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 75th Ordinary General Meeting of Shareholders

ORGANO CORPORATIONTo Shareholders
I would like to express our cordial appreciation for your continuous support and patronage.
You are cordially invited to attend the 75th Ordinary General Meeting of Shareholders of ORGANOCORPORATION to be held on Friday, June 26, 2020.
Please confirm proposals of General Meeting of Shareholders and business outline of the fiscal year 2019presented in the documents.
June 2020
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-

Notice of Convocation the 75th Ordinary General Meeting of Shareholders
Measures for the prevention of new coronavirus infection
The following measures will be implemented at this meeting to prevent infection and spread of the newcoronavirus (COVID-19). We appreciate your understanding and cooperation.
Measures by our company
 There will be no souvenirs or drinks available this year.
 We will not hold the shareholder briefing sessions after the General Meeting of Shareholders thisyear.
 There will be no waiting rooms or rest areas for shareholders.
 The number of seats available at the meeting will be considerably limited to increase the spaces
between shareholders’ seats.
 The proceedings of the meeting will be conducted smoothly and efficiently and will be shorter than inprevious years.
 In consideration of the safety of shareholders, the use of elevators will be prohibited. Please take thestairs to the meeting place on the second floor.
 Officers and management staff attending the meeting will 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 prospective of preventing the spread of infection, we strongly request that you exercise yourvoting rights in writing or via the Internet in advance and refrain from attending the meeting. Pleaserefer to pages 5 and 6 of this Notice for details on how to exercise your voting rights.
 We ask you to exercise particular caution for shareholders with underlying diseases, elderly
shareholders, pregnant shareholders, and shareholders with infants, who may be significantly affectedby infection.
 All shareholders attending the meeting are asked to bring and wear masks. Shareholders not wearing
masks will not be allowed to enter the meeting venue.
 Please use the disinfectant provided at the meeting venue before attending the meeting.
 Shareholders who have a cough or who appear to be unwell may be denied entry or asked to leave.
 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 the 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 10, 2020
To our shareholders:
Masaki Uchikura,
Representative Director and President

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

Notice of the 75th Ordinary General Meeting of Shareholders
We are pleased to announce the 75th Ordinary General Meeting of Shareholders of ORGANOCORPORATION (the “Company”), which will be held as indicated below.
Due to recent developments, such as the declaration of a state of emergency by the Japanese Government, astate of emergency measures by the Tokyo Metropolitan Government, strongly emphasized official requests
have been issued by the Japanese Government and the prefectural governors to refrain from unnecessarily
outings to prevent the spread of COVID-19. After giving serious consideration to the current state of affairs,
the Company has decided to hold this General Meeting of Shareholders with appropriate measures put inplace to prevent infection.
In light of the strongly emphasized official requests to refrain from unnecessary outings, we strongly
request that you refrain from attending this General Meeting of Shareholders and instead to make all
efforts to exercise your voting rights either by writing or via the Internet from the standpoint ofpreventing the spread of infection. We ask you to exercise particular caution for shareholders with
underlying diseases, elderly shareholders, pregnant shareholders, and shareholders with infants, who
may be significantly affected by infection. Upon exercising your voting rights in writing or via theInternet, etc., please review the attached Reference Documents for General Meeting of Shareholders,and exercise your voting rights by 5:00 p.m. on Thursday, June 25, 2020 (JST).

1. Date and Time:

Friday, June 26, 2020 at 11:00 a.m. (JST) (Reception is scheduled to be open at
10:00 a.m.)(Please note that the meeting will be held one hour later than usual.)

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 75th
fiscal year (from April 1, 2019 to March 31, 2020), 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 75th fiscal year (from April
1, 2019 to March 31, 2020)
Matters to be resolved:
Proposal No. 1 Election of Nine Directors
Proposal No. 2 Election of Two Substitute Audit and Supervisory Board Members-3-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 twice or more times via theInternet, etc., the last vote will be considered valid.

Notice of year-end dividends for the 75th fiscal year
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. Year-end dividends are in principle a matter for resolutionof the Ordinary General Meeting of Shareholders. However, in view of the impact of the spread of COVID19 infection and other factors, it was decided to pay the year-end dividend for the 75th fiscal year (from
April 1, 2019 to March 31, 2020) by resolution of the Board of Directors in order to promptly pay a yearend dividend with a record date of March 31, 2020.
The details of the resolution passed at the meeting of the Board of Directors held on May 12, 2020
regarding the year-end dividend for the 75th fiscal year of the Company.
(1) Type of dividend property
Cash(2) Allotment of dividend property and their ¥57 per common share of the Company
Total dividend amount is ¥655,906,524
total amount(3) Effective date of dividends of surplus
June 11, 2020
Please note that the Company encloses “Year-end Dividend Receipt” (“About the bank account” for those
who specify a bank transfer and “How to receive dividends” for those who specify the method of
proportional allocation based on the number of shares) and “Dividend Statement.” If you would like toreceive your year-end dividend with “Year-end Dividend Receipt,” please receive it at JAPAN POSTBANK Co., Ltd. or a post office during the payment period.

-4-

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: Friday, June 26, 2020, at 11:00 a.m. (Reception starts at 10:00
a.m.)(Please note that the meeting will be held one hour later than usual.)
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 thenreturn the form by postal mail so that your vote is received by the deadline.
Deadline: To arrive by no later than 5:00 p.m. Thursday, June 25, 2020
Exercising Voting Rights via the Internet, etc.
Please access the designated website for exercise of voting rights, and enter your approval ordisapproval by the deadline.
Deadline: Exercised by no later than 5:00 p.m. Thursday, June 25, 2020
Please refer to the page 6 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
“Consolidated Statement of Changes in Equity” and “Notes to Consolidated Financial Statements” in
the Consolidated Financial Statements, and “Statement of Changes in Equity” and “Notes to Nonconsolidated Financial Statements” in the Non-consolidated Financial Statements that are madeavailable on the Company’s website under laws and regulations and the Company’s Articles ofIncorporation are not available in this notice. The Consolidated Statement of Changes in Equity, theNotes to the Consolidated Financial Statements, the Statement of Changes in Equity and the Notes to
Non-consolidated Financial Statements posted on the Company’s website are subject to audit by the
Independent Auditor and the Audit and Supervisory Board Members and the Audit and Supervisory
Board.

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/)-5-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 if you want to change your vote after exercising your voting right, please access the website for
PC 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 PC 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 personal computer,smartphone, or mobile phone, 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.

-6-

Reference Documents for General Meeting of Shareholders
Proposal No. 1

Election of Nine Directors

The terms of office of all ten 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, decreasing the number of Internal Directors by one, in order to increase the ratio of Outside
Directors to the Board of Directors to at least one-third, for the purpose of further strengthening corporate
governance.
The candidates for Directors are determined by the Board of Directors after obtaining opinions based onreview 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
Director and President(Representative Director)
President and Executive
OfficerManaging Director andExecutive Officer
President of Performance
Products Business
Managing Director andExecutive Officer
President of R & D andEngineering
Director and Executive
OfficerPresident of Industrial Plant
Business and Senior General
Manager of Plant Division
Director and Executive
OfficerPresident of Corporate
Management and Planning
and General Manager ofCorporate Strategy andPlanning Dept.

Attendance at Boardof Directors meetings
100%(16/16)

1

Masaki Uchikura

Reelection2

Hitoshi Hori

Reelection

3

Haruki Myouga

Reelection

4

Yasutoshi Nakayama

Reelection

5

Nobuyoshi Suda

Reelection

6

Masayuki Yamada

Reelection

Director

100%(13/13)7

Motoo Nagai

Reelection
OutsideOutside Director

100%(16/16)

8

Keikou Terui

Reelection
OutsideOutside Director

88%(14/16)

9Kenji Hirai

Reelection
OutsideOutside Director

100%(13/13)100%(16/16)100%(16/16)100%(16/16)100%(13/13)

Directors Nobuyoshi Suda, Masayuki Yamada, and Kenji Hirai were elected at the 74th Ordinary General Meeting of
Shareholders, which was held on June 27, 2019, and they assumed office on that day. Accordingly, the attendance
figure stated above for the Directors indicates their attendance to the meetings of the Board of Directors that were
held on and after June 27, 2019.

-7-

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
3 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

7,100

Chairman of the Board (Representative
Director of ORGANO FOOD TECHCORPORATION (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 Office 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 advanced material business as a Director of
Tosoh Corporation, utilizing his expertise in functional material. After being appointed as a Director of theCompany, as President of Performance Products Business, he has drawn the growth strategy of the businessdivision. After being appointed as the Director and President of the Company, he has been demonstrating his
leadership in promoting long-term management plans and formulating and 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.

-8-

Candidate
No.

Name (Date of birth)

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

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

June 2000

Director of Eco-Techno Corporation

June 2006

Manager of Planning and Development,
Electronic Materials Division and Corporate
Planning Division of Tosoh Corporation

June 2011

Manager of Planning and Development,
Advanced Materials Division and Corporate
Production Technology Division

Mar. 2012

President (Representative Director), EcoTechno Corporation (retired in October
2015)

Reelection

June 2012

Associate Director of Tosoh Corporation(retired in June 2014)

Hitoshi Hori
(November 19, 1957)

June 2014

Managing Director and Executive Officer of
the Company

June 2015

Managing Director and Executive Officer,
General Manager of Trade Control Office

June 2016

Managing Director and Executive Officer,
President of Corporate Management andPlanning, and General Manager of Trade
Control Office

June 2017Managing Director and Executive Officer,
President of Corporate Management andPlanning

June 2019

Managing Director and Executive Officer,
President of Performance Products Business

Tenure as Director
6 years2

Number of theCompany’s
shares owned

4,200

Chairman of the Board (Representative
Director) of ORGANO FOOD TECHCORPORATION
Current position[Significant concurrent positions outside the Company]
Chairman of the Board (Representative Director) of ORGANO FOOD TECH CORPORATION[Reasons for nomination as candidate for Director]
Hitoshi Hori had been engaged in company management for many years at the Company’s affiliated company
that is engaged in the construction industry as Director and President. After being appointed as a Director of theCompany, he has promoted development of advanced technologies as a Director in charge of Development
Division, utilizing his knowledge and experience relating to life science. After that, he has a track record in theestablishment of group-wide management strategy and management and operation planning as a Director in
charge of all management divisions. Currently, as the President of Performance Products Business, he has been
involved in the search and development of high value-added functional materials and business expansion
strategies.
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.

-9-

Candidate
No.

