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 76th Ordinary General Meeting of Shareholders

ORGANO CORPORATIONTo Shareholders
I would like to express our cordial appreciation for your continuous support and patronage.
I am delighted to present this convocation notice of the 76th Ordinary General Meeting of Shareholders of
ORGANO CORPORATION to be held on Tuesday, June 29, 2021.
Please confirm proposals of General Meeting of Shareholders and business outline of the fiscal year 2020
presented in the documents.
June 2021
Representative Director and President
Masaki Uchikura
Management Philosophy
Organo serves as a valuable partner company by leveraging its leading-edge technologies cultivatedthrough long experience with water treatment, by contributing to the industries that create the future, andby playing a key role in the development of societal infrastructure.
Long-term Management Vision

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

-1-Measures to Prevent the Spread of Novel Coronavirus Disease (COVID-19)
at the 76th Ordinary General Meeting of Shareholders of the Company
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 as in
the previous year.
 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 as in the previous year.
 The proceedings of the meeting will be conducted smoothly and efficiently and will be short as in theprevious year.
 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 perspective 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.
 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 8, 2021
To our shareholders:
Masaki Uchikura,
Representative Director and President

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

Notice of the 76th Ordinary General Meeting of Shareholders
We are pleased to announce the 76th Ordinary General Meeting of Shareholders of ORGANOCORPORATION (the “Company”), which will be held as indicated below.
Since there are still concerns about the spread of COVID-19, the Company has decided to hold this General
Meeting of Shareholders with appropriate measures put in place to prevent infection.
From the perspective 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.
Upon exercising your voting rights in writing or via the Internet, etc., please review the attached
Reference Documents for General Meeting of Shareholders, and exercise your voting rights by 5:00
p.m. on Monday, June 28, 2021 (JST).
1. Date and Time:

Tuesday, June 29, 2021 at 10:00 a.m. (JST) (Reception is scheduled to be open
at 9:00 a.m.)(Please note that the meeting will be held at a different time than last year.)

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 76th
fiscal year (from April 1, 2020 to March 31, 2021), 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 76th fiscal year (from April
1, 2020 to March 31, 2021)
Matters to be resolved:
Proposal No. 1 Appropriation of Surplus
Proposal No. 2 Election of Nine Directors
Proposal No. 3 Election of One Audit and Supervisory Board Member
Proposal No. 4 Election of Two Substitute Audit and Supervisory Board Members
4. Other Matters relating to General Meetings of Shareholders
In the case of duplicate voting done both in writing and via the Internet, etc., the vote placed via theInternet, etc. will be considered valid. Additionally, in the case of voting twice or more times via theInternet, etc., the last vote will be considered valid.

-3-

Disclosure on the Internet


The following matters that are made available on the Company’s website under laws and regulations
and the Company’s Articles of Incorporation are not available in this notice. The matters posted on the
Company’s website are subject to audit by the Independent Auditor and the Audit and Supervisory Board
Members and the Audit and Supervisory Board.
(i)Outline of the development of systems and the operation status of systems to ensure theappropriateness of operations for the business report(ii) Consolidated Statement of Changes in Equity and Notes to Consolidated Financial Statements(iii) Statement of Changes in Equity and Notes to Non-consolidated Financial Statements

Any corrections in the Reference Documents for General Meeting of Shareholders, Business Report,
Consolidated Financial Statements, or Non-consolidated Financial Statements will be posted on the
Company’s website.
The Company’s website (https://www.organo.co.jp/)-4-Guide to Exercising Voting Rights
Attending the General Meeting of Shareholders
Please submit the enclosed voting form to the receptionist at the meeting.
Date and time of the Meeting: Tuesday, June 29, 2021, at 10:00 a.m. (Reception starts at 9:00 a.m.)(Please note that the meeting will be held at a different time than last year.)
Not Attending the General Meeting of Shareholders
Exercising Voting Rights by Mail (in Writing)
Please indicate your approval or disapproval of the proposals in the enclosed voting form, and then returnthe form by postal mail so that your vote is received by the deadline.
Deadline: To arrive by no later than 5:00 p.m. Monday, June 28, 2021
Exercising Voting Rights via the Internet, etc.
Please access the designated website for exercise of voting rights, and enter your approval or disapprovalby the deadline.
Deadline: Exercised by no later than 5:00 p.m. Monday, June 28, 2021
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.

-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

Appropriation of Surplus

The Company proposes the appropriation of surplus as follows:
1. Year-end dividends
The Company treats the return of profits to shareholders as one of the Company’s importantmanagement agendas, and it strives to provide distribution of profits in a way that considers theCompany’s revenue status, while adhering to a basic policy of providing stable and continuous
dividends.
In accordance with the above policy, the Company proposes to pay year-end dividends for the 76th
fiscal year as follows.
As a result, the annual dividend for the fiscal year under review including the interim dividend of ¥52
will amount to ¥114 per share.
(1) Type of dividend property
Cash(2) Allotment of dividend property and their total amount¥62 per common share of the Company
Total dividend amount is ¥713,409,634(3) Effective date of dividends of surplus
June 30, 2021
2. Other appropriation of surplus
As for internal reserves, the Company proposes the following to strengthen the managementfoundation.
(1) Item of surplus to be decreased and amount of decrease
Retained earnings brought forward:¥3,000,000,000(2) Item of surplus to be increased and amount of increase
General reserve:¥3,000,000,000-7-Proposal No. 2

Election of Nine Directors

The terms of office of all nine Directors will expire at the conclusion of this Ordinary General Meeting of
Shareholders. Therefore, the Company proposes the election of nine Directors including three Outside
Directors.
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.

Name

Position in the Company

Attendance at Boardof Directors meetings

1

Masaki Uchikura

Reelection

Director and President(Representative Director)
President and Executive
Officer2

Masayuki Yamada

Reelection

Director

3

Hitoshi Hori

Reelection

4

Yasutoshi Nakayama

Reelection

5

Nobuyoshi Suda

Reelection

6

Tetsushi Honda

New election

7

Motoo Nagai

Reelection
OutsideOutside Director

100%(14/14)8

Keikou Terui

Reelection
OutsideOutside Director

100%(14/14)9Kenji Hirai

Reelection
OutsideOutside Director

100%(14/14)

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

-8-

100%
(14/14)100%(14/14)100%(14/14)100%(14/14)100%(14/14)–

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
4 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

11,000Chairman 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 formulating and 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.

-9-

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)

Reelection

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)

Masayuki Yamada(January 7, 1959)

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

Tenure as Director
2 years

1,300

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

2

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]
None[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. After his appointment, he will be responsible for the planning and execution ofmanagement strategies as an Executive Director of the Company.
[Special interest between candidate and the Company]
There is no special interest between the candidate and the Company.

- 10 -

Candidate
No.

Name (Date of birth)

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

Joined 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
7 years3

Number of theCompany’s
shares owned

6,200

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.

