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 Convocation
the 77th 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 convocation notice of the 77th Ordinary General Meeting of Shareholders of
ORGANO CORPORATION to be held on Wednesday, June 29, 2022.
Please confirm proposals of the General Meeting of Shareholders and business outline of the fiscal year
2021 presented in the documents.
June 2022
Representative Director and President
Masaki Uchikura
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-Measures to Prevent the Spread of Novel Coronavirus Disease (COVID-19)
at the 77th Ordinary General Meeting of Shareholders of the Company
The following measures will be implemented at this meeting to prevent the infection and spread of the
new coronavirus (COVID-19). We would appreciate your understanding and cooperation.
Measures by our Company
 There will be no souvenirs or drinks available this year.
 We will not hold shareholder briefing sessions after the General Meeting of Shareholders.
 There will be no waiting rooms or rest areas for shareholders.
 The number of seats available at the meeting will be limited to increase the spaces between
shareholders’ seats.
 The proceedings of the meeting will be conducted smoothly and efficiently and will be short.
 Officers and management staff attending the meeting will check their physical condition, including
temperature, and wear masks.
 The matters to be reported and other materials on the day of the meeting will be posted on the
Company’s website (https://www.organo.co.jp/) at a later date.
Request to shareholders
 From the perspective of preventing the spread of COVID-19, please consider exercising your voting
rights in writing or via the Internet, etc. in advance, and decide on attending the meeting on the day of
the General Meeting of Shareholders based on your health condition and the infection status as of theGeneral Meeting of Shareholders. Please refer to pages 4 and 5 of this Notice for details on how to
exercise your voting rights.
 All shareholders attending the meeting are asked to bring and wear masks and use disinfectants
provided at the meeting venue.
 We will measure your temperature near the reception desk. Shareholders who are identified as having afever or who appear to be unwell may be denied entry or may be asked to leave the venue.
 If you do not cooperate in wearing a mask, using disinfectants, and having your temperature measured,etc., we may refuse entry.
 In case the number of visitors exceeds the number of seats available, we may have to restrict admissionin order to ensure the safety of shareholders.
The above measures are subject to change depending on the situation of the spread of infection by the dayof the General Meeting of Shareholders or announcements by the government. Any changes will beannounced on the Company’s website.
The Company’s website (https://www.organo.co.jp/)-2-

(Securities Code: 6368)
June 8, 2022
To our shareholders:
Masaki Uchikura,
Representative Director and President

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

Notice of the 77th Ordinary General Meeting of Shareholders
We are pleased to announce the 77th Ordinary General Meeting of Shareholders of ORGANOCORPORATION (the “Company”), which will be held as indicated below.
This General Meeting of Shareholders will be held after appropriately implementing measures to prevent
COVID-19. However, from the perspective of preventing the spread of infection, please consider exercising
your voting rights in writing or via the Internet, etc. in advance, and decide on attending the meeting on the
day of the General Meeting of Shareholders based on your health condition and the infection status as of theGeneral Meeting of Shareholders.
Upon exercising your voting rights in writing or via the Internet, etc., please review the attached
Reference Documents for General Meeting of Shareholders, and exercise your voting rights by 5:00
p.m. on Tuesday, June 28, 2022 (JST).
1. Date and Time:

Wednesday, June 29, 2022 at 10:00 a.m. (JST) (Reception is scheduled to beopen 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 77th
fiscal year (from April 1, 2021 to March 31, 2022), and the results of audits of
the Consolidated Financial Statements by the Independent Auditor and the Audit
and Supervisory Board
2. The Non-consolidated Financial Statements for the 77th fiscal year (from April
1, 2021 to March 31, 2022)
Matters to be resolved:
Proposal No. 1 Appropriation of Surplus
Proposal No. 2 Amendments to the Articles of Incorporation
Proposal No. 3 Election of Nine Directors
Proposal No. 4 Election of Two Substitute Audit and Supervisory Board Members
4. Other Matters Relating to General Meetings of Shareholders
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.

-3-

Guide to Exercising Voting Rights
Attending the General Meeting of Shareholders
Please submit the enclosed voting form to the receptionist at the meeting.
Date and time of the Meeting: Wednesday, June 29, 2022, 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 enclosed voting form, and then returnthe form by postal mail so that your vote is received by the deadline.
Deadline: To arrive by no later than 5:00 p.m. Tuesday, June 28, 2022
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. Tuesday, June 28, 2022
Please refer to page 5 for details.
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.
Disclosure on the Internet


The following matters that are made available on the Company’s website under laws and regulations
and the Company’s Articles of Incorporation are not available in this notice. The matters posted on the
Company’s website are included in business reports, consolidated financial statements and nonconsolidated financial statements audited by the Audit and Supervisory 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 for the business
report(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

Any corrections in the Reference Documents for General Meeting of Shareholders, Business Report,
Consolidated Financial Statements, or Non-consolidated Financial Statements will be posted on the
Company’s website.
The Company’s website (https://www.organo.co.jp/)-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
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 77th
fiscal year as follows.
As a result, the annual dividend for the fiscal year under review including the interim dividend of ¥72
will amount to ¥160 per share.
(1) Type of dividend property
Cash(2) Allotment of dividend property and their total amount¥88 per common share of the Company
Total dividend amount is ¥1,012,513,040(3) Effective date of dividends of surplus
June 30, 2022
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:¥5,000,000,000-6-Proposal No. 2

Amendments to the Articles of Incorporation

1. Reasons for the proposal
Since the revised provisions provided for in the proviso to Article 1 of the Supplementary Provisions of
the Act Partially Amending the Companies Act (Act No. 70 of 2019) are to be enforced on September
1, 2022, the Company proposes to make the following changes as it will introduce a system forproviding informational materials for the general meeting of shareholders in electronic format.
(1) As the Company shall be obligated to stipulate in the Articles of Incorporation that it will takemeasures for providing information that constitutes the content of reference documents for the general
meeting of shareholders, etc. in electronic format, Article 16 (Measures, etc. for Providing Information
in Electronic Format), paragraph 1 in the proposed amendment shall be newly established.
(2) To provide for being able to limit the scope of the items to be stated in the paper-based documents to
be delivered to shareholders who requested the delivery of paper-based documents to the scope
designated by the Ministry of Justice Order among items for which measures are taken for providing
information that constitutes the content of reference documents for the general meeting of shareholders,etc. in electronic format, Article 16 (Measures, etc. for Providing Information in Electronic Format),paragraph 2 in the proposed amendment shall be newly established.
(3) As the provisions under Article 16 (Internet Disclosure and Deemed Provision of Reference
Documents of the General Meeting of Shareholders, Etc.) of the current Articles of Incorporation shallno longer be required with the adoption of the system for providing informational materials for thegeneral meeting of shareholders in electronic format, these provisions shall be deleted.
(4) Supplementary provisions will be established to stipulate when the aforementioned newly establishedand deleted provisions will take effect. These supplementary provisions shall be deleted after the
specified date elapses.
2. Details of the amendment
The details of the amendments are as follows.
(Underlines indicate amended sections)
Proposed Amendments

Current Articles of Incorporation
Article 16. (Internet Disclosure and Deemed
Provision of Reference Documents of
the General Meeting of Shareholders,
Etc.)
When the Company convenes a General Meeting of
Shareholders, if it discloses information that is to bestated or indicated in the reference documents of theGeneral Meeting of Shareholders, business report,
financial statements and/or consolidated financial
statements through the internet in accordance with theprovisions prescribed by the Ordinance of the
Ministry of Justice, it may be deemed that theCompany has provided this information toshareholders.

(Deleted)(Newly established)

Article 16. (Measures, etc. for Providing
Information in Electronic Format)
1. When the Company convenes a general meetingof shareholders, it shall take measures forproviding information that constitutes the content
of reference documents for the general meeting ofshareholders, etc. in electronic format.

-7-

Current Articles of Incorporation

Proposed Amendments
2. Among items for which the measures forproviding information in electronic format will betaken, the Company is not required to state all orsome of those items designated by the Ministry ofJustice Order from statements in the paper-based
documents to be delivered to shareholders whorequested the delivery of paper-based documents
by the record date of voting rights.

(Newly established)

Supplementary Provisions
Article 1. (Transitional Measures for Providing
Informational Materials for the General
Meeting of Shareholders in Electronic
Format)1. The deletion of Article 16 (Internet Disclosure
and Deemed Provision of Reference Documentsof the General Meeting of Shareholders, Etc.) of
the Articles of Incorporation and the new
establishment of Article 16 (Measures, etc. for
Providing Information in Electronic Format) shallcome into effect from September 1, 2022.
2. Notwithstanding the provisions of the preceding
paragraph, Article 16 of the Articles ofIncorporation (Internet Disclosure and Deemed
Provision of Reference Documents for the
General Meeting of Shareholders, Etc.) shallremain effective regarding any general meeting ofshareholders held on a date within six months
from September 1, 2022.
3. The provisions in this Article shall be deleted on
the date when six months have elapsed from
September 1, 2022, or three months have elapsed
from the date of the general meeting ofshareholders in the preceding paragraph,
whichever is later.

-8-

Proposal No. 3

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 three Outside
Directors.
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

Position in the Company

1

Masaki Uchikura

Reelection

Director and President(Representative Director)
President and Executive
Officer2

Masayuki Yamada

Reelection

Senior Managing Directorand Executive Officer
Managing Director andExecutive Officer
President of Industrial Plant
Business, and Senior General
Manager of Electronics
DivisionManaging Director andExecutive Officer
Senior General Manager of
R&D Center, R&D andEngineering
Director and Executive
OfficerPresident of Corporate
Management and Planning
and General Manager ofCorporate Strategy andPlanning Dept.

Attendance at Boardof Directors meetings
100%(15/15)100%(15/15)100%(15/15)

3

Yasutoshi Nakayama

Reelection

4

Nobuyoshi Suda

Reelection

5

Tetsushi Honda

Reelection

6

Mitsutaka Sugata

New election–

7

Motoo Nagai

Reelection
OutsideOutside Director

100%(15/15)

8

Keikou Terui

Reelection
OutsideOutside Director

100%(15/15)9Kenji Hirai

Reelection
OutsideOutside Director

100%(15/15)100%(15/15)100%(12/12)–

Tetsushi Honda was elected at the 76th Ordinary General Meeting of Shareholders, which was held on June 29,
2021, and he assumed office on that day. Accordingly, the attendance figure stated above for the Director indicates
his attendance at the meetings of the Board of Directors that were held on and after June 29, 2021.

-9-

Candidate
No.