Name (Date of birth)

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

Joined the Company

June 2011

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

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

Reelection

Apr. 2013

Haruki Myouga(February 21, 1956)

Executive Officer, Senior General Manager
of R&D Center

Apr. 2015

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

June 2016

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

June 2017Managing Director and Executive Officer

June 2018

Managing Director and Executive Officer,
President of R & D and Engineering

Tenure as Director
4 years

Number of theCompany’s
shares owned

5,000

Current position
3(Responsibilities)
In charge of Environment, Safety and Quality Assurance
Dept. and Purchasing and Logistics Dept.
[Significant concurrent positions outside the Company]
None[Reasons for nomination as candidate for Director]
Haruki Myouga has been engaged in technology development, especially wastewater treatment, for many
years, and led research and development as a Senior General Manager of R&D Center, utilizing his advanced
expertise and experience relating to biotechnology. After being appointed as a Director of the Company, he has
been in charge of Engineering Technology Division and promoted improvement of technological capabilities
and creation of new technology and products. Currently he is in charge of the Environment, Safety and Quality
Assurance Department, Purchasing Department, etc., and is contributing to the improvement of company-widesafety and quality, and cost-cutting initiatives.
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)

Reelection

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 Business

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

Yasutoshi Nakayama(July 30, 1961)
Tenure as Director
2 years4

Number of theCompany’s
shares owned

3,400

Current position[Significant concurrent positions outside the Company]
None[Reasons for nomination as candidate for Director]
Yasutoshi Nakayama, as a top of the Plant Division, one of the Company’s core businesses, has been putting
effort in business growth and improvement of revenue, after being engaged in company management as thepresident of the Company’s overseas subsidiary. After being appointed as a Director of the Company, as the
Senior General Manager of Plant Division and President of Industrial Plant Business, he has been in charge ofwhole Water Treatment Engineering Business Unit, and working for expansion of the businesses and stableearnings 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.

- 11 -

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)

Reelection

Apr. 2016

Nobuyoshi Suda
(November 19, 1963)

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

Tenure as Director
1 year

1,800

Chairman of Organo (Vietnam) Co., Ltd.
(retired in June 2018)
June 2019

5

Number of theCompany’s
shares owned

Director and Executive Officer, President ofCorporate Management and Planning andGeneral Manager of Corporate Strategy andPlanning Dept.
Current position(Responsibilities)
In charge of Internal Auditing Office, Secretary Office,Global Management and Planning, Legal and Patent Dept.,
Trade Control Office, and Branches[Significant concurrent positions outside the Company]
None[Reasons for nomination as candidate for Director]
Nobuyoshi Suda has been engaged in Plant Technology Division, especially electronics industry, for many
years and has been responsible for businesses in electronics industry field. In addition, he has been engaged incompany management as the Representative Director and General Manager (President) of the Company’s
overseas subsidiary. After being appointed as a Director of the Company, as the General Manager of Corporate
Strategy and Planning Dept., he not only promotes the planning and execution of company-wide growthstrategies, but also improves group-wide internal controls and promotes CSR activities and complianceactivities as a Director in charge of all administrative divisions.
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. 1985

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

June 2007

President of Tosoh Bioscience, Inc.

Number of theCompany’s
shares owned

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)

Reelection
Masayuki Yamada(January 7, 1959)

Director of Tosoh Bioscience, Inc. (retired inJune 2019)

Tenure as Director
1 year1,100

Director of Tosoh Bioscience LLC (retired inJune 2019)
June 2016

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

June 2017

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

6

Chairman of the Board of Tosoh America,
Inc.
June 2019

Director, Executive Vice President, General
Manager of Research and Development
Planning, President of Specialty Group, andPresident of Engineering Group of Tosoh
Corporation
Director of the Company
Current position[Significant concurrent positions outside the Company]
Director, Executive Vice President of Tosoh Corporation
Chairman of the Board of Tosoh America, Inc.
[Reasons for nomination as candidate for Director]
Masayuki Yamada has been engaged in bioscience field at Tosoh Corporation for many years. After being
appointed as a Director, Executive Vice President, he has been leading management and operation of not only
Specialty Group but also a wide range of divisions, such as Research and Planning Division and EngineeringGroup, and contributed to creation and expansion of businesses of the aforesaid company. After being
appointed as a Director of the Company, he has been giving useful opinions that deepen the sharing of
information and the creation of synergies among the Group, utilizing his wealth of knowledge and 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.

- 13 -

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

2,000

Outside Audit and Supervisory Board
Member of the Company

Tenure as Outside Director
5 years
June 2015

Outside Audit & Supervisory Board Memberof Nisshin Seifun Group Inc.
Outside Director of the Company

June 20197

Outside Director of Nissan Motor Co., Ltd.
Outside Director of Nisshin Seifun GroupInc.
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]
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 theCompany, he has been giving us useful opinions and advices on the management of the Company, especiallyenhancement of governance, utilizing his abundant and various knowledge. In addition to high ethicalstandards, 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 sustainable growth and improvement ofcorporate value of the Group. Therefore, judging him as being capable of appropriately performing his duties
as an Outside Director, the Company nominates him as a candidate for Outside Director.
[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)

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

Deputy Minister of Technical Affairs,
Minister’s Secretariat

Jan. 2011

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

Reelection
OutsideIndependent

Apr. 2012

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

Aug. 2013

President of Nonprofit Organization Japan
Utility Telemetering Association

Keikou Terui(July 27, 1953)

Oct. 2013

Senior Fellow of Chemicals Evaluation andResearch Institute, Japan (retired in
September 2016)

Tenure as Outside Director
4 years

June 2014

Director of Union of Japanese Scientists andEngineers

Number of theCompany’s
shares owned

3,200

Outside Director of Ube Industries, Ltd.

8

Mar. 2016

Outside Director of Bridgestone Corporation

June 2016

Director of Chemicals Evaluation andResearch Institute, Japan
Outside Director of the Company
Current position[Significant concurrent positions outside the Company]
President of Nonprofit Organization Japan Utility Telemetering Association
Outside Director of Ube Industries, Ltd.
Outside Director of Bridgestone Corporation[Reasons for nomination as candidate for Outside Director]
Keikou Terui had held a number of management positions at 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 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 advices on the managementof the Company, utilizing his abundant and various piece of knowledge.
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.

- 15 -

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)

Reelection
OutsideIndependent

Apr. 1990

Senior Research Fellow

Apr. 1998

Senior Fellow

Jan. 2002

Vice President

Kenji Hirai(March 20, 1953)

Apr. 2004

Vice Chairman of the Board, President

Dec. 2018

Vice Chairman of the Board (Representative
Director), President (retired in March 2019)

Apr. 2019

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

June 2019

Outside Director of the Company

Tenure as Outside Director
1 yearNumber of theCompany’s
shares owned

1,200

Current position[Significant concurrent positions outside the Company]
Vice Chairman of the Board (Representative Director) of Sagami Chemical Research Institute9[Reasons for nomination as candidate for Outside Director]
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 on 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 advices on the management of the Company, especially on
research and technological development, utilizing his abundant and various piece of knowledge.
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]
Kenji Hirai is the Vice Chairman of the Board (Representative Director) of Sagami Chemical ResearchInstitute. The Company and the aforesaid institute are implementing joint research. The amount of expenditure
paid by the Company to the institute in the 75th fiscal year is ¥11 million. In addition, the Company has madedonations to the institute. The amount paid in the fiscal year ended March 31, 2020 is ¥300,000, which isinsignificant.

Notes: 1.

2.

3.

4.
5.
6.

7.

The positions and responsibilities held by Masaki Uchikura in the past five 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 Hitoshi Hori presently or in the past five years at the subsidiaries (EcoTechno Corporation) of the Company’s parent company Tosoh Corporation are presented in the above “Careersummary, and position and responsibility in the Company”.
The positions and responsibilities held by Masayuki Yamada presently or in the past five years at the Company’s
parent company Tosoh Corporation and its subsidiaries (Tosoh Bioscience, Inc., Tosoh Bioscience LLC, Tosoh
Techno-System, Inc., Tosoh Europe, N.V., and Tosoh America, Inc.) 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 Masayuki Yamada, Motoo Nagai, Keikou
Terui, and Kenji Hirai to set the minimum amount of liability provided by laws and regulations as the amount for
liability for damages under Article 423, paragraph 1 of the Companies Act in cases where there is good faith andno gross negligence, in accordance with Article 427, paragraph 1 of the same Act and the Articles ofIncorporation of the Company. If they are elected as Directors, the Company plans to enter into the same
agreement with each of them.
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 the- 16 -

8.

9.

10.

fiscal 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. In the United States, the Company
also entered into an administrative settlement agreement with the United States Securities and Exchange
Commission and paid a surcharge with respect to material 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 is discovered, but he had been providing recommendations from a legal compliance perspective at thesaid company’s board of directors meetings before this issue. In addition, since he has become aware of the issue,
Motoo Nagai has appropriately fulfilled his duties by giving directions regarding comprehensive investigations,recurrence prevention measures, etc.
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 by 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, since he has become aware of the issue, Motoo Nagai
has appropriately fulfilled his responsibilities by giving directions regarding comprehensive investigations,recurrence prevention measures, etc.
Ube Industries, Ltd., at which Keikou Terui currently serves as Outside Director, announced in February 2018that it had not carried out product tests in certain low-density polyethylene products that were meant to be
carried out as part of an agreement with customers. In addition, the said company announced non-conformity for
JIS certification of limestone aggregate for ready-mix concrete in May 2018, and fourteen new cases ofimproprieties in quality in June 2018. Further the said company announced, in October 2018, two cases ofimproprieties in quality including an overseas subsidiary, as the result of supplementary investigation. Keikou
Terui had been unaware of the said issue before the facts that led to the said company’s announcement came tolight, but he had been providing recommendations from a legal compliance perspective at the said company’sboard of directors meetings before this issue. In addition, since he has become aware of the issue, Keikou Terui
has appropriately fulfilled his responsibilities by requesting an investigation of the cause of the improprieties andthorough enforcement of compliance structure, etc.
The Company has submitted notification to the Tokyo Stock Exchange that 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 20.

- 17 -

Proposal No. 2

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 Kimio Watabe 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 Member 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 Power Plant Division, one of
the core businesses of the Company. After being appointed as a Director of the Company, he has managed
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 andexperience.
In addition to high ethical standards and 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 anappropriate audit to 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.

- 18 -

Candidate
No.

Name (Date of birth)

Kimio Watabe(September 5, 1953)

Career summary and position in the Company
Apr. 1976

Joined Nisso Petrochemical Industries Co.,
Ltd. (currently Maruzen Petrochemical Co.,Ltd.)

July 1997

General Manager of Production, Yokkaichi
Plant

June 2006

General Manager of Yokkaichi Plant

June 2007

Executive Officer, General Manager of
Yokkaichi Plant

June 2010

Executive Officer

Number of theCompany’s
shares owned

Director and Vice President of KEIYOPOLYETHYLENE CO.,LTD.
June 2011

President (Representative Director) (retired
in June 2014)

June 2014

Advisor of Maruzen Petrochemical Co., Ltd.
(retired in July 2014)

Aug. 2014

General Manager of Production, MORIN
Chemical Industries Co., Ltd.

Dec. 2014

Director, General Manager of Production

Dec. 2018

Advisor20

Current position[Significant concurrent positions outside the Company]
None[Reasons for nomination as candidate for Substitute Outside Audit and Supervisory Board Member]
Kimio Watabe has led plant operation as a general manager of the plant of major petrochemical company andbeen engaged in company management as a president of an associated company of the aforesaid company.
In addition to high ethical standards and 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 anappropriate audit to the management of the Company. Therefore, judging him as being capable of appropriately
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.

Kimio Watabe is a candidate for Substitute Outside Audit and Supervisory Board Member.
If the number of Audit and Supervisory Board Member does not satisfy the number prescribed by laws andregulations and Tomoaki Itou is appointed, the Company plans to enter into an agreement to set the minimum
amount of liability provided by laws and regulations as the amount for liability for damages under Article 423,
paragraph 1 of the Companies Act in cases where there is good faith and no gross negligence, in accordance with
Article 427, paragraph 1 of the same Act and the Articles of Incorporation of the Company. If the number of
Outside Audit and Supervisory Board Member does not satisfy the number prescribed by laws and regulations
and Kimio Watabe is appointed, the Company plans to enter into the same agreement with him.