- 11 -

Candidate
No.

Name (Date of birth)

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

Joined the Company

June 2010

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

Apr. 2012

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

Jan. 2014

Managing Director of Organo (Asia) Sdn.
Bhd.

June 2016

Executive Officer of the Company

May 2017

Director of Organo (Asia) Sdn. Bhd.

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

June 2020

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

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

Number of theCompany’s
shares owned

5,000

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.

- 12 -

Candidate
No.

Name (Date of birth)

Reelection

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

Joined the Company

June 2010

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

Apr. 2012

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

Jan. 2013

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

Apr. 2016

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

June 2017

Executive Officer, General Manager ofCorporate Strategy and Planning Dept.,
Corporate Management and PlanningNobuyoshi Suda
(November 19, 1963)
Tenure as Director
2 years5

Number of theCompany’s
shares owned

3,400

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

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

June 2020

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

- 13 -

Candidate
No.

Name (Date of birth)

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

Joined the Company

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

Jan. 2013

Director and Deputy President of PT Lautan
Organo Water

Apr. 2015

President (retired in July 2017)

June 2017

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

June 2018

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

June 2019

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

June 2020

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

New election
Tetsushi Honda(May 1, 1963)

6

Number of theCompany’s
shares owned

3,500

Current position[Significant concurrent positions outside the Company]
None[Reasons for nomination as candidate for Director]
Tetsushi Honda has been engaged in the sales division of the electric power business and overseas business formany years and has also been engaged in company management as the President of our overseas subsidiary.
After being appointed as an Executive Officer, he continued to work to strengthen the business and secure
profits as a General Manager of the Power Plant Division, and has been leading the research and developmentof new technologies and products as a General Manager of the R&D Center.
In addition to high ethical standards, and abilities to accurately make decisions and understand issues, which
are essential for a Director, he also possesses the necessary experience and insight to promote sustainablegrowth and improvement of corporate value of the Group. Therefore, the Company nominates him as a new
candidate for Director.
[Special interest between candidate and the Company]
There is no special interest between the candidate and the Company.

- 14 -

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

2,100

Outside Audit and Supervisory Board
Member of the Company

Tenure as Outside Director
6 years
June 2015

Outside Audit & Supervisory Board Memberof Nisshin Seifun Group Inc.

June 2019

Outside Director of Nissan Motor Co., Ltd.

Outside Director of the Company

7

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 and outline of the expected role
Motoo Nagai had worked for financial institutions for many years and had been engaged in company
management as a Director and Deputy President of Mizuho Trust & Banking Co., Ltd. In addition, he hasserved as an outside director of other listed companies, deepening his knowledge on multidimensional
corporate management.
After being appointed as an Outside Audit and Supervisory Board Member and Outside Director of 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. As the Chairman of the Nomination
and Remuneration Advisory Committee, he has also been leading the deliberations on matters related to theselection of candidates for Directors and the compensation of Directors. After his appointment, he is expected
to continue to fulfill the above-mentioned roles.
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)

Reelection
OutsideIndependent
Keikou Terui(July 27, 1953)

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

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

July 2008

Deputy Minister of Technical Affairs,
Minister’s Secretariat

Jan. 2011

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

Apr. 2012

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

Aug. 2013

President of Nonprofit Organization Japan
Utility Telemetering Association

Oct. 2013

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

June 2014

Tenure as Outside Director
5 years

Number of theCompany’s
shares owned

3,600

Director of Union of Japanese Scientists andEngineers
Outside Director of Ube Industries, Ltd.

Mar. 2016

Outside Director of Bridgestone Corporation

June 2016

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

June 2020
8

Executive Director of Japan Chemical
Innovation and Inspection Institute
Current position[Significant concurrent positions outside the Company]
President of Nonprofit Organization Japan Utility Telemetering Association
Executive Director of Japan Chemical Innovation and Inspection InstituteOutside Director of Ube Industries, Ltd.
Outside Director of Bridgestone Corporation
Reasons for nomination as candidate for Outside Director and outline of the expected role
Keikou Terui had held a number of management positions at 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. As a member of the Nomination andRemuneration Advisory Committee, he has also been contributing to the deliberations on matters related to theselection of candidates for Directors and the compensation of Directors. After his appointment, he is expected
to continue to fulfill the above-mentioned roles.
In addition to high ethical standards, and abilities to accurately make decisions and understand issues, which
are essential for a Director, he also possesses the necessary experience and insight to promote sustainablegrowth and improvement of corporate value of the Group. Therefore, judging him as being capable ofappropriately performing his duties as an Outside Director, the Company nominates him as a candidate for
Outside Director.
[Special interest between candidate and the Company]
There is no special interest between the candidate and the Company.

- 16 -

Candidate
No.

Name (Date of birth)

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

Tenure as Outside Director
2 years

June 2019

Number of theCompany’s
shares owned

1,500

Outside Director of the Company
Current position[Significant concurrent positions outside the Company]
Vice Chairman of the Board (Representative Director) of Sagami Chemical Research Institute[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. As a memberof the Nomination and Remuneration Advisory Committee, he has also been contributing to the deliberations
on matters related to the selection of candidates for Directors and the compensation of Directors. After his
appointment, he is expected to continue to fulfill the above-mentioned roles.
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.

9

Special interest between candidate and the Company and outline of the expected role
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 76th fiscal year is ¥10 million. In addition, the Company has madedonations to the institute. The amount paid in the fiscal year ended March 31, 2021 is ¥300,000, which isinsignificant.
Notes: 1.

2.

3.

4.
5.
6.

The positions and responsibilities held by Masaki Uchikura in the past ten years at the Company’s parent
company Tosoh Corporation and its subsidiaries (Tosoh Speciality Materials Corporation, Tosoh SMD, Inc., andTosoh America, Inc.) are presented in the above “Career summary, and position and responsibility in the
Company”.
The positions and responsibilities held by Masayuki Yamada presently or in the past ten 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 “Careersummary, and position and responsibility in the Company”. He is scheduled to retire as a Director of Tosoh
Corporation and Tosoh America, Inc. in June 2021.
The positions and responsibilities held by Hitoshi Hori presently or in the past ten 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”.
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 Motoo Nagai, Keikou Terui, and Kenji Hirai are elected as Directors, theCompany plans to enter into the same agreement with each of them.

- 17 -

7.

