DISCLAIMER: This translation may be used for reference purposes only. This English version is not an
official translation of the original Japanese document. In cases where any differences occur between the
English version and the original Japanese version, the Japanese version shall prevail. This translation is
subject to change without notice.

Notice of the78th Ordinary General Meeting of Shareholders

ORGANO CORPORATIONTo Shareholders
We would like to express our cordial appreciation
for your continuous support and patronage.
I am delighted to present this notice of the 78th
Ordinary General Meeting of Shareholders of
ORGANO CORPORATION to be held on Thursday,June 29, 2023.
Please confirm proposals of the General Meeting of
Shareholders and business outline of the fiscal year
2022 presented in the documents.
June 2023
Representative Director and President,
President and Executive Officer
Masayuki Yamada

Management Philosophy
Organo serves as a valuable partner company by leveraging its leading-edge technologies cultivatedthrough long experience with water treatment, by contributing to the industries that create the future, andby playing a key role in the development of societal infrastructure.
Long-term Management Vision

At Organo, we seek to expand our business through high value-added separation and purification 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 improve upon theway things were done yesterday, as a company where all employees are energetic and passionate about
their work.

-1-(Securities Code: 6368)
June 8, 2023
To our shareholders:
Representative Director and President
Masayuki Yamada

ORGANO CORPORATION
1-2-8, Shinsuna, Koto-ku, Tokyo

Notice of the 78th Ordinary General Meeting of Shareholders
We are pleased to announce the 78th Ordinary General Meeting of Shareholders of ORGANOCORPORATION (the “Company”), which will be held as indicated below.
When convening this General Meeting of Shareholders, the Company takes measures for providing
information that constitutes the content of reference documents for the general meeting of shareholders, etc.
(matters for which measures for providing information in electronic format are to be taken) in electronic
format, and posts this information on the Company’s website. Please access one of the websites shown below
to review the information.
The Company’s website
Website for posted notices of the https://www.organo.co.jp/ir/meeting/ (in Japanese)
general meeting of shareholders:
TSE website
Listed Company Search:https://www2.jpx.co.jp/tseHpFront/JJK010010Action.do?Show=Show(in Japanese)On the TSE website, enter “ORGANO” in “Issue name (company name)” or the Company’s securities code
“6368” in “Code,” and click “Search.” Then, click “Basic information” and select “Documents for public
inspection/PR information.”
Website for posted informational
materials for the general meeting https://d.sokai.jp/6368/teiji/ (in Japanese)of shareholders:If you are unable to attend the meeting in person, you may exercise your voting rights by mail (in writing) or
via the Internet, etc. Please examine the Reference Documents for the General Meeting of Shareholders andthen exercise your voting rights by 5:00 p.m. on Wednesday, June 28, 2023 (JST).
1. Date and Time:Thursday, June 29, 2023 at 10:00 a.m. (JST) (Reception is scheduled to be open
at 9:00 a.m.)

2. Venue:

Conference Room, 2nd floor, Head office building of the Company,
1-2-8, Shinsuna, Koto-ku, Tokyo

3. Purpose of the Meeting
Matters to be reported:
1. The Business Report and the Consolidated Financial Statements for the 78th
fiscal year (from April 1, 2022 to March 31, 2023), and the results of audits of
the Consolidated Financial Statements by the Independent Auditor and the Audit
and Supervisory Board-2-2. The Non-consolidated Financial Statements for the 78th fiscal year (from April
1, 2022 to March 31, 2023)
Matters to be resolved:
Proposal No. 1 Appropriation of Surplus
Proposal No. 2 Election of Nine Directors
Proposal No. 3 Election of Three Audit and Supervisory Board Members
Proposal No. 4 Election of Two Substitute Audit and Supervisory Board Members
Proposal No. 5 Revision of Amount of Remuneration for Outside Directors
4. Other Matters Relating to General Meetings of Shareholders

If no indication of approval of proposals is made on the voting form when exercising voting rights by
mail (in writing), it will be treated as an indication of approval having been made.

In the case of duplicate voting done both in writing and via the Internet, etc., the vote placed via theInternet, etc. will be considered valid. Additionally, in the case of voting more than once via the Internet,
etc., the last vote will be considered valid.

Request to Shareholders upon the 78th Ordinary General Meeting of Shareholders• If you appear to be coming down with a fever or have other symptoms of being unwell, please be prudent
in your decision regarding attendance of the meeting, including considering the option of not attending inperson.
• In accordance with changes made to the Japanese government’s basic policy on coping with the novel
coronavirus (COVID-19), the wearing of masks is now left to the discretion of the individual. We ask
those of you who will be attending this Ordinary General Meeting of Shareholders to decide on your need
to wear a mask after taking factors such as your physical condition and avoidance of the risk of infection
into consideration.
• Please enforce coughing etiquette and otherwise be considerate of the shareholders around you.
Methods of operating the general meeting of shareholders are subject to change depending on the situationof the spread of COVID-19 infection by the day of the meeting or announcements by the government. Anychanges will be announced on the Company’s website.
The Company’s website (https://www.organo.co.jp (in Japanese))-3-

Guide to Exercising Voting Rights
Attending the General Meeting of Shareholders
Please submit the voting form to the receptionist at the meeting.
Date and time of the Meeting: Thursday, June 29, 2023, at 10:00 a.m. (Reception starts at 9:00
a.m.)
Not Attending the General Meeting of Shareholders
Exercising Voting Rights by Mail (in Writing)
Please indicate your approval or disapproval of the proposals in the voting form, and then return the formby postal mail so that your vote is received by the deadline.
Deadline: To arrive by no later than 5:00 p.m. Wednesday, June 28, 2023
Exercising Voting Rights via the Internet, Etc.
Please access the designated website for exercise of voting rights, and enter your approval or disapprovalby the deadline.
Deadline: Exercised by no later than 5:00 p.m. Wednesday, June 28, 2023
For details, please see the “Guide to Exercising Voting Rights via the Internet, etc.”
In the case of duplicate voting done both in writing (by mail) and via the Internet, etc., the vote placed via
the Internet, etc. will be considered valid. If you exercise your voting rights more than once via the Internet,
etc., the last vote shall be deemed effective.
Matters for Disclosure over the Internet to Accompany Measures for Providing Information in Electronic
FormatOut of matters for which measures for providing information in electronic format are to be taken, thefollowing matters are excluded from the paper-based documents delivered to shareholders who havemade a request for delivery of such documents. Such matters are included in business reports,
consolidated financial statements and non-consolidated financial statements audited by the Audit andSupervisory Board Members and the Audit and Supervisory Board, and consolidated financial
statements and non-consolidated financial statements audited by the Independent Auditor.
(i)

Development of systems to ensure the appropriateness of business operations and overview ofoperational status of systems to ensure appropriateness of business operations(ii) Consolidated Statement of Changes in Equity and Notes to Consolidated Financial Statements(iii) Statement of Changes in Equity and Notes to Non-consolidated Financial Statements

If revisions to the matters for which measures for providing information in electronic format are to betaken arise, a notice of the revisions and the details of the matters before and after the revisions will be
posted on the Company’s website, the TSE website and the website for posted informational materials
for the general meeting of shareholders stated above.

-4-

Guide to Exercising Voting Rights via the Internet, etc.
By scanning the QR code (“Smart Exercise”)
You can log in to the website for exercise of voting rights without entering the voting rights exercise codeand password.
1． Please scan the QR code printed on the voting form at the bottom right.
*QR code is a registered trademark of DENSO WAVE INCORPORATED.
2． Then please follow the instructions on the screen and indicate your approval or disapproval.
The exercise of voting right by “Smart Exercise” is available only once.
In case you want to change your vote after exercising your voting right, please access the website for PCs
and log in by entering the “voting rights exercise code” and “password” indicated in the voting form, to
exercise your voting right again.
*You will be transferred to the website for PCs by scanning the QR code again.
By entering the voting rights exercise code and password
Website for exercise of voting rights: https://www.web54.net (in Japanese)
1． Please access the website for exercise of voting rights.
2． Please enter the “voting rights exercise code” indicated in the voting form.
3． Please enter the “password” indicated in the voting form.
4． Then please follow the instructions on the screen and indicate your approval or disapproval.
If you have any questions on how to exercise your voting rights via the Internet using a PC or smartphone,please contact the department below.
Sumitomo Mitsui Trust Bank, Limited,
Stock Transfer Agency Web Support, Dedicated line
0120-652-031 (toll free)(Business hours: 9:00 a.m. - 9:00 p.m.)
Institutional investors can exercise their voting rights via the “Electronic Voting Rights Exercise Platform”
for institutional investors operated by ICJ, Inc.

-5-

Reference Documents for General Meeting of Shareholders
Proposal No. 1

Appropriation of Surplus

The Company proposes the appropriation of surplus as follows:
1. Year-end dividends
The Company treats the return of profits to shareholders as one of the Company’s importantmanagement agendas, and it strives to provide distribution of profits in a way that considers theCompany’s revenue status, while adhering to a basic policy of providing stable and continuous
dividends.
In accordance with the above policy, the Company proposes to pay year-end dividends for the 78th
fiscal year as follows.
Note that the Company has implemented a 4-for-1 common share split on October 1, 2022, andfollowing conversion to reflect that share split, interim dividends (¥116 per share) with September 30,
2022 as the record date come to ¥29 per share, making full-year dividends for the fiscal year underreview equivalent to ¥62 per share.
(1) Type of dividend property
Cash(2) Allotment of dividend property and their total amount¥33 per common share of the Company
Total dividend amount is ¥1,518,724,185(3) Effective date of dividends of surplus
June 30, 2023
2. Other appropriation of surplus
As for internal reserves, the Company proposes the following to strengthen the managementfoundation.
(1) Item of surplus to be decreased and amount of decrease
Retained earnings brought forward:¥5,000,000,000(2) Item of surplus to be increased and amount of increase
General reserve:¥5,000,000,000(Reference)
Changes in dividend payout ratio pershare* A 4-for-1 common share split
was implemented effective as of
October 1, 2022. Dividends prior
to interim dividends for the 78th
term are stated on the
supposition that this share split
was implemented.

-6-

Proposal No. 2

Election of Nine Directors

The terms of office of all nine Directors will expire at the conclusion of this Ordinary General Meeting of
Shareholders. Therefore, the Company proposes the election of nine Directors including five Outside
Directors, increasing the number of Outside Directors by two, in order to increase the ratio of Outside
Directors to the Board of Directors to a majority, for the purpose of further strengthening corporate
governance.
The candidates for Directors are determined by the Board of Directors after obtaining opinions based on areview by the Nomination and Remuneration Advisory Committee, a voluntary advisory body of the Boardof Directors. The candidates for Director are as follows:
Candidate
No.

Note:

Name

GenderPosition in the Company
Director and President(Representative Director),
President and Executive
OfficerManaging Director andExecutive Officer
President of Industrial Plant
Business, and Senior
General Manager ofElectronics Division
Managing Director andExecutive Officer
President of R&D andEngineering, and Senior
General Manager of R&D
CenterDirector and Executive
OfficerPresident of Corporate
Management and Planning
and General Manager ofCorporate Strategy andPlanning Dept.

Times Attended
Board of Directors
Meetings
14/14(100%)

1

Masayuki Yamada

Reelection

Male

2

Yasutoshi Nakayama

Reelection

Male

3

Nobuyoshi Suda

Reelection

Male

4

Tetsushi Honda

Reelection

Male

5

Keikou Terui

Reelection
OutsideIndependent

Male

Outside Director

13/14
(93%)

6

Kenji Hirai

Reelection
OutsideIndependent

Male

Outside Director

14/14(100%)

7

Morifumi Wada

New election
OutsideIndependent

Male

–

–

8

Daisaku Abe

New election
OutsideIndependent

Male

–

–

9

Nobuko Hanano

New election
OutsideIndependent

FemaleOutside Audit andSupervisory Board Member

14/14(100%)

14/14(100%)

14/14(100%)

13/14
(93%)

For Nobuko Hanano, attendance at the meeting of the Board of Directors as an Audit and Supervisory Board
Member is stated.

-7-Candidate
No.

Name (Date of birth)

Career summary, and position and responsibility in the
Company
Apr. 1985

Joined Toyo Soda Manufacturing Co., Ltd.
(currently Tosoh Corporation)

June 2007

President of Tosoh Bioscience, Inc.

June 2011

Associate Director, Deputy Senior General
Manager of Bioscience Division of Tosoh
Corporation

June 2012

Associate Director, Senior General Manager
of Bioscience Division and Manager ofPlanning and Development

Number oftheCompany’s
sharesowned

President of Tosoh Bioscience LLC

Chairman of the Board of Tosoh Europe,
N.V. (retired in June 2019)
June 2013

Director, Senior General Manager of
Bioscience Division and Manager ofPlanning and Development of Bioscience
Division of Tosoh Corporation

June 2015

President (Representative Director) of Tosoh
Techno-System, Inc. (retired in June 2019)
Director of Tosoh Bioscience, Inc. (retired inJune 2019)
Director of Tosoh Bioscience LLC (retired inJune 2019)

Reelection
Masayuki Yamada(January 7, 1959)

June 2016

Senior Vice President, Senior General
Manager of Bioscience Division of Tosoh
Corporation

June 2017

Director, Executive Vice President, Presidentof Specialty Group and Senior General
Manager of Bioscience Division

1
Tenure as Director
4 years

10,900Chairman of the Board of Tosoh America,
Inc. (retired in June 2021)
June 2019

Director, Executive Vice President, General
Manager of Research and Development
Planning, President of Specialty Group, andPresident of Engineering Group of Tosoh
Corporation (retired in June 2021)

June 2021

Senior Managing Director and Executive
OfficerJune 2022

Director and President (Representative
Director) President and Executive Officer(current position)

Director of the Company[Reasons for nomination as candidate for Director]
Masayuki Yamada has been engaged in the bioscience field at Tosoh Corporation for many years. After being
appointed as Director, Executive Vice President, he has been leading management and operation of not only theSpecialty Group but also a wide range of divisions, such as the Research and Planning Division andEngineering Group, and contributed to creation and expansion of businesses of the aforesaid company. Afterbeing appointed as a Director of the Company, as the Director in charge, he has leveraged his global experience
as well as demonstrated his skills in areas such as promoting companywide safety and quality improvement,
cost reductions, and sustainability. Since assuming the position of President, he has been demonstrating
leadership in the promotion of long-term management plans and the devising and execution of strategy for theentire Group, including its overseas business.
In addition to high ethical standards, and abilities to accurately make decisions and understand issues, which areessential for a Director, he also possesses the necessary experience and insight to promote sustainable growthand improvement of corporate value of the Group. Therefore, the Company nominates him as a candidate for
Director.

-8-

[Significant concurrent positions outside the Company]
None[Special interest between candidate and the Company]
There is no special interest between the candidate and the Company.

-9-

Candidate
No.

Name (Date of birth)

Career summary, and position and responsibility in the
Company
Apr. 1984

Joined the Company

June 2010

General Manager of Electronics Industry
Sales Dept., Plant Division, Industrial Plant
Business

Apr. 2012

Director of Organo Kansai Co., Ltd. (retiredin December 2013)

Jan. 2014

Managing Director of Organo (Asia) Sdn.
Bhd.

June 2016

Executive Officer of the Company

May 2017

Director of Organo (Asia) Sdn. Bhd. (current
position)

June 2017

Executive Officer, Senior General Manager
of Plant Division, Industrial Plant Businessof the Company

Jan. 2018

Executive Officer, Senior General Manager
of Plant Division, Industrial Plant Business,
and General Manager of Electronics Industry
Sales Dept.

Apr. 2018

Executive Officer, Senior General Manager
of Plant Division, Industrial Plant Businessof the Company

Yasutoshi Nakayama(July 30, 1961)

June 2018

Tenure as Director
5 years

Director and Executive Officer, Deputy
President of Industrial Plant Business, andSenior General Manager of Plant Division

June 2019

Director and Executive Officer, President ofIndustrial Plant Business, and Senior General
Manager of Plant Division

June 2020

Managing Director and Executive Officer,
President of Industrial Plant Business, andSenior General Manager of Plant Division

June 2021

Managing Director and Executive Officer,
President of Industrial Plant Business, andSenior General Manager of Electronics
Division (current position)

Reelection

2

Number oftheCompany’s
sharesowned

29,600[Reasons for nomination as candidate for Director]
Yasutoshi Nakayama, as head of the Plant Division, one of the Company’s core businesses, has been putting
effort into business growth and improvement of revenue, after being engaged in company management as thepresident of an overseas subsidiary of the Company. After being appointed as a Director of the Company, as the
Senior General Manager of the Plant Division and President of the Industrial Plant Business, he has been in
charge of the whole Water Treatment Engineering Business Unit, and working to expand the businesses andachieve stable earnings in Japan and overseas.
In addition to high ethical standards, and abilities to accurately make decisions and understand issues, which areessential for a Director, he also possesses the necessary experience and insight to promote sustainable growthand improvement of corporate value of the Group. Therefore, the Company nominates him as a candidate for
Director.
[Significant concurrent positions outside the Company]
None[Special interest between candidate and the Company]
There is no special interest between the candidate and the Company.

- 10 -

Candidate
No.

Name (Date of birth)

Career summary, and position and responsibility in the
Company
Apr. 1984

Joined the Company

June 2010

Deputy General Manager of Plan Design
Dept., Technology & Production Center

Apr. 2012

General Manager of Electronics Industry
Sales Dept., Plant Division, Industrial Plant
Business and Project Management Officeand Engineering Dept., Engineering

Jan. 2013

Representative Director and General
Manager of Organo (Suzhou) Water
Treatment Co., Ltd. (retired in April 2016)

Apr. 2016

General Manager of Corporate Strategy andPlanning Dept., Corporate Management andPlanning of the Company

June 2017

Executive Officer, General Manager ofCorporate Strategy and Planning Dept.,
Corporate Management and Planning
Chairman of Organo (Vietnam) Co., Ltd.
(retired in June 2018)

June 2019

Director and Executive Officer, President ofCorporate Management and Planning andGeneral Manager of Corporate Strategy andPlanning Dept.

June 2020

Managing Director and Executive Officer,
President of Corporate Management andPlanning and General Manager of Corporate
Strategy and Planning Dept.

June 2021

Managing Director, Executive Officer,
Senior General Manager of R&D andEngineering and Senior General Manager of
R&D Center (current position)

Reelection
Nobuyoshi Suda
(November 19, 1963)
Tenure as Director
4 years3

Number oftheCompany’s
sharesowned

23,600(Responsibilities)
In charge of Environment, Safety and Quality Assurance
Dept., Purchasing and Logistics Dept., and Performance
Products Business[Reasons for nomination as candidate for Director]
Nobuyoshi Suda has been engaged in the Plant Technology Division, especially the electronics industry, formany years and has been responsible for businesses in the electronics industry field. In addition, he has been
engaged in company management as the Representative Director and General Manager (President) of an
overseas subsidiary of the Company. After being appointed as a Director of the Company, he has had a trackrecord in establishment of a group-wide management strategy and management and operation plan as a Director
in charge of all administrative divisions. Currently, as a Director in charge of the overall technology
development department, he has promoted the improvement of technical capabilities and the creation of newtechnologies and products, and as the Senior General Manager of R&D Center, he has promoted the planningand execution of strategic technology development.
In addition to high ethical standards, and abilities to accurately make decisions and understand issues, which areessential for a Director, he also possesses the necessary experience and insight to promote sustainable growthand improvement of corporate value of the Group. Therefore, the Company nominates him as a candidate for
Director.
[Significant concurrent positions outside the Company]
None[Special interest between candidate and the Company]
There is no special interest between the candidate and the Company.

- 11 -

Candidate
No.

Name (Date of birth)

4Career summary, and position and responsibility in the
Company
Apr. 1986

Joined the Company

Apr. 2012Managing Director of Organo (Asia) Sdn.
Bhd. (retired in January 2013)

Jan. 2013

Director and Deputy President of PT Lautan
Organo Water

Apr. 2015

President (retired in July 2017)

June 2017

General Manager of Power Plant Division,
Water Infrastructure and Energy of theCompany

June 2018

Executive Officer, Senior General Manager
of Power Plant Division, Industrial Plant
Business

June 2019
Reelection

Executive Officer, Deputy President ofIndustrial Plant Business, and General
Manager of Power Plant Division

June 2020

Tetsushi Honda(May 1, 1963)

Executive Officer, Senior General Manager
of R&D Center, R&D and Engineering

June 2021

Director and Executive Officer, President ofCorporate Management and Planning andGeneral Manager of Corporate Strategy andPlanning Dept. (current position)

Tenure as Director
2 years

Number oftheCompany’s
sharesowned

21,400(Responsibilities)
In charge of Internal Auditing Office, Corporate Secretariat
Office, Global Management and Planning, Legal and PatentDept., Trade Control Office, and Branches[Reasons for nomination as candidate for Director]
Tetsushi Honda has been engaged in the Sales Division of the electric power business and overseas business formany years and has also been engaged in company management as the President of an overseas subsidiary.
After being appointed as a Director of the Company, he has promoted sustainability and digital utilization as a
Director in charge of all administrative divisions, and also has promoted company-wide growth strategy
planning and execution as the General Manager of the Corporate Strategy and Planning Dept.
In addition to high ethical standards, and abilities to accurately make decisions and understand issues, which areessential for a Director, he also possesses the necessary experience and insight to promote sustainable growthand improvement of corporate value of the Group. Therefore, the Company nominates him as a candidate for
Director.
[Significant concurrent positions outside the Company]
None[Special interest between candidate and the Company]
There is no special interest between the candidate and the Company.

- 12 -

Candidate
No.

Name (Date of birth)

Reelection
OutsideIndependent
Keikou Terui(July 27, 1953)

Career summary, and position and responsibility in the
Company
Apr. 1979

Joined Ministry of International Trade andIndustry (currently Ministry of Economy,
Trade and Industry)

July 2008

Director-General for Technology Policy
Coordination, Minister’s Secretariat

Jan. 2011

Director-General of Kanto Bureau of
Economy, Trade and Industry

Apr. 2012

Director-General of Regional Economic andIndustrial Policy (retired in June 2013)

Aug. 2013

President of Japan Utility Telemetering
Association (current position)

Oct. 2013

Senior Research Associate of Chemicals
Evaluation and Research Institute, Japan(retired in September 2016)

June 2014

Director of Union of Japanese Scientists andEngineers (current position)

15,500Outside Director of Ube Industries, Ltd.
(current UBE Corporation) (retired in June
2022)
Mar. 2016

Outside Director of Bridgestone Corporation(retired in March 2023)

June 2016

Director of Chemicals Evaluation andResearch Institute, Japan (retired in June
2020)

Tenure as Director
7 years5

Number oftheCompany’s
sharesowned

Outside Director of the Company (current
position)Aug. 2018

Director of Japan Industrial Safety
Competency Center (current position)

June 2020

Executive Director of Japan Chemical
Innovation and Inspection Institute (current
position)[Reasons for nomination as candidate for Outside Director and outline of the expected role]
Keikou Terui had held a number of management positions at the Ministry of Economy, Trade and Industry. At
those positions, he had promoted preparation and implementation of industrial policy and demonstrated hisleadership at important positions in management of an organization. In addition, he has highly academic
knowledge on risk evaluation and management of chemicals, and has served as an outside director of otherlisted companies, deepening his knowledge on multidimensional corporate management. After being appointed
as an Outside Director of the Company, he has been giving us useful opinions and advice on the management of
the Company, utilizing his abundant knowledge of various kinds. In addition to driving forward deliberations ofmatters related to material transactions of the Company’s parent company group and the Company as Chair of
the Special Committee, he has also been contributing to deliberations on matters related to the selection ofcandidates for Directors and the compensation of Directors as a member of the Nomination and Remuneration
Advisory Committee. After his appointment, he is expected to continue to fulfill the above-mentioned roles aswell as serve as Chair of the Nomination and Remuneration Advisory Committee.
In addition to high ethical standards, and abilities to accurately make decisions and understand issues, which areessential for a Director, he also possesses the necessary experience and insight to promote sustainable growthand improvement of corporate value of the Group. Therefore, judging him as being capable of appropriately
performing his duties as an Outside Director, the Company nominates him as a candidate for Outside Director.
[Significant concurrent positions outside the Company]
President of Japan Utility Telemetering Association
Executive Director of Japan Chemical Innovation and Inspection Institute[Special interest between candidate and the Company]
There is no special interest between the candidate and the Company.