- 19 -

(Reference)
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 trading counterparty, 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
trading counterparty 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 significant amount of donations
from the Company.
(xii) A person who is a spouse or a relative within second degree of separation with any persons (i) to(viii) above (limited to material persons).

- 20 -

(Attached Documents)

Business Report(From April 1, 2019 to March 31, 2020)

1. Status of the corporate group(1) Business progress and results
Looking at the global economic situation during the fiscal year under review, the growth rate in2019 stagnated at the lowest level since directly after the global financial crisis in 2009, against
the backdrop of the slowdown of the Chinese and European economies and the decrease in global
trade volume triggered by trade friction between the United States and China, while the IMF
announced its projection for negative global economic growth in 2020 due to the impact of global
spread of COVID-19. Such conditions are expected to seriously hurt the economy.
The business environment surrounding the Organo Group continued on a more vibrant trend than
expected mainly due to production levels staying high, and the continuation of large-scale
semiconductor-related capital investment centered in Japan and Taiwan in the second half of theyear, despite an ongoing suppression of memory investment in the electronics field, our key
market. In addition, capital investment and production remained firm also in the general industrial
field. Since the beginning of 2020, the spread of COVID-19 has led to turmoil in logistics andhuman movement, particularly that which is overseas related. Nevertheless, its impact on earnings
performance in the fiscal year under review was limited.
Consequently, orders received increased by 1.1% year on year to ¥104,986 million and net sales
increased by 4.6% to ¥96,515 million, updating the highest ever results for orders received andnet sales for the second year in a row. The carry-over balance for order backlog, which will have amajor effect on sales for the next fiscal year was ¥67,837 million, exceeding the level of theprevious fiscal year (up 14.3%). On the profit side, operating profit increased by 51.1% to arecord high of ¥9,908 million, ordinary profit increased by 51.9% to ¥9,929 million, and profit
attributable to owners of the parent increased by 60.9% to ¥7,162 million. In addition, return on
equity (ROE) was 12.4% in comparison with 8.4% in the previous fiscal year, and the operating
profit ratio was 10.3% in comparison with 7.1% in the previous fiscal year.
Results by segment are as follows.
Starting from the fiscal year under review, we changed the classification of the equipment andchemical business of overseas businesses from inclusion in the “Water Treatment Engineering
Business Unit” to inclusion in the “Performance Products Business Unit.” As a result, thecomparisons and analysis of the previous fiscal year are based on a comparison against theprevious fiscal year prepared using the classification method following the changes.
<Water Treatment Engineering Business Unit>
In this business, despite a slowdown in semiconductor capital investment in the electronics field
in China, production levels remained high in Japan and overseas. Moreover, in the second half ofthe fiscal year, the Plant Division and Service Solutions Division exceeded their expectations,mainly owing to cutting-edge investment by a foundry in Taiwan and an order for a large-scale
project that will be the Company’s largest ever in Japan. Meanwhile in the general industrial field,
business is trending firmly, mainly due to investment for rationalization and labor-saving as acountermeasure to labor shortage, and investment for maintenance and renewals directed at aging
facilities. Consequently, orders received increased by 1.6% year on year to ¥86,475 million andnet sales increased by 5.5% to ¥77,921 million. On the profit side, in addition to the effect ofincreased sales mainly in the Plant Division, due to cost-cutting initiatives with respect to projects
in Japan and overseas, sales expansion in the Service Solutions Division, which has comparatively
high profit margins, led to improvement in the profitability. Consequently, operating profit
increased by 72.3% year on year to ¥8,921 million.
- 21 -

<Performance Products Business Unit>
In this business, despite the impact of a decline in plant operating rates, mainly due to reduced
exports, the injection of new products in the standard water treatment equipment field and growthin sales of water treatment chemicals for overseas markets led to a roughly flat year-on-year
performances, with orders received decreased by 1.2% year on year to ¥18,510 million and net
sales increased by 0.9% to ¥18,593 million. Meanwhile on the profit side, gross profit margin was
similar to the previous fiscal year, but due to an increase of expenses in line with thestrengthening of sales systems with an eye to the expansion of the overseas business activities andan increase of development investment in new products, operating profit decreased by 28.5% to¥986 million.
Item

Orders received
Amount(millions ofyen)

Percentage of
total
(%)

Water Treatment Engineering
Business Unit

86,475

Performance Products
Business Unit

Segment

Total

Net sales
YoY

Amount(millions ofyen)

Percentage of
total
(%)

YoY

82.4

+1.6%

77,921

80.7

+5.5%

18,510

17.6

-1.2%

18,593

19.3

+0.9%

104,986

100.0

+1.1%

96,515

100.0

+4.6%

(2) Capital investment
The Organo Group’s total outlays for capital investment amounted to ¥965 million during the
fiscal year under review.
(3) Financing
During the fiscal year ended March 31, 2020, the Company procured ¥3,000 million as long-termborrowings through financial institutions for use with respect to funding requirements of theGroup.
(4) Issues to be addressed
During the fiscal year under review, we focused on three key business fields of the electronics
industry, performance products, and new businesses. In particular, in the electronics field, wewere successfully involved in capital investment projects for cutting-edge semiconductors in
Taiwan and succeeded in receiving the largest-ever order for a semiconductor project in Japan. At
the same time, as a result of our efforts to promote cost reduction measures in each project and tobuild solution systems both in Japan and overseas, we achieved a significant improvement in thescale of sales and profitability. In the field of performance products, we have also made certain
progress by developing our business overseas, including in China and Taiwan, and establishing afoundation for overseas sales of standard equipment and water treatment chemicals. In the field of
new businesses, our accomplishments in the field of electronic material purification arebroadening. Meanwhile, in purifying and recovering facilities for lithium-ion batteries andcontinuous chromatographic systems for use in biopharmaceuticals, we are making progress
through such initiatives as conducting joint trials with customers and external research institutions,but time will be required to transform these efforts into a commercial business.
In the next Medium-term Management plan, we will continue to focus on “expanding theelectronics field” and “creating new businesses.” At the same time, we will promote integrated
initiatives in the performance products business and solutions business we have been working onin the past years and will also focus our efforts on “strengthening the solutions business” as a newpriority area. Currently, there are concerns that the COVID-19 pandemic across the world willlead to a prolonged stagnation in economic activities worldwide, making the outlook for the future
extremely difficult. However, in the medium to long term, the development in the electronics
industry, such as semiconductors and electronic components, is expected to continue, driven by
the expansion of medical and other various businesses as well as automated driving using 5G andother new communication technologies and AI/IoT technologies. We also believe that our
direction will not change, as seen in the solutions business aiming to enhance customer value
through the combination of ICT/AI technologies and various performance materials and products,- 22 -

as well as in the new businesses aiming to develop advanced separation and purification
technologies used for lithium-ion batteries, biopharmaceuticals, and cutting-edge semiconductors.
Furthermore, with respect to our initiatives such as promoting various types of business reform
aimed at improving productivity, cutting costs and strengthening overseas business expansion, andestablishing a global engineering center, we recognize the need to further strengthen our responses,
from a Business Continuity Plan (BCP) perspective.
Management targets for fiscal 2022, the final year of the Medium-term Management Plan, are net
sales of ¥105.0 billion or more, and operating profit of ¥9.0 billion or more, and the OreganoGroup aims to build a profit structure that can achieve an operating profit ratio and ROE (Return
On Equity) of at least 8.0% consistently and continuously. Furthermore, in order to evaluate thestatus of progress on sustainably enhancing corporate value and improving profitability, theOrgano Group positions ROE and consolidated operating profit ratio as key indicators.
An overview of the Medium-term Management Plan is provided is as follows.

- 23 -

Medium-term Management Plan 2020-2022
What We Aim For (Midium-term Management Vision)

A profitable engineering company that can deliver the optimal quality of water at the most reasonable
cost in the most timely manner to the electronics industry and other industries, in key economic areasin Asia.



A company that is globally expanding solution services utilizing high value-added performancematerials and cutting-edge ICT/AI technology on a platform of advanced specialist knowledge andextensive experience.



A company creating and developing new business by our original Separation and Purification
technology for creating new values of future industry.

Management Target
To achieve:
To establish an earnings structure capable ofconsistently and continuously achieving:

Net sales of ¥105.0 billion or more
Operating profit of ¥9.0 billion or more
Profit margin of 8.0% or more
ROE of 8.0% or moreCore Measures○

Expansion of Electronics Field
・ Development of cutting-edge separation and purification technology to meet ever moresophisticated needs
・ Expansion of capacity and profitability through streamlining engineering services and cutting
costs

○

Strengthening the solutions business・ Enhancing customer value through the combination of high value added performancematerials and products and ICT/AI technologies
・ Enhancement of overseas service solution systems○

Creation of New Businesses
・ Expansion of separation and purification technology to the fields of lithium-ion batteries,
biopharmaceuticals and cutting-edge semiconductors- 24 -

(5) Changes in assets and profit and loss

Category

72nd term
Fiscal year ended
March 31, 2017

73rd term
Fiscal year ended
March 31, 2018

74th term
Fiscal year ended
March 31, 201975th term(Fiscal year underreview)
Fiscal year ended
March 31, 2020

Orders received(Millions of yen)

74,041

88,049103,838

104,986

Net sales (Millions of yen)

81,114

79,226

92,27396,515

Operating profit(Millions of yen)

4,114

3,821

6,558

9,908

5.1

4.8

7.1

10.3

Ordinary profit(Millions of yen)

4,162

3,933

6,538

9,929

Profit attributable to ownersof parent (Millions of yen)

2,731

2,780

4,452

7,162

Basic earnings per share (yen)Operating profit ratio (%)

237.18241.50388.48626.05Return on equity (ROE) (%)

5.7

5.5

8.4

12.4

Total assets (Millions of yen)

95,40596,036

101,257

101,448

Net assets (Millions of yen)

49,034

51,68154,79560,857

Net assets per share (yen)4,247.27

4,477.64

4,784.81

5,301.26

Notes: 1.

2.

3.

The Company implemented share consolidation on October 1, 2017, consolidating five common shares into one.
Basic earnings per share and net assets per share have been calculated as if the aforementioned shareconsolidation had been carried out at the beginning of the 72nd fiscal year.
The Company has applied the “Partial Amendments to Accounting Standard for Tax Effect Accounting” (ASBJ
Statement No. 28; February 16, 2018) from the beginning of the 74th fiscal year, and this accounting standard,
etc. has been retrospectively applied to the amount of total assets for the 73rd fiscal year.
When calculating basic earnings per share, common shares of the Company held by the Officer Share Delivery
Trust have been included in treasury shares excluded from the calculation of the average number of shares
during the period for the 74th and 75th fiscal years. 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.