Name (Date of birth)

Career summary, and position and responsibility in the
Company
Apr. 1982

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

June 2010

Associate Director, General Manager ofLegal & Patents

June 2011

Director, General Manager of Legal &Patents

June 2015

President (Representative Director) of Tosoh
Specialty Materials Corporation (retired inJune 2017)

Number of theCompany’s
shares owned

Chairman of the Board of Tosoh SMD, Inc.
(retired in June 2017)Managing Director, President of Specialty
Group and Senior General Manager ofAdvanced Materials Division of Tosoh
Corporation

Reelection
Masaki Uchikura(August 6, 1954)
Tenure as Director
5 yearsMar. 2016

Chairman of the Board of Tosoh America,
Inc. (retired in June 2017)

June 2016

Director, Executive Vice President, Presidentof Specialty Group and Senior General
Manager of Advanced Materials Division of
Tosoh Corporation (retired in June 2017)

June 2017

Senior Managing Director and Executive
Officer, President of Performance Products
Business of the Company

14,000Chairman of the Board (Representative
Director of Organo Food Tech Corporation(retired in June 2019)1

Chairman of the Board (Representative
Director) of Hostec (retired in June 2019)
June 2019

Director and President (Representative
Director) President and Executive Officer of
the Company
Current position[Significant concurrent positions outside the Company]
None[Reasons for nomination as candidate for Director]
Masaki Uchikura had been engaged in legal and patent fields for many years at Tosoh Corporation. He
contributed to enhancement of corporate governance and expanded the advanced material business as a
Director of Tosoh Corporation, utilizing his expertise in functional materials. After being appointed as a
Director of the Company, as President of the Performance Products Business he has plotted out the growthstrategy of the business division. After being appointed as the Director and President of the Company, he has
been demonstrating his leadership in formulating and promoting long-term management plans and formulatingand executing strategies for the overall Group.
In addition to high ethical standards, and abilities to accurately make decisions and understand issues, which
are essential for a Director, he also possesses the necessary experience and insight to promote sustainablegrowth and improvement of corporate value of the Group. Therefore, the Company nominates him as a
candidate for Director.
[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. 1985

2

Joined Toyo Soda Manufacturing Co., Ltd.
(currently Tosoh Corporation)
June 2007
President of Tosoh Bioscience, Inc.
President of Tosoh Bioscience LLC
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
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 in
Reelection
June 2019)
Masayuki Yamada
Director of Tosoh Bioscience LLC (retired inJune 2019)(January 7, 1959)
June 2016
Senior Vice President, Senior General
Tenure as Director
Manager of Bioscience Division of Tosoh
3 years
Corporation
June 2017
Director, Executive Vice President, Presidentof Specialty Group and Senior General
Manager of Bioscience Division
Chairman 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)
Director of the Company
June 2021
Senior Managing Director and Executive
OfficerCurrent position(Responsibilities)
In charge of Global Management and Planning, Legal andPatent Dept., Trade Control Office, Environment, Safety andQuality Assurance Dept., and Purchasing and Logistics Dept.
[Significant concurrent positions outside the Company]

Number of theCompany’s
shares owned

1,400

None
[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. After
assuming the position of Director of the Company, he has been in charge of the Global Management andPlanning Dept., Environment, Safety and Quality Assurance Dept., Purchasing and Logistics Dept., etc., andhas been contributing to company-wide safety and quality improvement, cost reduction, etc. while capitalizing
on global experience.
In addition to high ethical standards, and abilities to accurately make decisions and understand issues, which
are essential for a Director, he also possesses the necessary experience and insight to promote sustainablegrowth and improvement of corporate value of the Group. Therefore, the Company nominates him as a
candidate for Director.
[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)

Reelection
Yasutoshi Nakayama(July 30, 1961)

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.

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

June 2018

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

Tenure as Director
4 years3

Number of theCompany’s
shares owned

6,400

Current position[Significant concurrent positions outside the Company]
None[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
are essential for a Director, he also possesses the necessary experience and insight to promote sustainablegrowth and improvement of corporate value of the Group. Therefore, the Company nominates him as a
candidate for Director.
[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)

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

Reelection
Nobuyoshi Suda
(November 19, 1963)

Number of theCompany’s
shares owned

4,800

Chairman of Organo (Vietnam) Co., Ltd.
(retired in June 2018)

Tenure as Director
3 years
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, andSenior General Manager of R&D Center,
R&D and Engineering

4

Current position[Significant concurrent positions outside the Company]
None[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 Corporate Strategy, Planning and Management Division. Currently, as a Director in
charge of the overall technology development department, he has promoted the improvement of technicalcapabilities and the creation of new technologies and products, and as the Senior General Manager of R&D
Center, he has promoted the planning and execution of strategic technology development.
In addition to high ethical standards, and abilities to accurately make decisions and understand issues, which
are essential for a Director, he also possesses the necessary experience and insight to promote sustainablegrowth and improvement of corporate value of the Group. Therefore, the Company nominates him as a
candidate for Director.
[Special interest between candidate and the Company]
There is no special interest between the candidate and the Company.

- 13 -

Candidate
No.

5Name (Date of birth)

Career 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

Reelection

June 2018

Tetsushi Honda(May 1, 1963)

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

June 2019

Tenure as Director
1 yearExecutive Officer, Deputy President ofIndustrial Plant Business, and General
Manager of Power Plant Division

June 2020

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.

Number of theCompany’s
shares owned

4,400

Current position(Responsibilities)
In charge of Internal Auditing Office, Secretary Office, andBranches[Significant concurrent positions outside the Company]
None[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 assuming the position of 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
are essential for a Director, he also possesses the necessary experience and insight to promote sustainablegrowth and improvement of corporate value of the Group. Therefore, the Company nominates him as a
candidate for Director.
[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
Mitsutaka Sugata(May 28, 1962)

6

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

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

June 2011

General Manager of Amines, Organic
Chemicals Division

June 2016

Director of Taiyo Vinyl Corporation (retired
in June 2018)

June 2018

Manager of Planning and Development,
Organic Chemicals Division of Tosoh
Corporation

June 2019

Group Leader of Raw Materials & FuelOperations, Purchasing & Logistics

Mar. 2022

Vice President, General Manager ofPurchasing & Logistics and Group Leader of
Raw Materials & Fuel Operations

Number of theCompany’s
shares owned

100

Current position[Significant concurrent positions outside the Company]
Vice President of Tosoh Corporation[Reasons for nomination as candidate for Director]
Mitsutaka Sugata has been involved in the organic chemicals field for many years at Tosoh Corporation, andsince becoming a Vice President, he has led the Purchasing and Logistics Dept. and the raw materials and fueloperations field, contributing to the expansion of the company’s business and profits.
In addition to high ethical standards, and abilities to accurately make decisions and understand issues, which
are essential for a Director, he also possesses the necessary experience and insight to promote sustainablegrowth and improvement of corporate value of the Group. Therefore, the Company nominates him as a new
candidate for Director.
[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)

Reelection
OutsideIndependent
Motoo Nagai(March 4, 1954)

Career summary, and position and responsibility in the
Company
Apr. 1977

Joined The Industrial Bank of Japan, Limited

Apr. 2005

Executive Officer of Mizuho Corporate
Bank, Ltd. (currently Mizuho Bank, Ltd.)

Apr. 2007

Managing Executive Officer (retired in April
2011)

Apr. 2011

Deputy President and Executive Officer ofMizuho Trust & Banking Co., Ltd.

June 2011

Director and Deputy President(Representative Director), Deputy President
and Executive Officer

Apr. 2014

Administrative Officer (retired in June 2014)

June 2014

Outside Statutory Auditor (Full-time) of
Nissan Motor Co., Ltd.

Number of theCompany’s
shares owned

2,277

Outside Audit and Supervisory Board
Member of the Company

Tenure as Outside Director
7 years
June 2015

Outside Audit & Supervisory Board Memberof Nisshin Seifun Group Inc.

June 2019

Outside Director of Nissan Motor Co., Ltd.

Outside Director of the Company
Outside Director of Nisshin Seifun GroupInc.
7

Current position[Significant concurrent positions outside the Company]
Outside Director of Nissan Motor Co., Ltd.
Outside Director of Nisshin Seifun Group Inc.
Reasons for nomination as candidate for Outside Director and outline of the expected role
Motoo Nagai had worked for financial institutions for many years and had been engaged in company
management as a Director and Deputy President of Mizuho Trust & Banking Co., Ltd. In addition, he hasserved as an outside director of other listed companies, deepening his knowledge on multidimensional
corporate management. After being appointed as an Outside Audit and Supervisory Board Member and Outside
Director of the Company, he has been giving us useful opinions and advice on the management of theCompany, especially enhancement of governance, utilizing his abundant knowledge of various kinds. As the
Chairman of the Nomination and Remuneration Advisory Committee, he has also been leading thedeliberations on matters related to the selection of candidates for Directors and the compensation of Directors.
After being elected, the Company expects that he will continue to fulfill the above roles and, as a member of
the Special Committee, contribute to the deliberation of matters relating to important transactions between the
Company’s parent company group and the Company.
In addition to high ethical standards, and abilities to accurately make decisions and understand issues, which
are essential for a Director, he also possesses the necessary experience and insight to promote sustainablegrowth and improvement of corporate value of the Group. Therefore, judging him as being capable ofappropriately performing his duties as an Outside Director, the Company nominates him as a candidate for
Outside Director.
[Special interest between candidate and the Company]
There is no special interest between the candidate and the Company.

- 16 -

Candidate
No.

Name (Date of birth)

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
Reelection
OutsideIndependent

President of Japan Utility Telemetering
Association

Oct. 2013

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

Keikou Terui(July 27, 1953)

June 2014

Director of Union of Japanese Scientists andEngineers

Tenure as Outside Director
6 years

Number of theCompany’s
shares owned

3,800

Outside Director of Ube Industries, Ltd.
(current UBE Corporation)
Mar. 2016

Outside Director of Bridgestone Corporation

June 2016

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

8Aug. 2018

Director of Japan Industrial Safety
Competency Center

June 2020

Executive Director of Japan Chemical
Innovation and Inspection Institute
Current position[Significant concurrent positions outside the Company]
President of Japan Utility Telemetering Association
Executive Director of Japan Chemical Innovation and Inspection InstituteOutside Director of UBE Corporation
Outside Director of Bridgestone Corporation
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 managementof the Company, utilizing his abundant knowledge of various kinds. As a member of the Nomination andRemuneration Advisory Committee, he has also been contributing to deliberations on matters related to theselection of candidates for Directors and the compensation of Directors. After being elected, the Company
expects that he will continue to fulfill the above roles and, as the Chair of the Special Committee, lead thedeliberation of matters relating to important transactions between the Company’s parent company group andthe Company.
In addition to high ethical standards, and abilities to accurately make decisions and understand issues, which
are essential for a Director, he also possesses the necessary experience and insight to promote sustainablegrowth and improvement of corporate value of the Group. Therefore, judging him as being capable ofappropriately performing his duties as an Outside Director, the Company nominates him as a candidate for
Outside Director.
[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. 1981

Joined Sagami Chemical Research Center(currently Sagami Chemical ResearchInstitute)Apr. 1990

Senior Research Fellow

Reelection
OutsideIndependent

Apr. 1998

Senior Fellow

Jan. 2002

Vice President

Apr. 2004

Vice Chairman of the Board, President

Kenji Hirai(March 20, 1953)

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

Tenure as Outside Director
3 years

Number of theCompany’s
shares owned

June 2019

Outside Director of the Company

June 2021

Research Advisor of Sagami Chemical
Research Institute

1,800

Current position[Significant concurrent positions outside the Company]
None
Reasons for nomination as candidate for Outside Director and outline of the expected role
9

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 theCompany, he has been giving us useful opinions and advice on the management of the Company, especially on
research and technological development, utilizing his abundant knowledge of various kinds. As a member of
the Nomination and Remuneration Advisory Committee, he has also been contributing to deliberations on
matters related to the selection of candidates for Directors and the compensation of Directors. After being
elected, the Company expects that he will continue to fulfill the above roles and, as a member of the Special
Committee, contribute to the deliberation of matters relating to important transactions between the Company’s
parent company group and the Company.
In addition to high ethical standards, and abilities to accurately make decisions and understand issues, which
are essential for a Director, he also possesses the necessary experience and insight to promote sustainablegrowth and improvement of corporate value of the Group. Therefore, judging him as being capable ofappropriately performing his duties as an Outside Director, the Company nominates him as a candidate for
Outside Director.
[Special interest between candidate and the Company]
There is no special interest between the candidate and the Company. Kenji Hirai is the research advisor of
Sagami Chemical Research Institute. The Company and the aforesaid institute are implementing joint research.
The amount of expenditure paid by the Company to the institute in the 77th fiscal year is ¥10 million. In
addition, the Company has made donations to the institute. The amount paid in the fiscal year ended March 31,
2022 is ¥300,000, which is insignificant.