- 13 -

Candidate
No.

Name (Date of birth)

Reelection
OutsideIndependent
Kenji Hirai(March 20, 1953)

6

Career summary, and position and responsibility in the
Company
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 (retired in March 2019)

Apr. 2019

Vice Chairman of the Board (Representative
Director), Research Advisor

June 2019

Outside Director of the Company (current
position)

June 2021

Research Advisor of Sagami Chemical
Research Institute (retired in March 2023)

Number oftheCompany’s
shares
owned

8,400

Tenure as Director
4 years[Reasons for nomination as candidate for Outside Director and outline of the expected role]
Kenji Hirai, while making distinguished achievements in research of cutting-edge functional substances, highperformance agrochemicals and environmental preservation substances, and development of biotechnology, hasdemonstrated his skills in management and operation of an organization, as Vice Chairman of the Board,
President of Sagami Chemical Research Institute. After being appointed as an Outside Director of the Company,
he has been giving us useful opinions and advice on the management of the Company, especially on researchand technological development, utilizing his abundant knowledge of various kinds. As a member of theNomination and Remuneration Advisory Committee, he has also been contributing to deliberations on mattersrelated to the selection of candidates for Directors and the compensation of Directors. Additionally, as a memberof the Special Committee, he has been contributing to the deliberation of matters related to material transactionsof the Company’s parent company group and the Company. After his appointment, he is expected to continue tofulfill the above-mentioned roles.
In addition to high ethical standards, and abilities to accurately make decisions and understand issues, which areessential for a Director, he also possesses the necessary experience and insight to promote sustainable growthand improvement of corporate value of the Group. Therefore, judging him as being capable of appropriately
performing his duties as an Outside Director, the Company nominates him as a candidate for Outside Director.
[Significant concurrent positions outside the Company]
None[Special interest between candidate and the Company]
There is no special interest between the candidate and the Company.

- 14 -

Candidate
No.

Name (Date of birth)

New election
OutsideIndependent
Morifumi Wada
(October 8, 1954)
7

Career summary, and position and responsibility in the
Company
Mar. 1978

Joined EIKEN CHEMICAL CO., LTD.

Apr. 2005

General Manager of Production Planning &Control Division, Production Division andGeneral Manager of Procurement
Department

June 2006

Executive Officer, General Manager of
Production Planning & Control Division,
Production Division and General Manager ofProcurement Department

Apr. 2007

Executive Officer, General Manager of Nogi
Plant, Production Division

May 2007

Executive Officer, General Manager of Nogi
Plant and General Manager of Togane Plant,
Production Division

Apr. 2011

Vice President and Executive Officer,
General Manager of Nogi Plant and General
Manager of Togane Plant, Production
Division

June 2011

Director, Vice President and Executive
Officer, General Manager of Nogi Plant andDirector of Togane Plant, Production
Division

Apr. 2012

Director, Vice President and Executive
Officer, General Manager of Sales Division

June 2014

Director, President and CEO

June 2021

Director, Chairman and CEO

June 2022

Director, Chairman (current position)

Number oftheCompany’s
sharesowned

0[Reasons for nomination as candidate for Outside Director and outline of the expected role]
Morifumi Wada, while having overseen corporate management for many years as a Director and CEO at a listedcompany in the pharmaceuticals industry, has a wealth of experience in corporate management and knowledgeof governance. After his appointment as Outside Director of the Company, in addition to leveraging thatabundance of knowledge in his possession to provide useful opinions and guidance to the management of theCompany, he is expected to contribute deliberations on matters related to the selection of candidates for
Directors and the compensation of Directors as a member of the Nomination and Remuneration Advisory
Committee as well as to deliberations of matters related to material transactions of the Company’s parent
company group and the Company as a member of the Special Committee.
In addition to high ethical standards, and abilities to accurately make decisions and understand issues, which areessential for a Director, he also possesses the necessary experience and insight to promote sustainable growthand improvement of corporate value of the Group. Therefore, judging him as being capable of appropriately
performing his duties as an Outside Director, the Company nominates him as a new candidate for Outside
Director.
[Significant concurrent positions outside the Company]
Director, Chairman of EIKEN CHEMICAL CO., LTD.
[Special interest between candidate and the Company]
There is no special interest between the candidate and the Company.

- 15 -

Candidate
No.

Name (Date of birth)

Career summary, and position and responsibility in the
Company
Apr. 1980

Joined The Industrial Bank of Japan, Limited

Apr. 2007

Executive Officer of Mizuho Corporate
Bank, Ltd. (currently Mizuho Bank, Ltd.)(retired in April 2009)

Apr. 2009Managing Executive Officer, Head of
Strategic Planning Group and Head of IT,
Systems & Operations Group, Mizuho
Financial Group, Inc.

Apr. 2012Managing Executive Officer, Head of IT &Systems Group and Head of Operations
Group

Number oftheCompany’s
sharesownedManaging Executive Officer, Mizuho Bank,Ltd.
Managing Executive Officer, Mizuho
Corporate Bank, Ltd.
Managing Executive Officer, Mizuho Trust& Banking Co., Ltd. (retired in April 2014)
June 2012Managing Director, Managing Executive
Officer, Head of IT & Systems Group andHead of Operations Group, Mizuho Financial
Group, Inc.

Apr. 2013

Deputy President and Deputy PresidentExecutive Officer, Head of IT & Systems
Group and Head of Operations Group
Deputy President-Executive Officer, Mizuho
Bank, Ltd. (retired in July 2013 due tomerger)8

Deputy President-Executive Officer, Mizuho
Corporate Bank, Ltd. (retired in April 2019)
New election
OutsideIndependent
Daisaku Abe(June 20, 1957)

Managing Executive Officer, Mizuho
Securities Co., Ltd. (retired in April 2014)
June 2014

Deputy President and Executive Officer,
Head of IT & Systems Group and Head ofOperations Group, Mizuho Financial Group,
Inc.

June 2019

Deputy Chairman and Executive Officer,
Head of Internal Audit Group and Officer in
Charge of Specially Assigned Matters
Director (Audit and Supervisory Committee
Member), Mizuho Trust & Banking Co., Ltd.
(retired in April 2020)
Director (Audit and Supervisory Committee
Member), Mizuho Securities Co., Ltd.
(retired in April 2020)
Outside Director, Mizuho Leasing Company,
LimitedApr. 2020

Administrative Officer, Mizuho Financial
Group, Inc. (retired in June 2020)

June 2020

Director and Chairman (Outside Director),
Mizuho Leasing Company, Limited

June 2021

Director and Chairman

June 2022

Executive Adviser (current position)
Outside Director, NIPPON STEEL KOWA
REAL ESTATE CO., LTD. (current position)- 16 -

0Candidate
No.

Name (Date of birth)

Career summary, and position and responsibility in the
Company

Number oftheCompany’s
sharesowned[Reasons for nomination as candidate for Outside Director and outline of the expected role]
Daisaku Abe has years of involvement in IT/systems planning, corporate planning and other areas at financial
institutions, and possesses deep knowledge of financial operations in general. He also possesses a wealth ofcorporate management experience through the series of successive officer and executive officer positions that heheld at numerous financial institutions, including the role of Deputy President and the role of Deputy President
and Executive Officer at the Mizuho Financial Group, Inc. Simultaneously, he has deepened his knowledge ofmultidimensional corporate management as an outside director of other listed companies. After his appointment
as Outside Director of the Company, in addition to leveraging that abundant, diverse knowledge in his
possession to provide useful opinions and guidance to the management of the Company, he is expected tocontribute deliberations on matters related to the selection of candidates for Directors and the compensation of
Directors as a member of the Nomination and Remuneration Advisory Committee as well as to deliberations ofmatters related to material transactions of the Company’s parent company group and the Company as a memberof the Special Committee.
In addition to high ethical standards, and abilities to accurately make decisions and understand issues, which areessential for a Director, he also possesses the necessary experience and insight to promote sustainable growthand improvement of corporate value of the Group. Therefore, judging him as being capable of appropriately
performing his duties as an Outside Director, the Company nominates him as a new candidate for Outside
Director.
[Significant concurrent positions outside the Company]
Outside Director, NIPPON STEEL KOWA REAL ESTATE CO., LTD.
[Special interest between candidate and the Company]
There is no special interest between the candidate and the Company.

- 17 -

Candidate
No.

Name (Date of birth)

Career summary, and position and responsibility in the
Company
Apr. 1991

Joined Nomura Research Institute, Ltd. (leftin April 1995)

Oct. 2000

Registered as Lawyer (Dai-Ichi Tokyo Bar
Association) (current position)

Number oftheCompany’s
sharesowned

Joined KOHWA SOHGOH LAW OFFICES

New election
OutsideIndependentOct. 2004

Partner (current position)

Mar. 2019

Outside Audit and Supervisory Board
Member, Kanro Inc. (current position)

Apr. 2020

Auditor, Drone Service Promotion
Association (current position)

June 2021

Outside Audit and Supervisory Board
Member of the Company (current position)

0

Nobuko Hanano(October 6, 1968)[Reasons for nomination as candidate for Outside Director and outline of the expected role]
After working for one of Japan’s largest consulting firms as a management researcher, Nobuko Hanano has
worked extensively as a lawyer. In addition, she has served as an outside auditor of another listed company,
deepening her knowledge on multidimensional corporate management. After being appointed as an Outside
Audit and Supervisory Board Member of the Company, she has contributed to improving the effectiveness of
the Company’s audits by utilizing her abundant and various pieces of knowledge. After her appointment as
Outside Director of the Company, in addition to leveraging that abundant, diverse knowledge in her possession
to provide useful opinions and guidance to the management of the Company, she is expected to contribute
deliberations on matters related to the selection of candidates for Directors and the compensation of Directors asa member of the Nomination and Remuneration Advisory Committee as well as to deliberations of mattersrelated to material transactions of the Company’s parent company group and the Company as a member of theSpecial Committee.
In addition to high ethical standards, and abilities to accurately make decisions and understand issues, which areessential for a Director, she also possesses the necessary experience and insight to promote sustainable growthand improvement of corporate value of the Group. Therefore, judging her as being capable of appropriately
performing her duties as an Outside Director, the Company nominates her as a new candidate for Outside
Director.

9[Significant concurrent positions outside the Company]
LawyerPartner, KOHWA SOHGOH LAW OFFICES
Outside Audit and Supervisory Board Member, Kanro Inc.
[Special interest between candidate and the Company]
There is no special interest between the candidate and the Company.
Notes: 1.

2.
3.
4.

The positions and responsibilities held by Masayuki Yamada in the past ten years at the Company’s parent
company Tosoh Corporation and its subsidiaries (Tosoh Bioscience, Inc., Tosoh Bioscience LLC, Tosoh TechnoSystem, Inc., Tosoh Europe, N.V., and Tosoh America, Inc.) are presented in the above “Career summary, andposition and responsibility in the Company.”
Keikou Terui, Kenji Hirai, Morifumi Wada, Daisaku Abe and Nobuko Hanano are candidates for Outside
Director.
Nobuko Hanano’s term of office as an Audit and Supervisory Board Member of the Company will be two years
upon the conclusion of this Ordinary General Meeting of Shareholders.
Currently, the Company has entered into respective agreements with Keikou Terui, Kenji Hirai and Nobuko
Hanano to set the minimum amount of liability provided by laws and regulations as the amount for liability fordamages under Article 423, paragraph 1 of the Companies Act in cases where there is good faith and no grossnegligence, in accordance with Article 427, paragraph 1 of the same Act and the Articles of Incorporation of theCompany. If they are elected as Directors, the Company plans to enter into the same agreement with each ofthem. In addition, if Morifumi Wada and Daisaku Abe are elected as Directors, the Company plans to enter into
the same agreement with each of them.

- 18 -

5.

6.

7.

At present, the Company and the insurance company have entered into an Officers’ Liability Insurance Contract
with all Directors included as insured persons as stipulated in Article 430-3, paragraph 1 of the Companies Act.
In the event of a claim for damages arising from duties performed by the insured in his or her position during theinsurance period, the insurance contract covers compensation for damage and dispute costs. However, there arecertain exemptions, such as damage caused intentionally or by gross negligence that is not covered by therelevant insurance contract. Each candidate who is elected as a Director will be insured under the insurance
contract. The term of the insurance contract is one year and shall be renewed upon resolution of the Board of
Directors before the expiration of the term.
UBE Corporation, at which Keikou Terui served as Outside Director until June 2022, announced in February
2018 that it had not carried out product tests on certain low-density polyethylene products that were meant to be
carried out as part of an agreement with customers. In addition, the said company announced a non-conformity
with JIS certification of limestone aggregate for ready-mix concrete in May 2018, and 14 new cases ofimproprieties in quality in June 2018. Further the said company announced, in October 2018, two cases ofimproprieties in quality including an overseas subsidiary, as the result of a supplementary investigation. Keikou
Terui had been unaware of the said issue before the facts that led to the said company’s announcement came tolight, but he had been providing recommendations from a legal compliance perspective at the said company’sboard of directors meetings before this issue. In addition, after becoming aware of the issue, Keikou Terui hasappropriately fulfilled his responsibilities by requesting an investigation of the cause of the improprieties andthorough enforcement of compliance structure, etc.
The Company has submitted notification to the Tokyo Stock Exchange that Keikou Terui, Kenji Hirai andNobuko Hanano have been designated as independent officers as provided for by the aforementioned exchange.
In addition, the Company has submitted notification to the said exchange that Morifumi Wada and Daisaku Abeshall be designated as independent officers. For the Company’s “Criteria for Independence of Outside Officers,”
please see the “(Reference)” part that follows “Proposal No. 4: Election of Two Substitute Audit and Supervisory
Board Members” in this Notice of the Ordinary General Meeting of Shareholders.

- 19 -

Proposal No. 3

Election of Three Audit and Supervisory Board Members

Audit and Supervisory Board Member Nobuko Hanano will retire upon the conclusion of this General
Meeting of Shareholders. Audit and Supervisory Board Members Masahiko Toyoda and Wataru Higuchi’s
terms of service will expire upon the conclusion of this General Meeting of Shareholders. Therefore, theCompany proposes the election of three Audit and Supervisory Board Members.
In addition, the consent of the Audit and Supervisory Board has been obtained for the submission of this
proposal.
The candidates for Audit and Supervisory Board Members is as follows:
Candidate No.

Name (Date of birth)

Career summary and position in the Company

Apr. 1985

Joined Toyo Soda Manufacturing Co., Ltd.
(currently Tosoh Corporation)

Apr. 1995

Corporate Control & Accounting

Dec. 2005

Corporate Control & Accounting and New
System Project Team

Jan. 2008

Corporate Control & Accounting

June 2010

Outside Corporate Auditor of PLAS-TECH
CORPORATION (retired in June 2013)
Outside Corporate Auditor, TOHOACETYLENE Co., Ltd. (retired in June
2013)

Number oftheCompany’s
sharesowned

100

Corporate Strategy, Tosoh Corporation
New election
Yoshihiro Tajitsu(February 25, 1963)
1

Feb. 2013

General Manager of Audit & Supervisory
Board Secretariat

June 2019

General Manager of Auditing

May 2022

Vice President, General Manager of Auditing(retired in June 2022)

June 2022

Executive Officer, Deputy President ofCorporate Management and Planning of theCompany (current position)[Reasons for nomination as candidate for Audit and Supervisory Board Member]
Yoshihiro Tajitsu has been extensive involvement with the finance department of Tosoh Corporation, where hedevised and executed finance and accounting strategy and achieved results in group company management.
Moreover, he leveraged that knowledge of finance to subsequently endeavor towards properly monitoring themanagement of Tosoh Corporation in the capacity of the General Manager of Auditing thereof. In addition, he
has served as an outside auditor of other listed companies, deepening his knowledge on multidimensional
corporate management. After being appointed as an Executive Officer of the Company, he has assisted a
Director in charge of all administrative divisions and has contributed to promoting the devising and executing ofcompanywide growth strategies of the Company.
In addition to high ethical standards and an ability to make decisions fairly and impartially, which are essential
for an Audit and Supervisory Board Member, he also possesses the necessary experience and insight to conduct
an appropriate audit on the management of the Company. Therefore, judging him as being capable ofappropriately performing his duties as an Audit and Supervisory Board Member, the Company nominates him as
a new candidate for Audit and Supervisory Board Member.
[Significant concurrent positions outside the Company]
None[Special interest between candidate and the Company]
There is no special interest between the candidate and the Company.

- 20 -

Candidat
e No.

Name (Date of birth)

Career summary and position in the Company

Oct. 1993

Joined Deloitte Touche Tohmatsu (currently
Deloitte Touche Tohmatsu LLC) (left in
August 1998)

Apr. 1997

Registered as Certified Public Accountant(excluding the period of legal training)(current position)

Oct. 2002

Registered as Lawyer (Dai-Ichi Tokyo Bar
Association) (current position)

Number oftheCompany’s
sharesowned

Joined SEIWA KYODO LAW OFFICE(SEIWA MEITETSU LAW OFFICE)

Reelection
OutsideIndependent
Wataru Higuchi(October 30, 1970)

2

Tenure as Audit and Supervisory
Board Member
4 years

Oct. 2007

Partner (left in September 2018)

June 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 andAccounting (current position)

June 2019

Outside Audit and Supervisory Board
Member of the Company (current position)

Oct. 2019

Executive Officer of Advance Residence
Investment Corporation (current position)

Mar. 2022

Inspector, The Professional Golfers’
Association of Japan (current position)

0[Reasons for nomination as candidate for Outside Audit and Supervisory Board Member]
Wataru Higuchi, as a lawyer and certified public accountant, has highly professional knowledge and experience
relating to legal, finance and accounting. In addition, he has served as an outside director (Audit and Supervisory
Committee Member) of another listed company, deepening his knowledge on multidimensional corporate
management. After being appointed as an Outside Audit and Supervisory Board Member of the Company, he has
contributed to improving the effectiveness of the Company’s audits by utilizing his abundant and various piecesof knowledge. After his appointment, he is expected to continue to fulfill the above-mentioned roles.
In addition to high ethical standards and an ability to make decisions fairly and impartially, which are essential
for an Audit and Supervisory Board Member, he also possesses the necessary experience and insight to conduct
an appropriate audit on the management of the Company. Therefore, judging him as being capable ofappropriately performing his duties as an Outside Audit and Supervisory Board Member, the Company
nominates him as a new candidate for Outside Audit and Supervisory Board Member.
[Significant concurrent positions outside the Company]
LawyerCertified Public Accountant
Representative Partner of Ootemon Law and Accounting
Executive Officer of Advance Residence Investment Corporation
Outside Director (Serving as Audit and Supervisory Committee Member) of Marubeni Construction Material
Lease Co., Ltd.
[Special interest between candidate and the Company]
There is no special interest between the candidate and the Company.

- 21 -

Candidat
e No.

Name (Date of birth)

New election
OutsideIndependent

Career summary and position in the Company

Apr. 1981

Joined Kagome Co., Ltd.

June 2006

Executive Officer, General Manager,
Corporate Planning Department

June 2008

Director & Executive Officer, General
Manager, Research & Development Division

June 2011

Director & Managing Executive Officer,
General Manager, Research & Development
Division

Apr. 2013

Director & Managing Executive Officer,
CEO, Asia Business Company

Oct. 2015

Director & Managing Executive Officer,
General Manager, Shared Service
Preparation Office

Apr. 2016

Director & Managing Executive Officer0

President & Representative Director of
Kagome Axis Co., Ltd. (Representative
Director) (retired in October 2017)
Mar. 2018

Hirohito Kodama(March 22, 1959)

3

Number oftheCompany’s
sharesowned

Outside Audit & Supervisory Board Memberof Dynapac Co., Ltd.
Director of Kagome Co., Ltd. (Full-time
Audit and Supervisory Committee Member)(current position)

Mar. 2020

Outside Director of Dynapac Co., Ltd. (Audit
and Supervisory Committee Member)(current position)[Reasons for nomination as candidate for Outside Audit and Supervisory Board Member]
Hirohito Kodama has been in charge of corporate management for many years as a director of a major food
manufacturer, and has been involved in audit operation as a director (Full-time Audit and Supervisory
Committee Member). In addition, he has served as an outside director (Audit and Supervisory Committee
Member) of another listed company, deepening his knowledge on multidimensional corporate management.
After being appointed as an Outside Audit and Supervisory Board Member of the Company, he is expected tocontribute to highly effective auditing by utilizing his abundant and various pieces of knowledge.
In addition to high ethical standards and an ability to make decisions fairly and impartially, which are essential
for an Audit and Supervisory Board Member, he also possesses the necessary experience and insight to conduct
an appropriate audit on the management of the Company. Therefore, judging him as being capable ofappropriately performing his duties as an Outside Audit and Supervisory Board Member, the Company
nominates him as a new candidate for Outside Audit and Supervisory Board Member.
[Significant concurrent positions outside the Company]
Director of Kagome Co., Ltd. (Full-time Audit and Supervisory Committee Member)
Outside Director of Dynapac Co., Ltd. (Audit and Supervisory Committee Member)[Special interest between candidate and the Company]
There is no special interest between the candidate and the Company.
Notes: 1.
2.
3.

4.

The positions and responsibilities held by Yoshihiro Tajitsu presently or in the past ten years at the Company’s
parent company Tosoh Corporation are presented in the above “Career summary and position in the Company.”
Wataru Higuchi and Hirohito Kodama are candidates for Outside Audit and Supervisory Board Member.
Currently, the Company has entered into respective agreements with Wataru Higuchi to set the minimum amountof liability provided by laws and regulations as the amount for liability for damages under Article 423, paragraph
1 of the Companies Act in cases where there is good faith and no gross negligence, in accordance with Article
427, paragraph 1 of the same Act and the Articles of Incorporation of the Company. If Wataru Higuchi is elected
as an Audit and Supervisory Board Member, the Company plans to enter into the same agreement with him. In
addition, if Yoshihiro Tajitsu and Hirohito Kodama are elected as Audit and Supervisory Board Members, theCompany plans to enter into the same agreement with each of them.
At present, the Company and the insurance company have entered into an Officers’ Liability Insurance Contract
with all Audit and Supervisory Board Members included as insured persons as stipulated in Article 430-3,
paragraph 1 of the Companies Act. In the event of a claim for damages arising from duties performed by the- 22 -

5.

insured in his or her position during the insurance period, the insurance contract covers compensation fordamage and dispute costs. However, there are certain exemptions, such as damage caused intentionally or bygross negligence that is not covered by the relevant insurance contract. Each candidate who is elected as an Audit
and Supervisory Board Member will be insured under the insurance contract. The term of the insurance contract
is one year and shall be renewed upon resolution of the Board of Directors before the expiration of the term.
The Company has submitted notification to the Tokyo Stock Exchange that Wataru Higuchi has been designatedas an independent officer as provided for by said exchange. In addition, the Company has submitted notification
to the said exchange that Hirohito Kodama shall be designated as an independent officer. For the Company’s“Criteria for Independence of Outside Officers,” please see the “(Reference)” part that follows “Proposal No. 4:
Election of Two Substitute Audit and Supervisory Board Members” in this Notice of the Ordinary General
Meeting of Shareholders.