- 25 -

Orders received / Net sales

Operating profit / Operating profit ratio

Orders received (Millions of yen)

Net sales (Millions of yen)
103,838
92,27388,04981,11474,041

Operating profit (Millions of yen)

Operating profit ratio (%)

104,986
96,515

9,908

79,226
6,558

72nd term

73rd term

74th term

75th term(Fiscal year underreview)

Profit attributable to owners of parent / Basic earnings per share

4,114

3,821

5.1

4.8

72nd term

73rd term

10.3

7.1

74th term

75th term(Fiscal year underreview)

ROE

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

(%)

7,162

12.4

626.05
8.4

4,452
2,731

2,780

237.18241.5072nd term

73rd term

388.4874th term

75th term(Fiscal year underreview)

Total assets

5.5

72nd term

73rd term

101,257

Net assets (Millions of yen)75th term(Fiscal year underreview)

Net assets per share (Yen)60,857

101,488

49,03496,036

51,68154,7955,301.26

4,247.27

72nd term

74th term

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

95,405

5.7

73rd term

74th term

75th term(Fiscal year underreview)

72nd term- 26 -

4,477.64

73rd term

4,784.81

74th term

75th 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 4,887 thousand shares(equity ownership 42.2% 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.

(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 ofwastewater treatment systems andrelated 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

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. The nine major subsidiaries above are consolidated subsidiaries of the Company, and one affiliated company was
accounted for by the equity method.

- 27 -

(7) Major businesses (As of March 31, 2020)
Business Segment

Water Treatment
Engineering Business
Unit

Performance Products
Business Unit

Major Products and Business
Plant Division

Ultrapure water production facilities, Pure water production facilities,
Industrial process water treatment facilities, Wastewater treatment
facilities, Wastewater recovery facilities, Valuable material recovery
facilities, Production processing-related facilities

Service Solutions
Division

Replacement of expendable items, Maintenance, Operational Support
Services, Renovation/Reconditioning, Build-Own-Operate (BOO),
Comprehensive maintenance service

Standard water
treatment equipment

Ultrapure water production systems, Pure water production systems,
Filters, Multi-functional water

Water treatment
chemicals

RO membrane protection chemicals, Wastewater treatment chemicals,
Cooling water treatment chemicals, Cleaning chemicals, Boiler water
treatment chemicals

Food processing
materials

Food ingredients, Food processing agents(8) Major business offices and factories (As of March 31, 2020)
Head Office

Head officeKoto-ku, Tokyo

Factories

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

Chugoku Branch

Hiroshima City, Hiroshima

Kyushu Branch

Fukuoka City, Fukuoka

Taiwan Branch

Hsinchu City, Taiwan R.O.C.

ORGANO PLANT SERVICECORPORATION

Bunkyo-ku, TokyoORGANO FOOD TECHCORPORATION

Satte City, Saitama

ORGANO ECO TECHCORPORATION

Koto-ku, Tokyo

The Company

In Japan

ORGANO ACTY CORPORATION Koto-ku, Tokyo

Subsidiaries
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- 28 -

(9) Employees (As of March 31, 2020)(i)

Employees of the Organo Group

Business Segment

Number of employees

Change from previous fiscal year-end

Water Treatment Engineering Business
Unit

1,749

Increase by 41

Performance Products Business Unit

359

Increase by 20

Company-wide (common)

141

Increase by 2

Note:

Total
2,249
Increase by 63
Due to a change in the reportable segment classification method from the fiscal year under review, changes from theprevious fiscal year-end are based on the new classification method.

(ii) Employees of the Company
Number of employees

Change from previous fiscal
year-end

1,051

Increase by 28

Average age

Average years of service

43.5 years old

15.9 years(10) Major lenders (As of March 31, 2020)
Amount of Borrowings(Millions of yen)

Lenders
Mizuho Bank, Ltd.

3,900

Sumitomo Mitsui Banking Corporation

1,020

MUFG Bank, Ltd.

1,020

The Hachijuni Bank, Ltd.

860

Mizuho Trust & Banking Co., Ltd.

760

- 29 -

2. Shares of the Company (As of March 31, 2020)(1) Total number of authorized shares: 25,392,000 shares(2) Total number of issued shares:11,589,925 shares (including treasury shares of 82,793 shares)(3) Number of shareholders:

4,641 shareholders(4) Major shareholders
Number of shares held(Thousands of shares)

Name of shareholder
Tosoh Corporation

Holding ratio
(%)

4,875

42.37

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

538

4.68

Japan Trustee Services Bank, Ltd. (Trust account)

514

4.47

Mizuho Bank, Ltd.

200

1.74

Mizuho Trust & Banking Co., Ltd.

155

1.35

Japan Trustee Services Bank, Ltd. (Trust account 5)

145

1.27

GOVERNMENT OF NORWAY

138

1.20

JPMorgan Chase Bank 385151

132

1.15

Japan Trustee Services Bank, Ltd. (Trust account 9)

124

1.08

BBH The Advisors’ Inner Circle Fund II Kopernik Global All-Cap
Fund

116

1.02

Notes:

1. The treasury shares (82,793 shares) are excluded in the calculation of the holding ratio shown above.
2. 53,800 shares of the Company held by Japan Trustee Services Bank, Ltd. (Trust account) (shares in the Officer
Share Delivery Trust) are not included in treasury shares.

(5) Other significant matters relating to shares
Pursuant to a resolution at the 73rd Ordinary General Meeting of Shareholders held on June 28,
2018, the Company introduced a performance-linked share-based remuneration plan using a trust
for Directors (excluding Non-Executive Directors) and Executive Officers (excluding nonresidents) of the Company, in order to heighten awareness of contributing to enhancing theOrgano Group’s medium- to long-term operating results and increasing corporate value. As of
March 31, 2020, the trust established by the Company held 53,800 shares of the Company.

- 30 -

3. Officers(1) Names etc. of Directors and Audit and Supervisory Board Members (As of March 31, 2020)
Position

Name

Director
Chairman of the Board of
Directors

Yasuyuki Koie

Director and President(Representative Director)
President and Executive
Officer

Masaki Uchikura

Managing Director andExecutive Office

Responsibility

Hitoshi Hori

President of Performance
Products Business

Managing Director andExecutive Office

Haruki Myouga

President of R & D andEngineering
In charge of Environment,
Safety and Quality Assurance
Dept. and Purchasing and
Logistics Dept.

Director and Executive
Officer

Yasutoshi Nakayama

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

President of Corporate
Management and Planning
and General Manager ofCorporate Strategy andPlanning Dept.
In charge of Internal Auditing
Office, Secretary Office,Global Management andPlanning, Legal and PatentDept., Trade Control Office,and Branches

Director and Executive
Officer

Director

Director

Director

Director

Significant concurrent
positions outside theCompany

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

Masayuki Yamada

Director, Executive Vice
President of Tosoh
Corporation
Chairman of the Board of
Tosoh America, Inc.

Motoo Nagai

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

Keikou Terui

President of Nonprofit
Organization Japan Utility
Telemetering Association
Outside Director of Ube
Industries, Ltd.
Outside Director of
Bridgestone Corporation

Kenji Hirai

Vice Chairman of the Board(Representative Director) ofSagami Chemical ResearchInstitute

Audit and Supervisory Board
Masahiko Toyoda
Member (Full-time)- 31 -

Position

Name

Responsibility

Significant concurrent
positions outside theCompany

Audit and Supervisory Board
Masao Wada
MemberCertified Public Accountant
Representative of Wada
Certified Public Accountant
OfficeOutside Corporate Auditor of
Nissin Sugar Co., Ltd.

Audit and Supervisory Board
Wataru Higuchi
Members;

LawyerCertified Public Accountant
Representative Partner of
OOTEMON LAW AND
ACCOUNTING
Executive Officer of Advance
Residence Investment
Corporation
Outside Director (Serving as
Audit and Supervisory
Committee Member) of
Marubeni Construction
Material Lease Co., Ltd.

Notes: 1.
2.
3.

4.

Directors Motoo Nagai, Keikou Terui, and Kenji Hirai are Outside Directors.
Audit and Supervisory Board Members Masao Wada and Wataru Higuchi are Outside Audit and Supervisory
Board Members.
Changes in Directors and Audit and Supervisory Board Members during the fiscal year under review are as
follows:(i) Directors Masaki Shiomi and Keiichiro Nishizawa, and Outside Audit and Supervisory Board Member
Osamu Hamada retired from their office due to expiration of their terms of office at the conclusion of the74th Ordinary General Meeting of Shareholders held on June 27, 2019.
(ii) Nobuyoshi Suda, Masayuki Yamada, and Kenji Hirai were elected as Directors, and Wataru Higuchi waselected as an Audit and Supervisory Board Member at the 74th Ordinary General Meeting of Shareholders
held on June 27, 2019, and assumed their office.
Audit and Supervisory Board Members Masao Wada and Wataru Higuchi possess extensive financial andaccounting knowledge as shown below.
・

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

・
5.

Audit and Supervisory Board Members Masao Wada and Wataru Higuchi are qualified as Certified Public
Accountants.
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 Masao Wada and Wataru
Higuchi 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 Yasuyuki Koie, Masayuki Yamada, Motoo Nagai, Keikou Terui and Kenji Hirai, andAudit and Supervisory Board Members Masahiko Toyoda, Masao Wada, and Wataru Higuchi,
which limit the amount of liability for damages as defined under Article 423, paragraph 1 of theCompanies Act to the minimum liability amount as stipulated in laws and regulations, presuming
they perform their respective duties in good faith and without gross negligence.

- 32 -

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

Policies and procedure of determining remuneration to Directors and Audit and Supervisory
Board Members

・ Basic policy on remuneration
The remuneration system for Executive Directors encourages business execution in line withmanagement policies and management targets and establishes a remuneration framework andremuneration standards which provide strong incentive for the achievement of short-term andmid- to long-term management targets in order to achieve sustainable growth and improve thecorporate value of the Group.
・ Remuneration framework
Remuneration to Executive Directors consists of fixed remuneration and performance-linked
remuneration, and performance-linked remuneration consists of short-term performance-linked
remuneration (cash) and mid- and long-term performance-linked remuneration (stock). Short-term
performance-linked remuneration is decided based on the consolidated operating profit for eachfiscal year. Mid- and long-term performance-linked remuneration is decided according toconsolidated ROE (Return On Equity), and shares of the Company are issued on a fixed dateevery year. The ratio of the total amount of performance-linked remuneration is intended to beapproximately 50% to 60% when the standard performance target set in advance is achieved, andthis ratio is higher for Directors of higher ranks.
Remuneration to Non-Executive Directors and Audit and Supervisory Board Members is a fixedamount according to their respective positions in the Company.
・ Process of determining remuneration
The Company has established the Nomination and Remuneration Advisory Committee as a nonstatutory advisory body to the Board of Directors in order to ensure objectivity and transparency
in the process of determining remuneration to Directors and provide an appropriate amount of
remuneration. The amount of remuneration to each Director is determined by resolution of theBoard of Directors based on the opinion of the Nomination and Remuneration Advisory
Committee and within the scope of the remuneration limit determined by resolution of theGeneral Meeting of Shareholders. The amount of remuneration to each Audit and Supervisory
Board Member is determined through 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

Category

Total amountof
remuneration,
etc.
(Millions ofyen)

Total amount of remuneration, etc. and Number of persons covered classified by type
Performance-linked remuneration
Fixed remuneration

Short-term(Cash)

Mid- and longterm (Stocks)

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)

238

99

9

81

56

7

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

17

17

1

－

－

－

Outside Directors

29

29

3

－

－

－

Outside Audit andSupervisory Board
Members

19

19

3

－

－

－

Total

305

166

16

81

56

7

Notes: 1.