Notes: 1.

2.

3.

4.
5.
6.

The positions and responsibilities held by Masaki Uchikura in the past ten years at the Company’s parent
company Tosoh Corporation and its subsidiaries (Tosoh Speciality Materials Corporation, Tosoh SMD, Inc., andTosoh America, Inc.) are presented in the above “Career summary, and position and responsibility in the
Company.”
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.”
The positions and responsibilities held by Mitsutaka Sugata presently or in the past ten years at the Company’s
parent company Tosoh Corporation and its subsidiaries (Taiyo Vinyl Corporation) are presented in the above“Career summary, and position and responsibility in the Company.”
Motoo Nagai, Keikou Terui and Kenji Hirai are candidates for Outside Director.
Motoo Nagai assumed office as an Audit and Supervisory Board Member for a year before assuming office as
Outside Director of the Company.
Currently, the Company has entered into respective agreements with Motoo Nagai, Keikou Terui, and Kenji
Hirai 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 gross- 18 -

negligence, 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 Masaki Uchikura and Mitsutaka Sugata are elected as Directors, the Company plans to enter
into the same agreement with each of them.
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.
8. Nissan Motor Co., Ltd., at which Motoo Nagai currently serves as an Outside Director, announced the issue ofserious misconduct by management including the chairman of the said company in November 2018. In
connection with the case, Nissan Motor Co., Ltd. issued an amendment report to correct the contents ofremuneration for directors (and other officers), etc. disclosed in the securities report for each fiscal year from thefiscal year ended March 31, 2006 to the fiscal year ended March 31, 2018, and submitted it to the Kanto Finance
Bureau on May 14, 2019. The Company was ordered by the Financial Services Agency to pay a surcharge on
February 27, 2020 in relation to its securities reports and other disclosure documents for the period from thefiscal year ended March 31, 2015 to the fiscal year ended March 31, 2018. Furthermore, the company was finedby the Tokyo District Court on March 3, 2022 for violating the Financial Instruments and Exchange Act inconnection with the case. In the United States, the Company also entered into an administrative settlementagreement with the United States Securities and Exchange Commission and paid a surcharge with respect tomaterial misstatements regarding remuneration for directors (and other officers) in the Company’s securities
reports. Motoo Nagai had been unaware of the said issue before such issue was discovered, but he had been
providing recommendations from a legal compliance perspective at the said company’s board of directors
meetings before this issue. In addition, after becoming aware of the issue, Motoo Nagai has appropriately
fulfilled his responsibilities by giving directions regarding comprehensive investigations, recurrence-prevention
measures, etc.
9. Nissan Motor Co., Ltd., at which Motoo Nagai currently serves as an Outside Director, received process
improvement orders from the Ministry of Land, Infrastructure, Transport and Tourism in March 2018 related tothe said company’s non-conformities in the final vehicle inspection processes at plants in Japan. Also, in
December 2018, the said company received process improvement directives from the said Ministry related to thesame non-conformities discovered in the said company’s self-inspection. Motoo Nagai had been unaware of thesaid issue before the facts that were the cause of the said process improvement orders and directives 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, Motoo Nagai hasappropriately fulfilled his responsibilities by giving directions regarding comprehensive investigations,recurrence-prevention measures, etc.
10. UBE Corporation, at which Keikou Terui currently serves as Outside Director, announced in February 2018 thatit had not carried out product tests on certain low-density polyethylene products that were meant to be carriedout 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 of improprieties inquality in June 2018. Further the said company announced, in October 2018, two cases of improprieties inquality 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 to light, but he had
been providing recommendations from a legal compliance perspective at the said company’s board of directors
meetings before this issue. In addition, after becoming aware of the issue, Keikou Terui has appropriately
fulfilled his responsibilities by requesting an investigation of the cause of the improprieties and thoroughenforcement of compliance structure, etc.
11. The Company has submitted notification to the Tokyo Stock Exchange that Motoo Nagai, Keikou Terui, andKenji Hirai have been designated as independent officers as provided for by the aforementioned exchange. For
the Company’s “Criteria for Independence of Outside Officers,” please refer to page 24.

- 19 -

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. Tomoaki Itou will be a
substitute for the Audit and Supervisory Board Member, Masahiko Toyoda, and Hirohito Kodama 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)Tomoaki Itou
(March 30, 1953)

Career summary and position in the Company
Apr. 1976

Joined the Company

June 2005

General Manager of Power Plant Division

Apr. 2008

Executive Officer, General Manager ofPower Plant Division

June 2011

Director and Executive Officer

June 2012Managing Director and Executive Officer

Apr. 2015

Managing Director and Executive Officer,
General Manager of Water Infrastructure andEnergyJune 2017

Advisor (retired in June 2018)

Number of theCompany’s
shares owned

956[Significant concurrent positions outside the Company]
1

None[Reasons for nomination as candidate for Substitute Audit and Supervisory Board Member]
Tomoaki Itou has contributed to the promotion and development of technology in the Power Plant Division,
one of the core businesses of the Company. After being appointed as a Director of the Company, he has
managed the Public Water Treatment Division, and contributed to expansion of the business and stable earnings
by preparing and implementing appropriate and well-balanced management measures with his broad
perspective and experience.
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.
[Special interest between candidate and the Company]
There is no special interest between the candidate and the Company.

- 20 -

Candidate
No.

Name (Date of birth)

Hirohito Kodama(March 22, 1959)

Career summary and position in the Company
Apr. 1981

Joined Kagome Co., Ltd.

June 2006

Executive Officer, General Manager,
Corporate Planning Department of Kagome
Co., Ltd.

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

Number of theCompany’s
shares owned

0

Director & Managing Executive Officer
President & Representative Director of
Kagome Axis Co., Ltd. (Representative
Director) (retired in October 2017)

Mar. 20182

Outside Audit & Supervisory Board Memberof Dynapac Co., Ltd.
Director of Kagome Co., Ltd. (Full-time
Audit and Supervisory Committee Member)Mar. 2020

Outside Director of Dynapac Co., Ltd. (Audit
and Supervisory Committee Member)
Current position[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)[Reasons for nomination as candidate for Substitute 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.
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 Substitute Outside Audit and Supervisory Board Member.
[Special interest between candidate and the Company]
There is no special interest between the candidate and the Company.
Notes: 1.
2.

3.

Hirohito Kodama 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 Tomoaki Itou or Hirohito Kodama is appointed,
the Company 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 Tomoaki Itou or Hirohito Kodama is appointed, he will become the insured under the- 21 -

4.

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.
If the number of Outside Audit and Supervisory Board Members does not satisfy the number prescribed by laws
and regulations and Hirohito Kodama is appointed, the Company will designate him 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 refer to page 24.

- 22 -

(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
Management /NameManagement

Legal affairs
Finance/Accounting and risk
management

Strategy
Masaki Uchikura
Masayuki
YamadaYasutoshi

Sales andmarketing

◎

◎

◎

◎

◎

◎

◎

Tetsushi Honda

◎

◎

◎

Mitsutaka Sugata

◎

◎

◎

(Outside)
Keikou Terui(Outside)
Kenji Hirai(Outside)
Notes:

◎

◎

◎

◎

◎

◎

◎

resource
strategy◎

Nobuyoshi Suda

Motoo Nagai

Human
Technology◎◎

Nakayama

Global

◎

◎
◎
◎

◎

◎

◎

◎

◎

◎

◎

◎

◎

1.

Among the skills possessed by each director candidate, skills that can be expected to demonstrate theirexpertise and experience are marked with a “◎” mark.

2.

All director candidates are considered to possess ESG (environmental, social, governance) skills.

- 23 -

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).

- 24 -

(Attached Documents)

Business Report(From April 1, 2021 to March 31, 2022)
1. Status of the corporate group(1) Business progress and results
During the fiscal year ended March 31, 2022 (from April 1, 2021 to March 31, 2022), the global
economy was subject to mounting concerns of an economic slowdown despite a recovery trend
overall even amid effects of COVID-19, in part given that Russia’s military invasion of Ukraine
during the latter half of the fiscal year culminated in progressing inflation particularly when it
comes to energy and food prices, as well as adverse consequences of economic sanctions imposedon Russia.
The electronics industry, the Organo Group’s main market, remained active amid factors that
included successive instances of substantial semiconductor-related capital investment acrossdifferent nations, being undertaken amid moves to rebuild global supply chains in response to theshortage of semiconductor supply, geopolitical risk, and other such developments. On the other
hand, there were signs of turmoil in supply chains including logistics largely due to restrictions on
economic activities brought about by a shortage of raw materials supply and the spread of
COVID-19. Meanwhile, some customers, including those in the general industry field,
encountered adverse effects particularly in terms of schedules for equipment construction anddelivery, and manufacturing activity. However, the overall recovery trend has persisted. In
addition, the electric power/water supply and sewage fields remained strong centered on renewedfacilities demand in Japan and solutions projects.
Under these conditions, the Organo Group has been actively working to achieve more expansive
business development, which has involved focusing its efforts on drawing in orders and deliveries
involving major semiconductor-related projects in Japan, Taiwan, and China, while also gaining a
new, major semiconductor order in the United States. We have also been making progress toward
strengthening our delivery system which has involved establishing a subsidiary in the UnitedStates and setting up a global engineering center (GEC) in Vietnam, with the aim of addressing a
growing number of orders. We have also been engaging in initiatives that include expanding our
R&D Center to enhance our next-generation ultrapure water systems as well as new separationand purification technologies, and seeking to digitalize and streamline various operations such as
those involving engineering.
As a result, for fiscal year ended March 31, 2022, orders received increased by 43.5% year on
year to ¥135,698 million, net sales increased by 11.4% year on year to ¥112,069 million,
operating profit increased by 13.3% to ¥10,850 million, ordinary profit increased by 16.6% to¥11,545 million, profit attributable to owners of parent increased by 30.2% to ¥9,210 million, andour carry-over balance for order backlog as of March 31, 2022 was up 39.7% to ¥86,417 million.
Orders received, net sales and the respective profit figures surpassed levels of the initial plan andearnings forecasts across the board and achieved record highs. Ordinary profit was affected by theCompany having posted foreign exchange gains due to rapid depreciation of the yen heading
toward fiscal year-end, and profit attributable to owners of parent was affected by the Company
having posted extraordinary income from sale of real estate. In addition, we have secured a highbalance with respect to carry-over backorder, which will form the basis for sales from next fiscal
year onward, through orders received involving successive major projects in Japan and overseas.