- 23 -

Proposal No. 4

Election of Two Substitute Audit and Supervisory Board Members

To prepare for a situation where the number of Audit and Supervisory Board Member does not satisfy the
number prescribed by laws and regulations, the Company proposes the election of two Substitute Audit andSupervisory Board Members.
The candidates for Substitute Audit and Supervisory Board Member are as follows. If Proposal No. 3 isapproved as proposed, Haruki Myouga will be a substitute for Audit and Supervisory Board Member
Yoshihiro Tajitsu, and Mio Minaki will be a substitute for an Outside Audit and Supervisory Board
Member.
The appointment of the Substitute Audit and Supervisory Board Member shall be subject to the number ofAudit and Supervisory Board Members not satisfying the number prescribed by laws and regulations, andthe term of office thereof shall be the remaining term of office of a predecessor.
In addition, the consent of the Audit and Supervisory Board has been obtained for the submission of this
proposal.
Candidate No.

Name (Date of birth)

Haruki Myouga(February 21, 1956)

1

Career summary and position in the Company

Apr. 1978

Joined the Company

June 2011

Executive Officer, Senior General Manager
of R&D Center and General Manager ofPlanning and Administration Dept., R&D
CenterApr. 2012

Executive Officer, Senior General Manager
of R&D Center and General Manager ofDevelopment Dept. I, R&D Center

Apr. 2013

Executive Officer, Senior General Manager
of R&D Center

Apr. 2015

Managing Executive Officer, Senior General
Manager of R&D Center

June 2016

Managing Director and Executive Officer,
Senior General Manager of R&D Center

June 2017Managing Director and Executive Officer

June 2018

Managing Director and Executive Officer,
President of R&D and Engineering (retired
in June 2021)

Number oftheCompany’s
sharesowned

34,400[Reasons for nomination as candidate for Substitute Audit and Supervisory Board Member]
Haruki Myouga has overseen corporate management for many years as a Director of the Company, andpossesses advanced levels of knowledge and experience regarding technology development, particularly that for
wastewater treatment technology. Over time, he has contributed to the enhancement of technological prowess
and the creation of new technologies and products at the Company.
In addition to high ethical standards and an ability to make decisions fairly and impartially, which are essential
for an Audit and Supervisory Board Member, he also possesses the necessary experience and insight to conduct
an appropriate audit on the management of the Company. Therefore, the Company nominates him as a candidate
for Substitute Audit and Supervisory Board Member.
[Significant concurrent positions outside the Company]
None[Special interest between candidate and the Company]
There is no special interest between the candidate and the Company.

- 24 -

Candidat
e No.

Name (Date of birth)

Career summary and position in the Company

Oct. 2003

Public Prosecutor, Tokyo District Public
Prosecutors Office

Apr. 2004

Public Prosecutor, Osaka District Public
Prosecutors Office

Apr. 2005

Public Prosecutor, Fukuoka District Public
Prosecutors Office

Apr. 2014

Litigation Prosecutor, Fukuoka Legal Affairs
BureauApr. 2016

Public Prosecutor, Tokyo District Public
Prosecutors Office

Apr. 2017

Visiting General Manager of Legal Affairs
Department, Agriculture, forestry andfisheries Fund corporation for Innovation,
Value-chain and Expansion Japan (retired in
March 2019)

Apr. 2019

Registered as Lawyer (Dai-Ni Tokyo Bar
Association) (current position)

Mio Minaki(April 6, 1973)
2

Number oftheCompany’s
sharesowned

0Partner of Minaki & Kitazawa Law Office(current position)
June 2019

Outside Director of SEIKAGAKUCORPORATION (current position)

June 2021

Outside Auditor of NITTOKU CO., LTD.
(current position)[Reasons for nomination as candidate for Substitute Outside Audit and Supervisory Board Member]
Mio Minaki is currently widely active as a lawyer based on her wealth of experience and insight into corporate
legal affairs cultivated over years in the judicial sector. Additionally, she has deepened her knowledge ofmultidimensional corporate management as an outside officer of other listed companies.
In addition to high ethical standards and an ability to make decisions fairly and impartially, which are essential
for an Audit and Supervisory Board Member, she also possesses the necessary experience and insight to conduct
an appropriate audit on the management of the Company. Therefore, judging her as being capable ofappropriately performing her duties as an Outside Audit and Supervisory Board Member, the Company
nominates her as a candidate for Substitute Outside Audit and Supervisory Board Member.
[Significant concurrent positions outside the Company]
LawyerPartner of Minaki & Kitazawa Law OfficeOutside Director of SEIKAGAKU CORPORATION
Outside Auditor of NITTOKU CO., LTD.
[Special interest between candidate and the Company]
There is no special interest between the candidate and the Company.
Notes: 1.
2.

3.

Mio Minaki is a candidate for Substitute Outside Audit and Supervisory Board Member.
If the number of Audit and Supervisory Board Members or Outside Audit and Supervisory Board Members does
not satisfy the number prescribed by laws and regulations and Haruki Myouga or Mio Minaki is appointed, theCompany plans to enter into an agreement to set the minimum amount of liability provided by laws andregulations as the amount for liability for damages under Article 423, paragraph 1 of the Companies Act in cases
where there is good faith and no gross negligence, in accordance with Article 427, paragraph 1 of the same Act
and the Articles of Incorporation of the Company.
At present, the Company and the insurance company have entered into an Officers’ Liability Insurance Contract
with all Audit and Supervisory Board Members included as insured persons as stipulated in Article 430-3,
paragraph 1 of the Companies Act. In the event of a claim for damages arising from duties performed by the
insured in his or her position during the insurance period, the insurance contract covers compensation fordamage and dispute costs. However, there are certain exemptions, such as damage caused intentionally or bygross negligence that is not covered by the relevant insurance contract. If the number of Audit and Supervisory
Board Members or Outside Audit and Supervisory Board Members does not satisfy the number prescribed bylaws and regulations and Haruki Myouga or Mio Minaki is appointed, he or she will become the insured under
the insurance contract. The term of the insurance contract is one year and shall be renewed upon resolution of theBoard of Directors before the expiration of the term.

- 25 -

4.

If the number of Outside Audit and Supervisory Board Members does not satisfy the number prescribed by laws
and regulations and Mio Minaki is appointed, the Company will designate her as an independent officer inaccordance with the provisions of the Tokyo Stock Exchange and notify it to the Exchange. For the Company’s“Criteria for Independence of Outside Officers,” please see the “(Reference)” part that follows this proposal.

- 26 -

(Reference)
Policy on Nomination of Director Candidates
The number of the Board of Directors shall be between three and ten, and in principle, one-third or more ofits members shall be comprised of Independent Outside Directors. In order to achieve sustainable growthand maximize corporate value over the medium to long term, the Company’s policy to nominate candidates
for Directors is to identify skills such as knowledge, experience, and abilities that should be provided as a
Director and ensure that the entire Board of Directors has a well-balanced structure.
Skill matrix of Directors (planned) after the General Meeting of Shareholders
Based on the above policy, the Company has identified the following items as skills necessary to realize its
medium- to long-term management plan. The skills possessed by each Director candidate are appropriatelybalanced, and the list is shown in the table below.
Corporate
Name

Management/

Finance/

Management Accounting
Strategy

Masayuki Yamada
Yasutoshi
Nakayama◎◎

Tetsushi Honda◎(Outside)
Kenji Hirai(Outside)
Morifumi Wada
(Outside)
Daisaku Abe(Outside)
Nobuko Hanano(Outside)Note:and risk

Globalmanagement◎◎

Nobuyoshi Suda

Keikou Terui

Legal affairs

marketing◎◎◎Sales andTechnology

resource◎◎

Sustainability

strategy

◎

◎
◎

Human

◎
◎

◎

◎

◎

◎

◎

◎

◎

◎

◎

◎

◎

◎

◎

◎

◎

◎

◎

◎

◎

◎

◎

◎

◎

◎

◎

◎
◎

Skills through which each director candidate is especially expected to demonstrate that candidate’s expertise andexperience are marked with a “◎” mark.

- 27 -

Criteria for Independence of Outside Officers
An outside officer of the Company will be deemed as not satisfying the requirements for independence if
any of the following statuses are applicable to him/her.
(i)A person who is currently, or who has been during the past ten years, an executive of the Company
or a subsidiary of the Company.
(ii) A person who is currently, or who has been during the past ten years, a non-executive director or an
accounting advisor of the Company or a subsidiary of the Company (applicable only in the case of
Outside Audit and Supervisory Board Members).
(iii) A person who is currently, or who has been during the past ten years, an executive or a nonexecutive director of the Company’s parent company.
(iv) A person who is currently, or who has been during the past ten years, an Audit and Supervisory
Board Member of the Company’s parent company (applicable only in the case of Outside Audit andSupervisory Board Members).
(v)
A person who is currently, or who has been during the past ten years, an executive at a sistercompany of the Company.
(vi) A person who is currently, or who has been during the past one year, either a person who has theCompany as a major business partner, or an executive of such an entity.
(vii) A person who is currently, or who has been during the past one year, either a person who is a major
business partner of the Company or an executive of such an entity.
(viii) A person who is currently, or who has been during the past one year receiving a large amount ofmoney or other assets from the Company other than remuneration for directors (and other officers)
either as a consultant, an accounting professional, or a legal professional.
(ix) A person who is currently a major shareholder of the Company (or an executive of the said major
shareholder if the shareholder is a corporation).
(x)
A person who is currently an executive at an entity under circumstances where outside officers aremutually appointed between said entity and the Company.
(xi) A person who is currently an executive at an entity that is receiving a significant amount of
donations from the Company.
(xii) A person whose spouse or relative within second degree of kinship falls under any of (i) through(viii) above (limited to material persons).

- 28 -

Proposal No. 5

Revision of Amount of Remuneration for Outside Directors

The amount of remuneration for Directors of the Company was set at not more than ¥340 million perannum (of which not more than ¥40 million is for Outside Directors) by approval at the 69th Ordinary
General Meeting of Shareholders held on June 27, 2014.
In order to strengthen corporate governance at this time as well as prepare for an increase in the number of
Outside Directors and the expansion of their role in the future, the Company proposes that the amount of
remuneration for Outside Directors be revised from not more than ¥40 million per annum to not more than
¥90 million per annum while keeping the amount of remuneration for Directors at not more than ¥340
million per annum.
Based on the Company’ s policy regarding the determination of remuneration, etc. for Directors, this
proposal was resolved by the Board of Directors and submitted for review to this General Meeting of
Shareholders after subjecting it to the review of the Nomination and Remuneration Advisory Committee, avoluntary advisory body of the Board of Directors whose majority members consist of Independent Outside
Directors, and obtaining the opinion of that committee. The Company believes that the amount of
remuneration is reasonable in light of the roles, liability, number, etc. of Outside Directors.
The Company also proposes that the amount of remuneration for Directors continues to not include salaries
as employees paid to Directors who are also employees in the same manner as before.
Additionally, the current number of Directors is nine (out of which three are Outside Directors). Should
Proposal No. 2 be approved as proposed, the number of Directors upon the conclusion of this General
Meeting of Shareholders will be nine (out of which five will be Outside Directors).

- 29 -

Business Report (From April 1, 2022 to March 31, 2023)
1. Status of the corporate group(1) Business progress and results
During the fiscal year ended March 31, 2023 (from April 1, 2022 to March 31, 2023), the pace ofrecovery in the global economy slowed and the sense of stagnation became stronger due to factors
such as the effects of progressive inflation caused by rising prices for energy, food and othergoods, and consequent changes in the monetary policies of various countries, amid the prolonged
impact of geopolitical risks, including the Russian invasion of Ukraine and trade friction between
the U.S. and China.
In the electronics industry, the Organo Group’s main market, there was a deterioration insemiconductor market conditions, centered around memory, and there were signs that somecustomers were reducing production and decreasing/postponing capital investment mainly due tothe impact of semiconductor-related restrictions imposed on China by the U.S. However, largescale investments in cutting-edge semiconductors in Taiwan, and capital investments in siliconwafers, automotive/power semiconductors, and others in Japan, China, Malaysia, etc. remained
active. The general industry field saw recovering capital investments, which had been weak due tothe impact of the COVID-19 pandemic, and there was continued strength in electric power/watersupply and sewage and other areas of social infrastructure, driven primarily by the Service
Solutions Division in Japan.
Under these conditions, the Organo Group proceeded to draw in orders and make deliveries forlarge-scale projects in Japan and overseas, while establishing supply chains and delivery
frameworks in each country, and promoting digitalization to improve efficiency in the engineering
operations and expand service solutions. We also engaged in initiatives to enhance R&D aimed at
the creation of next-generation ultrapure water systems and new separation and purification
technologies, and moved forward with measures to strengthen the management foundation, suchas bolstering governance through risk management, formulating sustainability policies, andidentifying issues of materiality.
As a result, for the fiscal year ended March 31, 2023, orders received increased by 27.9% year on
year to ¥173,491 million, net sales increased by 18.2% year on year to ¥132,426 million,
operating profit increased by 40.2% to ¥15,212 million, ordinary profit increased by 38.8% to¥16,020 million, profit attributable to owners of parent increased by 27.4% to ¥11,730 million,
and return on equity (ROE) was 14.5%, compared to 12.9% for the previous fiscal year. Orders
received, net sales and the respective profit figures surpassed the actual results of the previous
fiscal year and the levels of the initial plan across the board and achieved record highs. In
addition, we have secured a high balance with respect to carry-over balance for order backlog
centered on large-scale semiconductor projects, etc., which will form the basis for sales from next
fiscal year onward, with an order backlog of ¥117,659 million (up 36.2% year on year).

- 30 -

Orders received

Carry-over backorder

Net sales¥173.4 billion¥117.6 billion¥132.4 billion+27.9% YoY+38.8% vs. Plan

+36.2% YoY+36.2% vs. Plan

+18.2% YoY+5.9% vs. Plan

Operating profit

Operating profit ratio

Return on equity (ROE)¥15.2 billion

11.5%

14.5%

+40.2% YoY+30.0% vs. Plan

+1.8 points YoY+2.1 points vs. Plan

- 31 -+1.6 points YoY+3.9 points vs. Plan[Water Treatment Engineering Business Unit]
Orders received

Net sales

Operating profit¥152.4 billion¥111.6 billion¥12.9 billion+31.3% YoY+20.4% YoY

Major Business and ProductsPlant Division
Pure and ultrapure water production
facilities, Industrial process water
treatment facilities, Wastewater
treatment and recovery facilities,
Valuable material recovery facilities,
Production processing-related
facilities

Service Solutions Division
Replacement of expendable items,
Maintenance, Operational support
services, Renovation andreconditioning, Contract water
treatment, Comprehensive
maintenance

Customers and Markets
Electronics Industry

General Industry

Electric Power/Water
Supply and Sewage

Net sales

Net sales

Net sales¥75.4 billion¥24.3 billion¥11.7 billion• Semiconductors• Flat panel display• Electronic parts• Pharmaceuticals,
cosmetics• Food and beverage• Machinery andchemicals• Power plants• Water purification
plants• Sewage treatment
plants- 32 -+42.7% YoY

■Orders received
Orders received increased 31.3% year on year to ¥152,422 million. The electronics industry, which is theOrgano Group’s main market, saw a significant increase in orders received as a result of investing insemiconductor projects in Japan and cutting-edge semiconductors in Taiwan, and of receiving orders forlarge-scale construction programs involving the silicon wafer project in Japan, among others. Also, theincrease was contributed by the active investments in automotive/power semiconductors in countries
such as China and Malaysia. In the general industry field, there was also a recovery in large-scale capital
investments in areas related to the pharmaceutical, food and electronics industries, and therefore orders
received increased. In the field of social infrastructure, which includes electric power/water supply andsewage, orders received were about the same level as the previous fiscal year, mainly in solutions projects
in Japan.
■Net sales
Net sales increased 20.4% year on year to ¥111,601 million. In the electronics field, net sales increased
mainly due to mostly steady progress on the construction of the projects ordered as a whole, and strength
in maintenance, renovation/reconditioning, facility-owned projects/contracted processing, etc. of theService Solutions Division, despite the impact from revised schedules for some projects and delays inprocuring raw materials and in construction work. Sales also expanded in the general industry field,
driven by such factors as a recovery in orders received for large-scale projects, and a growth in the Service
Solutions Division. In the social infrastructure field, such as electric power/water supply and sewage, we
succeeded in recording net sales of about the same level as the previous fiscal year, driven mainly by
solutions projects in Japan.
■Operating profit
Operating profit increased 42.7% year on year to ¥12,966
million. In addition to gross profit increasing due to theeffects of higher sales primarily in the electronics industry,margins also improved year on year as a result of higher
profitability in large-scale projects, which more than offset
a rise in selling, general and administrative expenses
centered on personnel and outsourcing expenses, and led
to a year-on-year increase in operating profit.

- 33 -

[Performance Products Business Unit]
Orders received

Net sales

Operating profit¥21.0 billion¥20.8 billion¥2.2 billion+7.6% YoY

+7.6% YoY

Major Business and ProductsStandard Water
Treatment Equipment
and Filters Division
Pure and ultrapure
water production
systems
Water purification
filters

Food ingredients
Food processing agents

Water Treatment
Chemicals Division

Standard Water
Treatment Equipment
and Filters Division

Food Products Division

Net sales

Net sales

Net sales¥8.0 billion¥7.0 billion¥5.7 billion

Water Treatment
Chemicals Division
RO membraneprotection chemicals,
Wastewater treatment
chemicals, Coolingwater treatment
chemicals, Cleaningchemicals, Boilers
water treatment
chemicals

Food Products Division

Customers and Markets• Food factories, food
• Medical institutions,processing industry• Various manufacturing
research institutions• Beverageindustries• Various manufacturing
manufacturing• Buildings andindustries• Nursing care food,commercial facilities • Food and beverage,
health foodconvenience stores
manufacturing- 34 -+27.4% YoY

■Orders received/Net sales
Orders received increased 7.6% year on year to ¥21,068 million and net sales increased 7.6% year on
year to ¥20,824 million. Sales of various water treatment chemicals to the electronics industry increased,
while in the standard equipment and filters field, sales of small-scale pure water production equipment,such as Puric μ (mu), were also strong. In the food products field, sales of food processing agents, among
others, also increased.
■Operating profit
Operating profit increased 27.4% year on year to ¥2,246
million. In addition to the effects of higher sales in eachfield, we made progress in passing on higher costs, suchas increases in raw material prices, to selling prices,which resulted in operating profit growing year on year.

- 35 -

(2) Issues to be addressed
Every year, the Group has been formulating its three-year medium-term management plan on arolling basis based on ORGANO 2030, its long-term management plan. Under ORGANO 2030,
in addition to pursuing discussions on areas such as priority businesses, growth regions anddrivers and measures to reinforce its business foundation while envisioning business performancetargets of ¥200 billion in net sales and a 15% operating profit ratio, the Group is moving forwardwith identifying issues of materiality and setting quantitative targets for each issue to address witha view to reaching the dual sustainability goals of “achieving continuous business growth” and“establishing a business foundation.”In the fiscal year under review, amid the backdrop of a brisk order environment both in Japan andoverseas, the Group pushed forward with the utilization of engineering resources within theGroup and the expansion of outsourcing in order to handle design and delivery for large-scale
projects. However, in achieving the Group’s medium- to long-term targets, the further
enhancement of its resources and development of its human capital are indispensable. Alongsidechallenges faced by the supply chain such as the securing of materials, sharp rise in material
prices, and the effects of semiconductor regulations imposed on China by the US, the situation as
it stands requires greater response. Additionally, in the areas of service solutions and research anddevelopment, although positive outcomes such as the deployment of new service solutions thatmake use of the likes of equipment operation data, the development of technology aimed at nextgeneration ultrapure water systems and developments in advanced analysis technology werevisible to a certain degree, greater reinforcement and enhancement efforts are required in order tocreate new businesses.
In its new medium-term management plan whose last year is fiscal 2025, the Group will position
the corresponding three-year period as a crucial phase for the Company to transition to a newstage as it proceeds to tackle the reinforcement of its business foundation and the expansion of its
business development efforts. More specifically, as it espouses the “electronics industry,”“pharmaceuticals business” and “functional materials” as its priority areas, the Group will address
issues such as the “strengthening of its engineering structure” by automating design operations
and enhancing their efficiency with the use of digital technology and expanding capacity, the“deployment of service solutions” by expanding services overseas and reinforcing data utilizationmodel services, and the “enhancement of its research and development structure” for the purposeof furthering advanced separation and refinement technologies and analysis technology andcreating new businesses, and will pursue the execution of various measures and enhanced
cooperation and expanded investment with its partner companies, among other efforts, in order toreach its sustainability goals. For its management targets for fiscal 2025, the last year of themedium-term management plan, the Group will strive to reach net sales of ¥170.0 billion,
operating profit of ¥18.5 billion, and an operating profit ratio of 10.9%. The Group aims to build aprofit structure that can achieve an operating profit ratio and return on equity (ROE) of at least
12% consistently and continuously. Furthermore, in order to evaluate the status of progress insustainably enhancing corporate value and improving profitability, the Organo Group positions
ROE and operating profit ratio as key indicators.

- 36 -

Medium-term Management Plan
Priority Areas
Electronics industry
Expansion of efforts to develop business globally, including the US, Taiwanese and Chinese markets
Water treatment chemicals
Reinforcement of value chain and overseas expansion
Functional materials
Reinforcement of supply chain and enhancement of differentiated merchandise
Improvement and Enhancement of Structure
Engineering
Expansion of capacity to promote automation and enhanced efficiency
Service solutions
Enhancement of overseas expansion and service selection
Research and development
Reinforcement of development foundation and creation of new businesses
Sustainability Goals and Material Issues
Achieve Continuous Business Growth
Contribute to a sustainable global environment
Provide high value-added products and services by leveraging technological capabilities
Establishment of a Business Foundation
Strengthen governance and ensure compliance
Create a workplace where diverse human resources can play an active and rewarding role
Strengthen supply chain management■Management Target(Millions of yen)
Category

78th term
Fiscal year ended
March 31, 2023
(results)

79th term
Fiscal year ending
March 31, 2024
(planned)

80th term
Fiscal year ending
March 31, 2025
(planned)

Orders received

173,491

150,000

160,000

170,000

Net sales

132,426

150,000

160,000

170,000

Operating profit

18,50081st term
Fiscal year ending
March 31, 2026
(planned)

15,212

16,00017,200Operating profit ratio (%)

11.5

10.7

10.8

10.9

Return on equity (ROE) (%)

14.5

12.6

12.7

12.6

- 37 -

(3) Changes in assets and profit and loss
78th term(Fiscal year underreview)
Fiscal year ended
March 31, 2023

75th term
Fiscal year ended
March 31, 2020

76th term
Fiscal year ended
March 31, 2021

77th term
Fiscal year ended
March 31, 2022

Orders received (millions ofyen)

104,986

94,563

135,698

Net sales (millions of yen)

96,515

100,638

112,069

Operating profit (millions of
yen)

9,908

9,579

10,850Operating profit ratio (%)

10.3

9.5

9.7

Ordinary profit (millions of
yen)

9,929

9,900

11,545

Profit attributable to ownersof parent (millions of yen)

7,162

7,074

9,210

11,730

Basic earnings per share (yen)156.51

154.18200.67255.77Return on equity (ROE) (%)

12.4

11.1

12.9

14.5

Total assets (millions of yen)

101,448

115,011130,506

164,854

Net assets (millions of yen)

60,85767,35776,00486,371

Net assets per share (yen)1,325.31

1,464.06

1,655.14

1,877.80

Category

Notes: 1.