The above figures include two Directors and one Outside Audit and Supervisory Board Member who retired
upon the conclusion of the 74th Ordinary General Meeting of Shareholders held on June 27, 2019.

- 33 -

2.
3.

4.
5.

6.

Remuneration of Directors does not include salaries as employees paid to directors who are also employees.
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. In addition to this limited amount of remuneration, the Company introduced aperformance-linked share-based remuneration plan for Directors (excluding Non-Executive Directors) byresolution of the 73rd Ordinary General Meeting of Shareholders held on June 28, 2018 in which the amount ofcash the Company may contribute shall be limited to ¥300 million for the three fiscal years in the initial
applicable period, and the total number of Company’s shares that may be issued for Directors (excluding NonExecutive 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 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.
Two Non-Executive Directors who are not eligible for performance-linked remuneration have been included
under Directors (excluding Outside Directors). Although Director Yasuyuki Koie is included in the number of
persons covered for performance linked remuneration, he is excluded from performance linked remunerationfrom June 27, 2019, due to him changing his status from executive Director to non-executive Director at theBoard of Directors meeting held after the 74th Ordinary General Meeting of Shareholders held on the
aforementioned date.
The amount of mid- and long-term performance-linked remuneration (stock) includes provision for share-based
remuneration for directors (and other officers) (¥49 million) in the fiscal year under review.

(4) 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, 2020).” Director
Kenji Hirai is Vice Chairman of the Board (Representative Director) of Sagami Chemical
Research Institute. In addition to the Company participating in join research with said institute(in fiscal year ended March 31, 2020, payments of research costs to said institute was ¥11
million) the Company also donates money to said institute (in fiscal year ended March 31,
2020, payment amount was ¥300 thousand), the amounts of both of those payments are
immaterial. For the other outside Directors, the Company does not have any important dealingor other special relationship with the said each organizations where the officers holdsignificant concurrent positions.

- 34 -

(ii) Principal activities during the fiscal year under review

Motoo Nagai

Director
Keikou Terui

Kenji Hirai

Masao Wada

Board ofDirectors
meetings

Audit andSupervisory
Board meetings

Status ofattendance

Status ofattendance

16/16(100%)

14/16
(88%)

13/13
(100%)

15/16
(94%)

–

He mainly provided opinions as he saw fit
concerning such issues as management planning,
corporate governance, internal control systems,
compliance, business strategies, financial planning,
export management, and security management,
based on his extensive knowledge and experience
relating to company management as a top-level
manager of a financial institution.

-

He mainly provided opinions as he saw fit
concerning such issues as management planning,technology strategies, research and development,internal control systems, group governance,business strategies, and risk management, based on
his extensive knowledge relating to industrial
policy and industrial technology as well as his
experience gained from holding key positions in
the Ministry of Economy, Trade and Industry.

-

He mainly provided opinions as he saw fit
concerning such issues as research and technology
development, new businesses, risk management,
and security management, based on his extensive
knowledge and experience as the head of a research
institution.

15/15(100%)

He mainly provided opinions as he saw fit
concerning such issues as accounting policy,
changes in accounting and auditing standards,
internal control systems, compliance, and risk
management, based on his extensive knowledge
and experience related to accounting and auditing
operations as a certified public accountant.

12/12(100%)

He mainly provided opinions as he saw fit
concerning such issues as group governance,internal audit, internal control systems, compliance,risk management and shareholder return policies,
based on his extensive knowledge and experience
related to legal, finance and accounting operations
as a lawyer and certified public accountant.

Audit andSupervisory
Board
Members
Wataru Higuchi

Notes: 1.

2.

13/13
(100%)

Status of Expression of Opinions

Director Kenji Hirai was elected at the 74th Ordinary General Meeting of Shareholders, which was held on June27, 2019, and he assumed office on that day. Accordingly, the attendance figure stated above for the Director
indicates his attendance to the meetings of the Board of Directors that were held on and after June 27, 2019.
Audit and Supervisory Board Member Wataru Higuchi was elected at the 74th Ordinary General Meeting of
Shareholders, which was held on June 27, 2019, and he assumed office on that day. Accordingly, the attendance
figure stated above for the Director indicates his attendance to the meetings of the Board of Directors and Audit
and Supervisory Board that were held on and after June 27, 2019.

- 35 -

4. Independent Auditor(1) Name of Independent Auditor
KPMG AZSA LLC
Note: The term of office of ARK MEIJI AUDIT & Co. (currently ARK LLC), the Company’s Independent
Auditor, expired at the conclusion of the 74th Ordinary General Meeting of Shareholders held on June 27,
2019.

(2) Amount of remuneration, etc. for Independent Auditor for the fiscal year under review
ARK MEIJI AUDIT & Co.
(currently ARK LLC)
Amount of remuneration, etc. forIndependent Auditor for the fiscal year
under review
Total amount of money and other financial
profits to be paid by the Company and its
subsidiaries

KPMG AZSA LLC–¥58 million¥1 million¥58 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 consolidated subsidiaries, overseas subsidiaries are audited by othercertified public accountants or audit firms (including those who have equivalent certificates inforeign countries) other than the Company’s Independent Auditor.

(4) Description of non-auditing services
After replacing the Independent Auditor, the Company continues to assign duties, which are notstatutory auditing duties as stipulated in Article 2, paragraph 1 of the Certified Public Accountants
Act (non-auditing services), to ARK MEIJI AUDIT & Co. (currently ARK LLC), the Company’s
former Independent Auditor.

(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 General Meeting of Shareholders, such as in cases where theIndependent Auditor falls under any of items described in Article 340, paragraph 1 of theCompanies Act or where the Independent Auditor has difficulty in performing audit operation
properly.

- 36 -

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 timely and properly, and ensuretransparency.

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- 37 -

(iii) Organization Structurea.

Board of Directors
The Board of Directors consists of ten 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), all three ofwhom have appropriate knowledge relating to finance and accounting, and one of whom
has appropriate knowledge of legal matters.

c.

Executive Officer System
The Company has introduced an Executive Officer System and appointed 15 members(including five members who serve concurrently as Directors) in order to differentiate
the “management decision-making and supervision function” of Directors and the“business execution function” for Executive Officers, thereby clarifying responsibilities
and accelerating decision-making.

d.

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.

e.

Monthly Business Conference
The Monthly Business Conference consists of Executive Directors, Executive Officers,
General Managers, etc., and they inform matters already approved at the Management
Meeting, and confirm the progress made on 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, which 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.

f.

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

g.

Nomination and Remuneration Advisory Committee
The Nomination and Remuneration Advisory Committee consists of five 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.

- 38 -

(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 2018 to March 2019) was conducted in April 2019, and based on the results of thatquestionnaire, an analysis/assessment was performed at the Board of Directors meetings in
May and June 2019, and future efforts in which to engage were discussed.
As a result of this assessment, the Company confirmed that the overall effectiveness of theBoard of Directors was ensured in that the Board of Directors clarified the corporate
philosophy and management vision and responded appropriately to the planning andexecution of management strategies; the chairman created an atmosphere where active
discussions took place while still maintaining an appropriate amount of control; theincentive function of directors’ remuneration was appropriate based on clear calculation
criteria and decision-making process; and Independent Outside Directors fulfilled their
expected roles appropriately. In addition, it can be said that a further progress was made ascompared with the previous fiscal year in sharing the opinions among the Board membersthat were obtained through dialogue with shareholders and investors. At the same time, theCompany recognized needs to enhance discussions on improvement of shareholder value
and election of directors; to take measures to ensure sufficient time for discussions; and topromote dialogue with investors and shareholders.
Regarding efforts made in the current fiscal year, the Board of Directors deepened
discussions on the creation of long-term corporate value for the Company. In addition, theCompany added a nominating function, including the election and dismissal of directors, tothe existing Remuneration Advisory Committee in June 2019, and renamed it as theNomination and Remuneration Advisory Committee. To promote dialogue with investors
and shareholders, the Company started translating into English the convocation notice ofordinary general meeting of shareholders and the financial results reports. The Company willcontinue to strengthen information disclosure to investors and shareholders, such astranslating more disclosure materials into English and issuing an integrated report.

Notes:FY2018 (Evaluation period of questionnaire: April 2017 to March 2018)
FY2019 (Evaluation period of questionnaire: April 2018 to March 2019)- 39 -

(2) 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 has established the Compliance Committee to enact company-wide
initiatives such as the Organo Group Company Code of Conduct and spreading awarenessof declarations on compliance.
 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 byDirectors
 The Company will appropriately retain and manage documents and other information
concerning the performance of duties by Directors in accordance with internal rules suchas the Documents and Information Management Regulations, the Corporate Information
Basic Management Regulations, etc.
 The Directors and the Audit and Supervisory Board Members may inspect such
documents and other information as necessary.

(iii) Rules and other systems for management of risk of loss The Company will establish various rules, including the Crisis Management Basic
Regulations, and establish and operate a risk management system in order to respond tothe various risks in business activities.
 Each division will independently manage the risks of daily business activities, such as
economic risks and financial risks relating to regular transactions, under the guidance ofthe supervising Director.

(iv) Systems to ensure efficiency of the performance of duties by Directors
 The Company will ensure to establish the system that enables appropriate and efficientperformance of duties. Specifically, among others, the Board of Directors makes
decisions on important business execution and supervises the status of business execution
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).
- 40 -

 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 properness of operations of the corporate group consisting of the Company,
its parent company and subsidiariesa.

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

b.

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

c.

System to ensure efficiency of the performance of duties by directors, etc. of
subsidiaries
・ The Company will set company-wide goals based on the Organo Group’s Mediumterm Management Plan approved by the Board of Directors and the profit plan foreach fiscal year, and at the Group Liaison Conference will ensure the appropriate
execution of all projects through evaluating business progress reports by the
Presidents of each group company.
・ The Company will establish a system to make the business operations of groupcompanies more efficient by providing and sharing indirect business operations andoptimizing funding and management.

d.

System to ensure that directors, etc. and employees of subsidiaries perform their duties
in compliance with relevant laws and regulations and the Articles of Incorporation
・ The Company will prescribe the Organo Group Company Code of Conduct as a basic
code of conduct with which all officers and employees of group companies mustcomply, and seek to spread awareness.
・ The Company will provide compliance training to the group companies’ officers andemployees as necessary.
・ The Company’s Internal Auditing Dept. will perform audits concerning theperformance of duties and compliance practices of group companies.

- 41 -

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

Other system to ensure properness of operations of the corporate group 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 therequest of such Audit and Supervisory Board Members for assistance, matters relating to
independence of the relevant employees from Directors and matters relating to effectivenessof directions given to such employees to be ensured
 The Company will establish employees in Internal Auditing Dept. that assist in the dutiesof the Audit and Supervisory Board Members upon consulting with the Audit andSupervisory Board.
 The Company will determine proper procedures for handling matters related to humanresources for employees that assist in the duties of the Audit and Supervisory Board
Members upon consulting with the Audit and Supervisory Board.
 Employees that assist in the duties of the Audit and Supervisory Board Members will notreceive instructions or orders from executives regarding directions given to them by Audit
and Supervisory Board Members, and will be independent in their assistance in the dutiesof the 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 that theseparties 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 and supervisory board
members of group companies, they will provide an appropriate report without delay.
 Directors and employees of the Company and group companies or audit and supervisoryboard 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 as necessary.
 The Legal Division and external lawyers who serve as contact points for thewhistleblowing system will report to the Audit and Supervisory Board Members of theCompany on the whistleblowing information received from the Directors and employeesof the Company and group companies in accordance with the Whistleblowing
Regulations.
 The Company’s Audit and Supervisory Board Members also serves as a contact point for
the whistleblowing system.