At present, the Company and the insurance company have entered into the Officers’ Liability Insurance Contract
with all Directors included as insured persons as stipulated in Article 430-3, paragraph 1 of the Companies Act.
In the event of a claim for damages arising from duties performed by the insured in his or her position during theinsurance period, the insurance contract covers compensation for damage and dispute costs. However, there arecertain exemptions, such as damage caused by intentional or gross negligence that is not covered by the relevant
insurance contract. Each candidate who is elected as a Director will be insured under the insurance contract. The
term of the insurance contract is one year and shall be renewed upon resolution of the Board of Directors before
the expiration of the term.
8. Nissan Motor Co., Ltd., at which Motoo Nagai currently serves as an Outside Director, announced the issue ofserious misconduct by management including the chairman of the said company in November 2018. In
connection with the case, Nissan Motor Co., Ltd. issued an amendment report to correct the contents ofremuneration for directors (and other officers), etc. disclosed in the securities report for each fiscal year from thefiscal year ended March 31, 2006 to the fiscal year ended March 31, 2018, and submitted it to the Kanto Finance
Bureau on May 14, 2019. The Company was ordered by the Financial Services Agency to pay a surcharge on
February 27, 2020 in relation to its securities reports and other disclosure documents for the period from thefiscal year ended March 31, 2015 to the fiscal year ended March 31, 2018. 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 theissue, Motoo Nagai has appropriately fulfilled his responsibilities by giving directions regarding comprehensive
investigations, recurrence prevention measures, etc.
9. Nissan Motor Co., Ltd., at which Motoo Nagai currently serves as an Outside Director, received process
improvement orders from the Ministry of Land, Infrastructure, Transport and Tourism in March 2018 related tothe said company’s non-conformities in the final vehicle inspection processes at plants in Japan. Also, in
December 2018, the said company received process improvement directives from the said Ministry related to thesame non-conformities discovered 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.
10. 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.
11. The Company has submitted notification to the Tokyo Stock Exchange that Motoo Nagai, Keikou Terui, andKenji Hirai have been designated as independent officers as provided for by the aforementioned exchange. For
the Company’s “Criteria for Independence of Outside Officers”, please refer to page 23.

- 18 -

Proposal No. 3

Election of One Audit and Supervisory Board Member

The term of office of the Audit and Supervisory Board Member, Masao Wada, will expire at the conclusionof this Ordinary General Meeting of Shareholders. Therefore, the Company proposes the election of one
Audit and Supervisory Board Members.
In addition, the consent of the Audit and Supervisory Board has been obtained for the submission of this
proposal.
The candidate for Audit and Supervisory Board Member is as follows:
Name (Date of birth)

New election
OutsideIndependent
Nobuko Hanano(October 6, 1968)

Career summary and position in the Company
Apr. 1991

Joined Nomura Research Institute, Ltd. (left in
April 1995)

Oct. 2000

Registered as Lawyer (Dai-Ichi Tokyo Bar
Association)
Joined KOHWA SOHGOH LAW OFFICES

Oct. 2004

PartnerMar. 2019

Outside Audit and Supervisory Board Member,
Kanro Inc.

Apr. 2020

Auditor, Drone Service Promotion Association

Number of theCompany’s
shares owned0

Current position[Significant concurrent positions outside the Company]
LawyerPartner, KOHWA SOHGOH LAW OFFICES
Outside Audit and Supervisory Board Member, Kanro Inc.
[Reasons for nomination as candidate for Outside Audit and Supervisory Board Member]
After working for one of Japan’s largest consulting firms as a management researcher, Nobuko Hanano has worked
extensively as a lawyer. In addition, she has served as an outside auditor of other listed companies, deepening her
knowledge on multidimensional corporate management. After being appointed as an Outside Audit and Supervisory Board
Member of the Company, she is expected to contribute to highly effective auditing by utilizing her abundant and various
piece of knowledge.
In addition to high ethical standards and ability to make decisions fairly and impartially, which are essential for an Audit
and Supervisory Board Member, she also possesses the necessary experience and insight to conduct an appropriate audit to
the management of the Company. Therefore, judging her as being capable of appropriately performing her duties as an
Outside Audit and Supervisory Board Member, the Company nominates her as a new candidate for Outside Audit andSupervisory Board Member.
[Special interest between candidate and the Company]
There is no special interest between the candidate and the Company.
Notes: 1.
2.

3.

4.

Nobuko Hanano is a candidate for Outside Audit and Supervisory Board Member.
If Nobuko Hanano is appointed as an Audit and Supervisory Board Member, the Company plans to enter into anagreement with her 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.
At present, the Company and the insurance company have entered into the Officers’ Liability Insurance Contract
with all Audit and Supervisory Board Members included as insured persons as stipulated in Article 430-3,
paragraph 1 of the Companies Act. In the event of a claim for damages arising from duties performed by the
insured in his or her position during the insurance period, the insurance contract covers compensation fordamage and dispute costs. However, there are certain exemptions, such as damage caused by intentional or grossnegligence that is not covered by the relevant insurance contract. If Nobuko Hanano is appointed as an Audit andSupervisory Board Member, she will be insured under the insurance contract. The term of the insurance contract
is one year and shall be renewed upon resolution of the Board of Directors before the expiration of the term.
The Company has submitted notification to the Tokyo Stock Exchange that Nobuko Hanano shall be designatedas an independent officer as provided for by the aforementioned exchange. For the Company’s “Criteria for
Independence of Outside Officers”, please refer to page 23.

- 19 -

Proposal No. 4

Election of Two Substitute Audit and Supervisory Board Members

To prepare for a situation where the number of Audit and Supervisory Board Member does not satisfy the
number prescribed by laws and regulations, the Company proposes the election of two Substitute Audit andSupervisory Board Members.
The candidates for Substitute Audit and Supervisory Board Member are as follows. Tomoaki Itou will be a
substitute for the Audit and Supervisory Board Member, Masahiko Toyoda, and Masao Wada 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.

- 20 -

Candidate
No.

Name (Date of birth)

Masao Wada
(October 2, 1951)

Career summary and position in the Company
Nov. 1977

Joined Asahi & Co. (currently KPMG AZSA
LLC)Mar. 1982

Registered as Certified Public Accountant

July 2005

Representative member, AZSA & Co.
(currently KPMG AZSA LLC) (retired inJune 2012)

July 2012

Representative of Wada Certified Public
Accountant Office

June 2014

Auditor, National Land Planning Association

Apr. 2015

Auditor, Mimurodo Gakuen

June 2015

Outside Audit and Supervisory Board
Member, Nissin Sugar Co., Ltd.

June 2016

Auditor, The Japan Handicraft Artists
Association

June 2017

Audit and Supervisory Board Members of
the Company

Nov. 2017

Audit and Supervisory Board Member, MDI
Corporation (retired in September 2019)

June 2019

Auditor, Koshigaya City Land Development
Corporation

Oct. 2019

Member of the Wakoshi Station North Exit
Land Readjustment Council (civil service
special position)

June 2020

Outside Auditor, Saitama Prefectural Credit
Federation of Agricultural Cooperatives

2

Number of theCompany’s
shares owned0

Current position
Significant concurrent positions outside the Company
Certified Public Accountant
Representative of Wada Certified Public Accountant OfficeOutside Audit and Supervisory Board Member, Nissin Sugar Co., Ltd.
[Reasons for nomination as candidate for Substitute Outside Audit and Supervisory Board Member]
Masao Wada, who has been engaged in the accounting audit business of companies for many years as acertified public accountant, has highly professional knowledge and experience relating finance and accounting.
In addition, he has served as an outside auditor of other listed companies, deepening his knowledge on
multidimensional corporate management. After being appointed as an Outside Audit and Supervisory Board
Member of the Company, he has contributed to improving the effectiveness of the Company’s audits by
utilizing his abundant and various piece of knowledge.
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.