2.

3.

173,491
132,426
15,212
11.5
16,020

The Company implemented a share split on October 1, 2022, splitting one common share into four. Basicearnings per share and net assets per share have been calculated as if the aforementioned share split had been
carried out at the beginning of the 75th fiscal year.
When calculating basic earnings per share, common shares of the Company held by the Officer Share Delivery
Trust have been included in treasury shares excluded from the calculation of the average number of shares
during the period. Also, when calculating net assets per share, those shares have been included in treasury shares
excluded from the total number of issued shares at the end of the period.
The Company has applied Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, March 31,2020), etc., from the start of the 77th fiscal year. Concerning the status of property and profit and loss in andbeyond the 77th fiscal year, indicators, etc. are those after applying the said Accounting Standard, etc.

- 38 -

Orders received / Net sales

Operating profit / Operating profit ratio

Profit attributable to owners of parent / Basic earnings per share

ROE

Total assets

Net assets / Net assets per share- 39 -

(4) Parent company and major subsidiaries(i)Relationship with parent company
The Company’s parent company is Tosoh Corporation, and it holds 20,429 thousand shares(equity ownership 44.1% includes the portion of indirect ownership) of the Company.
The Company purchases items such as some raw materials for water treatment chemicals
from Tosoh Corporation and it also carries out other transactions with Tosoh Corporationsuch as selling various types of water treatment systems and related chemicals to the said
company.
Tosoh Corporation and the Company have not entered into any contracts or other agreements
regarding the Company’s material financial and business policies. There are no particular
restrictions on the Company’s material financial and business policies in relation to Tosoh
Corporation, including approval items in conducting business activities. Although theCompany is engaged in businesses related to the corporate group of Tosoh Corporation, thetwo companies are clearly segregated in terms of the products they handle and the customers
they do business with. The Company recognizes that as a listed company, it has secured acertain degree of management independence in its business activities and management
decisions.

(ii) Major subsidiaries
Company name

Major businesses

100.0

Installation and supervision ofvarious types of water treatment
systems50

100.0

Sales and manufacture of foodingredients and food processing
agents50

100.0

Sales and related construction ofvarious types of water treatment
systems and related chemicals

100.0

Printing business, agency businessinvolving various forms of
insurance and management
outsourcing business

ORGANO PLANT SERVICECORPORATION93

ORGANO FOOD TECHCORPORATIONORGANO ECO TECHCORPORATIONORGANO ACTY CORPORATION

Ownership of theCompany (%)

Share capital(Millionsof yen)20

Organo (Asia) Sdn. Bhd.

7,000

(Thousandsof MYR)

100.0

Sales and related construction ofvarious types of water treatment
systems and related chemicals

Organo (Suzhou) Water Treatment
Co., Ltd.

5,000(Thousandsof USD)

100.0

Sales and related construction ofvarious types of water treatment
systems and related chemicals

Organo Technology Co., Ltd.

30,000(Thousandsof NTD)

100.0

Sales and related construction ofvarious types of water treatment
systems and related chemicals

Organo (Thailand) Co., Ltd.

120,100(Thousandsof THB)*100.0

Sales and related construction ofvarious types of water treatment
systems and related chemicals

PT Lautan Organo Water

18,000(Millionsof IDR)

51.0

Sales and related construction ofvarious types of water treatment
systems and related chemicals

Organo (Vietnam) Co., Ltd.

3,150

(Thousandsof USD)

100.0

Sales and related construction ofvarious types of water treatment
systems and related chemicals

Organo USA, Inc.

3,000

(Thousandsof USD)

100.0

Sales and related construction ofvarious types of water treatment
systems and related chemicals

Notes:

1. Equity ownership with (*) mark includes the portion of indirect ownership held by the Company’s subsidiaries.

- 40 -

2. There is no subsidiary that falls under the category of specified wholly-owned subsidiary.
3. The eleven major subsidiaries above are consolidated subsidiaries of the Company, and one affiliated company
was accounted for by the equity method.

- 41 -

(5) Major business offices and factories (as of March 31, 2023)
In Japan
The Company❶ Head Office (Koto-ku, Tokyo)

Factories❷ Tsukuba Factory (Tsukuba City, Ibaraki)❸ Iwaki Factory (Iwaki City, Fukushima)

Research and Development Facility❹ R&D Center (Sagamihara City, Kanagawa)

Branches❺ Hokkaido Branch (Sapporo City, Hokkaido)❻ Tohoku Branch (Sendai City, Miyagi)❼ Kanto Branch (Koto-ku, Tokyo)❽ Chubu Branch (Nagoya City, Aichi)❾ Kansai Branch (Suita City, Osaka)❿ Chugoku Branch (Hiroshima City, Hiroshima)⓫ Kyushu Branch (Fukuoka City, Fukuoka)

Subsidiaries⓬ ORGANO PLANT SERVICECORPORATION(Bunkyo-ku, Tokyo)⓭ ORGANO FOOD TECH CORPORATION(Satte City, Saitama)⓮ ORGANO ECO TECH CORPORATION(Koto-ku, Tokyo)⓯ ORGANO ACTY CORPORATION(Koto-ku, Tokyo)

Oversea
Subsidiaries❶ Organo (Asia) Sdn. Bhd. (Malaysia)❷ Organo (Suzhou) Water Treatment Co., Ltd.

(China)❸ Organo Technology Co., Ltd. (Taiwan)❹ Organo (Thailand) Co., Ltd. (Thailand)❺ PT Lautan Organo Water (Indonesia)❻ Organo (Vietnam) Co., Ltd. (Viet Nam)
❼ Organo USA, Inc. (USA.)- 42 -

(6) Employees (as of March 31, 2023)(i)

Employees of the Organo Group

Business Segment

Number of employees

Change from previous fiscal year-end

Water Treatment Engineering Business
Unit

1,986

Increase by 42

Performance Products Business Unit

354

Decrease by 26

166

Increase by 14

2,506

Increase by 30

Company-wide (common)
Total(ii) Employees of the Company
Category

Number of employees

Change from previous
fiscal year-end

Average age

Average years ofserviceMale

880

Decrease by 17

44.2 years old

17.0 years

Female205

Increase by 1242.2 years old

14.4 years

Total or average

1,085

Decrease by 5

43.9 years old

16.6 years(iii) Ratio of female employees out of total managerial positions, rate of childcare leave taken bymale employees and gender-based employee wage disparity at the Company
Fiscal year under review
Ratio of female
Rate of childcare leave
employees out of total
taken by malemanagerial positions
employees(%) (Note 1)(%) (Note 2)
4.5%
Notes:

1.
2.

3.

(7)

55.3%

Gender-based employee wage disparity (%) (Note 1)
All employees
68.3%

Regular employees
73.9%

Non-regular
employees (Note 3)
48.5%

Calculated based on the provisions of the “Act on the Promotion of Women’s Active Engagement inProfessional Life” (Act No. 64 of 2015).
Calculated based on the rate of childcare leave, etc. taken under Article 71, paragraph (4), item (i) of the“Ordinance for Enforcement of the Act on Childcare Leave, Caregiver Leave, and Other Measures for the
Welfare of Workers Caring for Children or Other Family Members” (Ordinance of the Ministry of Labor No.
25 of 1991) based on the “Act on Childcare Leave, Caregiver Leave, and Other Measures for the Welfare ofWorkers Caring for Children or Other Family Members” (Act No. 76 of 1991).
Includes contract and temporary employees. Excludes part-time employees.

Capital investment
The Organo Group’s total outlays for capital investment amounted to ¥1,466 million (including
intangible assets) during the fiscal year under review. The two new testing buildings at theCompany’s R&D Center that were under construction entered operation in the fiscal year underreview.

(8)

Financing
No items to report.

- 43 -

(9)Major lenders (as of March 31, 2023)
Amount of Borrowings(Millions of yen)

Lenders
Mizuho Bank, Ltd.

11,462

MUFG Bank, Ltd

6,230

The Hachijuni Bank, Ltd.

4,970

Sumitomo Mitsui Banking Corporation

3,420

Sumitomo Mitsui Trust Bank, Limited

3,148- 44 -

2. Shares of the Company (As of March 31, 2023)(1)(2)

Total number ofauthorized shares:
Total number of issued
shares:101,568,000 shares
46,359,700 shares(including treasury shares of
337,755 shares)(3)

Number of shareholders:(4)

Major shareholders

6,913 shareholders

Number of shares held(Thousands of shares)

Name of shareholder

Holding ratio(%)

Tosoh Corporation

20,379The Master Trust Bank of Japan, Ltd. (Trust account)

4,190

9.11

Custody Bank of Japan, Ltd. (Trust account)

2,317

5.03

DZ PRIVATBANK S.A. RE INVESTMENTFONDS

871

1.89

KBC BANK NV-UCITS CLIENTS NON TREATY

870

1.89

STATE STREET BANK AND TRUST COMPANY 505223

506

1.10

Mizuho Bank, Ltd.

464

1.01

VICTORY TRIVALENT INTERNATIONAL SMALL-CAP
FUND

395

0.86

BNYMSANV RE BNYMSANVDUBRE LEGAL (AND)GENERAL UCITS ETF PLC

393

0.85

STATE STREET BANK AND TRUST COMPANY 505253

379

0.82

Notes:

44.28

1. The treasury shares (337,755 shares) are excluded in the calculation of the holding ratio shown above.
2. 133,040 shares of the Company held by Custody Bank of Japan, Ltd. (Trust account) (shares in the Officer Share
Delivery Trust) are not included in treasury shares.

- 45 -

(5) Shares issued to officers as compensation for the execution of their duties during the fiscal
year under review
Category

Number of shares

Directors (excluding Outside Directors)
Notes:

6,700 shares

Number of persons
6 persons

1. Pursuant to a resolution at the 73rd Ordinary General Meeting of Shareholders held on June 28, 2018, theCompany introduced a performance-linked, share-based remuneration plan using a trust for Directors (excluding
Non-Executive Directors) as well as Executive Officers (excluding non-residents) of the Company, in order toheighten awareness of contributing to enhancing the Organo Group’s medium- to long-term operating results andincreasing corporate value. The details are described in “3. (4) Remuneration, etc. to Directors and Audit andSupervisory Board Members.” As of March 31, 2023, the trust established by the Company held 133,040 sharesof the Company.
2. The above includes shares delivered during the current fiscal year as compensation for the execution of duties as
an Executive Officer prior to assuming the position of Director.
3. The Company implemented a share split on October 1, 2022, splitting one common share of the Company into
four. However, the number of shares indicated are those at the time of delivery (August 18, 2022).

(6) Other significant matters relating to shares
The Company implemented share split on October 1, 2022, splitting one common share of theCompany into four. In line with this, the total number of authorized shares increased by
76,176,000 shares to 101,568,000 shares. Additionally, the total number of issued shares increased
by 34,769,775 shares to 46,359,700 shares.

- 46 -

3. Officers(1) Names etc. of Directors and Audit and Supervisory Board Members (as of March 31, 2023)
Position

Name

Responsibilities and significant concurrent positions outside
the Company

Director
Chairman of the Board of
Directors

Masaki Uchikura

Director and President(Representative Director)
President and Executive
Officer

Masayuki Yamada

Managing Director andExecutive Officer

Yasutoshi Nakayama

President of Industrial Plant Business, and Senior General
Manager of Electronics DivisionNobuyoshi Suda

President of R&D and Engineering, Senior General Manager
of R&D CenterIn charge of Environment, Safety and Quality Assurance
Dept., Purchasing and Logistics Dept., and Performance
Products BusinessDirector andExecutive Officer

Tetsushi Honda

President of Corporate Management and Planning andGeneral Manager of Corporate Strategy and Planning Dept.
In charge of Internal Auditing Office, Corporate Secretariat
Office, Global Management and Planning, Legal and PatentDept., Trade Control Office, and Branches

Director

Mitsutaka Sugata

Executive Officer of Tosoh Corporation
Outside Director of MANAC Chemical Partners Co., Ltd.

Director

Motoo Nagai

Outside Director of Nissan Motor Co., Ltd.
Outside Director of Nisshin Seifun Group Inc.

Director

Keikou Terui

President of Japan Utility Telemetering Association
Executive Director of Japan Chemical Innovation andInspection Institute

Director

Kenji Hirai

Managing Director andExecutive Officer

Audit and Supervisory Board
Masahiko Toyoda
Member (Full-time)

Audit and Supervisory Board
Wataru Higuchi
MemberLawyerCertified Public Accountant
Representative Partner of Ootemon Law and Accounting
Executive Officer of Advance Residence Investment
Corporation
Outside Director (serving as Audit and Supervisory
Committee Member) of Marubeni Construction Material
Lease Co., Ltd.

Audit and Supervisory Board
Nobuko Hanano
MemberLawyerPartner, KOHWA SOHGOH LAW OFFICES
Outside Audit and Supervisory Board Member, Kanro Inc.

Notes: 1.
2.

Directors Motoo Nagai, Keikou Terui, and Kenji Hirai are Outside Directors.
Audit and Supervisory Board Members Wataru Higuchi and Nobuko Hanano are Outside Audit and Supervisory
Board Members.
3. Changes in Directors and Audit and Supervisory Board Members during the fiscal year under review are as
follows:(i) Director Hitoshi Hori retired from his office due to expiration of his term of office at the conclusion of the 77th
Ordinary General Meeting of Shareholders held on June 29, 2022.
(ii) Mitsutaka Sugata was elected as Director at the 77th Ordinary General Meeting of Shareholders held on June29, 2022, and assumed his office.
4. Changes in the important concurrent positions of Directors and Audit and Supervisory Board Members during
the fiscal year under review are as follows:
Director Keikou Terui resigned from the position of Outside Director of UBE Corporation on June 29, 2022 andfrom the position of Outside Director of Bridgestone Corporation on March 28, 2023.
5. Audit and Supervisory Board Members Masahiko Toyoda and Wataru Higuchi possess extensive financial andaccounting knowledge as shown below.

- 47 -

・

Audit and Supervisory Board Member Masahiko Toyoda has past experience of supervising finance andaccounting divisions at other companies.

・ Audit and Supervisory Board Member Wataru Higuchi is qualified as a certified public accountant.
The Company has submitted notification to the Tokyo Stock Exchange that Outside Directors Motoo Nagai,
Keikou Terui and Kenji Hirai and Outside Audit and Supervisory Board Members Wataru Higuchi and Nobuko
Hanano have been designated as independent officers as provided for by the aforementioned exchange.
7. Executive Officers who are not also Directors are as follows:

6.

Position

Name

Responsibility

Shin Asano

Deputy President of R&D and Engineering, General
Manager of Engineering Center

Managing Executive Officer

Makoto Tomizawa

President of Global Management and Planning, General
Manager of Global Management Office, and General
Manager of Trade Control Office
President of Organo (Singapore) Pte Ltd

Managing Executive Officer

Makoto Kukizaki

President of Performance Products Business and Senior
General Manager of Performance Products Business
Division

Executive Officer

Katsumi Ohga

General Manager of Legal and Patent Dept.

Executive Officer

Tatsuya Kunieda

General Manager of Global Engineering Center
Chairman of Organo (Vietnam) Co., Ltd.

Executive Officer

Ken Shimada

General Manager of Engineering Dept., Engineering Center,
R&D and Engineering

Executive Officer

Fusayoshi Akimoto

Deputy President of Corporate Management and Planning
and General Manager of Operation Improvement Dept.
Representative Director and President of ORGANO ACTYCORPORATION

Executive Officer

Shojiro Koike

Representative Director and President of ORGANO PLANTSERVICE CORPORATION

Executive Officer

Koh Yoshida

Deputy President of Performance Products Business andGeneral Manager of Product Planning and Technology Dept.

Executive Officer

Toru Amemiya

Representative Director and General Manager of Organo
Technology Co., Ltd.

Executive Officer

Yoshihiro Tajitsu

Deputy President of Corporate Management and PlanningManaging Executive Officer(2) Overview of limited liability agreements
Pursuant to the provisions of Article 427, paragraph 1 of the Companies Act and the Company’s
Articles of Incorporation, the Company has entered into limited liability agreements with
Directors Masaki Uchikura, Mitsutaka Sugata, Motoo Nagai, Keikou Terui and Kenji Hirai, andAudit and Supervisory Board Members Masahiko Toyoda, Wataru Higuchi, and Nobuko Hanano,which limit the amount of liability for damages as defined under Article 423, paragraph 1 of theCompanies Act to the minimum liability amount as stipulated in laws and regulations, presuming
they perform their respective duties in good faith and without gross negligence.
(3) Outline of the Officers’ Liability Insurance Contract
The Company has entered into the Officers’ Liability Insurance Contract for Directors and Audit
and Supervisory Board Members of the Company and its subsidiaries, as well as Executive
Officers of the Company, with an insurance company as insured persons, as stipulated in Article
430-3, paragraph 1 of the Companies Act. The contract is renewed every year. In the event of aclaim for damages arising from duties performed by the insured in his or her position during theinsurance period, the insurance contract covers compensation for damage and dispute costs.
However, there are certain exemptions, such as damage caused intentionally or by grossnegligence that is not covered by the relevant insurance contract. The total amount of insurance
expenses is shared proportionally by the Company and its subsidiaries.

- 48 -

(4) Remuneration, etc. to Directors and Audit and Supervisory Board Members(i)

Policies and procedure of determining remuneration to Directors and Audit and Supervisory
Board Membersa.

Directors
The following is a summary of the Company’s “Policy for determining remuneration,etc. to Directors” resolved at the Board of Directors meeting held on July 30, 2021. This
policy is resolved by the Board of Directors after obtaining opinions based on review by
the Nomination and Remuneration Advisory Committee, of which the majority are
Independent outside directors.
The Board of Directors has confirmed that the method of determining the details of
remuneration, etc. and the content of remuneration, etc. determined for each individual
Director for the fiscal year under review are consistent with the relevant decision policy
and that the opinions of the Nomination and Remuneration Advisory Committee havebeen respected. The Board of Directors has determined that the content of remuneration,etc. is in line with the relevant decision policy.
(a) Basic policy
The remuneration system for Executive Directors, in addition to the fixed
remuneration (cash), encourages business execution in line with management
policies and management targets and establishes a remuneration framework andremuneration standards which provide strong incentive for the achievement ofshort-term and mid- to long-term management targets in order to achievesustainable 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 theirsupervisory and monitoring functions work.
(b) Remuneration frameworki.

Executive Directors
Remuneration to Executive Directors consists of fixed remuneration andperformance-linked remuneration, and performance-linked remuneration consistsof short-term performance-linked remuneration (cash) and mid- and long-term
performance-linked remuneration (stock). The remuneration level is designed tobe appropriate for each position by comparing and verifying it with objective
data such as remuneration levels from external remuneration consultants andremuneration survey data from external research organizations.
Percentage breakdown of remuneration to Executive Directors (in the case of theRepresentative Director and President)

1)

Fixed remuneration
The total amount of remuneration based on the remuneration table set for eachposition shall be paid in equal monthly installments from July to June of thefollowing year.

2)

Performance-linked remuneration
The ratio of the total amount of performance-linked remuneration is designed
to be approximately 50% to 60% when the performance evaluation index is thestandard value set by the Board of Directors, and this ratio is higher for
Directors of higher ranks. In addition, the ratio of short-term performancelinked remuneration (cash) to medium-to-long-term performance-linked- 49 -

remuneration (shares) shall be designed to be approximately 5:5 in case theperformance evaluation index is at the standard value set by the Board of
Directors.
•

Short-term performance-linked remuneration (cash)
The short-term performance-linked remuneration shall be monetary
remuneration. From the perspective of clarifying the relationship between
business performance and remuneration, the Company shall use theconsolidated operating profit, which is an important management index of
the Group, as the performance evaluation index, and shall pay the total
amount calculated with the remuneration table for each position according
to the consolidated operating profit of the previous fiscal year in equalmonthly installments from July to June of the following year. The amount
paid varies in the range of 0 to 170% depending on the amount ofconsolidated operating profit.

•

Medium-to-long-term performance-linked remuneration (shares)
The medium-to-long-term performance-linked remuneration is a stockbased remuneration plan using a trust. From the perspective of improving
corporate values over the medium to long term and aligning the interests
with those of shareholders, the Company shall use the consolidated returnon equity (ROE), which is an important management indicator of the Groupand indicates capital efficiency, as the performance evaluation indicator, andshall deliver shares of the Company calculated based on the performancelinked coefficient determined in accordance with the consolidated return on
equity for the previous fiscal year and the basic amount for each position.
The amount equivalent to the payment varies in the range of 0 to 200%
depending on the consolidated return on equity. In addition, the Company
has established a three-year transfer restriction period from the time ofdelivery of the shares to be delivered.

ii.

Non-Executive Director
The remuneration for Non-Executive Directors consists of fixed remuneration
only, and the total remuneration based on their position is paid in equal monthly
installments from July to June of the following year. The remuneration level isdesigned to be appropriate for each position by comparing and verifying it with
objective data such as remuneration levels from external remuneration
consultants and remuneration survey data from external research organizations,and by taking into consideration the appointment of each Director as a memberof important committees and the nature of their duties.

(c) Process of determining remuneration
The Company has established the Nomination and Remuneration Advisory
Committee as a non-statutory advisory body to the Board of Directors in order toensure objectivity and transparency in the process of determining remuneration, etc.
and provide an appropriate amount of remuneration. The amount of remuneration to
the Company’s Directors and the method of calculating such amount shall be
determined by resolution of the Board of Directors based on the opinion of theNomination and Remuneration Advisory Committee and within the scope of the
remuneration limit determined by resolution of the General Meeting of
Shareholders. The Nomination and Remuneration Advisory Committee shall review
matters such as the total amount of remuneration for Directors, confirmation of theamount of remuneration for individual Directors, and the policy of remuneration,etc. for Directors, and report to the Board of Directors. Among the remunerations
for Directors, the amount of remuneration and the number of shares to be paid for
performance-linked remuneration shall be determined in unison in accordance witha predetermined method.

- 50 -

b.

Audit and Supervisory Board Members
Remuneration to Audit and Supervisory Board Members is a fixed amount according totheir respective positions in the Company. The amount of remuneration is determinedthrough discussion by the Audit and Supervisory Board Members within the scope of the
remuneration limit determined by resolution of the General Meeting of Shareholders.

- 51 -

(ii) Resolutions of the General Meeting of Shareholders related to remuneration, etc. to Directors
and Audit and Supervisory Board Members
Type of remuneration,etc.

Resolution date

Subject of
remuneration

Number of persons attime of resolution
10 persons(Out of which 1 person
is an Outside Director)

June 27, 2014

Directors

Within ¥340 million per
annum(Of which not more than
¥40 million is for Outside
Directors)

June 29, 2006

Audit andSupervisory Board
Members

Within ¥60 million per
annum

Monetary
remuneration, etc.