- 25 -

(Millions of yen)

Category

Orders received
Carry-over backorder
Net sales
Operating profit
Operating profit ratio (%)
Ordinary profit
Profit attributable to owners ofparentReturn on equity (ROE) (%)

76th term
Fiscal year ended
March 31, 2021

77th term(Fiscal year under review)
Fiscal year ended March 31, 2022

Year-on-year

Actual-toforecast

94,563
61,871
100,638
9,579
9.5
9,900

Initial plan
100,000
58,871103,000
8,250
8.0
8,150

Actual result
135,698
86,417
112,069
10,8509.7
11,545

43.5%
39.7%
11.4%
13.3%
–
16.6%

35.7%
46.8%
8.8%
31.5%
–
41.7%

7,074

6,500

9,210

30.2%

41.7%

11.1

9.3

12.9

–

–

- 26 -

[Water Treatment Engineering Business Unit]

Net sales ratio

Orders received¥116,116 million (Up 52.3% year-on-year)

Net sales¥92,723 million (Up 12.5% year-on-year)

Operating profit¥9,087 million (Up 7.3% year-on-year)

82.7%

Major Business●Major Business and ProductsPlant Division
Pure and ultrapure waterproduction facilities
Industrial process water
treatment facilities
Wastewater treatment andrecovery facilities
Valuable material
recovery facilities
Production processingrelated facilities●Customers and Markets
Service Solutions
Division
Replacement ofexpendable items
MaintenanceOperational support
services
Renovation andreconditioning
Contract water treatment
Comprehensive
maintenance contracts

Electronics
industry
Semiconductors
Flat panel
display
Electronic parts

Electric power/
water supply
and sewage
Power plants
Water
purification
plantsSewagetreatment
plantsGeneralindustry
Pharmaceuticals,
cosmetics
Food andbeverage
Machinery andchemicals■Orders received
Orders received increased 52.3% year on year to ¥116,116 million. In the electronics field, which is theGroup’s main market, circumstances remained upbeat worldwide. This was a result of factors that include
our having gained orders for water treatment facilities for major semiconductor plants from our major
customers in Japan and Taiwan, our having expanded into more regions by drawing in orders from newcustomers against a backdrop of active capital investment in China for automotive semiconductors,
power semiconductors, memory and other products, and our having successfully landed orders for major
semiconductor projects in the United States. In addition, in the general industry field and the electric
power/water supply and sewage fields, firm levels of orders continued in the Japanese market forequipment modification and renewal and various maintenance services.
■Net sales
Net sales increased 12.5% year on year to ¥92,723 million. The increase in net sales centered on theelectronics field amid steady progress in work achieved overall, despite having encountered situations
involving procedural overhaul of some projects due to supply chain turmoil particularly in the form of ashortage of raw materials supply and logistical delays. In the general industry field, the Service Solutions
Division performed well particularly in Japan, despite a downturn in sales of major plants due to factorsthat include the COVID-19 pandemic having caused a decrease in large-scale investment andconcentration of resources in the electronics field. In the electric power/water supply and sewage fields,
net sales increased year on year, mainly due to the Company having posted sales for major water supply
and sewage-related projects for which orders were received up until the previous fiscal year.
■Operating profit
Operating profit increased 7.3% year on year to ¥9,087 million. The year-on-year increase in operating
profit is a result of the Company having secured higher earnings amid an upturn in sales in the electronics
field and the electric power/water supply and sewage fields, as well as profitability improvements
achieved in the general industry field, despite an increase in the plant projects to net sales ratio including
large semiconductor-related projects, and a slight decrease in the operating profit ratio largely brought
about by higher selling, general and administrative expenses centered on personnel expenses and othersuch costs.

- 27 -

- 28 -

[Performance Products Business Unit]

Net sales ratio

Orders received¥19,581 million (Up 6.8% year-on-year)

Net sales¥19,346 million (Up 6.2% year-on-year)

Operating profit¥1,763 million (Up 58.4% year-on-year)

17.3%

Major Business●Major Business and Products
Water Treatment Chemicals
Division
RO membrane protection
chemicals, Wastewater treatment
chemicals, Cooling water treatment
chemicals, Cleaning chemicals,
Boilers water treatment chemicals●Customers and Markets
Various manufacturing industries
Buildings and commercial facilities

Standard Water Treatment Equipment
and Filters Division
Pure and ultrapure water production
systems
Water purification filters●Customers and Markets
Medical institutions, research
institutions
Various manufacturing industries
Food and beverage, convenience
storesFood Products Division
Food ingredients
Food processing agents●Customers and Markets
Food factories, food processing
industry
Beverage manufacturing
Nursing care food, health food
manufacturing■Orders received/Net sales
Orders received increased 6.8% year on year to ¥19,581 million and net sales increased 6.2% year on
year to ¥19,346 million. In the Water Treatment Chemicals Division, sales for the electronics industry
were favorable. The Standard Water Treatment Equipment and Filters Division saw a recovery in sales
centered on small-scale pure water production equipment for medical institutions and research
institutions, which had slumped last year. We are also seeing an increase in sales including a solid start
to sales of the small-scale ultrapure water production equipment “Puric μ (mu).” Meanwhile, in the Food
Products Division, sales were about level with the previous fiscal year as recovery in sales of products
for the restaurant market were offset by lower sales to the household food products market.
■Operating profit
Operating profit increased 58.4% year on year to ¥1,763 million. Operating profit increased year on year
amid factors that include higher net sales in the Water Treatment Chemicals Division and the Standard
Water Treatment Equipment and Filters Division, higher sales involving relatively high-margin productcategories, and better profit margins due to cost improvement efforts and other such initiatives.

- 29 -

(2) Capital investment
The Organo Group’s total outlays for capital investment amounted to ¥3,387 million (including
intangible assets) during the fiscal year under review. The main ongoing capital investment during
the fiscal year under review was the construction of two new testing buildings at the Company’s
R&D Center.
(3) Financing
During the fiscal year ended March 31, 2022, the Company procured ¥6,000 million as long-termborrowings through financial institutions for use with respect to funding requirements of theGroup.
(4) Issues to be addressed
In the electronics industry field, which is listed as a priority business for the current consolidated
fiscal year, the Company has advanced the development of new customers in China, won largescale semiconductor project contracts in the United States, and also received orders for large-scale
projects from major customers in Japan and Taiwan, among others. The Company has beendeveloping its business against the backdrop of market conditions where high levels of investment
continue. In addition, the Company has proceeded with strengthening its research anddevelopment system, such as the expansion of a new experimental building in the development
center, digitalized engineering operations, reallocated resources across groups, and promoted
outsourcing, etc., to improve operational efficiency. The Company also strengthened its overseas
business structure through initiatives such as establishing a locally incorporated company in the
United States, reviewing the Indian business, and establishing a global engineering center in
Vietnam, etc., to promote the strengthening of the group-wide engineering system.
The Group has formulated a three-year medium-term management plan on a rolling basis every
year. In the current fiscal year, the Group has formulated a medium-term management plan forfiscal 2022–2024, which assumes the management direction of priority businesses, growth
regions, growth drivers, etc., established last fiscal year, and the framework of the business
infrastructure that supports such a management direction. It has done so while proceeding withdiscussions based on the direction of initiatives to realize social value and customer value, such as
the SDGs, and the risks that supply chain disruptions impose on business results against the
backdrop of a prolonged response to COVID-19 and expansion of geopolitical risks, as well as
market trends, such as investment trends in large-scale projects in Japan and overseas in theelectronics industry field.
In the new medium-term management plan, based on the active investment situation in theelectronics industry sector, the Group considers reliable order acceptance and delivery of largescale projects as the most important issues. The Group aims to build a competitive global value
chain by advancing its initiatives with priority themes, such as the improvement of productivity
through digitalization and higher efficiency in operations, the utilization and development of
global human resources, expansion of the delivery system by strengthening partnerships withdomestic and foreign partner companies, provision of new values through solutions services
utilizing data, and building business models. Management targets for fiscal 2024, which is the lastyear of the plan, are net sales of ¥140.0 billion, and operating profit of ¥14.0 billion, and the
Oregano Group aims to build a profit structure that can achieve an operating profit ratio andreturn on equity (ROE) of at least 10.0% consistently and continuously. Furthermore, in order toevaluate the status of progress in sustainably enhancing corporate value and improving
profitability, the Organo Group positions ROE and consolidated operating profit ratio as key
indicators.

- 30 -

Medium-term Management Plan 2022–2024
Key Business Fields / Electronics industry
Reliable orders and deliveries for large-scale projects [Japan, Taiwan, China, United States]
Building a competitive global value chain[Growth Regions]
China/Taiwan markets
Construction and maintenance of systems for research and development, solutions, and productionStrengthening expansion outside of the electronics industry in the Chinese market[Growth drivers]
Service solutions
Establishment of the foundation for digital solution services



Development of the global solution system and quality improvement

Research and development
Expansion of development investment by 2.5% of salesNext-generation ultrapure water systems for the electronics industryCreation of new business with advanced separation and purification technology

Enhancement of sensing and digital technologies



Expansion of open innovation

Water treatment chemicals
Expansion of package service menu including chemicals, equipment, and the IoTRobust development of local partners and expansion of overseas business

Functional materials
Establishment and maintaining of global supply chains

Development of differentiated functional materials and creation of business models that realize social
value

Establishment of a business foundation
・ Strengthening the engineering structure
・ Initiatives for ESG/SDGs
・ Ensuring safety and compliance
・ Promoting data utilization
・ Developing and utilizing human resources- 31 -

Management Target(Millions of yen)
77th term
78th term
79th term
80th term
Fiscal year ended Fiscal year ending Fiscal year ending Fiscal year ending
Category
March 31, 2022 March 31, 2023
March 31, 2024 March 31, 2025
(Result)(Plan)(Plan)(Plan)
Orders received
135,698
125,000
130,000
140,000
Net sales
112,069
125,000
130,000
140,000
Operating profit
10,85011,70012,50014,000Operating profit ratio (%)
9.7
9.4
9.6
10.0
Return on equity (ROE)
12.9
10.6
10.4
10.7
(%)
(5) Changes in assets and profit and loss
74th term
Fiscal year ended
March 31, 201975th term
Fiscal year ended
March 31, 2020

76th term
Fiscal year ended
March 31, 2021

77th term(Fiscal year underreview)
Fiscal year ended
March 31, 2022

Orders received (millions ofyen)

103,838

104,986

94,563

135,698

Net sales (millions of yen)

92,27396,515

100,638

112,069

Operating profit (millions of
yen)

6,558

9,908

9,579

10,850Operating profit ratio (%)

7.1

10.3

9.5

9.7

Ordinary profit (millions of
yen)

6,538

9,929

9,900

11,545

Profit attributable to ownersof parent (millions of yen)

4,452

7,162

7,074

9,210

Basic earnings per share (yen)388.48626.05616.72802.69Category

Return on equity (ROE) (%)

8.4

12.4

11.1

12.9

Total assets (millions of yen)

101,257

101,448

115,011130,506

Net assets (millions of yen)

54,79560,85767,35776,004

Net assets per share (yen)4,784.81

5,301.26

5,856.25

6,620.54

Notes: 1.

2.

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 current consolidated fiscal year. Concerning the status of property and profit and loss in thecurrent consolidated fiscal year, the figures are stated as those after applying the said Accounting Standard, etc.

