)Total changes during current period
Balance at end of current period

55

ORGANO Group Report 2022

Total net assets

132
132
434

(0)
(0)
(0)

777
777
575

234
234
208

1,144
1,144
1,218

Cash flow from operating activities
Income before income taxes
Depreciation
Increase (decrease) in provisions
Increase (decrease) in retirement benefit liabilities
Decrease (increase) in retirement benefit assets
Interest and dividend income
Interest expenses
Foreign exchange losses (gains)Share of loss (profit) of entities accounted for using equity method
Loss (gain) on valuation of derivatives
Loss (gain) on sales of fixed assets
Loss on abandonment of fixed assets
Loss (gain) on sales of investment securities
Loss (gain) on valuation of investment securities
Loss (gain) on sales of right to use facilities
Loss on valuation of right to use facilities
Decrease (increase) in trade receivables
Decrease (increase) in trade receivables and contract assets
Decrease (increase) in lease investments
Decrease (increase) in inventories
Increase (decrease) in trade payables
Other
SubtotalInterest and dividends received
Interest paid
Insurance income received
Damages paid
Income taxes paid or refunded
Cash flow from operating activities
Cash flow from investing activities
Expenditures on acquisitions of tangible fixed assets
Income from sales of tangible fixed assets
Expenditures on acquisitions of intangible fixed assets
Expenditures on acquisitions of investment securities
Income from sales of investment securities
Loan expenditures
Income from loan collection
Income from sales of right to use facilities
Other
Cash flow from investing activities
Cash flow from financing activities
Net increase (decrease) in short-term borrowings
Income from long-term borrowings
Repayments of long-term borrowings
Acquisition of treasury stock
Dividends paid
Dividends paid to minority interests
Other
Cash flow from financing activities
Foreign exchange translation adjustments on cash and cash equivalents
Increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of current period
Increase in cash and cash equivalents associated with new consolidation
Cash and cash equivalents at end of current period(millions of yen)Previous fiscal year
(from April 1, 2020
to March 31, 2021)

Fiscal year under review(from April 1, 2021
to March 31, 2022)

9,695
1,212
105
(104)
–
(54)
117
19
(153)
(2)
(6)
161
(14)
59
4
0
(12,728)–
1,979(3,047)
3,752(3,004)(2,008)
66
(110)
132
(6)
(2,654)(4,582)

12,696
1,332
127
150
(250)
(60)
127
(178)
(160)
92
(1,150)
21
(23)
–
1
–
–
(320)
(1,518)(2,244)
5,451
403
14,497
73
(129)
11
(0)
(3,664)
10,787

(965)
74
(289)
(58)
25
(250)
250
0
(47)
(1,261)(2,492)
1,200
(306)
(8)
65
–
–
32
(10)
(1,520)

7,075
–
(800)
(65)
(1,254)
–
(27)
4,927
(52)
(968)
13,772–
12,804(5,979)
6,000
(600)
(354)
(1,541)(7)(101)(2,586)398
7,079
12,804314
20,198ORGANO Group Report 2022

56

Corporate Data

Company Information

Network (Japan/Overseas)

Company profile (as of March 31, 2022)
Company name ORGANO CORPORATIONFoundation

May 1, 1946

Capital8,225,499,312 yen

Representative	
Masayuki Yamada,
Representative Director and President
Number of
employees

2,476 consolidated(1,090 single entity)

Shares (as of March 31, 2022)

Domestic Group Companies
Major businesses	
As a comprehensive water treatment engineering
company, the Company is mainly engaged in the
manufacture, sale and maintenance of various types ofindustrial process water and wastewater treatment
systems using ion exchange resin, separation
membranes, activated charcoal, etc., the provision ofwater treatment outsourcing services, and the sale ofvarious chemicals and food processing materials.

Major shareholders (top ten)

Total number of authorized shares: 25,392,000 shares
Total number of issued shares:

11,589,925 shares

Number of shareholders:

4,103

Securities companies
111,977 shares(0.97%)

Treasury shares
84,095 shares(0.72%)

Individuals
1,194,614 shares(10.31%)
Financial
institutions
2,155,011 shares(18.59%)Foreigners
2,855,829 shares(24.64%)

Domestic
corporations
5,188,399 shares(44.77%)

Name of shareholder(as of September 30, 2022)
Number ofshares held(Thousandsof shares)

Holding ratio
(%)

4,925

42.81

The Master Trust Bank of Japan, Ltd. (Trust account)

984

8.56

Custody Bank of Japan, Ltd. (Trust account)

649

5.65

Mizuho Bank, Ltd.