Non-monetary
remuneration, etc.
(Medium-to-long-term June 28, 2018
performance-linked
remuneration (shares))
Note:

Description

4 personsNot more than ¥300
Directors
million/162,000 shares per(Excluding Nonthree fiscal years (not more
Executive Directors) than 54,000 shares per fiscal
year)

6 persons

The Company implemented a share split on October 1, 2022, splitting one common share of the Company into four.
However, the number of shares making up non-monetary remuneration, etc. (medium-to-long-term performancelinked remuneration (shares)) is stated as that at the time of the resolution (June 28, 2018).

(iii) Total amount of remuneration, etc. to Directors and Audit and Supervisory Board Members
for the fiscal year under review
Total amount of remuneration, etc. and number of persons covered classified by type

Category

Total amountof
remuneration,
etc.
(Millions ofyen)

Performance-linked remuneration

Fixed remuneration

Short-termMid- and long-term
Non-monetary
remuneration,
etc.
(Shares)Monetary remuneration, etc.
Total amount(Millions of yen)

Number of
persons covered

Total amount(Millions of yen)

Total amount(Millions of yen)

Number of
persons covered

Directors (excluding
Outside Directors)

228

102

7

73

52

6

Audit and Supervisory
Board Members(excluding Outside
Audit and Supervisory
Board Members)

18

18

1

–

–

–

Outside Directors

33

33

3

–

–

–

Outside Audit andSupervisory Board
Members

19

19

2

–

–

–

Total

299

173

13

73

52

6

Notes: 1.
2.
3.

4.

The above figures include one Director who retired upon the conclusion of the 77th Ordinary General Meeting of
Shareholders held on June 29, 2022.
The total amount of remuneration, etc. to Directors does not include salaries as employees paid to Directors who
are also employees.
The details of the performance indicators related to the performance-linked remuneration, the reasons forselecting such performance indicators, and the calculation method of the performance-linked remuneration are
described in “(i) Policies and procedure of determining remuneration to Directors and Audit and Supervisory
Board Members,” and changes in the performance indicators including in the current fiscal year are described in“1. (3) Changes in assets and profit and loss.”
The details of non-monetary remuneration, etc. (medium- to long-term performance-linked remuneration(shares)) are described in “(i) Policies and procedure of determining remuneration to Directors and Audit andSupervisory Board Members.” The amount of non-monetary remuneration, etc. (shares) above includes theamount of remuneration delivered in the current fiscal year and the amount to be delivered in the following fiscal
year, which should be recorded as expenses in the current fiscal year. The status of shares issued to officers is
described in “2. (5) Shares issued to officers as compensation for the execution of their duties during the fiscal
year under review.”- 52 -

5.

Although Director Masaki Uchikura is included in the number of persons covered for performance linked
remuneration, he is excluded from performance linked remuneration from June 29, 2022, because he changed his
status from executive Director to non-executive Director at the Board of Directors meeting held after the 77th
Ordinary General Meeting of Shareholders held on the aforementioned date.

- 53 -

(5) Outside Directors and Outside Audit and Supervisory Board Members(i)

Significant concurrent positions outside the Company and relation between the Company andsuch other corporations
Significant concurrent positions outside the Company are as described in “(1) Names etc. of
Directors and Audit and Supervisory Board Members (As of March 31, 2023).” The
Company does not have any important dealing or other special relationship with the saidorganizations where the officers hold significant concurrent positions.

(ii) Principal activities during the fiscal year under review
Category

Directors

Name

Attendance at Board of
Directors meetings

Attendance at Audit andSupervisory Board
meetings

Attendance at
Nomination andRemuneration Advisory
Committee meetings

Motoo Nagai

14/14(100%)–

9/9(100%)

Keikou Terui

13/14
(93%)

–

9/9
(100%)

Kenji Hirai

14/14(100%)–

9/9(100%)

14/14(100%)

15/15(100%)

–

13/14
(93%)

15/15
(100%)–

Wataru Higuchi
Audit andSupervisory
Board Members Nobuko
HananoCategory

Directors

Name

Status of Expression of Opinions and Summary of Duties Performed in Relation to
the Expected Role

Motoo Nagai

He has been fulfilling his role appropriately by mainly providing opinions asnecessary on such issues as management plans, business strategies, risk
management, compliance, corporate governance, personnel policies, sustainability,
information management, internal control, internal audits, etc. based on his
extensive knowledge and experience in corporate management mainly as a manager
of a financial institution.
As the Chairman of the Nomination and Remuneration Advisory Committee, in
addition to reviewing the organization structure of the Company, he led thesupervisory function in the process of selecting candidates, etc. for the Company’s
Board of Directors and determining the remuneration, etc. for Directors.

Keikou Terui

He has been fulfilling his role appropriately by mainly providing opinions asnecessary on such issues as management plans, business strategies, corporate
governance, affiliate management, personnel policies, risk management, information
management, internal control, compliance, capital policy, and sustainability, etc.,
based on his extensive knowledge of industrial policy and industrial technology andhis experience in key positions at the Ministry of Economy, Trade and Industry.
As the member of the Nomination and Remuneration Advisory Committee, in
addition to reviewing the organization structure of the Company, he was responsible
in part for the supervisory function in the process of selecting candidates, etc. for the
Board of Directors and determining the remuneration, etc. for Directors.

Kenji Hirai

He has been fulfilling his role appropriately by mainly providing opinions asnecessary on such issues as management plans, business strategies, personnel
policies, sustainability, technology development strategies, corporate governance,risk management, and employee labor management, etc., based on his extensive
knowledge and experience as the head of a research institution.
As the member of the Nomination and Remuneration Advisory Committee, in
addition to reviewing the organization structure of the Company, he was responsible
in part for the supervisory function in the process of selecting candidates, etc. for the
Board of Directors and determining the remuneration, etc. for Directors.

- 54 -

Category

Audit andSupervisory Board
Members

Name

Status of Expression of Opinions and Summary of Duties Performed in Relation to
the Expected Role

He mainly provided opinions as he saw fit concerning such issues as internal audits,affiliate management, information management, compliance, risk management,
Wataru Higuchi sustainability, group governance, and credit management, etc., based on his
extensive knowledge and experience related to legal, finance and accounting
operations as a lawyer and certified public accountant.
She mainly provided opinions as she saw fit concerning such issues as internal
control, internal audits, accounting policies, receivables management, compliance,
Nobuko Hanano sustainability, group governance, information management, risk management,
affiliate management, and credit management, etc., based on her extensive legal
knowledge and experience related to legal operations as a lawyer.

- 55 -

4. Independent Auditor(1) Name of Independent Auditor
KPMG AZSA LLC(2) Amount of remuneration, etc. for Independent Auditor for the fiscal year under review
Amount of remuneration, etc.

Category

Amount of remuneration, etc. for Independent Auditor for the fiscal year underreview¥57 million

Total amount of money and other financial profits to be paid by the Company
and its subsidiaries¥57 million

Notes: 1. The audit agreement between the Company and KPMG AZSA LLC, the Independent Auditor, does
not clearly distinguish remuneration, etc. paid for audit work performed in conformity with theCompanies Act and remuneration, etc. paid for audit work performed in conformity with the Financial
Instruments and Exchange Act, and it is effectively impossible to do so. Therefore, the figure
presented in the amount of remuneration, etc. for the fiscal year under review above shows the total
amount.
2. The Audit and Supervisory Board has checked and comprehensively reviewed the content of audit
plan, the status of the performance of duties of the Independent Auditor and the grounds forcalculation of remuneration estimates. As a result of this review, the Audit and Supervisory Board
consents to the remuneration, etc. for the Independent Auditor in accordance with Article 399,
paragraph 1 of the Companies Act.

(3) Audit of consolidated subsidiaries
Among the Company’s major overseas subsidiaries, Organo Technology Co., Ltd. and five othercompanies are audited by other certified public accountants or audit firms (including those whohave equivalent certificates in foreign countries) other than the Company’s Independent Auditor.
(4) Description of non-auditing services
Not applicable.
(5) Policy for decisions on dismissal or non-reappointment of the Independent Auditor
When the matters prescribed in the items in Article 340, paragraph 1 of the Companies Act are
applicable to the Independent Auditor, the Audit and Supervisory Board of the Company will
dismiss the Independent Auditor by the unanimous consent of the Audit and Supervisory Board
Members. In such case, an Audit and Supervisory Board Member appointed by the Audit andSupervisory Board will report on the decision of dismissal and its reasons at the first General
Meeting of Shareholders convened after the dismissal.
Furthermore, the Audit and Supervisory Board shall determine the details of a proposal withregards to dismissal or non-reappointment of the Independent Auditor if such a proposal isdeemed necessary to be submitted to the General Meeting of Shareholders, such as in cases where
the Independent Auditor falls under any of the items described in Article 340, paragraph 1 of theCompanies Act or where the Independent Auditor has difficulty in performing audit operation
properly.

- 56 -

5. Company systems and policies(1) Corporate governance(i)

Basic views on corporate governance
The Company has been engaging in efforts to enhance corporate governance that conforms
to the following basic views in order to realize fair and trustworthy management andimprove management efficiency.
a.

The Company will respect the rights of shareholders and ensure equality.

b.

The Company will take into account the benefits for a wide range of stakeholders
including shareholders/investors, consumers/customers, business partners, employees
and local communities, and cooperate with these stakeholders appropriately.

c.

The Company will disclose the Company’s information in a timely and proper way, andensure transparency.

d.

The Directors, Audit and Supervisory Board Members, and Executive Officers willrecognize their fiduciary responsibilities, and will effectively fulfill their expected rolesand duties.

e.

The Company will hold constructive dialogue with shareholders.

The Company’s basic views and basic policy on corporate governance are provided in the“Organo Corporate Governance Guidelines” available on the Company’s website (inJapanese).
(https://www.organo.co.jp/company/governance/guidance/)(ii) Schematic view of corporate governance structure- 57 -

(iii) Organization structurea.

Board of Directors
The Board of Directors consists of nine Directors (including three Independent Outside
Directors), and provides decision-making for the execution of important business andsupervises the status of business execution.

b.

Audit and Supervisory Board
The Audit and Supervisory Board consists of three Audit and Supervisory Board
Members (including two Outside Audit and Supervisory Board Members), two of whom
have appropriate knowledge relating to finance and accounting, and two of whom haveappropriate knowledge of legal matters.

c.

Nomination and Remuneration Advisory Committee
The Nomination and Remuneration Advisory Committee consists of four Directors (ofwhich, three are Independent Outside Directors). It reviews matters relating tonomination of officers including the election and dismissal of Directors and Executive
Officers as well as remuneration for Directors, and reports the results to the Board of
Directors.

d.

Special Committee
The Special Committee, which consists solely of three Independent Outside Directors,
monitors and supervises issues regarding conflicts of interest between the Company’s
parent company Tosoh Corporation and its subsidiaries (excluding the Company and its
subsidiaries; the “parent company group”) and minority shareholders. To adequately
protect the interests of minority shareholders, when important transactions, etc. between
the parent company group and the Company arise, the Committee deliberates the natureof those transactions, etc. and makes a report to the Board of Directors.

e.

Executive Officer System
The Company has introduced an Executive Officer System, and 15 members (in whichfour Executive Officers concurrently serve as Director) are selected. This system allows
for differentiating between the “management decision-making and supervision function”
of Directors and the “business execution function” of Executive Officers, thereby
clarifying responsibilities and accelerating decision-making.

f.

Management Meeting
The Management Meeting consists of Executive Directors and Executive Officers withtitles, and proposes medium- and long-term strategies, etc., and discusses importantmanagement agendas.
Non-Executive Directors and Audit and Supervisory Board Members are able toparticipate in the Management Meeting and express opinions, etc., as necessary, and in
this way the Company strives to ensure the effectiveness of supervision by Directors andaudits by the Audit and Supervisory Board Members.

g.

Monthly Business Conference
The Monthly Business Conference consists of Executive Directors, Executive Officers,
General Managers, etc., and announces matters already approved at the Management
Meeting, and confirm the progress made in each business, the Medium-termManagement Plan, and the profit plan for each fiscal year.
In addition, once every quarter the Monthly Business Conference is held as the Group
Liaison Conference, and it includes Presidents of group companies, General Managersof overseas divisions, General Managers of administrative divisions, and Branch
General Managers, and the same progress confirmation, etc., is made for the overall
Group including the group companies.

- 58 -

Non-Executive Directors and Audit and Supervisory Board Members are able toparticipate in the Monthly Business Conference and express opinions, etc., as necessary,and in this way the Company strives to ensure the effectiveness of supervision by
Directors and audits by the Audit and Supervisory Board Members.
h.

Compliance Committee
The Compliance Committee consists of nine Internal Officers (including four Directors),
and engages in efforts to establish the compliance system and formulate complianceeducation plans.

i.

Sustainability Committee
The Sustainability Committee, which consists of Executive Directors and Executive
Officers holding important posts, plans, proposes and implements measures to promotesustainability management based on the basic policy determined by the Board of
Directors.
The Sustainability Implementation Meeting, the subordinate organization, promotes
specific measures.

(iv) Assessment of the overall effectiveness of the Board of Directors
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 thefunction of the Board.
78th Term (Fiscal Year Ended March 31, 2023)(Evaluation period of questionnaire: April 2021 to March 2022)■Main issues• The Company needs to provide guidance on the policy for measures to protect minority
shareholders in conducting transactions, etc. with the controlling shareholder as a prime market
listed company with a controlling shareholder. (Disclosure of corporate governance reports
required)• Policy on developing director candidates and method of development requires clarification.
• Deeper discussions required to ensure diversity on the Board of Directors, including the selectionof female candidates and foreigner candidates for Director.
• Risk management system needs reinforcement.
• Disclosure of sustainability initiatives required as prime market listing requirement.
■Status of response• A Special Committee was established to deliberate and review important transactions, etc. with theparent company and its subsidiaries (excluding the Company and its subsidiaries). 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 andreport 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.
• The 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.
- 59 -

• The Company is identifying key risks and creating risk scenarios, and is improving the group-widerisk management system by taking measures such as the establishment of the Risk Management
Office in June 2022 under Corporate Management and Planning and augmenting the staff in theInternal 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 issues ofmateriality in May 2022 and established the sustainability policy the following month. At the endof November 2022, the Board of Directors determined the KPIs and goals. Currently, the Company
is implementing initiatives to achieve sustainability management.
(2) Basic policy on control of the Company
The Company has not particularly prescribed a basic policy regarding the nature of parties that
control the determination of the finance and business policy of the Company.
(3) Policy on determination of dividends of surplus and others
The Company treats the return of profits to shareholders as one of the Company’s most importantmanagement agendas, and it strives to provide distribution of profits taking into account theCompany’s revenue status while adhering to a basic policy of providing stable and continuous
dividends.
The Company will utilize internal reserve funds in business investments and R&D investments, etc.,
to achieve sustainable growth.
The Company has included provisions in the Articles of Incorporation on the payment of dividends,
etc., of surplus by resolution of the Board of Directors. Dividend payments are made twice a year
in interim dividends and year-end dividends, and year-end dividends are in principle a matter for
resolution of the Ordinary General Meeting of Shareholders.

Monetary amounts in this Business Report are rounded down to the nearest unit.

- 60 -

Consolidated Financial Statements
Consolidated Balance Sheet (As of March 31, 2023)
Item
AssetsCurrent assets

AmountItem
Liabilities
Current liabilities
Notes and accounts payable trade
Electronically recorded
obligations - operating
Short-term borrowings

136,765

Cash and deposits

15,558Notes receivable - trade

1,026

Accounts receivable - trade
Electronically recorded monetaryclaims - operating
Contract assets
Investments in leases
Merchandise and finished goods

39,470Work in process

21,886

Raw materials and supplies

1,744

Other
Allowance for doubtful accounts
Non-current assets
Property, plant and equipment
Buildings and structures
Machinery, equipment andvehicles

4,891
(17)
28,08820,795
6,078

2,826

Income taxes payable

32,359
9,853
7,165

1,129

Land

12,296

Construction in progress
Other
Intangible assets
Investments and other assets
Investment securities
Retirement benefit assets

118
1,171
949
6,343
2,430
815

Deferred tax assets

2,673

Other
Total liabilities

Other

596

Allowance for doubtful accounts(171)

Total assets

Contract liabilities
Provision for bonuses
Provision for product warranties
Provision for loss on construction
contracts
Provision for share awards for
Directors (and other officers)
Other
Non-current liabilities
Long-term borrowings
Deferred tax liabilities
Retirement benefit liability

Net assets
Shareholders’ equity
Share capital
Capital surplus
Retained earnings
Treasury shares
Accumulated other comprehensive
incomeValuation difference on availablefor-sale securities
Deferred gains or losses on hedges
Foreign currency translation
adjustment
Remeasurements of defined benefit
plans
Non-controlling interests

164,854- 61 -(Millions of yen)Amount
68,73820,904
4,640
29,124
3,014
3,007
1,594
548
512
105
5,284
9,744
3,895
91
5,511
245
78,48384,1238,225
7,508
69,002
(613)
2,047
539
(2)
1,191
317
201

Total net assets

86,371

Total liabilities and net assets

164,854

Consolidated Statement of Income (From April 1, 2022 to March 31, 2023)(Millions of yen)
Item

AmountNet sales
Cost of sales

132,426
97,449Gross profit
Selling, general and administrative expenses

34,976
19,763Operating profit
Non-operating income
Interest and dividend income
Foreign exchange gains
Share of profit of entities accounted for using equity
methodOther

15,212
80
559
208
130

Non-operating expenses
Interest expenses
Other

159
10

978

170

Ordinary profit
Extraordinary income
Gain on sales of non-current assets
Gain on sales of investment securities

16,02054046Extraordinary losses
Loss on sales of non-current assets
Loss on abandonment of non-current assets
Loss on sale of investment securities

0
28
1

31

Profit before income taxes
Income taxes - current
Income taxes - deferred

16,035
4,628
(357)

4,270

ProfitProfit attributable to non-controlling interests

11,764
34

Profit attributable to owners of parent

11,730- 62 -

Non-consolidated Financial Statements
Balance Sheet (As of March 31, 2023)(Millions of yen)
Item
AssetsCurrent assets
Cash and deposits
Notes receivable - trade

AmountItem

97,6326,130933

Accounts receivable - trade30,360Electronically recorded monetaryclaims - operating

2,826

Contract assets

14,295Investments in leases
Merchandise and finished goods
Work in process
Raw materials and supplies
Advance payments - trade
Prepaid expenses

9,966
5,669
20,276
1,156
2,206
316

Short-term loans receivable

2,612

Other

Liabilities
Current liabilities
Notes payable - trade
Accounts payable - trade
Electronically recorded obligations operating
Short-term borrowings

902

Allowance for doubtful accounts
Non-current assets
Property, plant and equipment
Buildings
Structures(19)
27,60320,0195,355
259

Machinery and equipment

1,059

VehiclesTools, furniture and fixtures
Land
Construction in progress
Intangible assets
Software
Other
Investments and other assets
Investment securities
Shares of subsidiaries and associates

6
1,023
12,194
118
860
781
78
6,724
935
2,548

Total liabilities

Guarantee deposits

106

Prepaid pension costs

462

Deferred tax assets

2,468

Other
Allowance for doubtful accounts

375
(171)

Total assets

Current portion of long-termborrowings
Accounts payable - other
Income taxes payable
Contract liabilities
Deposits received
Provision for bonuses
Provision for product warranties
Provision for loss on construction
contracts
Provision for share awards for
Directors (and other officers)
Other
Non-current liabilities
Long-term borrowings
Provision for retirement benefits
Other
Net assets
Shareholders’ equity
Share capital
Capital surplus
Legal capital surplus
Other capital surplus
Retained earnings
Legal retained earnings
Other retained earnings
Reserve for dividends
Reserve for research anddevelopment
Reserve for tax purpose reduction
entry of non-current assets
Reserve for special account for tax
purpose reduction entry of noncurrent assets
General reserve
Retained earnings brought forward
Treasury shares
Valuation and translation
adjustments
Valuation difference on availablefor-sale securities
Deferred gains or losses on hedges

125,235- 63 -

Amount46,999327
10,941
3,823
20,900
1,700
1,422
1,813
616
1,298
1,115
460
538
105
1,935
9,411
3,895
5,422
94
56,411
68,358
8,225
7,508
7,508
0
53,238832
52,405
140
90
494
17
35,065
16,597
(613)
465
467
(2)

Total net assets

68,824

Total liabilities and net assets

125,235

Statement of Income (From April 1, 2022 to March 31, 2023)(Millions of yen)
Item

AmountNet sales
Cost of sales

78,38753,998Gross profit
Selling, general and administrative expenses

24,38915,555

Operating profit
Non-operating income
Interest and dividend income
Rental income from non-current assets
Other

8,834

Non-operating expenses
Interest expenses
Depreciation
Property tax
Other
Ordinary profit
Extraordinary income
Gain on sales of non-current assets
Gain on sales of investment securities

1,803
309
269

2,382

70
91
25
2

190
11,026040

Extraordinary losses
Loss on sales of non-current assets
Loss on abandonment of non-current assets
Loss on sale of investment securities
Loss on valuation of shares of subsidiaries andassociates

41

0
26
1
49

Profit before income taxes
Income taxes - current
Income taxes - deferred78
10,988

2,709
(313)

Profit

2,395
8,593

Figures are rounded down to the nearest unit.

- 64 -

Audit Report(English translation)

Certified copy of Independent Auditor’s audit report on the Consolidated Financial
Statements
Independent Auditor’s Report
May 9, 2023
To the Board of Directors of
ORGANO CORPORATION:

KPMG AZSA LLC
Tokyo Office, Japan
Kentaro Yamamoto
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
Koichi Hamaguchi
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
OpinionWe have audited the consolidated financial statements, which comprise the consolidated balance sheet, theconsolidated statement of income, the consolidated statement of changes in net assets and the related notesof ORGANO CORPORATION (“the Company”) and its consolidated subsidiaries (collectively referred toas “the Group”), as at March 31, 2023 and for the year from April 1, 2022 to March 31, 2023 in accordancewith Article 444-4 of the Companies Act.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects,
the consolidated financial position and the results of operations of the Group for the period, for which theconsolidated financial statements were prepared, in accordance with accounting principles generally acceptedin Japan.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of
the Consolidated Financial Statements section of our report. We are independent of the Group in accordancewith the ethical requirements that are relevant to our audit of the consolidated financial statements in Japan,
and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Other Information
The other information comprises the business report and its supplementary schedules. Management is
responsible for the preparation and presentation of the other information. Audit and Supervisory Board
Members and the Audit and Supervisory Board are responsible for overseeing the Directors’ performance of
their duties with regard to the design, implementation and maintenance of the reporting process for the otherinformation.
Our opinion on the consolidated financial statements does not cover the other information and we do not
express any form of assurance conclusion thereon.