- 32 -

Orders received / Net sales
Orders received (Millions of yen)

Operating profit / Operating profit ratio
Net sales (Millions of yen)

Operating profit (Millions of yen)

10,850135,698
104,986

103,838
92,27396,515

Operating profit ratio (%)

9,908

9,579

112,069

100,638
94,563

6,558

10.3

9.5

9.7

76th term

77th term(Fiscal year underreview)

7.1

74th term

75th term

76th term

77th term(Fiscal year underreview)

Profit attributable to owners of parent / Basic earnings per share

74th term

75th term

ROE

Profit attributable to owners of parent (Millions of yen)
Basic earnings per share (Yen)

(%)

9,210

12.9

12.4
7,162

7,074

626.05616.7275th term

76th term

11.1

802.698.4

4,452
388.4874th term

74th term

77th term(Fiscal year underreview)

Total assets

75th term

76th term

77th term(Fiscal year underreview)

Net assets / Net assets per share(Millions of yen)

Net assets (Millions of yen)

130,506

Net assets per share (Yen)
76,00467,35760,857

101,257

101,448

74th term

75th term

5,856.25
4,784.81

76th term

6,620.54

54,795

115,01177th term(Fiscal year underreview)- 33 -

74th term

5,301.26

75th term

76th term

77th term(Fiscal year underreview)

(6) Parent company and major subsidiaries(i)Relationship with parent company
The Company’s parent company is Tosoh Corporation, and it holds 4,937 thousand shares(equity ownership 42.6% 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- 34 -

Notes:

1. Equity ownership with (*) mark includes the portion of indirect ownership held by the Company’s subsidiaries.
2. There is no subsidiary that falls under the category of specified wholly-owned subsidiary.
3. Organo (Vietnam) Co., Ltd. became a major subsidiary from the current consolidated fiscal year due to its
increased importance. In addition, Organo USA, Inc. was established in September 2021.
4. The eleven major subsidiaries above are consolidated subsidiaries of the Company, and one affiliated company
was accounted for by the equity method.

- 35 -

(7) Major business offices and factories (as of March 31, 2022)
Head Office
Factories

The Company

Head officeKoto-ku, Tokyo

Tsukuba Factory

Tsukuba City, Ibaraki

Iwaki Factory

Iwaki City, Fukushima

Research andDevelopment Facility

R&D Center

Sagamihara City, Kanagawa

Branches

Hokkaido Branch

Sapporo City, Hokkaido

Tohoku Branch

Sendai City, Miyagi

Kanto Branch

Koto-ku, Tokyo

Chubu Branch

Nagoya City, Aichi

Kansai Branch

Suita City, Osaka

In Japan

Chugoku Branch

Hiroshima City, Hiroshima

Kyushu Branch

Fukuoka City, Fukuoka

ORGANO PLANT SERVICECORPORATION

Bunkyo-ku, TokyoORGANO FOOD TECHCORPORATION

Satte City, Saitama

ORGANO ECO TECHCORPORATION

Koto-ku, TokyoORGANO ACTY CORPORATION Koto-ku, Tokyo
Subsidiaries

Notes:

Oversea

Organo (Asia) Sdn. Bhd.

Selangor, Malaysia

Organo (Suzhou) Water Treatment
Co., Ltd.

Jiangsu, China

Organo Technology Co., Ltd.

Hsinchu City, Taiwan, R.O.C.

Organo (Thailand) Co., Ltd.

Bangkok, Thailand

PT Lautan Organo Water

Jakarta, Indonesia

Organo (Vietnam) Co., Ltd.

Ho Chi Minh, Viet Nam

Organo USA, Inc.

Ohio, USA.

In October 2021, the Taiwan branch was closed.

- 36 -

(8) Employees (as of March 31, 2022)(i)

Employees of the Organo Group

Business Segment

Number of employees

Change from previous fiscal year-end

Water Treatment Engineering Business
Unit

1,944

Increase by 135

Performance Products Business Unit

380

Increase by 21

Company-wide (common)
Total

152

Increase by 1

2,476

Increase by 157(ii) Employees of the Company
Number of employees

Change from previous fiscal
year-end

1,090

(9)

Increase by 18

Average age

Average years of service

43.6 years old

16.3 years

Major lenders (as of March 31, 2022)
Amount of Borrowings(Millions of yen)

Lenders
Mizuho Bank, Ltd.

5,300

Sumitomo Mitsui Banking Corporation

1,660

MUFG Bank, Ltd

1,660

Sumitomo Mitsui Trust Bank, Limited

1,255

The Hachijuni Bank, Ltd.

1,150

- 37 -

2. Shares of the Company (As of March 31, 2022)(1) Total number of authorized shares: 25,392,000 shares(2) Total number of issued shares:

11,589,925 shares(including treasury shares of 84,095 shares)(3) Number of shareholders:

4,103 shareholders(4) Major shareholders
Number of shares held(Thousands of shares)

Name of shareholder
Tosoh Corporation

4,925

Holding ratio
(%)
42.81

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

966

8.40

Custody Bank of Japan, Ltd. (Trust account)

632

5.50

SSBTC CLIENT OMNIBUS ACCOUNT

279

2.43

Mizuho Bank, Ltd.

200

1.74

KBC BANK NV-UCITS CLIENTS NON TREATY

153

1.33

BBH FOR THE ADVISORS’ INNER CIRCLE FUND
II/KOPERNIK GLO ALL-CAP FUND

127

1.11

DZ PRIVATBANK S.A. RE INVESTMENTFONDS

110

0.96

MLI FOR CLIENT GENERAL OMNI NON COLLATERALNON TREATY-PB

102

0.89

BNYM AS AGT/CLTS 10 PERCENT

91

0.79

Notes:

1. The treasury shares (84,095 shares) are excluded in the calculation of the holding ratio shown above.
2. 51,160 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.

(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:

9,200

Number of persons
6

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, 2022, the trust established by the Company held 51,160 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.

- 38 -

3. Officers(1) Names etc. of Directors and Audit and Supervisory Board Members (as of March 31, 2022)
Position
Director and President(Representative Director)
President and Executive
Officer

Name

Responsibility

Masaki Uchikura

Masayuki Yamada

In charge of Global
Management and Planning,
Legal and Patent Dept., Trade
Control Office, Environment,
Safety and Quality Assurance
Dept., and Purchasing and
Logistics Dept.

Hitoshi Hori

President of Performance
Products Business

Managing Director andExecutive Officer

Yasutoshi Nakayama

President of Industrial Plant
Business, and Senior General
Manager of Electronics
DivisionManaging Director andExecutive Officer

Nobuyoshi Suda

Senior General Manager of
R&D Center, R&D andEngineering

Tetsushi Honda

President of Corporate
Management and Planning
and General Manager ofCorporate Strategy andPlanning Dept.
In charge of Internal Auditing
Office, Secretary Office, andBranches

Senior Managing Directorand Executive Officer

Managing Director andExecutive Officer

Director and Executive
Officer

Significant concurrent
positions outside theCompany

Chairman of the Board(Representative Director) of
ORGANO FOOD TECHCORPORATION

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 InstituteOutside Director of Ube
Industries, Ltd.
Outside Director of
Bridgestone Corporation

Director

Kenji Hirai

Director

Audit and Supervisory Board
Masahiko Toyoda
Member (Full-time)- 39 -

Position

Name

Responsibility

Significant concurrent
positions outside theCompany

Audit and Supervisory Board
Wataru Higuchi
MemberLawyerCertified Public Accountant
Representative Partner of
Ootemon Law andAccounting
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 & 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 Haruki Myouga and Outside Audit and Supervisory Board Member Masao Wada retired from theiroffice due to expiration of their terms of office at the conclusion of the 76th Ordinary General Meeting of
Shareholders held on June 29, 2021.
(ii) Tetsushi Honda was elected as a Director and Nobuko Hanano was elected as an Audit and Supervisory Board
Member at the 76th Ordinary General Meeting of Shareholders held on June 29, 2021, and they assumed theiroffice.
4. Changes in the important concurrent positions of Directors and Audit and Supervisory Board Members during
the fiscal year under review are as follows:(i) As of June 2021, Director Masayuki Yamada retired as Director, Executive Vice President of Tosoh Corporation
and Chairman of the Board of Tosoh America, Inc.
(ii) As of June 2021, Director Kenji Hirai retired as Vice Chairman of the Board (Representative Director) ofSagami Chemical Research Institute.
5. Audit and Supervisory Board Members Masahiko Toyoda and Wataru Higuchi possess extensive financial andaccounting knowledge as shown below.
・6.

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.

(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 Motoo Nagai, Keikou Terui and Kenji Hirai, and Audit and Supervisory Board
Members Masahiko Toyoda, Wataru Higuchi, and Nobuko Hanano, which limit the amount ofliability for damages as defined under Article 423, paragraph 1 of the Companies Act to theminimum liability amount as stipulated in laws and regulations, presuming they perform theirrespective duties in good faith and without gross negligence.
A similar limited liability agreement was concluded with Director Masayuki Yamada, but due to atransfer from the post of Non-Executive Director to Executive Director on June 29, 2021, theagreement was terminated.

- 40 -

(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 by intentional or gross negligencethat is not covered by the relevant insurance contract. The total amount of insurance expenses isshared proportionally by the Company and its subsidiaries.
(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.
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- 41 -

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
remuneration (shares) shall be designed to be approximately 7:3 in case theperformance evaluation index is at the standard value set by the Board of
Directors. In addition, the same ratio will be designed with 5:5 as a guide from
April 1, 2022.


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 the- 42 -

amount 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.
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.

(ii) 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.
(Stocks)

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)

286

90

7

127

68

7

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

17

17

1

–

–

–

Outside Directors

33

33

3

–

–

–

Outside Audit andSupervisory Board
Members

19

19

3

–

–

–

Total

356

160

14

127

68

7

Notes: 1.
2.
3.

4.

5.

The above figures include one Director and one Outside Audit and Supervisory Board Member who retired upon
the conclusion of the 76th Ordinary General Meeting of Shareholders held on June 29, 2021.
Remuneration of 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 “(1) 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. (5) 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 “(1) 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.”
The amount of remuneration for Directors was set at not more than ¥340 million per year (of which, not morethan ¥40 million is for Outside Directors) by resolution of the 69th Ordinary General Meeting of Shareholders
held on June 27, 2014. The number of Directors as of the close of this General Meeting of Shareholders is 10(including one Outside Director).
In addition to this limited amount of remuneration, the Company introduced a performance-linked, share-based
remuneration plan for Directors (excluding Non-Executive Directors) by resolution of the 73rd Ordinary General
Meeting of Shareholders held on June 28, 2018 in which the amount of cash the Company may contribute shallbe limited to ¥300 million for the three fiscal years in the initial applicable period, and the total number ofCompany’s shares that may be issued for Directors (excluding Non-Executive Directors) shall be limited to
54,000 shares per fiscal year (162,000 shares for the three fiscal years in the initial application period). The- 43 -

6.

7.

number of Directors (excluding Non-Executive Directors) as of the close of this General Meeting of
Shareholders is six.
The amount of remuneration for Audit and Supervisory Board Members was set at not more than ¥60 million peryear by resolution of the 61st Ordinary General Meeting of Shareholders held on June 29, 2006. The number ofAudit and Supervisory Board Members as of the close of this General Meeting of Shareholders is four.
Director Masayuki Yamada is eligible for performance-linked remuneration from June 29, 2021 because hechanged his status from Non-Executive Director to Executive Director at the Board of Directors meeting held
after the 76th Ordinary General Meeting of Shareholders held on the aforementioned date.