3.

Masao Wada is a candidate for Substitute Outside Audit and Supervisory Board Member.
If the number of Audit and Supervisory Board Members or Outside Audit and Supervisory Board Members does
not satisfy the number prescribed by laws and regulations and Tomoaki Itou or Masao Wada is appointed, theCompany plans to enter into an agreement to set the minimum amount of liability provided by laws andregulations as the amount for liability for damages under Article 423, paragraph 1 of the Companies Act in cases
where there is good faith and no gross negligence, in accordance with Article 427, paragraph 1 of the same Act
and the Articles of Incorporation of the Company.
At present, the Company and the insurance company have entered into the Officers’ Liability Insurance Contract
with all Audit and Supervisory Board Members included as insured persons as stipulated in Article 430-3,
paragraph 1 of the Companies Act. In the event of a claim for damages arising from duties performed by the
insured in his or her position during the insurance period, the insurance contract covers compensation for- 21 -

4.

damage and dispute costs. However, there are certain exemptions, such as damage caused by intentional or grossnegligence that is not covered by the relevant insurance contract. If the number of Audit and Supervisory Board
Members or Outside Audit and Supervisory Board Members does not satisfy the number prescribed by laws andregulations and Tomoaki Itou or Masao Wada is appointed, he will become the insured under the insurance
contract. The term of the insurance contract is one year and shall be renewed upon resolution of the Board of
Directors before the expiration of the term.
If the number of Outside Audit and Supervisory Board Members does not satisfy the number prescribed by laws
and regulations and Masao Wada is appointed, the Company will designate him as an independent officer inaccordance with the provisions of the Tokyo Stock Exchange and notify it to the Exchange. For the Company’s“Criteria for Independence of Outside Officers”, please refer to page 23.

- 22 -

(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).

- 23 -

(Attached Documents)

Business Report(From April 1, 2020 to March 31, 2021)

1. Status of the corporate group(1) Business progress and results
During the fiscal year ended March 31, 2021 (from April 1, 2020 to March 31, 2021), the global
economy has been in a state of significant turmoil following the global spread of COVID-19 withrestrictions on movement of people and economic activity in Japan and overseas. In theelectronics field, which is the Company’s main market, we maintained high-level production andinvestment in Japan and overseas, increasing investment for increased production with the growthin semiconductor demand for smartphones and data centers and increasing investment in cuttingedge fields, amid the full-fledged friction over semiconductors between the United States andChina. In addition, despite the electric power/water supply and sewage fields trending firmly,
difficult conditions continued due to factors such as the ongoing trend to curb and delay capital
investment in the general industrial field caused by COVID-19 and the decline in sales of someproducts with the decline in customer production levels in the Performance Products Business
Unit.
Under these conditions, the Organo Group identified “expanding the electronics field,”“strengthening the service solutions” and “creating new businesses” as key fields and aimed toenhance the system for implementing remote operations amid the constraints on movements andbusiness activities in Japan and overseas. We introduced various communication tools andpromoted the shift to digitalization in our engineering and solutions services as well as various
supervisory operations, and balanced preventing the spread of COVID-19 with our businessactivities.
Consequently, although orders received were below the previous year, when there were largescale orders, net sales reached a record high of more than ¥100.0 billion due to steady progress inconstruction of large-scale projects in Japan and overseas. On the profit side, a high level wasachieved that was only second to the record high profit recorded in the previous fiscal year
because of a decrease in selling, general and administrative expenses focused on operating
expenses such as travel expenses and transportation expenses due to COVID-19 and various cost
reduction measures on construction projects. In addition, return on equity (ROE) also exceeded
the initial plan.
(Millions of yen)

Category

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

75th term
Fiscal year ended
March 31, 2020

76th term(Fiscal year under review)
Fiscal year ended March 31, 2021

Year-on-year

Actual-toforecast

104,986
67,83796,515
9,908
10.3
9,929

Initial plan
100,000
67,837100,000
7,200
7.2
7,100

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

(9.9)%(8.8)%
4.3%(3.3)%–(0.3)%(5.4)%(8.8)%
0.6%
33.1%
–
39.4%

7,162

4,700

7,074

(1.2)%

50.5%

12.4

7.5

11.1

–

–

- 24 -

[Water Treatment Engineering Business Unit]

Net sales ratio

Orders received¥76,227 million (Down 11.9% year-on-year)

Net sales¥82,424 million (Up 5.8% year-on-year)

Operating profit¥8,466 million (Down 5.1% year-on-year)

81.9%
Major Business●Major Business and ProductsPlant Division
Pure and ultrapure waterproduction facilities
Industrial process water
treatment facilities
Wastewater treatment andrecovery facilities
Valuable material
recovery facilities
Production processingrelated facilities●Customers and Markets
Service Solutions
Division
Replacement ofexpendable items
MaintenanceOperational support
services
Renovation andreconditioning
Contract water treatment
Comprehensive
maintenance contracts

Electronics
industry
Semiconductors
Flat panel
display
Electronic parts

Electric power/
water supply
and sewage
Power plants
Water
purification
plantsSewagetreatment
plantsGeneralindustry
Pharmaceuticals,
cosmetics
Food andbeverage
Machinery andchemicals■Orders received
Orders received decreased 11.9% year on year to ¥76,227 million. In the electronics field, trends werefavorable in overseas markets with capital investment in Taiwan and China remaining active due tofactors such as friction over semiconductors between the United States and China, a global shortage ofsemiconductors, and competition in the development of cutting-edge semiconductors, but there was a
decline in the Japanese market in counter-reaction to the orders for large-scale projects in the previous
year. In addition, in the general industrial field, orders decreased because of the ongoing trend to curb or
delay capital investment in Japan and overseas due to COVID-19. The electric power/water supply andsewage fields maintained around the same levels as the previous fiscal year.
■Net sales
Net sales increased 5.8% year on year to ¥82,424 million. In the electronics field, in addition to growthin sales in the Plant Division due to steady progress in construction of large-scale projects in Japan thatwere ordered in the previous fiscal year and the continuation of large-scale capital investment in overseas
markets such as Taiwan and China, the Service Solutions Division was also firm due to high productionlevels. In the general industrial field, steady progress was made on construction projects that had been
carried-over from the order backlog, but sales also decreased due to the decrease in orders. The electric
power/water supply and sewage fields maintained around the same levels as the previous fiscal year,
similar to orders.
■Operating profit
Operating profit decreased 5.1% year on year to ¥8,466 million. Although selling, general andadministrative expenses such as operating expenses declined while net sales were up, this was largely
because the gross profit margin was lower in counter-reaction to the concentration of comparatively
profitable projects and projects with prominent cost reduction effects in the previous fiscal year.