- 65 -

In connection with our audit of the consolidated financial statements, our responsibility is to read the otherinformation and, in doing so, consider whether the other information is materially inconsistent with theconsolidated financial statements or our knowledge obtained in the audit, or otherwise appears to bematerially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this otherinformation, we are required to report that fact.
We have nothing to report in this regard.
Responsibilities of Management and Audit and Supervisory Board Members and the Audit andSupervisory Board for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial statementsin accordance with accounting principles generally accepted in Japan, and for such internal control as
management determines is necessary to enable the preparation of consolidated financial statements that are
free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the Group’s
ability to continue as a going concern, disclosing, as applicable, matters related to going concern inaccordance with accounting principles generally accepted in Japan.
Audit and Supervisory Board Members and the Audit and Supervisory Board are responsible for overseeing
the Directors’ performance of their duties with regard to the design, implementation and maintenance of theGroup’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as awhole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with auditing standards generally accepted in Japan will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to influence the economic decisions ofusers taken on the basis of these consolidated financial statements.
As part of our audit in accordance with auditing standards generally accepted in Japan, we exercise
professional judgment and maintain professional skepticism throughout the audit. We also:・ Identify and assess the risks of material misstatement of the consolidated financial statements, whether
due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting amaterial misstatement resulting from fraud is higher than for one resulting from error, as fraud may
involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
・ Obtain an understanding of internal control relevant to the audit in order to design audit procedures thatare appropriate in the circumstances, while the objective of the audit is not to express an opinion on theeffectiveness of the Group’s internal control.
・ Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimatesand related disclosures made by management.
・ Conclude on the appropriateness of management’s use of the going concern basis of accounting andbased on the audit evidence obtained, whether a material uncertainty exists related to events orconditions that may cast significant doubt on the Group’s ability to continue as a going concern. If weconclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to
the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, tomodify our opinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor’s report. However, future events or conditions may cause the Group to cease to continue as agoing concern.
・ Evaluate whether the presentation and disclosures in the consolidated financial statements are inaccordance with accounting standards generally accepted in Japan, the overall presentation, structure
and content of the consolidated financial statements, including the disclosures, and whether the- 66 -

consolidated financial statements represent the underlying transactions and events in a manner that
achieves fair presentation.
・ Obtain sufficient appropriate audit evidence regarding the financial information of the entities orbusiness activities within the Group to express an opinion on the consolidated financial statements. We
are responsible for the direction, supervision and performance of the group audit. We remain solely
responsible for our audit opinion.
We communicate with Audit and Supervisory Board Members and the Audit and Supervisory Board
regarding, among other matters, the planned scope and timing of the audit, significant audit findings,
including any significant deficiencies in internal control that we identify during our audit.
We also provide Audit and Supervisory Board Members and the Audit and Supervisory Board with astatement that we have complied with relevant ethical requirements regarding independence, andcommunicate with them all relationships and other matters that may reasonably be thought to bear on our
independence, and where applicable, related safeguards.
Interest required to be disclosed by the Certified Public Accountants Act of Japan
We do not have any interest in the Group which is required to be disclosed pursuant to the provisions of theCertified Public Accountants Act of Japan.
Notes to the Reader of Independent Auditor’s Report:
The Independent Auditor’s Report herein is the English translation of the Independent Auditor’s Report as
required by the Companies Act for the conveniences of the reader.

- 67 -

(English translation)

Certified copy of Independent Auditor’s audit report
Independent Auditor’s Report
May 9, 2023
To the Board of Directors of
ORGANO CORPORATION:

KPMG AZSA LLC
Tokyo Office, Japan
Kentaro Yamamoto
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
Koichi Hamaguchi
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
OpinionWe have audited the financial statements, which comprise the balance sheet, the statement of income, thestatement of changes in net assets and the related notes, and the accompanying supplementary schedules(“the financial statements and the accompanying supplementary schedules”) of ORGANO CORPORATION(“the Company”) as at March 31, 2023 and for the year from April 1, 2022 to March 31, 2023 in accordancewith Article 436-2-1 of the Companies Act.
In our opinion, the financial statements and the accompanying supplementary schedules referred to above
present fairly, in all material respects, the financial position and the results of operations of the Company forthe period, for which the financial statements and the accompanying supplementary schedules were prepared,in accordance with accounting principles generally accepted in Japan.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of
the Financial Statements and the Accompanying Supplementary Schedules section of our report. We are
independent of the Company in accordance with the ethical requirements that are relevant to our audit of thefinancial statements in Japan, and we have fulfilled our other ethical responsibilities in accordance with theserequirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide abasis for our opinion.
Other Information
The other information comprises the business report and its supplementary schedules. Management is
responsible for the preparation and presentation of the other information. Audit and Supervisory Board
Members and the Audit and Supervisory Board are responsible for overseeing the Directors’ performance of
their duties with regard to the design, implementation and maintenance of the reporting process for the otherinformation.
Our opinion on the financial statements and the accompanying supplementary schedules does not cover theother information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements and the accompanying supplementary schedules, our
responsibility is to read the other information and, in doing so, consider whether the other information ismaterially inconsistent with the financial statements and the accompanying supplementary schedules or our
knowledge obtained in the audit, or otherwise appears to be materially misstated.
- 68 -

If, based on the work we have performed, we conclude that there is a material misstatement of this otherinformation, we are required to report that fact.
We have nothing to report in this regard.
Responsibilities of Management and Audit and Supervisory Board Members and the Audit andSupervisory Board for the Financial Statements and the Accompanying Supplementary Schedules
Management is responsible for the preparation and fair presentation of the financial statements and theaccompanying supplementary schedules in accordance with accounting principles generally accepted inJapan, and for such internal control as management determines is necessary to enable the preparation offinancial statements and the accompanying supplementary schedules that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements and the accompanying supplementary schedules, management is
responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable,
matters related to going concern in accordance with accounting principles generally accepted in Japan.
Audit and Supervisory Board Members and the Audit and Supervisory Board are responsible for overseeing
the Directors’ performance of their duties with regard to the design, implementation and maintenance of theCompany’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Financial Statements and the Accompanying
Supplementary Schedules
Our objectives are to obtain reasonable assurance about whether the financial statements and theaccompanying supplementary schedules as a whole are free from material misstatement, whether due to fraud
or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level ofassurance, but is not a guarantee that an audit conducted in accordance with auditing standards generally
accepted in Japan will always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of these financial statements and theaccompanying supplementary schedules.
As part of our audit in accordance with auditing standards generally accepted in Japan, we exercise
professional judgment and maintain professional skepticism throughout the audit. We also:・ Identify and assess the risks of material misstatement of the financial statements and the accompanying
supplementary schedules, whether due to fraud or error, design and perform audit procedures responsive
to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our
opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one
resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations,or the override of internal control.
・ Obtain an understanding of internal control relevant to the audit in order to design audit procedures thatare appropriate in the circumstances, while the objective of the audit is not to express an opinion on theeffectiveness of the Company’s internal control.
・ Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimatesand related disclosures made by management.
・ Conclude on the appropriateness of management’s use of the going concern basis of accounting andbased on the audit evidence obtained, whether a material uncertainty exists related to events orconditions that may cast significant doubt on the Company’s ability to continue as a going concern. If
we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s reportto the related disclosures in the financial statements and the accompanying supplementary schedules or,if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit
evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause
the Company to cease to continue as a going concern.
・ Evaluate whether the presentation and disclosures in the financial statements and the accompanying
supplementary schedules are in accordance with accounting standards generally accepted in Japan, theoverall presentation, structure and content of the financial statements and the accompanying
supplementary schedules, including the disclosures, and whether the financial statements and the- 69 -

accompanying supplementary schedules represent the underlying transactions and events in a mannerthat achieves fair presentation.
We communicate with Audit and Supervisory Board Members and the Audit and Supervisory Board
regarding, among other matters, the planned scope and timing of the audit, significant audit findings,
including any significant deficiencies in internal control that we identify during our audit.
We also provide Audit and Supervisory Board Members and the Audit and Supervisory Board with astatement that we have complied with relevant ethical requirements regarding independence, andcommunicate with them all relationships and other matters that may reasonably be thought to bear on our
independence, and where applicable, related safeguards.
Interest required to be disclosed by the Certified Public Accountants Act of Japan
We do not have any interest in the Company which is required to be disclosed pursuant to the provisions of
the Certified Public Accountants Act of Japan.
Notes to the Reader of Independent Auditor’s Report:
This is an English translation of the Independent Auditor’s Report as required by the Companies Act of Japanfor the conveniences of the reader.

- 70 -

(English translation)

Certifies Copy of Audit Report by Audit and Supervisory Board Member
Audit Report
With respect to the Directors’ performance of their duties during the 78th fiscal year from April 1, 2022 toMarch 31, 2023, the Audit and Supervisory Board has prepared this Audit Report after deliberations basedon the audit reports prepared by each Audit and Supervisory Board Member. We hereby report as follows:
1. Method and Content of Audits by Audit and Supervisory Board Members and the Audit andSupervisory Board(1) The Audit and Supervisory Board specified audit policies, assigned duties to each Audit andSupervisory Board Member and received reports from each Audit and Supervisory Board Member
on the status of implementation and results of audit, and received reports from Directors, etc. andthe Independent Auditor on the status of the performance of their duties and asked them for
explanations as necessary.
(2) In conformity with the auditing standards stipulated by the Audit and Supervisory Board, and inaccordance with auditing policies and the assignment of duties, all Audit and Supervisory Board
Members strived to achieve effective communication with Directors, the Internal Auditing Dept.
and other employees, collected information and improved the audit environment. In addition, all
Audit & Supervisory Board Members conducted an audit in the following methods.
(i) Audit and Supervisory Board Members attended the Board of Directors meetings and otherimportant meetings, received reports from Directors and employees about the status of theperformance of their duties, obtained explanations as necessary, reviewed important approval
documents, and conducted investigations on the status of the business operations and assetsof the Company at its head office and other major offices. Furthermore, Audit andSupervisory Board Members also worked to facilitate communication and informationexchange with the Directors, Audit and Supervisory Board Members and others of thesubsidiaries of the Company, and received reports on the business conditions of subsidiaries
as necessary.
(ii) Audit and Supervisory Board Members received reports periodically from Directors andemployees on the content of the resolution made by the Board of Directors concerning thedevelopment of a system for ensuring that the performance of duties by Directors conforms
with laws and regulations and the Company’s Articles of Incorporation, as described in the
Company’s business report, and other systems prescribed in Article 100, paragraphs 1 and 3of the Regulation for Enforcement of the Companies Act as systems necessary for ensuring
proper business conduct by a corporate group formed by a stock company and its
subsidiaries (internal control system), as well as the construction and status of operation of
the internal control system developed based on said resolution. As necessary, Audit andSupervisory Board Members also asked for explanations from Directors and employees andexpressed opinions.
(iii) Audit and Supervisory Board Members monitored and verified whether the Independent
Auditor maintained its independence and properly conducted its audit, received a report fromthe Independent Auditor on the status of their performance of duties, and asked for
explanations as necessary. The Independent Auditor reported to us that the “Systems for
Ensuring Proper Performance of Duties” (listed in each item of Article 131 of Regulation on
Corporate Accounting) have been developed in accordance with the “Quality Control
Standards concerning Audit” (Business Accounting Council, October 28, 2005) and otherapplicable regulations, and we asked the Independent Auditor for explanations as necessary.
Based on the methods mentioned above, we have reviewed the business report, and their supplementaryschedule, non-consolidated financial statements (balance sheet, statement of income, statement ofchanges in equity, and notes to non-consolidated financial statements), and their supplementaryschedules, and consolidated financial statements (consolidated balance sheet, consolidated statement ofincome, consolidated statement of changes in equity, and notes to consolidated financial statements) for
the fiscal year under review.

- 71 -

2. Result of Audit(1) Results of Audit of Business Report, Etc.
(i) We confirm that the business report and its supplementary schedules present fairly thesituation of the Company in accordance with relevant laws and regulations and theCompany’s Articles of Incorporation.
(ii) With respect to the Directors’ performance of their duties, we confirm that there has been no
improper act committed or important violation of applicable laws and regulations or of the
Articles of Incorporation.
(iii) The resolution of the Board of Directors regarding the internal control system is fair andreasonable. There are no matters requiring additional comment regarding the contents of thebusiness report on such internal control system and the performance of duties by Directors.
(2) Result of Audit of non-consolidated financial statements and supplementary schedules thereof
We confirm that the auditing methods and results of KPMG AZSA LLC, the Independent Auditor,
are proper.
(3) Results of audit of consolidated financial statements
We confirm that the auditing methods and results of KPMG AZSA LLC, the Independent Auditor,
are proper.
May 10, 2023
Audit and Supervisory Board, ORGANOCORPORATION
Audit and Supervisory Board Member (Full-time)Masahiko Toyoda [Seal]
Outside Audit and Supervisory Board Member
Wataru Higuchi[Seal]
Outside Audit and Supervisory Board Member
Nobuko Hanano [Seal]- 72 -

78th Ordinary General Meeting of Shareholders
Other Matters Subject to Measures for Electronic Provision(Matters Excluded From Delivered Paper-based Documents)

78th fiscal year
(From April 1, 2022 to March 31, 2023)(i). Business Report
Development of systems to ensure the appropriateness ofbusiness operations
Overview of operational status of systems to ensure
appropriateness of business operations(ii). Consolidated Financial Statements
Consolidated Statement of Changes in Equity
Notes to Consolidated Financial Statements(iii). Non-consolidated Financial Statements
Statement of Changes in Equity
Notes to Non-consolidated Financial Statements

ORGANO CORPORATION
In accordance with the provisions of laws and regulations and the Company’s Articles of Incorporation, theabove matters (i) through (iii) are excluded from the paper-based documents delivered to shareholders who
have made a request for delivery of such documents.

Company systems and policies(1) Development of systems to ensure the appropriateness of business operations
The Company, in its Board of Directors meetings, made a resolution regarding the basic policy on
systems to ensure the appropriateness of business operations (internal control system) as follows:(i)

System to ensure that Directors and employees perform their duties in compliance with
relevant laws and regulations and the Articles of Incorporation

 The Company will establish the Organo Group Company Code of Conduct and theCompliance Regulations and will ensure that all officers and employees of the Company
are aware of them.
 To promote compliance, the Company will establish the Compliance Committee toformulate a compliance education plan, establish a compliance system, and enact othercompany-wide initiatives.
 The Company has established the Whistleblowing Regulations in order to ensure theeffectiveness of compliance, and the system allows the Company’s officers andemployees to directly report to or consult with the Company’s Legal Division, the Audit
and Supervisory Board Members, or external lawyers about systematic or personal legal
violations, etc.
 The Company will seek to raise awareness of compliance by providing compliancetraining to the Company’s officers and employees as necessary.
 The Internal Auditing Dept. will perform periodic audits concerning the performance of
duties and compliance practices.


In order to carry out appropriate financial reporting for the Group, the Company
establishes and operates a system of internal control over financial reporting, including
the establishment of an internal control policy for financial reporting and theestablishment of an Internal Control Division, and evaluates this system.

(ii) System for retaining and managing information pertaining to the performance of duties
by Directors
 The Company will appropriately retain and manage documents and other information
concerning the performance of duties by Directors in accordance with internal rules suchas the Documents and Information Management Regulations, the Corporate Information
Basic Management Regulations, etc.
 The Directors and the Audit and Supervisory Board Members may inspect such
documents and other information as necessary.
(iii) Rules and other systems for management of risk of loss The Company will establish various rules, including the Crisis Management Basic
Regulations, and establish and operate a risk management system in order to respond tothe various risks in business activities.
 Each division will independently manage the risks of daily business activities, such as
economic risks and financial risks relating to regular transactions, under the guidance ofthe supervising Director.
(iv) Systems to ensure efficiency of the performance of duties by Directors
 The Company will ensure to establish the system that enables appropriate and efficientperformance of duties. Specifically, among others, the Board of Directors makes
decisions on important business execution and supervises the status of business execution-1-

at the meetings (held at least once per month in principle), whereas Executive Directors
and Executive Officers with title formulate medium- to long-term strategies, etc. anddiscuss important management issues at the Management Meetings (held twice per monthin principle).
 The Company has introduced an Executive Officer System in seeking to differentiate the“management decision-making and supervision function” of Directors and the “businessexecution function” for Executive Officers, thereby clarifying responsibilities andaccelerating decision-making.
 In business management, the Company sets company-wide goals based on the Mediumterm Management Plan approved by the Board of Directors and the profit plan for eachfiscal year, and at the Monthly Business Conference (in principle, held once per month,and once per quarter as the Group Liaison Conference including Presidents of groupcompanies, etc.) consisting of Executive Directors, Executive Officers, and General
Managers, etc., ensures the appropriate execution of all projects through evaluating
progress reports by the General Managers on the business of each division.
(v) System to ensure the appropriateness of business operations of the corporate groupconsisting of the Company, its parent company and subsidiariesa.

Systems for the reporting of items related to the performance of the duties of directors,
etc. of subsidiaries to the Company
The Company will provide Group Companies Management Regulations, and require
reports from the group companies on management policies/management plans, humanresources/organization, accounting/financial affairs, audits, disasters/accidents, and otherimportant matters. These reports will be made at the Group Liaison Conference (inprinciple, held once per quarter).

b.

Rules and other systems for management of risk of loss at subsidiaries
At the Company, each supervising Director and the Corporate Strategy and Planning
Dept. provide comprehensive advice and guidance on business management and risk
management systems for group companies.

c.

System to ensure efficiency of the performance of duties by directors, etc. of
subsidiaries


The Company will set company-wide goals based on the Organo Group’s Mediumterm Management Plan approved by the Board of Directors and the profit plan foreach fiscal year, and at the Group Liaison Conference will ensure the appropriate
execution of all projects through evaluating business progress reports by the
Presidents of each group company.



The Company will establish a system to make the business operations of groupcompanies more efficient by providing and sharing indirect business operations andoptimizing funding and management.

d.

System to ensure that directors, etc. and employees of subsidiaries perform their duties
in compliance with relevant laws and regulations and the Articles of Incorporation
The Company will prescribe the Organo Group Company Code of Conduct as a basic
code of conduct with which all officers and employees of group companies mustcomply, and seek to spread awareness.

The Company will provide compliance training to the group companies’ officers andemployees as necessary.
-2-The Company’s Internal Auditing Dept. will perform audits concerning theperformance of duties and compliance practices of group companies.



The officers and employees of group companies are also able to use the Company’s
whistleblowing system.

e.

Other system to ensure the appropriateness of business operations of the corporategroup consisting of the Company, its parent company and subsidiaries


From the perspective of internal controls pertaining to consolidated financial
statements, the Company’s Internal Control Division and Accounting Division will
cooperate in the development and operation of the accounting and financial reporting
processes of the group companies.



The Company will ensure a certain degree of independence in business activities andmanagement decisions from the Company’s parent company, Tosoh Corporation, andpromotes appropriate coordination of activities through regular meetings, etc., withthe company.

(vi) Matters relating to employees that assist the Audit and Supervisory Board Members
upon the request of such Audit and Supervisory Board Members for assistance, mattersrelating to independence of the relevant employees from Directors and matters relating
to effectiveness of directions given to such employees to be ensured
The Company will establish a secretariat for the Audit and Supervisory Board andassign employees that assist in the duties of Audit and Supervisory Board Members.



Audit and Supervisory Board Members will make personnel evaluations of
employees that assist in the duties of Audit and Supervisory Board Members, and will
determine proper procedures for handling matters related to human affairs, including
personnel changes, for employees that assist in the duties of the Audit andSupervisory Board Members with the prior consent of the Audit and Supervisory
Board.



Employees that assist in the duties of the Audit and Supervisory Board Members will
not receive instructions or orders from executives, but will follow direct instructions
or orders from Audit and Supervisory Board Members.

(vii) System for directors, etc., and employees of the Company and its subsidiaries to report
to Audit and Supervisory Board Members of the Company, and system for ensuring thatthese parties will not be treated adversely due to making reports

If Audit and Supervisory Board Members of the Company request reports from
Directors and employees of the Company and group companies or audit andsupervisory board members of group companies, they will provide an appropriate
report without delay.

Directors and employees of the Company and group companies or audit andsupervisory board members of group companies will immediately report to the Audit
and Supervisory Board Members of the Company if they discover facts that could
cause significant damage on the Company or the group companies.

Audit and Supervisory Board Members participate in important meetings such as theBoard of Directors, the Group Liaison Conference, etc., and will request explanations
from the Directors and employees of the Company and group companies asnecessary.



The Legal Division and external lawyers who serve as contact points for thewhistleblowing system will report to the Audit and Supervisory Board Members of
the Company on the whistleblowing information received from the Directors and-3-

employees of the Company and group companies in accordance with theWhistleblowing Regulations.


The Company’s Audit and Supervisory Board Members also serve as a contact point
for the whistleblowing system.



The Company will ensure that Directors and employees of the Company and groupcompanies who make reports to the Audit and Supervisory Board Members of theCompany, or otherwise make a report in accordance with the Whistleblowing
Regulations, will not be treated adversely due to the report or the act of making thereport.

(viii)Other systems to ensure that Audit and Supervisory Board Members perform audits
effectively


The Representative Director will regularly exchange opinions with the Audit andSupervisory Board Members on matters related to overall management.



The Audit and Supervisory Board Members will receive reports from the Independent
Auditor, Internal Auditing Dept., and Audit and Supervisory Board Members ofgroup companies, seeking mutual cooperation and consulting with lawyers asnecessary.



The Company will bear any expenses incurred by Audit and Supervisory Board
Members in the performance of duties, provided that these expenses have not been
deemed unnecessary in the performance of duties by Audit and Supervisory Board
Members.

-4-

(2) Overview of operational status of systems to ensure appropriateness of business operations
The Company has established the internal control systems listed above, and engaged in thefollowing specific initiatives based on that basic policy.
The Company has a systematic approach to promoting compliance to ensure that all officers andemployees are aware of laws and regulations and internal rules with which they must comply.
More specifically, the Company distributes the Organo Group Company Code of Conduct Card toits employees to conduct education, as well as conducts education (e-learning) on harassment
prevention, corporate ethics and compliance, and provides hierarchical patent and legal education
programs and training on contracts, so as to raise awareness of compliance.
In addition, the Company provided Directors and Audit and Supervisory Board Members withexecutive training provided by external instructors and training provided by externalorganizations, and the Directors and Audit and Supervisory Board Members attended as
appropriate.
The Company has established a BCP (Business Continuity Plan) to minimize loss or disadvantage
suffered by the Company and group companies. The New Coronavirus Infectious Disease
Countermeasures Headquarters, established in accordance with the Crisis Management Basic
Regulations and the BCP, took the lead in ensuring smooth business continuity by collecting anddisseminating information, planning and instructing the implementation of countermeasures suchas the establishment of a telecommuting environment, and minimizing the human and economic
impact.
In addition, the Company is building the PDCA cycle of the process to ensure and enhance theeffectiveness of group-wide risk management. In executing management plans and strategies, theCompany’s Board of Directors identifies major risks among the risks pointed out by various
departments/divisions and group companies. Various departments/divisions proceed with theirrisk responses based on the risk management plan formulated by the supervising
department/division that leads the responses against those major risks. Among other activities, theInternal Auditing Dept. evaluates the progress of the risk management plan, and the Board of
Directors conducts monitoring and gives directives for improvement of the plan, thereby
supervising the risk management status.
In the fiscal year under review, the Company held 14 meetings of the Board of Directors, 21Management Meetings to discuss important management agendas, and continued to strive toensure the appropriateness and efficiency of business execution by Directors. In addition, theMonthly Business Conference was held 12 times (including four Group Liaison Conferences), andprogress on goal developed based on the Medium-term Management Plan and the profit plan for
the fiscal year under review was confirmed through the reception of status reports on business by
the General Managers of each division, etc.
The Company’s Audit and Supervisory Board Members participated in meetings of the Board of
Directors, the Management Meeting, the Monthly Business Conference and other important
meetings, established internal controls for the Company, and confirmed the status of operations
through regular reports from the Legal and Patent Dept., Corporate Strategy and Planning Dept.,
Accounting Dept., Internal Auditing Office and other departments pertaining to internal control
while making efforts to improve the efficiency and effectiveness of its audits by exchanging
information and opinions with Independent Auditors as necessary. In addition, in September 2022
and March 2023, the Representative Director and the Audit and Supervisory Board Members held
opinion exchanges on overall management and endeavored to ensure the effectiveness of audits.