- 42 -

 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 the report.

(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 of groupcompanies, seeking mutual cooperation and consulting with lawyers as necessary.
 The Company will bear any expenses incurred by Audit and Supervisory Board Membersin the performance of duties, provided that these expenses have not been deemed
unnecessary in the performance of duties by Audit and Supervisory Board Members.

The above describes the structure for the fiscal year under review. With the aim of strengthening
the legal compliance system and further fostering awareness of compliance, the Company also
enacted the Compliance Regulations as of March 31, 2020 and strengthened the functions of theCompliance Committee. Accordingly, as of April 1, 2020, the Company has amended a part of theabove “(i) System to ensure that Directors and employees perform their duties in compliance with
relevant laws and regulations and the Articles of Incorporation” as follows (underlines indicate
amended sections).
(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 theCompany 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
other company-wide initiatives.
(Omission)(3) Overview of operational status of system for ensuring properness of operations
The Company has established the internal control systems listed above, and engaged in thefollowing specific initiatives based on that basic policy.

As efforts to spread legal compliance, the Company amended its internal reporting rules inJanuary 2020 to enhance the effectiveness of its internal reporting system and established theCompliance Regulations in March 2020 to promote and thoroughly enforce compliance. The
Company also conducted compliance education for new employees in April 2019 and harassment
education for all employees from April to June 2019 to raise awareness of compliance.
In addition, the Company provided Directors and Audit and Supervisory Board Members withexecutive training provided by external instructors and training provided by external organizations,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. As part of that, in November 2019, the Company
conducted crisis response training based on the premise of a fire at the head office.

- 43 -

In the fiscal year under review, the Company held 16 meetings of the Board of Directors, 25Management Meetings to discuss important management agendas, and continued to strive toensure the appropriateness and efficiency of business execution by Directors. In addition, theMonthly Business Conference was held 12 times (including four Group Liaison Conferences), andprogress on goal developed based on the Medium-term Management Plan and the profit plan for
the fiscal year under review was confirmed through the reception of status reports on business by
the General Managers of each division, etc.
The Company’s Audit and Supervisory Board Members participated in meetings of the Board of
Directors, the Management Meeting, the Monthly Business Conference and other important
meetings, established internal controls for the Company, and confirmed the status of operations
through regular reports from the Legal and Patent Dept., Corporate Strategy and Planning Dept.,
Accounting Dept., Internal Auditing Office and other departments pertaining to internal control
while making efforts to improve the efficiency and effectiveness of its audits by exchanging
information and opinions with Independent Auditors as necessary. In addition, in May andOctober 2019, the Representative Director and the Audit and Supervisory Board Members held
opinion exchanges on overall management and endeavored to ensure the effectiveness of audits.

(4) Basic policy on control of the Company
We currently have no plans to introduce anti-takeover measures.

(5) 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 ofdividends, etc., of surplus by resolution of the Board of Directors. Dividend payments are madetwice 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. However, in the 75th
fiscal year, if the Ordinary General Meeting of Shareholders cannot be held in June as stipulated
in the Company’s Articles of Incorporation due to the COVID-19 pandemic and other factors, theCompany will not be able to pay a year-end dividend with a record date of March 31, 2020.
Therefore, the year-end dividend for the current fiscal year will be paid by resolution of the Boardof Directors.
In accordance with the above policy, the Company proposes to pay a year-end dividend of ¥57 pershare for the 75th fiscal year. As a result, the annual dividend for the fiscal year under review
including the interim dividend of ¥47 will amount to ¥104 per share.

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

- 44 -

Consolidated Balance Sheet(As of March 31, 2020)
Item

AmountAssetsCurrent assets
Cash and deposits
Notes and accounts receivable trade
Electronically recorded monetaryclaims - operating
Investments in leases
Merchandise and finished goods
Work in process

Liabilities
76,078Current liabilities
Notes and accounts payable trade32,24036,783

Short-term borrowings

7,644

1,590

Income taxes payable

1,959

13,772

11,7525,710
2,728

Raw materials and supplies

1,392

Other

2,448

Allowance for doubtful accounts
Non-current assets
Property, plant and equipment
Buildings and structures
Machinery, equipment andvehiclesLand
Construction in progress(Millions of yen)AmountItem(98)
25,36919,296
5,347

Advances received
Provision for bonuses
Provision for product warranties
Provision for loss on construction
contracts
Provision for share-based
remuneration for directors (andother officers)
Other provisions
Other
Non-current liabilities
Long-term borrowings

722

Deferred tax liabilities

12,284
98

105
10
4,866
8,349
2,095
9

Total liabilities

40,590Intangible assets

1,113

Net assets

Investments and other assets
Investment securities
Deferred tax assets
Other
Allowance for doubtful accounts

4,959
1,553
3,037
780
(411)

Shareholders’ equity
Share capital
Capital surplus
Retained earnings
Treasury shares
Accumulated other comprehensive
incomeValuation difference on availablefor-sale securities
Foreign currency translation
adjustment
Remeasurements of defined benefit
plans
Non-controlling interests- 45 -

64

6,153
91

842

101,448

1,543
1,339
324

Retirement benefit liability
Other

Other

Total assets

14,381

61,2778,225
7,508
46,081
(537)
(560)
143
(178)
(525)
140

Total net assets

60,857

Total liabilities and net assets

101,448

Consolidated Statement of Income(From April 1, 2019 to March 31, 2020)(Millions of yen)
Item

AmountNet sales
Cost of sales

96,515
69,232Gross profit
Selling, general and administrative expenses

27,282
17,374

Operating profit
Non-operating income
Interest and dividend income
Insurance claim income
Share of profit of entities accounted for using equity
method
Other

9,908
72
81
170

Non-operating expenses
Interest expenses
Foreign exchange losses
Provision of allowance for doubtful accounts
Compensation for damage
Other

59

383

136
41
78
91
13

362

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

9,929
5
4
0

Extraordinary losses
Loss on abandonment of non-current assets
Loss on valuation of investment securities

39
49

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

9

88
9,850

3,014
(336)

2,678

ProfitProfit attributable to non-controlling interests

7,172
10

Profit attributable to owners of parent

7,162- 46 -

Balance Sheet(As of March 31, 2020)
Item

Amount(Millions of yen)AmountItem

AssetsLiabilities

Current assets
Cash and deposits
Notes receivable - trade
Electronically recorded monetaryclaims - operating

60,238
8,316
1,912

Current liabilities
Notes payable - trade
Accounts payable - trade26,595
4,345
5,980

1,590

Short-term borrowings

5,900

Accounts receivable - trade25,687

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

11,718
4,909
1,291
1,028
474
203

Short-term loans receivable

1,942

Other

1,168

Allowance for doubtful accounts
Non-current assets
Property, plant and equipment
Buildings
Structures(4)
25,412
18,6994,953
128

Machinery and equipment

572

VehiclesCurrent portion of long-termborrowings
Accounts payable - other
Income taxes payable
Advances received
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
Total liabilities
Net assets

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

753
12,191
94
1,026
952
73
5,686
503

Long-term loans receivable

300

Guarantee deposits

85

Deferred tax assets

2,562

Shareholders’ equity
Share capital
Capital surplus
Legal 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
assetsGeneral reserve
Retained earnings brought
forwardTreasury shares
Valuation and translation
adjustments
Valuation difference on availablefor-sale securities

Other

315

Allowance for doubtful accounts(411)

Total assets

85,650- 47 -

1,203
1,613
650
3,137
918
168
176
105
1,595
7,311
2,095
5,181
34
33,907

5

2,329

800

51,623
8,225
7,508
7,508
36,427832
35,59514090
33
27,065
8,266
(537)
120
120

Total net assets

51,743

Total liabilities and net assets

85,650Statement of Income(From April 1, 2019 to March 31, 2020)(Millions of yen)
Item

AmountNet sales
Cost of sales

70,90749,442Gross profit
Selling, general and administrative expenses

21,464
14,656

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

6,808
1,269
327
95

Non-operating expenses
Interest expenses
Provision of allowance for doubtful accounts
Depreciation
Property tax
Compensation for damage
Other

61
78
112
37
39
21

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

1,693

349
8,151

0
4
0

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

4

39
8
41

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

88
8,067

2,172
(270)

Profit

1,902
6,165

Figures are rounded down to the nearest unit.

- 48 -

(English translation)

Certified copy of Independent Auditor’s audit report on the Consolidated Financial
Statements
Independent Auditor’s Report
May 7, 2020
The Board of Directors
ORGANO CORPORATIONKPMG AZSA LLC
Tokyo Office, Japan
Designated
Limited Liability Certified
Partner
PublicAccountant
Engagement
Partner

Masahiko
Kobayashi

Designated
Limited Liability Certified
Partner
PublicAccountant
Engagement
Partner

Yoshitaka[Seal]
Kuwamoto[Seal]

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, 2020 and for the year from April 1, 2019 to March 31, 2020 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
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 Consolidated Financial Statements section of our report. We are independent of the Group inaccordance with 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 theserequirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide abasis for our opinion.

Responsibilities of Management and Corporate auditors and the board of corporate auditors for theConsolidated 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 in- 49 -

accordance with accounting principles generally accepted in Japan and using the going concern basis ofaccounting unless management either intends to liquidate the Group or to cease operations, or has no
realistic alternative but to do so.
Corporate auditors and the board of corporate auditors are responsible for overseeing the directors’
performance of their duties including the design, implementation and maintenance of the Group’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 reportthat includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that anaudit conducted in accordance with auditing standards generally accepted in Japan will always detect amaterial misstatement when it exists. Misstatements can arise from fraud or error and are consideredmaterial if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users 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
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 proceduresthat are appropriate in the circumstances, while the objective of the audit is not to express an opinion
on the effectiveness of the Group’s internal control.

Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and 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.

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 corporate auditors and the board of corporate auditors regarding, among othermatters, 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 corporate auditors and the board of corporate auditors with a statement that we havecomplied with relevant ethical requirements regarding independence, and communicate with them all
relationships and other matters that may reasonably be thought to bear on our independence, and whereapplicable, related safeguards.

- 50 -

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.

- 51 -

(English translation)

Certified copy of Independent Auditor’s audit report
Independent Auditor’s Report
May 7, 2020
To the Board of Directors of
ORGANO CORPORATIONKPMG AZSA LLC
Tokyo Office, Japan
Designated
Limited Liability
PartnerEngagement
Partner

CertifiedMasahikoPublic[Seal]
Kobayashi
Accountant

Designated
Limited Liability
PartnerEngagement
Partner

Certified
Yoshitaka[Seal]
PublicKuwamoto
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 supplementary schedules of ORGANOCORPORATION (“the Company”) as at March 31, 2020 and for the year from April 1, 2019 to March 31,
2020 in accordance with Article 436-2-1 of the Companies Act.
In our opinion, the financial statements and the supplementary schedules referred to above present fairly, inall material respects, the financial position and the results of operations of the Company for the period, forwhich the financial statements and the supplementary schedules were prepared, in accordance withaccounting 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 Others section of our report. We are independent of the Company inaccordance with the ethical requirements that are relevant to our audit of the 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.