- 25 -

Water Treatment Engineering Business Unit
Orders by field(Billions of yen)

Water Treatment Engineering Business Unit
Net sales by field(Billions of yen)

86.4

82.4

76.2

77.9

10.5

11.2

23.0

24.6

48.1

42.5

41.9

47.6

75th term

76th term(Fiscal year ended
March 31, 2021)

75th term

76th term(Fiscal year ended
March 31, 2021)

11.1

10.6

27.1

Electronics industry

General industry

Electric power/
water supply
and sewage

Electronics industry- 26 -

24.1

General industry

Electric power/
water supply
and sewage

[Performance Products Business Unit]

Net sales ratio

Orders received¥18,336 million (Down 0.9% year-on-year)

Net sales¥18,213 million (Down 2.0% year-on-year)

Operating profit¥1,113 million (Up 12.8% year-on-year)

18.1%
Major Business●Major Business and Products
Water Treatment Chemicals
Division
RO membrane protection
chemicals, Wastewater treatment
chemicals, Cooling water treatment
chemicals, Cleaning chemicals,
Boilers water treatment chemicals●Customers and Markets
Various manufacturing industries
Buildings and commercial facilities

Standard Water Treatment Equipment
and Filters Division
Pure and ultrapure water production
systems
Water purification filters●Customers and Markets
Medical institutions, research
institutions
Various manufacturing industries
Food and beverage, convenience
storesFood Products Division
Food ingredients
Food processing agents●Customers and Markets
Food factories, food processing
industry
Beverage manufacturing
Nursing care food, health food
manufacturing■Orders received/Net sales
Orders received decreased 0.9% year on year to ¥18,336 million and net sales decreased 2.0% year on
year to ¥18,213 million.
The Water Treatment Chemicals Division was affected by the decrease in sales to general industry suchas the automotive industry due to lower production levels and delayed development of overseas markets
such as Taiwan and China due to COVID-19, but sales of various agents for the electronics industry andOrplus® slightly acidic electrolyzed water for disinfecting and deodorizing performed favorably, andnet sales decreased slightly year on year.
The Standard Water Treatment Equipment and Filters Division saw a decline in sales such as inspection
grade pure water equipment for medical institutions and water purification filters for beverage dispensers,
but sales of pure and ultrapure water equipment for laboratory use such as in research institutions were
firm, securing net sales around the same level as the previous year.
The Food Products Division was affected by the decrease in sales to restaurants, but efforts were madewith products for household food products including products catering to stay-at-home consumption,and net sales were only down slightly year on year.
■Operating profit
Operating profit increased 12.8% year on year to ¥1,113 million. Net sales for the Water Treatment
Chemicals Division and the Food Products Division declined, but the profit margin improved due todecreases in areas such as indirect expenses in the manufacturing division and operating expenses.

- 27 -

Performance Products Business Unit
Net sales by field(Billions of yen)
18.5

18.2

5.1

5.0

6.2

6.2

7.1

6.9

75th term

76th term(Fiscal year ended
March 31, 2021)

Food productsStandard water treatment equipment and filters
Water treatment chemicals(2) Capital investment
The Organo Group’s total outlays for capital investment amounted to ¥1,015 million during the
fiscal year under review. The main ongoing capital investment during the fiscal year under review
is the construction of two new testing buildings at the Company’s R&D Center.
From the fiscal year under review, the total amount of capital investment includes investment inproperty, plant and equipment as well as intangible assets.
(3) Financing
No items to report.
(4) Issues to be addressed
In the current consolidated fiscal year, the Company promoted various initiatives in our key
business fields of “electronics industry expansion,” “enhancement of service solutions,” and“creation of new businesses.” For the electronics industry expansion, we expanded our businessagainst the backdrop of active market conditions, including the successful acquisition of several
large projects in Taiwan, China, and other countries, while making progress in the construction oflarge projects in Japan that were acquired in the previous fiscal year. For the enhancement ofservice solutions, we have enhanced our solution systems in Taiwan and China, which have been
growing, and reviewed our domestic system. Also, as a new solution service utilizing IoT and
ICT, we are expanding our business model combining equipment and chemicals. For the creationof new businesses, sales of functional materials for the purification of various chemicals andsolvents used in the manufacture of electronic materials increased. In addition, the purification
facilities for lithium-ion batteries achieved certain results, including progress in evaluation tests at
customers. However, restrictions on travel and visits in Japan and overseas had an impact onefforts to develop new customers and technologies and to strengthen our overseas businessstructure.
The Organo Group has prepared its Medium-term Management Plan on a rolling basis every year.
However, in this fiscal year, given the fact that the previously assumed business environment isundergoing a major transformation due to the spread of COVID-19, the Group has been
discussing the long-term management direction and put together a framework for a long-term planand then formulated a Medium-term Management Plan for fiscal years 2021 to 2023. Whilecontinuing to implement measures to strengthen and expand the electronics industry and service
solutions, which have been our key business fields, we have established a medium-to-long-termbusiness development plan that includes strengthening our products and technologies in water
treatment chemicals and functional materials, expanding our service menu, and positioning the
Chinese market as a target for expanding the general industrial field and functional products
business. In addition to strengthening our engineering system and ensuring safety and compliance,
which we have been working on to build our business foundation, we have set new challenges tobe addressed, including sustainability initiatives such as addressing climate change anddecarbonization, initiatives aimed at developing and utilizing diverse human resources in Japan- 28 -

and overseas, and measures for digital transformation. Although the corona disaster has made it
extremely difficult to predict the future, we recognize that there is no major change in the
direction we should takein the key business fields of our Medium-term Management Plan,
including the development of the electronics industry, the promotion of service solutions using
digital technology, the utilization of water resources using functional material technology such as
ion exchange resins and membranes, and the advancement of wastewater treatment technology.
We will continue to make efforts to balance the prevention of the spread of infection and ourbusiness activities.
Management targets for fiscal 2023, the final year of the new Medium-term Management Plan,
are net sales of ¥110.0 billion, and operating profit of ¥10.5 billion, and the Oregano Group aims
to build a profit structure that can achieve an operating profit ratio and ROE (Return On Equity)of at least 9.0% consistently and continuously. Furthermore, in order to evaluate the status ofprogress on sustainably enhancing corporate value and improving profitability, the Organo Grouppositions ROE and consolidated operating profit ratio as key indicators.

- 29 -

Medium-term Management Plan 2021-2023
Key business fields / Market and growth drivers
Electronics industry

Expansion of the water treatment processing consignment service

Entering the U.S. market and establishing systems



Improvement of the efficiency of engineering operations

Water treatment chemicals
Expansion of package menu including chemicals, equipment, sensors, and IoTDevelopment of new products and technologies, development of overseas markets (Taiwan, China,
U.S., etc.)