-5-Consolidated Statement of Changes in Equity(From April 1, 2022 to March 31, 2023)(Millions of yen)
Shareholders’ equity
Share capital

Capital surplus

Retained earnings

Treasury shares

Total
shareholders’equity

8,225

7,508

59,619(734)

74,617

Dividends of surplus--(2,347)-(2,347)

Profit attributable toowners of parent--

11,730-11,730Purchase of treasury
shares

-

-

-

(4)

(4)

Disposal of treasury
shares

-

0

-

125

125

Net changes in items
other thanshareholders’ equity

-

-

-

-

-

-

0

9,383

121

9,505

8,225

7,508

69,002(613)

84,123

Balance at beginning of
periodChanges during period

Total changes during
periodBalance at end of period

Accumulated other comprehensive income
Valuationdifferenceonavailablefor-salesecurities

Deferred
gains orlosses onhedgesForeigncurrencytranslation
adjustment

Remeasurements ofdefinedbenefit
plans

434

(0)

575

208

1,218

168

76,004

Dividends of surplus

-

-

-

-

-

-

(2,347)

Profit attributable toowners of parent

-

-

-

-

-

-

11,730Purchase of treasury
shares

-

-

-

-

-

-

(4)

Disposal of treasury
shares

-

-

-

-

-

-

125

Net changes in items
other thanshareholders’ equity

104

(2)

616

109

828

32

861

Total changes during
period

104

(2)

616

109

828

32

10,366

Balance at end of period

539

(2)

1,191

317

2,047

201

86,371

Balance at beginning of
periodTotal
Nonaccumulat- controllinged otherinterests
comprehens
ive income

Total net
assetsChanges during period-6-Notes to Consolidated Financial Statements
1. Notes on significant matters for the basis of the preparation of consolidated financial statements(1) Scope of consolidation(i) Status of consolidated subsidiaries
・ Number of consolidated subsidiaries:
11 companies
・ Names of principal consolidated subsidiaries:
ORGANO PLANT SERVICE CORPORATIONORGANO FOOD TECH CORPORATION
Organo Technology Co., Ltd.
(ii) Status of non-consolidated subsidiaries
・ Number of non-consolidated subsidiaries:
2 companies
・ Names of principal non-consolidated subsidiaries:
HOSTEC・ Reason for exclusion from scope of consolidation:
The two non-consolidated subsidiaries are small in size and the aggregate total assets, net
sales, profit or loss (based on the Company’s ownership percentage), retained earnings(based on the Company’s ownership percentage), and other indicators do not have amaterial effect on the consolidated financial statements and have therefore been excluded
from the scope of consolidation.
(2) Application of the equity method(i) Status of affiliates accounted for by the equity method
・ Number of affiliates accounted for by the equity method:
1 company
・ Name of the affiliate accounted for by the equity method:
TOHOKU DENKI TEKKO Co., Ltd.
(ii) Status of non-consolidated subsidiaries and affiliates not accounted for by the equity method
・ Number of non-consolidated subsidiaries and affiliates not accounted for by the equity
method:2 companies
・ Names of principal non-consolidated subsidiaries or affiliates not accounted for by theequity method:
HOSTEC・ Reason for not applying equity method:
Since the two non-consolidated subsidiaries to which the equity method was not applied
would give only a minimal impact on the consolidated financial statements whenremoved, judging from profit or loss (based on the Company’s ownership percentage),retained earnings (based on the Company’s ownership percentage) and the like, and they
are not material as a whole, they are removed from the scope to which the equity method
is applied.
(3) Fiscal year-end of consolidated subsidiaries
Of consolidated subsidiaries, seven overseas subsidiaries have their fiscal year-end on December
31.
In the preparation of the consolidated financial statements, their financial statements as of thisdate have been used, with adjustments made as necessary upon consolidation for materialtransactions that occur between their fiscal year-end and that of the Company.

-7-(4) Accounting policies(i) Valuation standards and methods for significant assets
a. Securities
Other securities
Other than shares, etc. without market prices
Stated at fair value (Valuation differences are included in a separate component of net
assets, and cost of sales is determined by the moving-average method.)
Shares, etc. without market prices
Stated at cost using the moving-average methodb. Derivatives
Stated at fair valuec. Inventories
Inventories held for sale in the ordinary course of businessStated at cost (based on the method of writing down the book value in accordance withthe declining in profitability).
Merchandise, finished goods and raw materials
Stated using the moving-average method principally
Work in process
Stated using the identified cost method(ii) Depreciation and amortization method for significant depreciable assets
a. Property, plant and equipment (excluding leased assets)
Depreciated mainly using the declining balance method.
Buildings (excluding facilities attached to buildings) acquired on or after April 1, 1998 andfacilities attached to buildings and structures acquired on or after April 1, 2016 aredepreciated using the straight-line method.
The estimated useful lives of major items are as follows.
Buildings and structures: 3 to 50 years
Machinery, equipment and vehicles: 4 to 17 years
b. Intangible assets (excluding leased assets)
Depreciated using the straight-line method.
Software for internal use is amortized using the straight-line method over the internally
expected useful life (mainly five years).
c. Leased assets
Leased assets under finance lease transactions that do not transfer ownership
Depreciated by the straight-line method assuming the lease periods as useful lives
without residual value.
(iii) Standards for recognition of principal allowances and provisions
a. Allowance for doubtful accounts
To prepare for losses from bad debt, an estimated uncollectible amount is recorded at theamount estimated by using the historical rate of credit loss for ordinary receivables, andbased on individual consideration of collectability for specific receivables such as highly
doubtful receivables.
b. Provision for bonuses
To prepare for payment of employee bonuses, of the estimated future bonus payment, anamount to be borne during the fiscal year under review is recorded.
c. Provision for product warranties
To prepare for warranties against defects in completed construction contracts, etc., anamount is recorded by giving consideration to the expected amount of future guarantees-8-based mainly on the past two years’ performance. For items that can be estimatedindividually, the estimated amount is recorded.
d. Provision for loss on construction contracts
To prepare for any losses on undelivered construction projects, the estimated amount oflosses in or after the following fiscal years is recorded for some of the construction projects
as of the end of the fiscal year under review, which are highly probable to incur losses andfor which the amounts thereof can be reasonably estimated.
e. Provision for share awards for directors (and other officers)
To prepare for the delivery of the Company’s shares, etc. to Directors and Executive
Officers, pursuant to the Share Delivery Regulations, the Company recorded a provision
for share awards for directors (and other officers) based on estimated share benefit
obligations at the end of the fiscal year under review.
(iv) Standards for recognition of revenues and expenses
a. Revenue from contracts with customers
Details of main performance obligations in business relating to revenue from contracts
with customers of the Company and its consolidated subsidiaries, and the typical point intime (typical point in time revenue is recognized) at which such performance obligations
are satisfied are as follows.
i. Water Treatment Engineering Business Unit
The water treatment engineering business unit provides various water treatment
services that mainly include construction work of water treatment plant, renovation andreconditioning of existing facilities, maintenance, and operational support. In thesetransactions, judging that performance obligations are satisfied over a certain period oftime, revenue is recognized based on the progress toward satisfying the performanceobligations. The measurement of progress in construction contracts, including
construction and renovation and reconditioning of facilities, is based on the ratio ofconstruction costs incurred until the last day of each reporting period to the total
estimated construction costs. Furthermore, the measurement of progress in water
treatment service transactions in contracts with one-year or multi-year terms, including
maintenance and operational support of facilities, is based on the time elapsed and theassessment of the results achieved. In addition, the Company is to recognize revenue
using the cost recovery method in cases where it expects to recover costs incurred but
is unable to reasonably estimate the extent of progress made toward satisfying
performance obligations.
ii. Performance Products Business Unit
The performance products business unit manufactures and sells mainly water treatment
chemicals, standard water treatment equipment and filters, food ingredients and foodprocessing agents. For such sales transactions, revenue is recognized at the timemerchandise and finished goods are each delivered to customers. In their domestic
sales, however, revenue is recognized at the time of shipment of such merchandise andfinished goods. Among sales transactions of merchandise, for items where it is judged
the Company and its consolidated subsidiaries correspond to agents, the net amount,which is the amount receivable in exchange for merchandise provided by another party
minus the amount payable to such other party, is recognized as revenue.
b. Standard for recognition of revenue related to finance lease transactions
Revenue related to finance lease transactions follows a method of accounting net sales andcost of sales at the time of receiving lease fees.
(v) Method of significant hedge accounting
a. Method of hedge accounting
Principally, accounted for with deferred hedge accounting. The designated hedge
accounting (the “Furiate-shori”) is applied to forward exchange contracts that satisfy
requirements for such accounting, and the exceptional treatment (the “Tokurei-shori”) isapplied to interest rate swaps that satisfy the requirements for such treatment.

-9-

b. Hedging instruments and hedged items
Hedging instruments: Forward exchange contracts and interest rate swaps
Hedged items: Foreign currency-denominated monetary claims, obligations, etc., andborrowingsc. Hedging policy
Foreign exchange rate fluctuation risk and market interest rate fluctuation risk are hedged
within a certain range based on transaction management regulations that stipulate
authorization relating to derivatives and other matters.
d. Method of assessing hedge effectiveness
The Company assesses hedge effectiveness by comparing cumulative cash flow or fairvalue fluctuations of hedged items with those of hedging instruments quarterly and basedon those fluctuation amounts.
However, assessment of effectiveness is omitted for interest rate swaps which areaccounted for applying the exceptional treatment.
(vi) Other significant matters for the basis of the preparation of consolidated financial statements
Standard for recognition of retirement benefit liability
To prepare for the payment of employees’ retirement benefits, the amount of retirement
benefit obligations minus plan assets is recorded as retirement benefit liability, based on theestimated amount at the end of the fiscal year under review.
If the amount of plan assets exceeds the amount of retirement benefit obligations,retirement benefit assets will be recorded.
Past service costs are recognized as expenses at the time they are incurred.
Actuarial gains and losses are amortized in the year following the year in which the gains
or losses are recognized by the straight-line method in equally allocated amounts over acertain number of years (principally ten years) which are within the average remaining
years of service of the eligible employees at the time of occurrence.
Unrecognized actuarial gains and losses are recorded in the remeasurements of defined
benefit plans in the accumulated other comprehensive income of the net assets after
adjusting for tax effects. In the calculation of retirement benefit obligations, the method
used to attribute expected retirement benefits to periods up to the fiscal year under review
is benefit formula basis.
2.

Notes to accounting estimates
Accounting estimates are reasonable amounts calculated based on information available at the time of
preparation of the consolidated financial statements. Of the amounts recorded in the consolidated
financial statements for the current fiscal year that are based on accounting estimates, the following
items have the risk of having a material impact on the consolidated financial statements for thefollowing fiscal year.
(Recording of revenue regarding transactions recognizing revenue over a certain period of time in thewater treatment engineering business unit)(1) Amount recorded in the consolidated financial statements for the fiscal year under review
In the consolidated statement of income, the Company recorded ¥96,380 million of revenue on
performance obligations satisfied over a certain period of time in the water treatment
engineering business unit for the fiscal year under review. The amount includes various water
treatment services contracts that mainly include maintenance and operational support andconstruction contracts using the cost recovery method, and the revenue excluding these is¥67,959 million.
(2) Information on the details of significant accounting estimates for identified items
The Company and its consolidated subsidiaries recognize revenue over a certain period of timein alignment with satisfaction of performance obligations to transfer goods or services tocustomers when control over a good or service is to be transferred to the customer over a- 10 -

certain period of time. Revenue is recorded by reasonably estimating the total amount ofconstruction revenue, total amount of construction cost, and progress as of the end of the fiscal
year.
The Company estimates the total amount of construction cost, which is the basis for therecognition of the revenue, as the expected cost for each contract. However, the content of thework may change due to an increase in the number of man-hours or changes in site conditions
caused by facts that become known after the start of the construction contract. In particular,large-scale construction projects require a long time to complete, and therefore there is a highdegree of uncertainty in estimating the work content and man-hours required for completion.
More specifically, the estimate of the total cost of construction at the end of the consolidated
fiscal year will be significantly affected by the identification of the work required for thecompletion of a construction contract, the estimation of the cost of that work, and the timely
and appropriate reflection of changes in the work due to changes in conditions after the start ofconstruction.
3.

4.

Notes to the consolidated balance sheet(1) Accumulated depreciation for property, plant and equipment(2) Contingent liabilities
Guarantee obligation for bank loans of employees¥23,341 million¥0 million

Notes to the consolidated statement of changes in equity(1) Total number of shares issued
Class of shares
Common shares

Note:

Number of shares at
beginning of period(Thousands of shares)
11,589

Increase in number ofshares during theperiod(Thousands of shares)
34,769Decrease in number ofshares during theperiod(Thousands of shares)-

Number of shares at
end of period(Thousands of shares)
46,359The Company implemented a share split on October 1, 2022, splitting one common share into four, which increased
the total number of issued shares by 34,769 thousand shares.

(2) Number of treasury sharesClass of shares
Common shares

Number of shares at
beginning of period(Thousands of shares)

Increase in number ofshares during theperiod(Thousands of shares)

135

353

Decrease in number ofshares during theperiod(Thousands of shares)17

Number of shares at
end of period(Thousands of shares)
470

Notes: 1. The Company implemented a share split on October 1, 2022, splitting one common share into four.
2. The increase of 353 thousand shares in the number of treasury shares reflects the increase of 352 thousand
shares due to the share split and the increase of 0 thousand shares due to the purchase of shares less than one
unit.
3. The decrease of 17 thousand shares in the number of treasury shares reflects the decrease of 17 thousand shares
due to the delivery of the Company’s share held by the Officer Share Delivery Trust and the decrease of 0
thousand shares due to the sale of shares less than one unit.
4. The number of treasury shares at the end of the fiscal year under review includes 133 thousand shares of theCompany held by the Officer Share Delivery Trust.

(3) Dividends of surplus(i) Dividends paid, etc.
a. Dividends resolved at the 77th Ordinary General Meeting of Shareholders held on June29, 2022
 Total dividends:¥1,012 million
 Dividend per share:¥88 Record date:
March 31, 2022
 Effective date:June 30, 2022
Note

Total dividends include ¥4 million in dividends for shares of the Company held by the Officer Share
Delivery Trust.

- 11 -

b.





Dividends resolved at the meeting of the Board of Directors held on October 31, 2022
Total dividends:¥1,334 million
Dividend per share:¥116
Record date:
September 30, 2022
Effective date:
December 5, 2022

Notes

1. Total dividends include ¥3 million in dividends for shares of the Company held by the Officer
Share Delivery Trust.
2. Dividend per share is shown as the amount before the share split on October 1, 2022, since therecord date is September 30, 2022.

(ii) Dividends whose record date falls in the fiscal year under review and which have aneffective date in the next fiscal year
The following dividends are proposed for the 78th Ordinary General Meeting of
Shareholders, scheduled for June 29, 2023.
 Total dividends:¥1,518 million
 Source of dividends:
Retained earnings
 Dividend per share:¥33
 Record date:
March 31, 2023
 Effective date:June 30, 2023
Note

5.

Total dividends include ¥4 million in dividends for shares of the Company held by the Officer Share
Delivery Trust.

Notes to financial instruments(1) Status of financial instruments(i) Policy for handling financial instruments
The Organo Group procures long-term capital and short-term operating capital from banks inaccordance with its capital investment plan, etc.
Derivatives are used to hedge the various risks as described in detail below, and theCompany does not enter into derivatives for trading or speculative purposes.
(ii) Details of financial instruments and associated risks
Notes receivable - trade, accounts receivable - trade, electronically recorded monetaryclaims - operating and investments in leases, all of which are trade receivables, are exposedto credit risks of customers. Although foreign currency-denominated trade receivables thatarise in conducting business in overseas are exposed to foreign exchange rate fluctuation
risk, the Company hedges the risk with the use of forward exchange contracts as necessary.
Investment securities are mainly shares held to strengthen relationships with business
partners or purely for investment. These are exposed to market price fluctuation risk.
Notes and accounts payable - trade and electronically recorded obligations - operating thatare trade payables are mainly due within one year. Furthermore, these include foreign
currency-denominated payables associated with imports, which are exposed to foreignexchange fluctuation risk. However, these are hedged as necessary using forward exchange
contracts.
Borrowings are mainly for the purpose of procuring capital needed for capital investment
and short-term operating capital. Although some of them have floating rates and are exposed
to interest rate risks, they are hedged through derivatives (interest rate swaps).
Derivatives are forward exchange contracts executed for the purpose of hedging foreignexchange rate fluctuation risk associated with foreign currency-dominated trade receivables
and payables, interest rate swaps executed for the purpose of hedging interest rate
fluctuation risk associated with borrowings. With respect to hedging instruments and hedged
items, hedging policy and method of assessing hedge effectiveness, please refer to “1. Notes
on significant matters for the basis of the preparation of consolidated financial statements (4)Accounting policies (v) Method of significant hedge accounting” previously described.

- 12 -

(iii) Management system for risks associated with financial instruments
a. Management of credit risks (risks of contractual defaults by business partners)
For trade receivables, the sales divisions within each business segment conduct regularmonitoring of the status of business partners, and manage maturity dates and balances bycounterparty in accordance with the internal rules. In addition, they endeavor to quickly
identify and mitigate any concerns regarding the collection of receivables due todeteriorated financial conditions of business partners. The consolidated subsidiaries
exercise similar management based on the regulations of the Company.
In utilizing derivatives, the Organo Group has transactions only with high-rated financial
institutions to mitigate credit risks.
b. Management of market risks (risks of fluctuations in foreign exchange rates and interest
rates)The Organo Group, with respect to foreign currency-denominated trade receivables andpayables, hedges foreign exchange fluctuation risk identified by each transaction with theuse of forward exchange contracts as necessary.
The Organo Group also utilizes interest rate swaps to limit the risks of fluctuations ininterest rates on borrowings.
In terms of investment securities, the Organo Group assesses the market values andfinancial positions of issuers (business partners) on a regular basis. As for those excluding
held-to-maturity debt securities, the Organo Group continuously reviews positions in
consideration of the market conditions and relationships with business partners.
Execution and management of derivatives is conducted with the approval of the decisionmaking person in the responsible department in accordance with transaction management
regulations that stipulate authorization relating to derivatives and other matters.
c. Management of liquidity risk associated with procurement of funds (risk of becoming
unable to repay on payment date)
The Organo Group in a timely way develops and updates the financing plans throughdivisions in charge of accounting based on reports from each division, and manages
liquidity risks by maintaining cash balances.
(iv) Supplemental remarks on fair values of financial instruments
As changeable factors are included in calculating fair values of financial instruments, if
different assumptions, etc. are used, these values could vary.
(v) Concentration of credit risks
Of the trade receivables as of the consolidated balance sheet date for the current fiscal year,
32.6% are those from the top three companies.
(2) Fair value of financial instruments
Amount on the consolidated balance sheet as of March 31, 2023, fair values and the difference are as
follows. Shares, etc. without market prices are not included in the following table. (Please refer toNote) Furthermore, notes are omitted for cash. Notes are also omitted for deposits, notes receivable trade, electronically recorded monetary claims - operating, notes and accounts payable - trade,- 13 -

electronically recorded obligations - operating, and short-term borrowings, given that the fair values
are proximate to the book values since they are settled in a short term.
(Millions of yen)Amounts on consolidatedbalance sheet
(i)
(ii)
(iii)

(i)

[*]
Note

Fair value

Differences

Accounts receivable - trade
Investments in leases
Investment securities

39,4709,853
1,045

39,470
10,547
1,045

(0)
693
-

Total assets
Long-term borrowings(including current portion of
long-term borrowings)

50,37051,063

693

5,595

5,565

(29)

Total liabilities

5,595

5,565

(29)

Derivatives [*]

(2)

(2)

-

Net claims/obligations that arise from derivatives are indicated as net amounts, and the amounts of items for which
net obligations are recognized in total are indicated in parentheses.
Shares, etc. without market prices(Millions of yen)
Category
Amounts on consolidated balance sheet
Unlisted shares

1,384

The Company does not include unlisted shares in “(iii) Investment securities.”(3) Breakdown, etc. of fair value of financial instruments by appropriate category
Fair values of financial instruments are categorized into the following three levels depending on theobservability and significance of inputs used for fair value measurement.
Level 1 fair value: Fair value measured by using, of observable inputs for fair value measurement,
quoted prices in active markets for assets or liabilities that are subject to the fairvalue measurement concerned
Level 2 fair value: Fair value measured by using, of observable inputs for fair value measurement,
inputs other than Level 1 inputs for fair value measurement
Level 3 fair value: Fair value measured by using unobservable inputs for fair value measurement
If multiple inputs that have a significant impact on fair value measurement are used, the inputs are
categorized under the lowest priority level of fair value measurement in which each input belongs.
(i) Financial assets and financial liabilities recorded at fair value on consolidated balance sheet(Millions of yen)
Category
Investment securities
Other securities
SharesTotal assets
Derivatives
Currency derivatives
Total liabilities

Fair value
Level 1

Level 2

Level 3

Total

1,045

-

-

1,045

1,045

-

-

1,045

-

2

-

2

-

2

-

2

- 14 -

(ii) Financial assets and financial liabilities not recorded at fair value on consolidated balance
sheet(Millions of yen)
Fair value

Category

Level 1

Level 2

Level 3

Total

Accounts receivable - trade
Investments in leases-

39,470
10,547-39,470
10,547

Total assets-

50,018-50,018Long-term borrowings (including current
portion of long-term borrowings)

-

5,565

-

5,565

Total liabilities

-

5,565

-

5,565

(Note) Description of valuation techniques and inputs used for fair value measurement
Investment securities
Listed shares are appraised using market price. Since listed shares are traded in active markets, the fair values are
categorized under Level 1 fair value.
Derivatives
Fair values of forward exchange contracts are measured by a discounted cash flow method using observable
inputs such as foreign exchange rates. They are categorized under Level 2 fair value.
Accounts receivable - trade
Fair values of accounts receivable - trade are measured by a discounted cash flow method based on amount ofreceivables, period to maturity, and interest rates that take into account credit risks of each receivable categorized
by period of time. They are categorized under Level 2 fair value.
Investments in leases
Fair values of investments in leases are measured by a discounted cash flow method, under which the sum of
principal and interest is discounted at an interest rate assumed in a case of similar new lease transactions. They
are categorized under Level 2 fair value.
Long-term borrowings (including current portion of long-term borrowings)
Fair values of long-term borrowings are measured by a discounted cash flow method, under which the sum of
principal and interest is discounted at an interest rate assumed in a case of similar new borrowings. They are
categorized under Level 2 fair value. Of the long-term borrowings with floating rates, fair values of ones subject
to exceptional treatment for interest rate swaps are measured by a discounted cash flow method, under which thesum of principal and interest treated in combination with the said interest rate swap is discounted based on areasonably estimated rate applied to a similar new borrowing.

6.