Responsibilities of Management and Corporate Auditors and the Board of Corporate Auditors for
the Financial Statements and Others
Management is responsible for the preparation and fair presentation of the financial statements and the
supplementary schedules in accordance with accounting principles generally accepted in Japan, and forsuch internal control as management determines is necessary to enable the preparation of financial
statements and the supplementary schedules that are free from material misstatement, whether due to fraud
or error.
In preparing the financial statements and the supplementary schedules, management is responsible forassessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related togoing concern in accordance with accounting principles generally accepted in Japan and using the going
concern basis of accounting unless management either intends to liquidate the Company or to cease
operations, or has no realistic alternative but to do so.
- 52 -

Corporate auditors and the board of corporate auditors are responsible for overseeing the directors’
performance of their duties including the design, implementation and maintenance of the Company’s
financial reporting process.
Auditor’s Responsibilities for the Audit of the Financial Statements and Others
Our objectives are to obtain reasonable assurance about whether the financial statements and the
supplementary schedules as a whole are free from material misstatement, whether due to fraud or error, andto 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 inJapan 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 toinfluence the economic decisions of users taken on the basis of these financial statements and the
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
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 thanfor 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 proceduresthat are appropriate in the circumstances, while the objective of the audit is not to express an opinion
on the effectiveness of the Company’s internal control.

Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and 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 supplementary schedules or, if suchdisclosures 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 theCompany to cease to continue as a going concern.



Evaluate whether the presentation and disclosures in the financial statements and the supplementaryschedules are in accordance with accounting standards generally accepted in Japan, the overall
presentation, structure and content of the financial statements and the supplementary schedules,
including the disclosures, and whether the financial statements and the supplementary schedules
represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with corporate auditors and the board of corporate auditors regarding, among othermatters, 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 corporate auditors and the board of corporate auditors with a statement that we havecomplied with relevant ethical requirements regarding independence, and communicate with them all
relationships and other matters that may reasonably be thought to bear on our independence, and whereapplicable, 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 ofJapan for the conveniences of the reader.
- 53 -

(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 75th fiscal year from April 1, 2019 toMarch 31, 2020, 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. andIndependent 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.

- 54 -

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 8, 2020
Audit and Supervisory Board of ORGANOCORPORATION
Audit and Supervisory Board Member (Full-time)Masahiko Toyoda [Seal]
Outside Audit and Supervisory Board Member
Masao Wada
[Seal]
Outside Audit and Supervisory Board Member
Wataru Higuchi[Seal]- 55 -

Items Disclosed on the Internet Concerning Notice of the 75th
Ordinary General Meeting of Shareholders

75th fiscal year
(From April 1, 2019 to March 31, 2020)(i). Consolidated Financial Statements
Consolidated Statement of Changes in Equity
Notes to Consolidated Financial Statements(ii). Non-consolidated Financial Statements
Statement of Changes in Equity
Notes to Non-consolidated Financial Statements

ORGANO CORPORATION“Consolidated Statement of Changes in Equity” and “Notes to Consolidated Financial Statements” in theConsolidated Financial Statements and “Statement of Changes in Equity” and “Notes to Non-consolidated
Financial Statements" in the Non-consolidated Financial and Statements are provided to shareholders byposting them on the Company’s website (https://www.organo.co.jp/) pursuant to the provisions of laws andregulations and Article 16 of the Company’s Articles of Incorporation.

Consolidated Statement of Changes in Equity(From April 1, 2019 to March 31, 2020)(Millions of yen)
Shareholders’ equity
Share capital

Capital surplus

Retained earnings

Treasury shares

Total
shareholders’equity

8,225

7,508

39,967(629)

55,071--(1,047)-(1,047)

-

-

7,162

-

7,162

Purchase of treasury
shares

-

-

-

(8)

(8)

Disposal of treasury
shares

-

-

(0)

100

100

Net changes in items
other than shareholders’equity

-

-

-

-

-

Total changes during
period

-

-

6,114

91

6,206

8,225

7,508

46,081(537)

61,277

Balance at beginning of
periodChanges during period
Dividends of surplus
Profit attributable toowners of parent

Balance at end of period

Accumulated other comprehensive income
Valuationdifferenceonavailablefor-salesecurities

Deferred
gains orlosses onhedgesForeigncurrencytranslation
adjustment

273

(0)

(193)

(494)

-

-

-

-

-

Purchase of treasury
shares-

Disposal of treasury
sharesRemeasureTotal
ments ofaccumudefined
lated otherbenefitcomprehens
plans
ive income

Noncontrollinginterests

Total net
assets(414)

138

54,795---(1,047)

-

-

-

-

7,162

-

-

-

-

-

(8)

-

-

-

-

-

-

100

Net changes in items
other than shareholders’equity

(130)

0

15

(31)

(146)

2

(144)

Total changes during
period

(130)

0

15

(31)

(146)

2

6,061

Balance at end of period

143

-

(178)

(525)

(560)

140

60,857

Balance at beginning of
periodChanges during period
Dividends of surplus
Profit attributable toowners of parent-1-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:
9 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:
3 companies
・ Names of principal non-consolidated subsidiaries:
Organo (Vietnam) Co., Ltd.
・ Reason for exclusion from scope of consolidation:
The three 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
method4 companies
・ Names of principal non-consolidated subsidiaries or affiliates not accounted for by theequity method:
Organo (Vietnam) Co., Ltd.
・ Reason for not applying equity method:
Since the three 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 the scope towhich the equity method is applied.
(3) Fiscal year-end of consolidated subsidiaries
The following consolidated subsidiaries have their fiscal year-end on December 31: Organo(Asia) Sdn. Bhd., Organo (Suzhou) Water Treatment Co., Ltd., Organo Technology Co., Ltd.,
Organo (Thailand) Co., Ltd., and PT Lautan Organo Water.
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.

-2-(4) Accounting policies(i) Valuation standards and methods for significant assets
a. Securities
Other securities
Securities with fair value
Stated at fair value based on the market price or the like on the fiscal year-end.
(Valuation differences are included in a separate component of net assets, and cost of
sales is determined by the moving-average method.)
Securities without fair value
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, an amount isrecorded by giving consideration to the expected amount of future guarantees based mainly-3-

on the past two years’ performance. For items that can be estimated individually, theestimated 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. Standard for recognition of completed construction contracts and cost of sales of completed
construction contracts
Construction activities whose outcome from the completed portion as of the fiscal yearend are deemed to be definite
Percentage-of-completion method (the cost-to-cost method is used to estimate thepercentage of completion)
Other construction activities
Completed-contract methodb. Standard for recognition of revenue related to finance lease transactions
Revenue related to finance lease transactions mainly follows a method of accounting net
sales and cost of sales at the time of receiving lease fees.
(v) Method of significant hedge accounting
a. Method of hedge accounting
Principally, accounted for with deferred hedge accounting. The designated hedge
accounting (the “Furiate-shori”) is applied to forward exchange contracts that satisfy
requirements for such accounting, and the exceptional treatment (the “Tokurei-shori”) isapplied to interest rate swaps that satisfy the requirements for such treatment.
b. Hedging instruments and hedged items
Hedging instruments: Forward exchange contracts and interest rate swaps
Hedged items: Foreign currency-denominated monetary claims and obligations 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) Method and period for amortization of goodwill
Goodwill is amortized by the straight-line method over the reasonably estimated periodthat its effect will continue to be realized.

-4-

(vii) Other significant matters for the basis of the preparation of consolidated financial statements
a. 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.
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.
b. Accounting treatment of consumption taxes
Accounting treatment of consumption tax and local consumption tax is based on the taxexcluded method. Non-deductible consumption tax and local consumption tax arerecognized as an expense for the fiscal year under review.
2. Notes to changes in the manner of presentation(Consolidated balance sheet)“Electronically recorded monetary claims - operating,” which was included in “Notes and accounts
receivable - trade” in the previous fiscal year, is presented separately in the fiscal year under review as it
has become significant in terms of quantitative materiality.
“Electronically recorded monetary claims - operating” in the previous fiscal year is ¥1,060 million.
(Consolidated statement of income)“Insurance claim income,” which was included in “Other” in non-operating income in the previous
fiscal year, is presented separately in the fiscal year under review as it has become significant in termsof quantitative materiality.
“Insurance claim income” in the previous fiscal year is ¥5 million.
“Compensation for damage,” which was included in “Other” in non-operating expenses in the previous
fiscal year, is presented separately in the fiscal year under review as it has become significant in termsof quantitative materiality.
“Compensation for damage” in the previous fiscal year is ¥15 million.
3. Notes to the consolidated balance sheet(1) Accumulated depreciation for property, plant and equipment¥21,782 million(2) Contingent liabilities
Guarantee obligation for bank loans of employees
Performance bonds
Organo (Vietnam) Co., Ltd.
4.

¥2 million¥23 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--5-

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)

166

1

Decrease in number ofshares during theperiod(Thousands of shares)
31

Number of shares at
end of period(Thousands of shares)
136

Notes: 1. The increase of 1 thousand shares in the number of treasury shares reflects the increase of 1 thousand shares
due to the purchase of shares less than one unit.
2. The decrease of 31 thousand shares in the number of treasury shares reflects the decrease of 31 thousand shares
due to the delivery of the Company’s share held by the Officer Share Delivery Trust and the decrease of 0
thousand shares due to the sale of shares less than one unit.
3. The number of treasury shares at the end of the fiscal year under review includes 53 thousand shares of theCompany held by the Officer Share Delivery Trust.

(3) Dividends of surplus(i) Dividends paid, etc.
a. Dividends resolved at the 74th Ordinary General Meeting of Shareholders held on June 27,2019 Total dividends:¥506 million
 Dividend per share:¥44
 Record date:
March 31, 2019 Effective date:June 28, 2019
Note:

Total dividends resolved at the Ordinary General Meeting of Shareholders held on June 27, 2019
include ¥3 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 5, 2019
 - Total dividends:¥540 million
 - Dividend per share:¥47
 - Record date:
September 30, 2019
 - Effective date:
December 9, 2019
Note:

Total dividends resolved at the meeting of the Board of Directors held on November 5, 2019 include¥2 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 meeting of the Board of Directors to be heldon May 12, 2020.
 Total dividends:¥655 million
 Source of dividends:
Retained earnings
 Dividend per share:¥57
 Record date:
March 31, 2020
 Effective date:June 11, 2020
Note:

Total dividends include ¥3 million in dividends for shares of the Company held by the Officer Share
Delivery Trust.

5. 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.

-6-

(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 that are trade payables are mainly due within one year.
Furthermore, these include foreign currency-denominated payables associated with imports,
which are exposed to foreign exchange fluctuation risk. However, these are hedged asnecessary using forward exchange contracts.
Borrowings are mainly for the purpose of procuring capital needed for capital investment
and short-term operating capital. Although some of them have floating rates and are exposed
to interest rate risks, they are hedged through derivatives (interest rate swaps).
Derivatives are forward exchange contracts executed for the purpose of hedging foreignexchange rate fluctuation risk associated with foreign currency-dominated trade receivables
and payables, interest rate swaps executed for the purpose of hedging interest rate
fluctuation risk associated with borrowings. With respect to hedging instruments and hedged
items, hedging policy and method of assessing hedge effectiveness, please refer to “1. Notes
on significant matters for the basis of the preparation of consolidated financial statements (4)Accounting policies (v) Method of significant hedge accounting” previously described.
(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.