Functional materials
Development of functional materials such as ion exchange resins and membranes for new businesses
and technologies



Establishment of the stable supply system for functional materials in Japan and overseas

Service solutions

Development of infrastructure for digital service solutions such as Ortopia and Orsmart

Improvement of the system and quality of service solutions in Japan and overseas

China and Taiwan marketsOrders for semiconductor projects



Development of general industry and functional products business

Local production, and research and development



Development of the solution system

Research and development
Expand investment in development with a target of 2.5% of net sales; create new businesses throughnext-generation ultra-pure water systems, water recovery technologies, and non-aqueous separationand purification technologies for the electronics industry; strengthen sensing and digital technologies.

Establishment of a business foundation
・ Strengthening the engineering structure
・ Initiatives for ESG/SDGs
・ Ensuring safety and compliance
・ Promoting data utilization
・ Developing and utilizing human resources- 30 -

Management Target(Millions of yen)
76th term
77th term
78th term
79th term
Fiscal year ended Fiscal year ended Fiscal year ended Fiscal year ended
Category
March 31, 2021 March 31, 2022
March 31, 2023 March 31, 2024
(Result)(Plan)(Plan)(Plan)
Orders received
94,563100,000
105,000
110,000
Net sales
100,638
103,000
105,000
110,000
Operating profit
9,579
8,250
9,000
10,500Operating profit ratio (%)
9.5
8.0
8.6
9.5
Return on equity (ROE)
11.1
9.3
8.3
9.0
(%)
(5) Changes in assets and profit and loss
73rd term
Fiscal year ended
March 31, 2018

74th term
Fiscal year ended
March 31, 201975th term
Fiscal year ended
March 31, 2020

76th term(Fiscal year underreview)
Fiscal year ended
March 31, 2021

Orders received (Millions ofyen)

88,049103,838

104,986

94,563

Net sales (Millions of yen)

79,226

92,27396,515

100,638

Operating profit (Millions of
yen)

3,821

6,558

9,908

9,579

Operating profit ratio (%)

4.8

7.1

10.3

9.5

Ordinary profit (Millions of
yen)

3,933

6,538

9,929

9,900

Profit attributable to ownersof parent (Millions of yen)

2,780

4,452

7,162

7,074

Basic earnings per share (yen)241.50388.48626.05616.72Category

Return on equity (ROE) (%)

5.5

8.4

12.4

11.1

Total assets (Millions of yen)

96,036

101,257

101,448

115,011

Net assets (Millions of yen)

51,68154,79560,85767,357

Net assets per share (yen)4,477.64

4,784.81

5,301.26

5,856.25

Notes: 1.

2.

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 subsequent fiscal years. Also, when calculating net assets per share, thoseshares have been included in treasury shares excluded from the total number of issued shares at the end of theperiod.

- 31 -

Orders received / Net sales

Operating profit / Operating profit ratio

Orders received (Millions of yen)
103,838
92,27388,049Net sales (Millions of yen)
104,986
96,515

Operating profit (Millions of yen)

100,638
94,563Operating profit ratio (%)
9,908

9,579

79,226
10.3

6,558

9.5

7.1

3,821
4.8

73rd term

74th term

75th term

73rd term

76th term(Fiscal year underreview)

Profit attributable to owners of parent / Basic earnings per share

74th term

(%)

7,074

12.4
11.1

616.72626.05

8.4

4,452
2,780

76th term(Fiscal year underreview)

ROE

Profit attributable to owners of parent (Millions of yen)
Basic earnings per share (Yen)
7,162

75th term

5.5

388.48241.5073rd term

74th term

75th term

73rd term

76th term(Fiscal year underreview)

Total assets

74th term

76th term(Fiscal year underreview)

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

Net assets (Millions of yen)
115,011

101,257

101,488

74th term

75th term

Net assets per share (Yen)
67,35760,857

51,681
4,477.64

96,03673rd term

75th term

76th term(Fiscal year underreview)- 32 -

73rd term

54,7955,856.25
5,301.26

4,784.81

74th term

75th term

76th term(Fiscal year underreview)

(6) Parent company and major subsidiaries(i)Relationship with parent company
The Company’s parent company is Tosoh Corporation, and it holds 4,937 thousand shares(equity ownership 42.6% includes the portion of indirect ownership) of the Company.
The Company purchases items such as some raw materials for water treatment chemicals
from Tosoh Corporation and it also carries out other transactions with Tosoh Corporationsuch as selling various types of water treatment systems and related chemicals to the said
company.
Tosoh Corporation and the Company have not entered into any contracts or other agreements
regarding the Company’s material financial and business policies. There are no particular
restrictions on the Company’s material financial and business policies in relation to Tosoh
Corporation, including approval items in conducting business activities. Although theCompany is engaged in businesses related to the corporate group of Tosoh Corporation, thetwo companies are clearly segregated in terms of the products they handle and the customers
they do business with. The Company recognizes that as a listed company, it has secured acertain degree of management independence in its business activities and management
decisions.

(ii) Major subsidiaries
Company name

Major businesses

100.0

Installation and supervision ofvarious types of water treatment
systems50

100.0

Sales and manufacture of foodingredients and food processing
agents50

100.0

Sales and related construction 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.

- 33 -

(7) Major business offices and factories (As of March 31, 2021)
Head Office
Factories

Head officeKoto-ku, Tokyo

Tsukuba Factory

Tsukuba City, Ibaraki

Iwaki Factory

Iwaki City, Fukushima

Research andDevelopment Facility

R&D Center

Sagamihara City, Kanagawa

Branches

Hokkaido Branch

Sapporo City, Hokkaido

The Company

In JapanTohoku 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, TokyoORGANO 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- 34 -

(8) Employees (As of March 31, 2021)(i)

Employees of the Organo Group

Business Segment

Number of employees

Change from previous fiscal year-end

Water Treatment Engineering Business
Unit

1,809

Increase by 60

Performance Products Business Unit

359–

Company-wide (common)
Total

151

Increase by 10

2,319

Increase by 70(ii) Employees of the Company
Number of employees

Change from previous fiscal
year-end

1,072

(9)

Increase by 21

Average age

Average years of service

43.4 years old

16.0 years

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

Lenders
Mizuho Bank, Ltd.

5,200

Sumitomo Mitsui Banking Corporation

2,440

The Hachijuni Bank, Ltd.

2,230

MUFG Bank, Ltd

1,940

Sumitomo Mitsui Trust Bank, Limited

1,743- 35 -

2. Shares of the Company (As of March 31, 2021)(1) Total number of authorized shares: 25,392,000 shares(2) Total number of issued shares:
shares)

11,589,925 shares (including treasury shares of 83,318(3) Number of shareholders:

4,574 shareholders(4) Major shareholders
Number of shares held(Thousands of shares)

Name of shareholder
Tosoh Corporation

Holding ratio
(%)

4,925

42.80

Custody Bank of Japan, Ltd. (Trust account)

694

6.03

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

643

5.59

Banque et Caisse d’Epargne de l’Etat, Luxembourg 46985807

202

1.76

Mizuho Bank, Ltd.