200

1.74

SSBTC CLIENT OMNIBUS ACCOUNT

156

1.36

KBC BANK NV - UCITS CLIENTS NON TREATY

152

1.33

DZ PRIVATBANK S.A. RE INVESTMENTFONDS

144

1.26

BNYM AS AGT/CLTS 10 PERCENT

113

0.98

JPMorgan Chase Bank 385781

91

0.79

BNYM SA/NV DUB BNYM GO UCITS ETF Solutions PLC

90

0.79

Tosoh Corporation

Note: The treasury shares (84,345 shares) are excluded in the calculation of theholding ratio shown above.

ORGANO PLANT SERVICE CORPORATION

1-2-8, Shinsuna, Koto-ku, Tokyo, 136-0075

ORGANO FOOD TECH CORPORATION

2100-43, Kamiyoshiba, Satte City, Saitama, 340-0121

ORGANO ECO TECH CORPORATION

1-2-8, Shinsuna, Koto-ku, Tokyo, 136-0075

ORGANO ACTY CORPORATION

1-2-8, Shinsuna, Koto-ku, Tokyo, 136-0075

HOSTEC

2-12-28, Osachigosho, Okaya City, Nagano, 394-0082

Tohoku Denki Tekko Co., Ltd.

1-4-57, Ohama, Sakata City, Yamagata, 998-0064

Overseas Group Companies
No. 49, Jalan Bagan Terap 26/11, Seksyen 26, 40400 Shah Alam, Selangor Darul

Organo (Asia) Sdn. Bhd.

Ehsan, Malaysia

Organo (Suzhou) Water Treatment Co., Ltd.

No. 28 Sheng gang Rd. Suzhou Industrial Park, Suzhou 215126, China

Organo Technology Co., Ltd.

10th Floor, No. 158, Sec. 2, Gongdao 5th Rd., Hsinchu City 300, Taiwan R.O.C.

Graha Indramas 5th Floor, Jl. AIP II K.S. Tubun Raya, No.77, Jakarta 11410, Indonesia

Organo (Singapore) Pte., Ltd–

Organo (Vietnam) Co., Ltd.

Head Office
1-2-8, Shinsuna, Koto-ku, Tokyo, 136-8631
R&D Center	
4-4-1, Nishi-Onuma, Minami-ku, Sagamihara, Kanagawa, 252-0332
Tsukuba Factory	2-3, Midorigahara (Tsukuba TechnoPark Toyosato), Tsukuba City, Ibaraki, 300-2646
1-66, Yoshima Kogyodanchi, Iwaki City, Fukushima, 970-1144
Iwaki Factory	Hokkaido Branch	
5-8-37, Kita 7 Jou Higashi (Organo Hokkaido Building), Higashi-ku,
Sapporo City, Hokkaido, 060-0907
1-11-1, Honcho (HF Sendai Honcho Building), Aoba-ku, Sendai City, Miyagi, 980-0014
Tohoku Branch	
1-2-8, Shinsuna, Koto-ku, Tokyo, 136-8631
Kanto Branch	Chubu Branch	
3-7-3, Uchiyama (NTP Plaza Chikusa-Uchiyama), Chikusa-ku, Nagoya City,
Aichi, 464-0075
1-6, Enoki Town (Kansai Organo Building), Suita City, Osaka, 564-0053
Kansai Branch	Chugoku Branch	
2-14, Inari Town (Wako-Inarimachi Building), Minami-ku, Hiroshima City,
Hiroshima, 732-0827
1-4-2, Shirokane (Organo Kyushu Building), Chuo-ku, Fukuoka City,
Kyushu Branch	Fukuoka, 810-0012

Organo USA, Inc.

Tsukuba Factory

Head Office

Our website
For more information, please refer to our website below:
https://www.organo.co.jp/english/

R&D Center

Bangkok 10900, Thailand

PT Lautan Organo Water

Major offices

Iwaki Factory

89/1 Kasemsap Building, 6th Floor, Viphavadi Rangsit Rd., Chom Phon, Chatuchak,Organo (Thailand) Co., Ltd.

Thuy Loi 4 Office Building, 3rd Floor, 102 Nguyen Xi Street, Ward 26, Binh Thanh
District, Ho Chi Minh City, Vietnam
3600 Gantz Road, Grove City, Ohio 43123-1895, United States

Organo (Suzhou)
Water Treatment Co., Ltd.

Organo USA, Inc.
Arizona Branch

Organo Technology Co., Ltd.
Organo (Thailand) Co., Ltd.
Organo (Vietnam) Co., Ltd.
Organo (Asia) Sdn. Bhd.
Organo (Singapore) Pte Ltd

PT Lautan Organo Water

57

ORGANO Group Report 2022

ORGANO Group Report 202258

1-2-8, Shinsuna, Koto-ku, Tokyo 136-8631
https://www.organo.co.jp/english/