- 44 -

(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, 2022).” Director
Kenji Hirai was Vice Chairman of the Board (Representative Director) of Sagami Chemical
Research Institute until June 2021. The Company participating in join research with said
institute (in fiscal year ended March 31, 2022, payments of research costs to said institutewas ¥10 million) the Company also donates money to said institute (in fiscal year ended
March 31, 2022, the payment amount was ¥300 thousand), the amounts of both of thosepayments are immaterial. For the other Outside Officers, the Company does not have any
important dealing or other special relationship with the said each organization where theofficers hold significant concurrent positions.

(ii) Principal activities during the fiscal year under review
a.

Name

Directors
Board ofDirectors
meetings
Status ofattendance

Motoo Nagai

Keikou Terui

Kenji Hirai

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

15/15
(100%)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, crossshareholdings, dialogue with investors, sustainability, safety management, internal
control, 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, heattended all 9 meetings of the Committee held during the fiscal year under review
and led the supervisory function in the process of selecting candidates, etc. for theCompany’s Board of Directors and determining the remuneration, etc. for Directors,
in addition to examining the skill sets required of the Board of Directors.

15/15(100%)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, crossshareholdings, technology development strategies, capital policy, and sustainability,
etc., based on his extensive knowledge of industrial policy and industrial technology
and his experience in key positions at the Ministry of Economy, Trade and Industry.
As a member of the Nomination and Remuneration Advisory Committee, heattended all 9 meetings of the Committee held during the fiscal year under review
and is responsible for the supervisory function in the process of selecting candidates,etc. for the Board of Directors and determining the remuneration, etc. for Directors,
in addition to examining the skill sets required of the Board of Directors.

15/15(100%)He has been fulfilling his role appropriately by mainly providing opinions asnecessary on such issues as management plans, business strategies, personnel
policies, compliance, sustainability, risk management, employee labor management,
and information disclosure, etc., based on his extensive knowledge and experienceas the head of a research institution.
As the member of the Nomination and Remuneration Advisory Committee, heattended all 9 meetings of the Committee held during the fiscal year under review
and is responsible for the supervisory function in the process of selecting candidates,etc. for the Board of Directors and determining the remuneration, etc. for Directors,
in addition to examining the skill sets required of the Board of Directors.

- 45 -b.

Name

Wataru Higuchi

Nobuko Hanano

Audit and Supervisory Board Member
Board ofDirectors
meetings

Audit andSupervisory
Board meetings

Status ofattendance

Status ofattendance

15/15(100%)

12/12(100%)

Status of Expression of Opinions

14/14(100%)

He mainly provided opinions as he saw fit concerning such issues
as internal audits, affiliate management, director remuneration
policies, compliance, risk management, 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.

11/11(100%)She mainly provided opinions as she saw fit concerning such
issues as internal control, internal audits, and accounting policies,
sustainability, group governance, information management, risk
management, and credit management, etc., based on her extensive
legal knowledge and experience as a lawyer.

Notes: Audit and Supervisory Board Member Nobuko Hanano was elected at the 76th Ordinary General Meeting of
Shareholders, which was held on June 29, 2021, and she assumed office on that day. Accordingly, the attendance
figure stated above for the Audit and Supervisory Board Member indicates her attendance at the meetings of theBoard of Directors and Audit and Supervisory Board that were held on and after June 29, 2021.

- 46 -

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¥54 million

Total amount of money and other financial profits to be paid by the Company
and its subsidiaries¥54 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.

- 47 -

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 only).
(https://www.organo.co.jp/company/governance/guidance/)(ii) Schematic view of corporate governance structure
General Meeting of Shareholders

Consultation

Opinion on nomination,
remuneration, etc.
regarding Directors, etc.

Nomination andRemuneration Advisory
Committee

Audit and Supervisory
Board Member (Audit
and Supervisory Board)

Audit

Board of Directors
Appointment

Election/
Dismissal

Election/Dismissal

Election/Dismissal

Management decision-making/Supervision

Cooperation

Independent Auditor
Cooperation

Cooperation

Audit

Representative Director and President

Financial
audit

Internal Auditing Dept.

Compliance Committee
Sustainability Committee
Management Meeting

Establishment of compliancesystem, etc.
Consideration, etc. of policies and goals
relating to sustainability
Proposal of strategies /Discussion of management agendaMonthly Business Conference Reporting of business execution, etc.
Various departments/divisions- 48 -

Internal audit

(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.

Executive Officer System
The Company has introduced an Executive Officer System, and 17 members (in which
six 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.

d.

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.

e.

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.

f.

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.
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.

g.

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

- 49 -

h.

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.

Notes: The Company monitors and supervises conflicts of interest between the parent
company of the Company and its subsidiaries (hereinafter referred to as the “Parent
Company Group”) and minority shareholders, and in order to appropriately protect
the interests of minority shareholders, a special committee consisting only of
independent Outside Directors was established on April 1, 2022. If an importanttransaction, etc., occurs between the Parent Company Group and the Company, thecommittee will deliberate on the details of the transaction and inform or report to theBoard of Directors.
(iv) Assessment of the overall effectiveness of the Board of Directors
Every year, an analysis/assessment is performed on the overall effectiveness of the Board of
Directors, and a summary of the results is released. In the fiscal year under review, a signed
questionnaire for all Directors and Audit and Supervisory Board Members (target period:
April 2020 to March 2021) was conducted in April 2021, and based on the results of thatquestionnaire, an analysis/assessment was performed at the Board of Directors meetings in
May and June 2021, and future efforts to make were discussed.
As a result of the evaluation, we have confirmed that the effectiveness of the Board of
Directors as a whole is ensured on the grounds that the Board of Directors presented thetarget direction and growth strategy, and the Board of Directors responds appropriately to thepromotion and revisions, etc., of the execution thereof, and that the incentive function of
director remuneration is appropriate. In addition, we have judged that the results ofdiscussions by the Nomination and Remuneration Advisory Committee were properly
reported to the Board of Directors and there was an improvement in the support system for
Non-Executive Directors and Outside Audit and Supervisory Board Members, among otherthings, compared with the previous fiscal year. On the other hand, we have identified that itis necessary for the Board of Directors to be more effectively involved in the election of
Directors and the appointment of the President, narrow down the agenda of the Board of
Directors, and take more time for discussion, among other things.
In addition, as an initiative for this fiscal year, with a view to ensuring the diversity of
executives, we appointed female Outside Auditors, discussed the diversity of officers thatshould be ensured in light of our management policies and strategies, and identified skills,
etc. required for Directors and the Board of Directors. Going forward, we will deepen
discussions on the direction of ensuring diversity among executives.

- 50 -

Notes

FY2020 (Evaluation period of questionnaire: April 2019 to March 2020)
FY2021 (Evaluation period of questionnaire: April 2020 to March 2021)(2) Basic policy on control of the Company
We currently have no plans to introduce anti-takeover measures.
(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.

- 51 -

Consolidated Balance Sheet(As of March 31, 2022)
Item

AmountAssetsCurrent assets(Millions of yen)AmountItem
Liabilities

102,862

Cash and deposits

20,198Notes receivable - trade

1,703

Current liabilities
Notes and accounts payable trade
Electronically recorded
obligations - operating

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

25,63925,584
11,293
5,264Work in process

6,735

Raw materials and supplies

1,456

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

3,133(6)
27,64420,995
6,166

1,862

Short-term borrowings
Income taxes payable
Contract liabilities
Provision for bonuses
Provision for product warranties
Provision for loss on construction
contracts
Provision for share-based
remuneration for Directors (andother officers)
Other
Non-current liabilities
Long-term borrowings
Deferred tax liabilities
Retirement benefit liability

709

Other

12,257

Construction in progress

1,115

Net assets

Other
Intangible assets
Investments and other assets
Investment securities
Retirement benefit assets

745
1,082
5,566
2,058
624

Deferred tax assets

2,369

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

Total liabilities

979

Allowance for doubtful accounts(464)

Total assets

130,506- 52 -

18,795
5,575
9,933
1,444
1,820
1,477
296
46
123
3,559
11,429
5,695
53
5,512
168

Land

Other

43,07254,501
74,6178,225
7,508
59,619
(734)
1,218
434
(0)
575
208
168

Total net assets

76,004

Total liabilities and net assets

130,506

Consolidated Statement of Income(From April 1, 2021 to March 31, 2022)(Millions of yen)
Item

AmountNet sales
Cost of sales

112,069
83,556Gross profit
Selling, general and administrative expenses

28,512
17,662

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

10,850
60
573
160
129

Non-operating expenses
Interest expenses
Loss on valuation of derivatives
Other

127
92
9

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

924

229
11,545Extraordinary losses
Loss on abandonment of non-current assets
Loss on sales of right to use facilities
Profit before income taxes
Income taxes - current
Income taxes - deferred

1,150
23
11

1,185

21
13

35
12,696

2,984
485

3,470

ProfitProfit attributable to non-controlling interests

9,226
15

Profit attributable to owners of parent

9,210- 53 -

Balance Sheet(As of March 31, 2022)(Millions of yen)
Item

AmountItem

AssetsCurrent assets
Cash and deposits
Notes receivable - trade75,246
10,556

Current liabilities
Notes payable - trade
Electronically recorded obligations operating

1,527Electronically recorded monetaryclaims - operating
Accounts receivable - trade

19,007

Contract assets

12,771

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

11,293
4,223
6,223
987
962
293

Short-term loans receivable

4,351

Other

1,191

1,862

Accounts payable - trade

Allowance for doubtful accounts
Non-current assets
Property, plant and equipment
Buildings
Structures(6)
27,475
20,267
5,477
228

Machinery and equipment

581

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

Total liabilities

637
12,161
1,174
981
913
67
6,226
829
2,541

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
non-current assets
General reserve:
Retained earnings brought forward:

Guarantee deposits

94

Prepaid pension costs

244
2,196
400
(380)

Treasury shares
Valuation and translation
adjustments
Valuation difference on availablefor-sale securities

102,721- 54 -

29,377
1,311
4,880
7,753
5,900
1,800
1,158
764
1,299
1,699
1,027
206
140
123
1,312
10,982
5,695
5,274
13
40,360Net assets

300

Total assets

Short-term borrowings
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-based
remuneration for Directors (andother officers)
Other
Non-current liabilities
Long-term borrowings
Provision for retirement benefits
Other

5

Long-term loans receivable

Deferred tax assets
Other
Allowance for doubtful accounts

AmountLiabilities

61,990
8,225
7,508
7,508
0
46,992832
46,159
140
90
30
494
30,065
15,338
(734)
370
370

Total net assets

62,361

Total liabilities and net assets

102,721

Statement of Income(From April 1, 2021 to March 31, 2022)(Millions of yen)
Item

AmountNet sales
Cost of sales

70,063
48,997Gross profit
Selling, general and administrative expenses

21,066
14,294

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

6,772

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
Gain on sales of shares of subsidiaries and associates
Gain on sales of right of using facilities

1,584
311
198

2,094

57
99
34
7

199
8,667

1,150
22
1
11

Extraordinary losses
Loss on abandonment of non-current assets
Loss on valuation of shares of subsidiaries andassociates
Loss on sales of right to use facilities

1,185

17
109
13

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

140
9,712

1,751
480

Profit

2,232
7,480

Figures are rounded down to the nearest unit.

- 55 -

(English translation)

Certified copy of Independent Auditor’s audit report on the Consolidated Financial
Statements
Independent Auditor’s Report
May 9, 2022
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
Yoshitaka Kuwamoto
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, 2022 and for the year from April 1, 2021 to March 31, 2022 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.
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 the- 56 -

consolidated 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
consolidated financial statements represent the underlying transactions and events in a manner that
achieves fair presentation.