200

1.74

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

165

1.43

KBC BANK NV-UCITS CLIENTS NON TREATY

134

1.17

BBH BOSTON CUSTODIAN FOR BBHTSIA HEPTAGONFUND PLC COPEL 620357

118

1.03

Custody Bank of Japan, Ltd. (Securities Investment Trust
Account)

105

0.92

Custody Bank of Japan, Ltd. (Trust Account 5)

99

0.86

Notes

1. The treasury shares (83,318 shares) are excluded in the calculation of the holding ratio shown above.
2. 29,300 shares of the Company held by Custody Bank of Japan, Ltd. (Trust account) (shares in the Officer Share
Delivery Trust) are not included in treasury shares.

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

Number of shares

Directors (excluding Outside Directors)
Notes

10,200

Number of persons
5

1. Pursuant to a resolution at the 73rd Ordinary General Meeting of Shareholders held on June 28, 2018, theCompany introduced a performance-linked share-based remuneration plan using a trust for Directors (excluding
Non-Executive Directors) as well as Executive Officers (excluding non-residents) of the Company, in order toheighten awareness of contributing to enhancing the Organo Group’s medium- to long-term operating results andincreasing corporate value. The details are described in “3. (4) Remuneration, etc. to Directors and Audit andSupervisory Board Members.” As of March 31, 2021, the trust established by the Company held 29,300 sharesof the Company.
2. The above includes shares delivered during the current fiscal year as compensation for the execution of duties
as an Executive Officer prior to assuming the position of Director.

- 36 -

3. Officers(1) Names etc. of Directors and Audit and Supervisory Board Members (As of March 31, 2021)
Position
Director and President(Representative Director)
President and Executive
Officer

Name

Responsibility

Masaki Uchikura

Hitoshi Hori

President of Performance
Products BusinessDirector
Managing Executive Officer

Haruki Myouga

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

Director
Managing 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
Managing Executive Officer

Director
Managing 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
Executive Director of Japan
Chemical Innovation andInspection InstituteOutside 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)- 37 -

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.
Director Yasuyuki Koie retired from his office due to expiration of his term of office at the conclusion of the75th Ordinary General Meeting of Shareholders held on June 26, 2020.
Audit and Supervisory Board Members Masahiko Toyoda, Masao Wada and Wataru Higuchi possess extensive
financial and accounting knowledge as shown below.
・

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

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.

・5.

(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 Masayuki Yamada, Motoo Nagai, Keikou Terui and Kenji Hirai, and Audit andSupervisory 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 the Companies
Act to the minimum liability amount as stipulated in laws and regulations, presuming they
perform their respective duties in good faith and without gross negligence.
(3) Outline of the Officers’ Liability Insurance Contract
The Company has entered into the Officers’ Liability Insurance Contract for Directors and Audit
and Supervisory Board Members of the Company and its subsidiaries, as well as Executive
Officers of the Company, with an insurance company as insured persons, as stipulated in Article
430-3, paragraph 1 of the Companies Act. The contract is renewed every year. In the event of aclaim for damages arising from duties performed by the insured in his or her position during theinsurance period, the insurance contract covers compensation for damage and dispute costs.
However, there are certain exemptions, such as damage caused by intentional or gross negligencethat is not covered by the relevant insurance contract. The total amount of insurance expenses isshared proportionally by the Company and its subsidiaries.

- 38 -

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

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

Director
The following is a summary of the Company’s “Policy for determining remuneration,etc. to Directors” resolved at the Board of Directors meeting held on February 1, 2021.
This policy is resolved by the Board of Directors after obtaining opinions based onreview by the Nomination and Remuneration Advisory Committee, of which the
majority are independent outside directors.
The Board of Directors has confirmed that the method of determining the details of
remuneration, etc. and the content of remuneration, etc. determined for each individual
Director for the fiscal year under review are consistent with the relevant decision policy
and that the opinions of the Nomination and Remuneration Advisory Committee havebeen respected. The Board of Directors has determined that the content of remuneration,etc. is in line with the relevant decision policy.
(a) Basic policy
The remuneration system for Executive Directors, in addition to the fixed
remuneration (cash), encourages business execution in line with management
policies and management targets and establishes a remuneration framework andremuneration standards which provide strong incentive for the achievement ofshort-term and mid- to long-term management targets in order to achievesustainable growth and improve the corporate value of the Group. The
remuneration system for Non-Executive Directors, including Outside Directors,
shall be fixed remuneration (cash) only, for the purpose of effectively functioning
their supervisory and monitoring functions.
(b) Remuneration frameworki.

Executive Directors
Remuneration to Executive Directors consists of fixed remuneration andperformance-linked remuneration, and performance-linked remuneration consistsof short-term performance-linked remuneration (cash) and mid- and long-term
performance-linked remuneration (stock). The remuneration level is designed tobe appropriate for each position by comparing and verifying it with objective
data such as remuneration levels from external remuneration consultants andremuneration survey data from external research organizations.
1)

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

2)

Performance-linked remuneration
The ratio of the total amount of performance-linked remuneration is designed
to be approximately 50% to 60% when the performance evaluation index is thestandard value set by the Board of Directors, and this ratio is higher for
Directors of higher ranks. In addition, the ratio of short-term performancelinked remuneration (cash) to medium-to-long-term performance-linked
remuneration (shares) shall be designed to be approximately 7:3 in the case theperformance evaluation index is at the standard value set by the Board of
Directors.
・ Short-term performance-linked remuneration (cash)
The short-term performance-linked remuneration shall be monetary
remuneration. From the perspective of clarifying the relationship between- 39 -

business performance and remuneration, the Company shall use theconsolidated operating profit, which is an important management index of
the Group, as the performance evaluation index, and shall pay the total
amount calculated by the remuneration table for each position according to
the consolidated operating profit of the previous fiscal year in equal monthly
installments from July to June of the following year. The amount paid varies
in the range of 0-170% depending on the amount of consolidated operating
profit.
・ Medium-to-long-term performance-linked remuneration (shares)
The medium-to-long-term performance-linked remuneration is a stockbased remuneration plan using a trust. From the perspective of improving
corporate values over the medium to long term and aligning the interests
with those of shareholders, the Company shall use the consolidated returnon equity (ROE), which is an important management indicator of the Groupand indicates capital efficiency, as the performance evaluation indicator, andshall deliver shares of the Company calculated based on the performancelinked coefficient determined in accordance with the consolidated return on
equity for the previous fiscal year and the basic amount for each position.
The amount equivalent to the payment varies in the range of 0 to 200%
depending on the consolidated return on equity. In addition, the Company
has established a three-year transfer restriction period from the time ofdelivery of the shares to be delivered.
ii.