Notes to revenue recognition(1) Information on disaggregation of revenue from contracts with customers(Millions of yen)
Reportable Segment[Water Treatment
Engineering
Business Unit][Performance
Products
Business Unit]

Total

Total

Japan
TaiwanChina
Southeast Asia
Other59,82523,264
11,277
9,634
4,163

19,535
239
413
583
53

79,36023,504
11,691
10,217
4,216

79,36023,504
11,691
10,217
4,216

Revenue from contracts with customers

108,165

20,824

128,989

128,989

3,436

-

3,436

3,436

111,601

20,824132,426

132,426

Other revenue
Sales to external customers- 15 -

(2) Basic information to understand revenue from contracts with customers(i) Water Treatment Engineering Business Unit
The water treatment engineering business unit provides various water treatment services thatmainly include construction work of water treatment plant facilities, renovation andreconditioning of existing facilities, maintenance, and operational support to customers inJapan and overseas regions. There is no significance in variable consideration in thesetransactions.
At a point in time when performance obligations are satisfied, they are judged to be satisfied
over a certain period of time. With respect to construction contracts, this is because themajority of transactions are the building of facilities on the customer’s grounds based on thecustomer’s specifications, and any of the following conditions are satisfied:a. Fulfilment of performance obligation arises when a new asset is created or the value ofan asset is increased and the customer takes control of that asset or that asset’s
increased value.
b. By fulfillment of performance obligation, an asset that cannot be operated for adifferent purpose is created and the Company has the legal right to receive from thecustomer the amount of consideration corresponding to the part that performanceobligation was completed for.
As for provision of services such as maintenance, performance obligations are judged to besatisfied over a certain period of time since customers are able to enjoy benefits as
obligations are performed by the Company and its consolidated subsidiaries.
The measurement of progress in construction contracts is based on the ratio of construction
costs incurred until the last day of each reporting period to the total estimated construction
costs. This is due to the fact that construction work is believed to progress in proportion to
the extent construction costs are incurred. Furthermore, the measurement of progress inwater treatment service transactions in contracts with one-year or multi-year terms is basedon the time elapsed and the assessment of the results achieved. This is because considerationand service-rendering items for each period are defined in contracts in advance, andcustomer acceptance is conducted for each period. In addition, the Company is to recognize
revenue using the cost recovery method in cases where it expects to recover costs incurred
but is unable to reasonably estimate the extent of progress made toward satisfying
performance obligations.
Consideration is in accordance with the conditions set forth in the contract and is generally
received in steps, in proportion to the progress of performance obligations. The remaining
consideration is received generally within one year after all performance obligations are
satisfied. No significant financing component is included.
Construction and maintenance contracts, etc. have product warranty obligations wheredefects found generally within two years after delivery will be repaired or replaced at nocharge. As such warranty obligations guarantee customers that finished goods will function
as intended according to the specification set forth in the contracts with customers, they arerecognized as a provision for product warranties.
(ii) Performance Products Business Unit
The performance products business unit manufactures and sells mainly water treatment
chemicals, standard water treatment equipment and filters, food ingredients and foodprocessing agents to customers in Japan and overseas regions. There is no significance invariable consideration in these transactions.
The time performance obligations are satisfied is set at the point when each piece ofmerchandise and finished goods is delivered to the customer. This is because, at such point,
legal ownership and physical possession of merchandise and finished goods, as well as
significant risks and economic values from owning finished goods are transferred to thecustomer, and therefore it can be judged that the right to receive payment of transaction
consideration from the customer has been obtained. In their domestic sales, however,revenue is recognized at the time of shipment of such merchandise and finished goods.

- 16 -

Among sales transactions of merchandise, for items where it is judged the Company and its
consolidated subsidiaries correspond to agents, the net amount, which is the amountreceivable in exchange for merchandise provided by another party minus the amountpayable to such other party, is recognized as revenue.
Consideration is received generally within four months after delivery, and no significant
financing component is included.
(3) Information on relation between satisfaction of performance obligations based on contracts withcustomers and cash flow arising from such contracts, and expected amount and period of revenue
recognition as from the following fiscal year based on contracts with customers existing as of theend of the fiscal year under review(i) Balance of contract assets and contract liabilities, etc.
(Millions of yen)
Fiscal year under review
Receivables from contracts with customers (balance at beginning of
period)Receivables from contracts with customers (balance at end of period)

42,033Contract assets (balance at beginning of period)
Contract assets (balance at end of period)

25,58432,359Contract liabilities (balance at beginning of period)
Contract liabilities (balance at end of period)

1,820
3,007

27,835Contract assets are rights to consideration in exchange for the satisfied portion of
performance obligations to mainly construction work of water treatment plant, renovation
and reconditioning of existing facilities, and maintenance and they are measured based on
the progress as of the end of the fiscal year, net of receivables. Contract assets are transferred
to receivables arising from contracts with customers at the time rights to consideration by
the Company and its consolidated subsidiaries become unconditional.
Contract liabilities are mainly advances received from customers. Contract liabilities are
reduced when revenue is recognized.
Of the revenue amount recognized in the fiscal year under review, the amount included in
the balance of contract liabilities as of the beginning of the period was ¥1,654 million.
There is no significance in the amount of revenue recognized in the fiscal year under review
from performance obligations satisfied (or partially satisfied) in a past period.
(ii) Transaction prices allocated to remaining performance obligations
The Company and its consolidated subsidiaries adopt a practical expedient when noting
transaction prices allocated to remaining performance obligations, and do not include
performance obligations relating to water treatment service transactions performed undercontracts with an initially expected term of one year or less, and one year or multi-year
contracts claiming fixed amounts based on implementation of service-rendering items set
forth in the contracts in advance. The unsatisfied (or partially unsatisfied) performanceobligations as of the end of the fiscal year under review were ¥90,607 million. Suchperformance obligations are mainly related to the construction work of water treatment
plant, renovation and reconditioning of existing facilities and maintenance in the water
treatment engineering business unit. Approximately 64% is expected to be recognized asrevenue within one year after the last day of the period, and of the remaining approximately
36%, approximately 35% within two years that follow, and approximately 1% thereafter.
7.

Notes to per share information
Net assets per share
Basic earnings per share¥1,877.80¥255.77

Notes 1.The Company implemented a share split on October 1, 2022, splitting one common share into four.
Basic earnings per share have been calculated as if the aforementioned share split had been carried out at the
beginning of the fiscal year under review.

- 17 -

2.When calculating net assets per share, common shares of the Company held by the Officer Share Delivery
Trust have been included in treasury shares excluded from the total number of issued shares at the end of theperiod (133 thousand shares at the end of the fiscal year under review).
3.When calculating basic earnings per share, common shares of the Company held by the Officer Share
Delivery Trust have been included in treasury shares excluded from the calculation of the average number ofshares during the period (158 thousand shares in the fiscal year under review).

8.

Significant subsequent events
Not applicable.

- 18 -

Statement of Changes in Equity(From April 1, 2022 to March 31, 2023)(Millions of yen)
Shareholders’ equity
Capital surplus
SharecapitalBalance at beginning of
periodLegalcapitalsurplusRetained earnings

Other
capitalsurplusLegalretainedearnings

Otherretainedearnings

TreasurysharesTotalshareholders’ equity

8,225

7,508

0

832

46,159(734)

61,990

Dividends of surplus

-

-

-

-

(2,347)-(2,347)

Profit

-

-

-

-

8,593

-

8,593

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

-

-

-

-

-

-

-

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

-

-

-

-

-

-

-

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

-

-

-

-

-

-

-

Provision of generalreserve

-

-

-

-

-

-

-

Purchase of treasury
shares

-

-

-

-

-

(4)

(4)

Disposal of treasury
shares

-

-

0

-

-

125

125

Net changes in items
other thanshareholders’ equity

-

-

-

-

-

-

-

-

-

0

-

6,246

121

6,367

8,225

7,508

0

832

52,405(613)

68,358Changes during period

Total changes during
periodBalance at end of period- 19 -

(Millions of yen)
Valuation and translation adjustments
Valuation difference
on available-for-salesecurities

Deferred gains orlosses on hedges

Total valuation andtranslation
adjustments

Total net assets

370

-

370

62,361Dividends of surplus

-

-

-

(2,347)

ProfitProvision of reserve
for tax purpose
reduction entry of
non-current assets
Reversal of reserve
for tax purpose
reduction entry of
non-current assets
Reversal of reserve
for special accountfor tax purpose
reduction entry of
non-current assets
Provision of generalreserve
Purchase of treasury
shares
Disposal of treasury
sharesNet changes in items
other thanshareholders’ equity
Total changes during
periodBalance at end of period

-

-

-

8,593

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

(4)

-

-

-

125

96

(2)

94

94

96

(2)

94

6,462

467

(2)

465

68,824

Balance at beginning of
periodChanges during period- 20 -

(Components of other retained earnings)(Millions of yen)

Balance at beginning of
periodChanges during period

Reservefordividends

Reserveforresearchanddevelopment

Reservefor tax
purposereduction
entry ofnoncurrent
assetsReservefor
specialaccount
for tax
purposereduction entry
of noncurrent
assets

140

90

30

494

Generalreserve

Retainedearnings
brought
forwardTotal

30,065

15,33846,159Dividends of surplus

-

-

-

-

-

(2,347)(2,347)

ProfitProvision of reserve
for tax purpose
reduction entry of
non-current assets
Reversal of reserve
for tax purpose
reduction entry of
non-current assets
Reversal of reserve
for special account for
tax purpose reduction
entry of non-current
assetsProvision of generalreserve
Purchase of treasury
shares
Disposal of treasury
sharesNet changes in items
other thanshareholders’ equity
Total changes during
periodBalance at end of period

-

-

-

-

-

8,593

8,593

-

-

477

-

-

(477)

-

-

-

(13)

-

-

13

-

-

-

-

(477)

-

477

-

-

-

-

-

5,000

(5,000)

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

464

(477)

5,000

1,259

6,246

140

90

494

17

35,065

16,59752,405- 21 -

Notes to Non-consolidated Financial Statements
1. Significant accounting policies(1) Valuation standards and methods for assets(i) Securities
Shares of subsidiaries and associates
Stated at cost using the moving-average method
Other securities
Other than shares, etc. without market prices
Stated at fair value (Valuation differences are included in a separate component of net
assets, and cost of sales is determined by the moving-average method.)
Shares, etc. without market prices
Stated at cost using the moving-average method(ii) Derivatives
Stated at fair value(iii) Inventories
Inventories held for sale in the ordinary course of businessStated at cost (based on the method of writing down the book value in accordance withthe declining in profitability).
Merchandise, finished goods and raw materials
Stated using the moving-average method
Work in process
Stated using the identified cost method
Supplies
Stated using the last purchase cost method(2) Depreciation and amortization of non-current assets(i) Property, plant and equipment
Depreciated using the declining balance method.
Buildings (excluding facilities attached to buildings) acquired on or after April 1, 1998 andfacilities attached to buildings and structures acquired on or after April 1, 2016 aredepreciated using the straight-line method.
The estimated useful lives of major items are as follows.
Buildings and structures: 3 to 50 years
Machinery, equipment and vehicles: 4 to 17 years
Tools, furniture and fixtures: 2 to 20 years(ii) Intangible assets
Depreciated using the straight-line method.
Software for internal use is amortized using the straight-line method over the internally
expected useful life (five years).
(3) Standards for recognition of allowances and provisions(i) Allowance for doubtful accounts
To prepare for losses from bad debt, an estimated uncollectible amount is recorded at theamount estimated by using the historical rate of credit loss for ordinary receivables, andbased on individual consideration of collectability for specific receivables such as highly
doubtful receivables.
(ii) Provision for bonuses
To prepare for payment of employee bonuses, of the estimated future bonus payment, anamount to be borne during the fiscal year under review is recorded.

- 22 -

(iii) Provision for product warranties
To prepare for warranties etc. against defects in completed construction contracts, an amountis recorded based on the past two years’ performance and giving consideration to the
expected amount of future guarantees. For items that can be estimated individually, theestimated amount is recorded.
(iv) Provision for loss on construction contracts
To prepare for any losses on undelivered construction projects, the estimated amount oflosses in or after the following fiscal years is recorded for some of the construction projects
as of the end of the fiscal year under review, which are highly probable to incur losses andfor which the amounts thereof can be reasonably estimated.
(v) Provision for share awards for directors (and other officers)
To prepare for the shares of the Company’s shares, etc. to Directors and Executive Officers,
pursuant to the Share Delivery Regulations, the Company recorded a provision for shareawards for directors (and other officers) based on estimated share benefit obligations at theend of the fiscal year under review.
(vi) Provision for retirement benefits
To prepare for the payment of employees’ retirement benefits, the Company recorded a
provision for retirement benefits, which was recognized at the end of the fiscal year underreview, based on estimated retirement benefit obligations and plan assets at the end of the
fiscal year under review.
If the amount of plan assets exceeds the amount of the retirement benefit obligations
adjusted by unrecognized actuarial gains and losses, it is recorded under prepaid pension
costs.
Past service costs are recognized as expenses at the time they are incurred.
Actuarial gains and losses are amortized in the year following the year in which the gains orlosses are recognized by the straight-line method over a certain number of years (ten years)
which are within the average remaining years of service of the eligible employees at the timeof occurrence.
(4) Standards for recognition of revenues and expenses(i) Revenue from contracts with customers
Details of main performance obligations in business relating to revenue from contracts withcustomers of the Company and the typical point in time (typical point in time revenue isrecognized) at which such performance obligations are satisfied are as follows.
a. Water Treatment Engineering Business Unit
The water treatment engineering business unit provides various water treatment
services that mainly include construction work of water treatment plant, renovation andreconditioning of existing facilities, maintenance, and operational support. In thesetransactions, judging that performance obligations are satisfied over a certain period oftime, revenue is recognized based on the progress toward satisfying the performanceobligations. The measurement of progress in construction contracts, including
construction and renovation and reconditioning of facilities, is based on the ratio ofconstruction costs incurred until the last day of each reporting period to the total
estimated construction costs. Furthermore, the measurement of progress in water
treatment service transactions in contracts with one-year or multi-year terms, including
maintenance and operational support of facilities, is based on the time elapsed and theassessment of the results achieved. In addition, the Company is to recognize revenue
using the cost recovery method in cases where it expects to recover costs incurred but
is unable to reasonably estimate the extent of progress made toward satisfying
performance obligations.
b. Performance Products Business Unit
The performance products business unit manufactures and sells mainly water treatment
chemicals, standard water treatment equipment and filters, food ingredients and foodprocessing agents. For such sales transactions, revenue is recognized at the time- 23 -

merchandise and finished goods are each delivered to customers. In their domestic
sales, however, revenue is recognized at the time of shipment of such merchandise andfinished goods. Among sales transactions of merchandise, for items where it is judged
the Company corresponds to an agent, the net amount, which is the amount receivablein exchange for merchandise provided by another party minus the amount payable tosuch other party, is recognized as revenue.
(ii) Standard for recognition of revenue related to finance lease transactions
Revenue related to finance lease transactions follows a method of accounting net sales andcost of sales at the time of receiving lease fees.
(5) Method of significant hedge accounting(i) Method of hedge accounting
Principally, accounted for with deferred hedge accounting. The designated hedge accounting(the “Furiate-shori”) is applied to forward exchange contracts that satisfy requirements forsuch accounting, and the exceptional treatment (the “Tokurei-shori”) is applied to interest
rate swaps that satisfy the requirements for such treatment.
(ii) Hedging instruments and hedged items
Hedging instruments: Forward exchange contracts and interest rate swaps
Hedged items: Foreign currency-denominated monetary claims, obligations, etc., andborrowings(iii) Hedging policy
Foreign exchange rate fluctuation risk and market interest rate fluctuation risk are hedged
within a certain range based on transaction management regulations that stipulate
authorization relating to derivatives and other matters.
(iv) Method of assessing hedge effectiveness
The Company assesses hedge effectiveness by comparing cumulative cash flow or fair value
fluctuations of hedged items with those of hedging instruments quarterly and based on thosefluctuation amounts.
However, assessment of effectiveness is omitted for interest rate swaps which are accounted
for applying the exceptional treatment.
(6) Other significant matters for the basis of the preparation of non-consolidated financial statements
Accounting treatment of retirement benefits
The accounting treatment method for unrecognized actuarial gains or losses related toretirement benefits is different from the treatment for the item in the consolidated financial
statements.
2. Notes to accounting estimates
Accounting estimates are reasonable amounts calculated based on information available at the time of
preparation of the non-consolidated financial statements. Of the amounts recorded in the nonconsolidated financial statements for the fiscal year under review that are based on accounting
estimates, the following items have the risk of having a material impact on the non-consolidated
financial statements for the following fiscal year.
(Recording of revenue regarding transactions recognizing revenue over a certain period of time in thewater treatment engineering business unit)(1) Amount recorded in the non-consolidated financial statements for the fiscal year under review
In the non-consolidated statement of income, the Company recorded ¥46,228 million ofrevenue on performance obligations satisfied over a certain period of time in the water
treatment engineering business unit for the fiscal year under review. The amount includes
various water treatment services contracts that mainly include maintenance and operational
support and construction contracts using the cost recovery method, and the revenue excludingthese is ¥26,417 million.

- 24 -

(2) Information on the details of significant accounting estimates for identified items
The details are the same as those described in “(2) Information on the details of significant
accounting estimates for identified items” in “2. Notes to accounting estimates” of Notes toConsolidated Financial Statements.
3. Notes to the non-consolidated balance sheet(1) Accumulated depreciation for property, plant and equipment(2) Contingent liabilities¥22,029 million

Guarantee obligation for bank loans of employees
Joint and several suretyship for bank loans
Organo (Suzhou) Water Treatment Co., Ltd.
Organo Technology Co., Ltd.
Performance bonds
Organo (Asia) Sdn. Bhd.
Organo (Suzhou) Water Treatment Co., Ltd.
Organo Technology Co., Ltd.
Organo (Vietnam) Co., Ltd.

¥0 million¥2,545 million¥3,197 million¥816 million¥3,141 million¥23 million¥464 million(3) Monetary claims and obligations to subsidiaries and associates
Short-term monetary claims
Short-term monetary obligations
Long-term monetary obligations¥7,407 million¥6,539 million¥77 million

4. Notes to the non-consolidated statement of income
Total transactions with subsidiaries and associates
Operating transactions (income)Operating transactions (payment)
Transactions other than operating transactions (income)Transactions other than operating transactions (payment)¥6,467 million¥19,649 million¥2,075 million¥8 million

5. Notes to the non-consolidated statement of changes in equity
Number of treasury sharesClass of shares
Common shares

Number of shares at
beginning of period(Thousands of shares)

Increase in number ofshares during theperiod(Thousands of shares)

135

353

Decrease in number ofshares during theperiod(Thousands of shares)17

Number of shares at
end of period(Thousands of shares)
470

Notes: 1. The Company implemented a share split on October 1, 2022, splitting one common share into four.
2. The increase of 353 thousand shares in the number of treasury shares reflects the increase of 352 thousand shares
due to the share split and the increase of 0 thousand shares due to the purchase of shares less than one unit.
3. The decrease of 17 thousand shares in the number of treasury shares reflects the decrease of 17 thousand shares
due to the delivery of the Company’s share held by the Officer Share Delivery Trust and the decrease of 0
thousand shares due to the sale of shares less than one unit.
4. The number of treasury shares at the end of the fiscal year under review includes 133 thousand shares of theCompany held by the Officer Share Delivery Trust.

- 25 -

6. Note to tax-effect accounting
Breakdown of deferred tax assets and liabilities by main cause(Millions of yen)
Deferred tax assets
Provision for bonuses
Enterprise tax payable
Provision for retirement benefits
Provision for product warranties
Provision for loss on construction contracts
Provision for share awards for directors (and other officers)
Testing and research facilities
Allowance for doubtful accounts
Loss on valuation of right to use facilities
Loss on valuation of shares of subsidiaries and associates
Other
Subtotal deferred tax assets
Valuation allowance
Total deferred tax assets
Deferred tax liabilities
Valuation difference on available-for-sale securities
Prepaid pension costs
Reserve for tax purpose reduction entry of non-current assets
Reserve for special account for tax purpose reduction entry of noncurrent assets

341
126
1,659
141
164
32
63
58
59
308
450
3,406
(364)
3,041
(206)
(141)
(218)
(7)
(573)
2,468

Total deferred tax liabilities
Net deferred tax assets- 26 -

7. Note to transactions with related parties
Subsidiaries
Name of thecompany

Location

ORGANO
PLANT
Bunkyo-ku,
SERVICETokyo
CORPORATIONORGANOECO TECH Koto-ku,
CORPORAT- Tokyo
ION

Organo(Suzhou)
Water
Treatment
Co., Ltd.

OrganoTechnology
Co., Ltd.

Notes

Jiangsu,
China

Share capital¥93 million¥50 million

US$5,000thousand

Hsinchu City,
NT$30,000
Taiwan,thousand
R.O.C.

Voting rights
ownership
ratio

Relationshipwith relatedparties

Details oftransaction

Transaction
amount(Millions of
yen)

Item

Balance at
end of period(Millions ofyen)

Directownership
100.0%

Installationof various
types ofwater
treatment
systems andordering ofsupervision
services
Dispatchingof officers

Installationof various
types ofwater
treatment
systems andordering ofsupervision
services

6,623

Accounts
payable trade

1,480

Directownership
100.0%

Ordering ofvarious types
of wastewater
treatment
systems andrelatedconstruction
Dispatchingof officers

Ordering ofvarious types
of wastewater
treatment
systems andrelatedconstruction

6,654

Accounts
payable trade

3,300

Directownership
100.0%

Sales ofvarious types
of watertreatment
Debt
systems andguarantees
relatedchemicals
Dispatchingof officers

Directownership
100.0%

Sales ofvarious types
Sales ofof watervarious types treatmentof watersystems andtreatment
relatedsystems and chemicals
relatedCollection ofchemicals
loans
Dispatchingreceivableof officers
Debt
guarantees

5,687

3,079

-

-

Accounts
receivable trade

3,691

Contract
assets

2,317

2,069

Short-term
loans
receivable

-

3,220

-

-

1. Conditions of transaction and policies for deciding conditions of transaction are determined by referencing
general trading conditions in consideration of market prices, etc.
2. Interest rates on loans of funds are reasonably determined taking interest rates on the market into account.
3. The Company provides debt guarantees on their loans from financial institutions. The Company does not receive
guarantee fees.

8. Notes to revenue recognition
Basic information to understand revenue from contracts with customers
The details are the same as those described in “(2) Basic information to understand revenue fromcontracts with customers” in “6. Notes to revenue recognition” of Notes to Consolidated Financial
Statements.

- 27 -

9. Notes to per share information
Net assets per share
Basic earnings per shareNotes¥1,499.80¥187.36

1. The Company implemented a share split on October 1, 2022, splitting one common share into four.
Basic earnings per share have been calculated as if the aforementioned share split had been carried out at the
beginning of the fiscal year under review.
2. When calculating net assets per share, common shares of the Company held by the Officer Share Delivery Trust
have been included in treasury shares excluded from the total number of issued shares at the end of the period(133 thousand shares at the end of the fiscal year under review).
3. When calculating basic earnings per share, common shares of the Company held by the Officer Share Delivery
Trust have been included in treasury shares excluded from the calculation of the average number of shares during
the period (158 thousand shares in the fiscal year under review).

10. Significant subsequent events
Not applicable.
Figures are rounded down to the nearest unit.

- 28 -