- 57 -

・ 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.

- 58 -

(English translation)

Certified copy of Independent Auditor’s audit report
Independent Auditor’s Report
May 9, 2022
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
Yoshitaka Kuwamoto
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, 2022 and for the year from April 1, 2021 to March 31, 2022 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.
- 59 -

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- 60 -

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.

- 61 -

(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 77th fiscal year from April 1, 2021 toMarch 31, 2022, 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.

- 62 -

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, 2022
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]- 63 -

Items Disclosed on the Internet Concerning Notice of the 77th
Ordinary General Meeting of Shareholders

77th fiscal year
(From April 1, 2021 to March 31, 2022)(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
The matters from (i) to (iii) above are provided to shareholders by posting them on the Company’s website(https://www.organo.co.jp/) pursuant to the provisions of laws and regulations and Article 16 of theCompany’s Articles of Incorporation.

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 Internal Control
Division, the division which establishes control systems, serves as a center in promoting
maintenance activities, and the Internal Auditing Dept., the assessment division, performs
independent assessments in accordance with “Internal Controls over Financial Reports”
stipulated in the Financial Instruments and Exchange Act.
(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-1-

decisions on important business execution and supervises the status of business execution
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.

-2-



The Company will provide compliance training to the group companies’ officers andemployees as necessary.



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.

-3-



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



The Company’s Audit and Supervisory Board Members also serves 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 seeks to raise awareness of compliance, and as efforts to spread legal compliance, isconducting education on corporate ethics and compliance for new employees through the use of elearning, etc.
In addition, the Company arranged for external organizations to provide training to Directors andAudit and Supervisory Board Members, 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 their risk
responses based on the risk management plan formulated by the supervising department/divisionthat lead the responses against those major risks. Among other activities, the Internal 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 15 meetings of the Board of Directors, 27Management Meetings to discuss important management agendas, and continued to strive to ensure
the appropriateness and efficiency of business execution by Directors. In addition, the Monthly
Business Conference was held 12 times (including four Group Liaison Conferences), and progresson 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 2021
and March 2022, 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, 2021 to March 31, 2022)(Millions of yen)
Shareholders’ equity
Share capital

Capital surplus

Retained earnings

Treasury shares

Total
shareholders’equityBalance at beginning of
period

8,225

7,508

51,902(495)

67,139Cumulative effects ofchanges in accounting
policies

-

-

11

-

11

8,225

7,508

51,913(495)

67,151Dividends of surplus--(1,541)-(1,541)

Profit attributable toowners of parent

-

-

9,210

-

9,210

Increased amount ofretained earnings fromincrease inconsolidated
subsidiaries

-

-

36

-

36

Purchase of treasury
shares

-

-

-

(354)

(354)

Disposal of treasury
shares

-

-

-

115

115

Net changes in items
other thanshareholders’ equity

-

-

-

-

-

-

-

7,705

(238)

7,466

8,225

7,508

59,619(734)

74,617

Restated balance
Changes during period

Total changes during
periodBalance at end of period-6-Accumulated other comprehensive income
Valuationdifferenceonavailablefor-salesecurities

Deferred
gains orlosses onhedgesForeigncurrencytranslation
adjustment

Remeasurements ofdefinedbenefitplans

Balance at beginning of
period

301

-

(201)

(25)

74

143

67,357

Cumulative effects ofchanges in accounting
policies

-

-

-

-

-

-

11

301

-

(201)

(25)

74

143

67,369Dividends of surplus

-

-

-

-

-

-

(1,541)

Profit attributable toowners of parent

-

-

-

-

-

-

9.210

Increased amount ofretained earnings fromincrease inconsolidated
subsidiaries

-

-

-

-

-

-

36

Purchase of treasury
shares

-

-

-

-

-

-

(354)

Disposal of treasury
shares

-

-

-

-

-

-

115

Net changes in items
other thanshareholders’ equity

132

(0)

777

234

1,144

25

1,169

Total changes during
period

132

(0)

777

234

1,144

25

8,635

Balance at end of period

434

(0)

575

208

1,218

168

76,004

Restated balance

Total
Nonaccumulate controllingd otherinterests
comprehens
ive income

Total net
assetsChanges during period-7-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
method2 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 and one affiliate to which the equity method
was not applied would give only a minimal impact on the consolidated financial
statements when removed, judging from profit or loss (based on the Company’sownership 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 thescope to which the equity method is applied.
(3) Change in scope of consolidation
Organo (Vietnam) Co., Ltd. has been included in the scope of consolidation from the fiscal year
under review due to its increased significance. Furthermore, from the fiscal year under review, thenewly established Organo USA, Inc. has been included in the scope of consolidation.
(4) 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.

-8-(5) 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 difference 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-9-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-based remuneration 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-based remuneration for directors (and other officers) based on estimated sharebenefit 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 theamount receivable in exchange for merchandise provided by another party minus theamount 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- 10 -

requirements for such accounting, and the exceptional treatment (the “Tokurei-shori”) isapplied to interest rate swaps that satisfy the requirements for such treatment.
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 changes in the accounting policies
Application of Accounting Standard for Revenue Recognition, etc.
The Company has applied the “Accounting Standard for Revenue Recognition” (ASBJ Statement No.
29, March 31, 2020) and relevant revised ASBJ regulations effective from the beginning of the fiscal
year under review, and it has recognized revenue at the time the control of promised goods or services istransferred to the customer at the amount expected to be received upon exchange of said goods orservices. With respect to construction contracts, the Company previously had applied the percentage-ofcompletion method to construction work whose outcome from the completed portion was deemeddefinite, and had applied the completed-contract method to other construction work. As a result of thisapplication, however, the Company has changed the method to recognize revenue over a certain periodof time in alignment with its 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 certain periodof time. In measuring progress made in satisfying a performance obligation, construction costs incurred
as of the last day of each reporting period are to be calculated based on the ratio of the total estimatedconstruction costs. In addition, the Company is to recognize revenue using the cost recovery method incases where it expects to recover costs incurred but is unable to reasonably estimate the extent ofprogress made toward satisfying performance obligations.
Application of the Accounting Standard for Revenue Recognition and relevant revised ASBJ regulations
is subject to the transitional treatment provided for in the proviso to paragraph 84 of the Accounting- 11 -

Standard for Revenue Recognition. The cumulative effect of the retrospective application, assuming the
new accounting policy had been applied to periods prior to the beginning of the fiscal year underreview, was added to or deducted from the opening balance of retained earnings of the fiscal year underreview, and thus the new accounting policy was applied from such opening balance. As a result, for the
fiscal year under review, net sales increased ¥1,320 million, cost of sales grew ¥1,220 million, operating
profit went up ¥99 million, and ordinary profit and profit before income taxes each increased ¥92
million. In addition, the opening balance of retained earnings increased by ¥11 million.
Due to the application of the Accounting Standard for Revenue Recognition and relevant revised ASBJ
regulations, “Notes and accounts receivable - trade” under current assets of the consolidated balance
sheet of the previous fiscal year have been included in “Notes receivable - trade,” “Accounts receivable- trade” and “Contract assets” under current assets from the fiscal year under review. In addition,“Advances received” under current liabilities have been included in “Contract liabilities” from the fiscal
year under review.
Application of Accounting Standard for Fair Value Measurement, etc.
The Company has applied the “Accounting Standard for Fair Value Measurement” (ASBJ Statement
No. 30, July 4, 2019) and relevant revised ASBJ regulations effective from the beginning of the fiscal
year under review, and in the future will accordingly apply new accounting policy stipulated by the
Accounting Standard for Fair Value Measurement, etc. in accordance with the transitional treatment
provided for in paragraph 19 of the Accounting Standard for Fair Value Measurement and paragraph 442 of the “Accounting Standard for Financial Instruments” (ASBJ Statement No. 10, July 4, 2019).
Moreover, notes on the breakdown, etc. of fair value of financial instruments by level is provided in “8.
Notes to financial instruments.” This will not affect the consolidated financial statements.
3. Notes to changes in the manner of presentation(Consolidated statement of income)“Insurance claim income” (¥11 million in the fiscal year under review) was presented separately until
the previous fiscal year, but it is included in “Other” under non-operating income from the fiscal year
under review, as it has become insignificant in terms of quantitative materiality.
4.

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 ¥79,155 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¥52,139 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 acertain 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 the- 12 -

work 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.
5. Additional Information(Impact arising due to the proliferation of COVID-19)
Although the COVID-19 pandemic is gradually settling as the spread of infections continue to subside,
it will probably take quite some time before the end is reached. However, accounting estimates havebeen made based on the assumption that the impact on the Group’s business performance will be limited
based on the current status of customers’ capital investment plan, the operation status of customer
plants, and the outlook for construction progress in backlog projects.
The assumptions made above are highly uncertain, and depending on the situation of the spread of theinfection and its impact on the economy, there may be a significant impact on the consolidated financial
statements for the next and subsequent fiscal years.
6.

7.

Notes to the consolidated balance sheet(1) Accumulated depreciation for property, plant and equipment(2) Contingent liabilities
Guarantee obligation for bank loans of employees¥22,426 million¥0 million

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

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

Increase in number ofshares during theperiod(Thousands of shares)

11,589-Decrease in number ofshares during theperiod(Thousands of shares)-

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

112

49

Decrease in number ofshares during theperiod(Thousands of shares)27

Number of shares at
end of period(Thousands of shares)
135

Notes: 1. The increase of 49 thousand shares in the number of treasury shares reflects the acquisition of 49 thousand
shares by the Officer Share Delivery Trust and the increase of 0 thousand shares due to the purchase of sharesless than one unit.
2. The decrease of 27 thousand shares in the number of treasury shares reflects the decrease of 27 thousand shares
due to the delivery of the Company’s shares held by the Officer Share Delivery Trust.
3. The number of treasury shares at the end of the fiscal year under review includes 51 thousand shares of theCompany held by the Officer Share Delivery Trust.

(3) Dividends of surplus(i) Dividends paid, etc.
a. Dividends resolved at the 76th Ordinary General Meeting of Shareholders held on June 29,2021
 Total dividends:¥713 million
 Dividend per share:¥62
 Record date:
March 31, 2021
 Effective date:June 30, 2021
- 13 -

Note

Total dividends resolved at the 76th Ordinary General Meeting of Shareholders held on June 29, 2021
include ¥1 million in dividends for shares of the Company held by the Officer Share Delivery Trust.

b. Dividends resolved at the meeting of the Board of Directors held on November 1, 2021
 Total dividends:¥828 million
 Dividend per share:¥72
 Record date:
September 30, 2021
 Effective date:
December 6, 2021
Note

Total dividends resolved at the meeting of the Board of Directors held on November 1, 2021 include¥0 million in dividends for shares of the Company held by the Officer Share Delivery Trust.

(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 77th Ordinary General Meeting of
Shareholders, scheduled for June 29, 2022.
 Total dividends:¥1,012 million
 Source of dividends:
Retained earnings
 Dividend per share:¥88 Record date:
March 31, 2022
 Effective date:June 30, 2022
Note

8.

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, electronically recorded monetary claims - operating, accounts
receivable - trade 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 (5)Accounting policies (v) Method of significant hedge accounting” previously described.