-7-

(iv) Supplemental remarks on fair values of financial instruments
The fair values of financial instruments are based on market prices or reasonably calculated
values if they have no market price. As changeable factors are included in calculating thesevalues, if different assumptions, etc. are used, these values could vary.
(2) Fair value of financial instruments
Amount on the consolidated balance sheet as of March 31, 2020, fair values and the difference are as
follows. Financial instruments whose fair values are deemed to be extremely difficult to determine
are not included in the following table. (Please refer to item 2. of Notes.)(Millions of yen)Amounts on consolidatedbalance sheet
(i)
(ii)
(iii)
(iv)
(v)

Cash and deposits
Notes and accounts receivable trade
Electronically recordedmonetary claims - operating
Investments in leases
Investment securities

(ii)
(iii)

Differences

13,772

13,772-36,78336,783

-

1,590

1,590

-

11,752533

11,752533-

64,43164,431-

14,381

14,381

-

7,644
2,095

7,651
2,072

7
(23)

Total liabilities

24,121

24,105(16)

Derivatives [*]

[2]

[2]

-

Total assets(i)

Fair value

Notes and accounts payable trade
Short-term borrowings
Long-term borrowings[*]

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.
Notes: 1. Methods of fair value measurement of financial instruments and matters relating to securities and derivatives
Assets(i) Cash and deposits, (ii) Notes and accounts receivable - trade, and (iii) Electronically recorded monetary claims- operating
The book values are used as the fair values of these assets, given that the fair values are almost the same as thebook values since they are mainly settled in a short period of time.
(iv) Investments in leases
The fair value of investments in leases is calculated based on the present value which is obtained bydiscounting the total of the principal and interest by the interest rate assumed in a case where the sametransactions are newly made. Moreover, since the fair value approximates the book value, the book value ispresented.
(v) Investment securities
The fair values of investment securities are based on the prices of shares, etc. traded at the stock exchange.
Liabilities(i) Notes and accounts payable - trade
The book values are used as the fair values of these liabilities, given that the fair values are almost the same as
the book values since they are settled in a short period of time.
(ii) Short-term borrowings and (iii) Long-term borrowings
Fair values of short-term borrowings and long-term borrowings are calculated based on the present value
which is obtained by discounting the total of the principal and interest by the interest rate assumed in a casewhere the same borrowings are newly made. The fair value of short-term borrowings and long-termborrowings with floating rates to which exceptional treatment of interest rate swaps is applied is calculated bydiscounting the sum of principal and interest, which is treated in combination with the said interest rate swap,
at a reasonably estimated rate applied to a similar new borrowing.
Derivatives(1) Forward exchange contracts
Fair values are measured based on prices presented by financial institutions with which the Company
does business.

-8-

(2)

As forward exchange contracts, which are accounted for applying the Furiate-shori, are treated inconjunction with currency-dominated monetary claims and obligations that are deemed as hedged items,
fair values of the forward exchange contracts are included in the fair value of the currency-dominatedmonetary claims and obligations.
Interest rate swaps
Fair values are measured based on prices presented by financial institutions with which the Company
does business.
Because interest rate swaps, which are accounted for applying the Tokurei-shori, are treated inconjunction with short-term borrowings and long-term borrowings that are deemed as hedged items, fairvalues of the interest rate swaps are included in the fair values of the short-term borrowings and longterm borrowings.

2. Financial instruments whose fair values are deemed to be extremely difficult to determine(Millions of yen)Amounts on consolidated balance sheet

Category
Unlisted shares

1,019

The Company does not include unlisted shares in “(v) Investment securities” because they have no market prices
and their fair values are deemed to be extremely difficult to determine.

6. Notes to per share information
Net assets per share
Basic earnings per share

5,301.26
626.05

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 (53 thousand shares at the end of the fiscal year under review).
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 (67 thousand shares in the fiscal year under review).

7. Significant subsequent events
Not applicable.

-9-Statement of Changes in Equity(From April 1, 2019 to March 31, 2020)(Millions of yen)
Shareholders’ equity

Share capital

Balance at beginning of
periodCapitalsurplusRetained earnings

Legal capitalsurplus

Legal retained Other retained
earnings
earnings

TreasurysharesTotalshareholders’equity

8,225

7,508

832

30,477(629)

46,413

Dividends of surplus

-

-

-

(1,047)-(1,047)

Profit

-

-

-

6,165

-

6,165

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

-

-

-

-

-

-

Provision of generalreserve

-

-

-

-

-

-

Purchase of treasury
shares

-

-

-

-

(8)

(8)

Disposal of treasury
shares

-

-

-

(0)

100

100

Net changes in items
other thanshareholders’ equity

-

-

-

-

-

-

Total changes during
period

-

-

-

5,117

91

5,209

Balance at end of period

8,225

7,508

832

35,595(537)

51,623

Changes during period

Valuation and translation adjustments
Valuation difference
Total valuation andDeferred gains or
on available-for-saletranslation
losses on hedges
securities
adjustments
Balance at beginning of
periodChanges during period

Total net assets

232

(0)

232

46,646

Dividends of surplus

-

-

-

(1,047)

ProfitReversal of reserve
for 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

-

-

-

6,165

-

-

-

-

-

-

-

-

-

-

-

(8)

-

-

-

100

(111)

0

(111)

(111)

(111)

0

(111)

5,097

120

-

120

51,743- 10 -

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

Reserve forresearch anddevelopment

Reserve fortax purpose
reduction
entry of noncurrent assets

140

90

34

25,0655,146

30,477

Dividends of surplus

-

-

-

-

(1,047)(1,047)

ProfitReversal of reserve
for 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

-

-

-

-

6,165

6,165

-

-

(1)

-

1

-

-

-

-

2,000

(2,000)

-

-

-

-

-

-

-

-

-

(0)

(0)

Balance at beginning of
periodChanges during period-

Generalreserve

Retainedearnings
brought
forward

Total

-

-

-

-

-

-

-

-

(1)

2,000

3,119

5,117

140

90

33

27,0658,266

35,595- 11 -

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
Securities with fair value
Stated at fair value based on the market price or the like on the fiscal year-end.
(Valuation difference are included in a separate component of net assets, and cost of
sales is determined by the moving-average method.)
Securities without fair value
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(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.

- 12 -

(iii) Provision for product warranties
To prepare for warranties against defects in completed construction contracts, an amount isrecorded based on the past two years’ performance and giving consideration to the expectedamount of future guarantees. For items that can be estimated individually, the estimatedamount 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.
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) Standard for recognition of completed construction contracts and cost of sales of completed
construction contracts
Construction activities whose outcome from the completed portion as of the fiscal year-end
are deemed to be definite
Percentage-of-completion method (The cost-to-cost method is used to estimate thepercentage of completion.)
Other construction activities
Completed-contract method(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 and obligations, borrowings- 13 -

(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(i) 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.
(ii) Accounting treatment of consumption taxes
Accounting treatment of consumption tax and local consumption tax is based on the taxexcluded method. Non-deductible consumption tax and local consumption tax arerecognized as an expense for the fiscal year under review.
2. Notes to changes in the manner of presentation(Balance sheet)“Electronically recorded monetary claims - operating,” which was included in “Notes receivable trade” in the previous fiscal year, is presented separately in the fiscal year under review as it has
become significant in terms of quantitative materiality.
“Electronically recorded monetary claims - operating” in the previous fiscal year is ¥1,060 million.
(Statement of Income)“Compensation for damage,” which was included in “Other” in non-operating expenses in theprevious fiscal year, is presented separately in the fiscal year under review, as it has become
significant in terms of quantitative materiality.
“Compensation for damage” in the previous fiscal year is ¥1 million.
3. Notes to the non-consolidated balance sheet(1) Accumulated depreciation for property, plant and equipment(2) Contingent liabilities
Guarantee obligation for bank loans of employees
Joint and several suretyship for bank loans
Organo (Suzhou) Water Treatment Co., Ltd.
Performance bonds
Organo (Asia) Sdn. Bhd.
Organo (Suzhou) Water Treatment Co., Ltd.
Organo Technology Co., Ltd.
Organo (Vietnam) Co., Ltd.
(3) Monetary claims and obligations to subsidiaries and associates
Short-term monetary claims
Long-term monetary claims
Short-term monetary obligations- 14 -¥20,872 million¥2 million¥847 million¥95 million¥31 million¥36 million¥23 million¥4,627 million¥300 million¥4,741 million

4. Notes to the non-consolidated statement of income
Total transactions with subsidiaries and associates
Net sales
Purchase of goods
Transactions other than operating transactions:¥3,595 million¥16,850 million¥1,597 million

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

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

Common shares

Increase in number ofshares during theperiod(Thousands of shares)

166

Decrease in number ofshares during theperiod(Thousands of shares)

1

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

31

136

Notes: 1. The increase of 1 thousand shares in the number of treasury shares reflects the increase of 1 thousand shares dueto the purchase of shares less than one unit.
2. The decrease of 31 thousand shares in the number of treasury shares reflects the decrease of 31 thousand shares
due to the delivery of the Company’s share held by the Officer Share Delivery Trust and 0 thousand shares due tothe sale of shares less than one unit.
3. The number of treasury shares at the end of the fiscal year under review includes 53 thousand shares of theCompany held by the Officer Share Delivery Trust.

6. Note to tax-effect accounting
Breakdown of deferred tax assets and liabilities by main cause(Millions of yen)
Deferred tax assets
Provision for bonuses
Enterprise tax payable
Provision for retirement benefits
Provision for product warranties
Provision for loss on construction contracts
Provision for share-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
Reserve for tax purpose reduction entry of non-current assets
Total deferred tax liabilities
Net deferred tax assets- 15 -

281
113
1,585
51
53
32
80
127
73
250
453
3,103
(473)
2,630
(53)
(14)
(67)
2,562

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

Location

ORGANO
PLANT
Bunkyo-ku,
SERVICETokyo
CORPORATI
ON

Organo(Suzhou)
Water
Treatment
Co., Ltd.

OrganoTechnology
Co., Ltd.

Jiangsu,
China

Voting rights
ownership
ratio

Share capital¥93 million

US$5,000thousand

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

Directownership
100.0％

Directownership
100.0％

Directownership
100.0％

Relationshipwith relatedparties
Installationof various
types ofwater
treatment
systems andordering ofsupervision
services
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

7,704

Accounts
payable trade

1,156

Deposits of
funds

1,523

Deposits
received

1,600

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

878

1,695

-

Accounts
receivable trade

-

2,069

Notes: 1. The transaction amounts listed above do not include consumption taxes, but the balance at end of period includes
consumption taxes.
2. Conditions of transaction and policies for deciding conditions of transaction are determined by referencing general
trading conditions in consideration of market prices, etc.
3. Interest rates 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.
4. The Company provides debt guarantees on their loans from financial institutions. The Company does not receive
guarantee fees.

8. Notes to per share information
Net assets per share
Basic earnings per shareNotes¥4,517.80¥538.91

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 (53thousand shares at the end of the fiscal year under review).
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 (67 thousand shares in the fiscal year under review).

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

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