- 14 -

(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,
34.2% are those from the top three companies.
(2) Fair value of financial instruments
Amount on the consolidated balance sheet as of March 31, 2022, 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,- 15 -

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

25,63911,293924

25,638
11,699
924

(0)
406
-

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

37,85638,262

405

7,495

7,471

(23)

Total liabilities

7,495

7,471

(23)

Derivatives [*]

(92)

(92)

-

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

1,134

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

924

-

-

924

924

-

-

924

-

92

-

92

-

92

-

92

- 16 -

(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-

25,638
11,699-25,638
11,699Total assets-

37,338-37,338Long-term borrowings (including current
portion of long-term borrowings)

-

7,471

-

7,471

Total liabilities

-

7,471

-

7,471

(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.

9.

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
Other

51,79019,311
12,772
4,372
1,024

17,854
212
538
501
239

69,644
19,523
13,3104,874
1,263

69,644
19,523
13,3104,874
1,263

Revenue from contracts with customers

89,271

19,346108,617

108,617

Other revenue

3,452

-

3,452

3,452

Sales to external customers

92,723

19,346

112,069

112,069- 17 -

(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 is 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.

- 18 -

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)

27,835Contract assets (balance at beginning of period)
Contract assets (balance at end of period)

22,73225,584Contract liabilities (balance at beginning of period)
Contract liabilities (balance at end of period)

1,092
1,820

28,570Contract 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 ¥824 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 ¥47,242 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 65% is expected to be recognized asrevenue within one year after the last day of the period, and of the remaining 35%,
approximately 10% within two years that follow, and approximately 25% thereafter.
10. Notes to per share information
Net assets per share
Basic earnings per share¥6,620.54¥802.69

Notes 1.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 (51 thousand shares at the end of the fiscal year under review).

- 19 -

2.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 (31 thousand shares in the fiscal year under review).

11. Significant subsequent events
Not applicable.

- 20 -

Statement of Changes in Equity(From April 1, 2021 to March 31, 2022)(Millions of yen)
Shareholders’ equity
Capital surplus
SharecapitalLegalcapitalsurplusRetained earnings

Other
capitalsurplusLegalretainedearnings

Otherretainedearnings

TreasurysharesTotalshareholders’ equity

Balance at beginning of
period

8,225

7,508

0

832

40,220(495)

56,290

Cumulative effects ofchanges inaccounting policies

-

-

-

-

0

-

0

8,225

7,508

0

832

40,221(495)

56,291Dividends of surplus

-

-

-

-

(1,541)-(1,541)

Profit

-

-

-

-

7,480

-

7,480

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

-

-

-

-

-

-

-

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

-

-

-

-

-

-

-

Provision of generalreserve

-

-

-

-

-

-

-

Purchase of treasury
shares

-

-

-

-

-

(354)

(354)

Disposal of treasury
shares

-

-

-

-

-

115

115

Net changes in items
other thanshareholders’ equity

-

-

-

-

-

-

-

-

-

-

-

5,938

(238)

5,699

8,225

7,508

0

832

46,159(734)

61,990

Restated balance
Changes during period

Total changes during
periodBalance at end of period- 21 -

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

Total valuation andtranslation
adjustments

Total net assets

257

257

56,547

-

-

0

257

257

56,548Dividends of surplus--(1,541)

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

-

-

7,480

-

-

-

-

-

-

-

-

-

-

-

(354)

-

-

115

113

113

113

113

113

5,813

370

370

62,361

Balance at beginning of
periodCumulative effects ofchanges inaccounting policies
Restated balance
Changes during period- 22 -

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

Reservefordividends

Reserveforresearchanddevelopment

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

140

90

31

-

27,065

12,89240,220

-

-

-

-

-

0

0

140

90

31

-

27,065

12,89340,221Dividends of surplus

-

-

-

-

-

(1,541)(1,541)

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

-

-

-

-

-

7,480

7,480

-

-

(1)

-

-

1

-

-

-

-

494

-

(494)

-

-

-

-

-

3,000

(3,000)

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

(1)

494

3,000

2,445

5,938

140

90

30

494

30,065

15,33846,159Balance at beginning of
periodCumulative effects ofchanges in accounting
policies
Restated balance

Generalreserve

Retainedearnings
brought
forward

Total

Changes during period- 23 -

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 difference 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.

- 24 -

(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-based remuneration 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 sharebased remuneration for directors (and other officers) based on estimated share benefit
obligations at the end 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- 25 -

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 receivable in exchange
for merchandise provided by another party minus the amount payable to such otherparty, 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 changes in the accounting policies
Application of Accounting Standard for Revenue Recognition, etc.
The Company has applied the “Accounting Standard for Revenue Recognition” (ASBJ Statement No.
29, March 31, 2020) and relevant revised ASBJ regulations effective from the beginning of the fiscal
year under review, and it has recognized revenue at the time the control of promised goods or services
is transferred to the customer at the amount expected to be received upon exchange of said goods orservices. With respect to construction contracts, the Company previously had applied the percentageof-completion method to construction work whose outcome from the completed portion was deemeddefinite, and had applied the completed-contract method to other construction work. As a result of thisapplication, however, the Company has changed the method to recognize revenue over a certain
period of time in alignment with its satisfaction of performance obligations to transfer goods orservices to customers when control over a good or service is to be transferred to the customer over acertain period of time. In measuring progress made in satisfying a performance obligation,
construction costs incurred as of the last day of each reporting period are to be calculated based on theratio of the total estimated construction costs. 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- 26 -

reasonably estimate the extent of progress made toward satisfying performance obligations.
Application of the Accounting Standard for Revenue Recognition and relevant revised ASBJ
regulations is subject to the transitional treatment provided for in the proviso to paragraph 84 of the
Accounting Standard for Revenue Recognition. The cumulative effect of the retrospective application,
assuming the new accounting policy had been applied to periods prior to the beginning of the fiscal
year under review, was added to or deducted from the opening balance of retained earnings of the
fiscal year under review, and thus the new accounting policy was applied from such opening balance.
As a result, for the fiscal year under review, net sales increased ¥78 million, cost of sales grew ¥91
million, while operating profit, ordinary profit, and profit before income taxes each decreased ¥13
million. In addition, the opening balance of retained earnings increased by ¥0 million.
Due to the application of the Accounting Standard for Revenue Recognition and relevant revised
ASBJ regulations, “Accounts receivable - trade” under current assets of the non-consolidated balance
sheet of the previous fiscal year have been included in “Accounts receivable - trade” and “Contract
assets” under current assets from the fiscal year under review. In addition, “Advances received” undercurrent liabilities have been included in “Contract liabilities” from the fiscal year under review.
Application of Accounting Standard for Fair Value Measurement, etc.
The Company has applied the “Accounting Standard for Fair Value Measurement” (ASBJ Statement
No. 30, July 4, 2019) and relevant revised ASBJ regulations effective from the beginning of the fiscal
year under review, and in the future will accordingly apply new accounting policy stipulated by the
Accounting Standard for Fair Value Measurement, etc. in accordance with the transitional treatment
provided for in paragraph 19 of the Accounting Standard for Fair Value Measurement and paragraph44-2 of the “Accounting Standard for Financial Instruments” (ASBJ Statement No. 10, July 4, 2019).
There is no impact of this change on the non-consolidated financial statements.
3. 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 ¥40,851 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 ¥22,969 million.
(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 “4. Notes to accounting estimates” of Notes toConsolidated Financial Statements.
4. Additional Information(Impact arising due to the proliferation of COVID-19)
Although the COVID-19 pandemic is gradually settling as the spread of infections continue tosubside, it will probably take quite some time before the end is reached. However, accounting
estimates have been made based on the assumption that the impact on the Company’s businessperformance will be limited based on the current status of customers’ capital investment plan, theoperation status of customer plants, and the outlook for construction progress in backlog projects.
The assumptions made above are highly uncertain, and depending on the situation of the spread of- 27 -COVID-19 and its impact on the economy, there may be a significant impact on the non-consolidated
financial statements for the next and subsequent fiscal years.
5. Notes to the non-consolidated balance sheet(1) Accumulated depreciation for property, plant and equipment(2) Contingent liabilities¥21,233 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 (Vietnam) Co., Ltd.

¥0 million¥2,056 million¥1,029 million¥197 million¥1,103 million¥66 million(3) Monetary claims and obligations to subsidiaries and associates
Short-term monetary claims
Long-term monetary claims
Short-term monetary obligations¥6,023 million¥300 million¥5,011 million

6. 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)¥5,488 million¥16,903 million¥1,873 million¥10 million

7. 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)

112

49

Decrease in number ofshares during theperiod(Thousands of shares)27

Number of shares at
end of period(Thousands of shares)
135

Notes: 1. The increase of 49 thousand shares in the number of treasury shares reflects the acquisition of 49 thousand sharesby the Officer Share Delivery Trust and the increase of 0 thousand shares due to the purchase of shares less than
one unit.
2. The decrease of 27 thousand shares in the number of treasury shares reflects the decrease of 27 thousand shares
due to the delivery of the Company’s shares held by the Officer Share Delivery Trust.
3. The number of treasury shares at the end of the fiscal year under review includes 51 thousand shares of theCompany held by the Officer Share Delivery Trust.

- 28 -

8. 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-based remuneration 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

314
76
1,613
63
42
37
77
118
66
218
534
3,164
(498)
2,665
(163)
(74)
(13)
(218)
(469)
2,196

Total deferred tax liabilities
Net deferred tax assets- 29 -

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

Location

ORGANO
PLANT
Bunkyo-ku,
SERVICETokyo
CORPORATIONORGANOECO TECH Koto-ku,
CORPORATI Tokyo
ON

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

Directownership
100.0%

Directownership
100.0%

Directownership
100.0%

Directownership
100.0%

Relationshipwith relatedparties
Installationof various
types ofwater
treatment
systems andordering ofsupervision
services
Dispatchingof officers
Ordering ofvarious types
of watertreatment
systems andrelatedconstruction
Dispatchingof officers

Details oftransaction

Transaction
amount(Millions of
yen)

Item

Balance at
end of period(Millions ofyen)

Installationof various
types ofwater
treatment
systems andordering ofsupervision
services

6,226

Accounts
payable trade975

Deposits of
funds

1,100

Deposits
received

500

Ordering ofvarious types
of wastewater
treatment
systems andrelatedconstruction

5,366

Accounts
payable trade

1,370

Sales ofvarious types
of watertreatment
systems and Debt
relatedguarantees
chemicals
Dispatchingof officers

Sales ofvarious types
of watertreatment
systems andrelatedchemicals
Dispatchingof officers

Sales ofvarious types
of watertreatment
systems andrelatedchemicals

3,160

2,949

-

-

Accounts
receivable trade

1,178

Contract
assets

2,658

2,069

Loans of
funds

795

Short-term
loans
receivable

Debt
guarantees

1,029

-

-

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 and those on deposits of funds are reasonably determined taking interest rates on
the market into account. For transaction amounts, the average balance during the fiscal year is indicated.
3. The Company provides debt guarantees on their loans from financial institutions. The Company does not receive
guarantee fees.

10. 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 “9. Notes to revenue recognition” of Notes to Consolidated Financial
Statements.

- 30 -

11. Notes to per share information
Net assets per share
Basic earnings per shareNotes¥5,444.21¥651.91

1. 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 (51thousand shares at the end 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 (31thousand shares at the end of the fiscal year under review).

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

- 31 -