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

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

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

- 40 -

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

Category

Total amountof
remuneration,
etc.
(Millions ofyen)

Performance-linked remuneration

Fixed remuneration

Short-termMid- and long-term
Non-monetary
remuneration,
etc.
(Stocks)

Monetary remuneration, etc.
Total amount(Millions of yen)

Number of
persons covered

Total amount(Millions of yen)

Total amount(Millions of yen)

Number of
persons covered

Directors (excluding
Outside Directors)

243

86

7

100

56

5

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

17

17

1

－

－

－

Outside Directors

32

32

3

－

－

－

Outside Audit andSupervisory Board
Members

19

19

2

－

－

－

Total

312

156

13

100

56

5

Notes: 1.
2.
3.

4.

5.

6.

The above figures include one Director who retired upon the conclusion of the 75th Ordinary General Meeting of
Shareholders held on June 26, 2020.
Remuneration of Directors does not include salaries as employees paid to directors who are also employees.
The details of the performance indicators related to the performance-linked remuneration, the reasons forselecting such performance indicators, and the calculation method of the performance-linked remuneration are
described in “(1) Policies and procedure of determining remuneration to Directors and Audit and Supervisory
Board Members”, and the changes in the performance indicators including the current fiscal year are described in“1. (5) Changes in assets and profit and loss.”
The details of non-monetary remuneration, etc. (medium-to-long-term performance-linked remuneration(shares)) are described in “(1) Policies and procedure of determining remuneration to Directors and Audit andSupervisory Board Members.” The amount of non-monetary remuneration, etc. (shares) above includes theamount of remuneration delivered in the current fiscal year and the amount to be delivered in the following fiscal
year, which should be recorded as expenses in the current fiscal year. The status of shares issued to officers is
described in “2. (5) Shares issued to officers as compensation for the execution of their duties during the fiscal
year under review.”
The amount of remuneration for Directors was set at not more than ¥340 million per year (of which not morethan ¥40 million is for Outside Directors) by resolution of the 69th Ordinary General Meeting of Shareholders
held on June 27, 2014. The number of Directors as of the close of this General Meeting of Shareholders is 10(including one Outside Director).
In addition to this limited amount of remuneration, the Company introduced a performance-linked share-based
remuneration plan for Directors (excluding Non-Executive Directors) by resolution of the 73rd Ordinary General
Meeting of Shareholders held on June 28, 2018 in which the amount of cash the Company may contribute shallbe limited to ¥300 million for the three fiscal years in the initial applicable period, and the total number ofCompany’s shares that may be issued for Directors (excluding Non-Executive Directors) shall be limited to
54,000 shares per fiscal year (162,000 shares for the three fiscal years in the initial application period). The
number of Directors (excluding Non-Executive Directors) as of the close of this General Meeting of
Shareholders is six.
The amount of remuneration for Audit and Supervisory Board Members was set at not more than ¥60 million peryear by resolution of the 61st Ordinary General Meeting of Shareholders held on June 29, 2006. The number ofAudit and Supervisory Board Members as of the close of this General Meeting of Shareholders is four.

- 41 -

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

Significant concurrent positions outside the Company and relation between the Company andsuch other corporations
Significant concurrent positions outside the Company are as described in “(1) Names etc. of
Directors and Audit and Supervisory Board Members (As of March 31, 2021).” 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, 2021, payments of research costs to said institutewas ¥10 million) the Company also donates money to said institute (in fiscal year ended
March 31, 2021, payment amount was ¥300 thousand), the amounts of both of thosepayments are immaterial. For the other outside Directors, the Company does not have any
important dealing or other special relationship with the said each organizations where theofficers hold significant concurrent positions.

(ii) Principal activities during the fiscal year under reviewa.
Name

Motoo Nagai

Keikou Terui

Kenji Hirai

Directors
Board ofDirectors
Status ofattendance

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

14/14
(100%)He has been fulfilling his role appropriately by mainly providing opinions asnecessary on such issues as management plans, business strategies, ESG issues,
affiliate management, risk management, compliance, internal reporting system,
evaluation of the effectiveness of the Board of Directors, dividend policy, andinformation disclosure based on his extensive knowledge and experience incorporate management mainly as a manager of a financial institution.
As the Chairman of the Nomination and Remuneration Advisory Committee, heattended all 10 meetings of the Committee held during the fiscal year under review
and led the supervisory function in the process of selecting candidates, etc. for theCompany’s Board of Directors and determining the remuneration, etc. for Directors.

14/14(100%)He has been fulfilling his role appropriately by mainly providing opinions asnecessary on such issues as management plans, business strategies, affiliate
management, technological development, personnel policies, evaluation of theeffectiveness of the Board of Directors, risk management, dialogue with investors,
compliance, and safety management based on his extensive knowledge of industrial
policy and industrial technology and his experience in key positions at the Ministryof Economy, Trade and Industry.
As a member of the Nomination and Remuneration Advisory Committee, heattended all 10 meetings of the Committee held during the fiscal year under review
and led the supervisory function in the process of selecting candidates, etc. for theCompany’s Board of Directors and determining the remuneration, etc. for Directors.

14/14(100%)He has been fulfilling his role appropriately by mainly providing opinions asnecessary on such issues as business strategies, operational reforms, human resource
development, compliance, and information disclosure based on his extensive
knowledge and experience as the head of a research institution.
As a member of the Nomination and Remuneration Advisory Committee, heattended all 10 meetings of the Committee held during the fiscal year under review
and led the supervisory function in the process of selecting candidates, etc. for theCompany’s Board of Directors and determining the remuneration, etc. for Directors.

- 42 -b.

Name

Masao Wada

Wataru Higuchi

Audit and Supervisory Board Members
Board ofDirectors

Audit andSupervisory
Board meetings

Status ofattendance

Status ofattendance

14/14(100%)

14/14(100%)

Status of Expression of Opinions

14/14(100%)He has been mainly providing opinions as necessary on such
issues as major audit considerations, affiliate management,
business strategies, compliance, and risk management based on his
extensive knowledge and experience related to accounting andauditing operations as a certified public accountant.

14/14(100%)He has been mainly providing opinions as necessary on such
issues as internal audits, affiliate management, management plans,business environment, compliance, and risk management based on
his extensive knowledge and experience related to legal, financeand accounting operations as a lawyer and certified public
accountant.

- 43 -

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

Category

Amount of remuneration, etc. for Independent Auditor for the fiscal year underreview¥54 million

Total amount of money and other financial profits to be paid by the Company
and its subsidiaries¥62 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
The Company entrusts the independent auditor with “support services for projects aimed atapplying the ‘Accounting Standard for Revenue Recognition’ (ASBJ Statement No. 29)” and“income certification services for tax returns related to employees seconded overseas,” which areservices other than those stipulated in Article 2, paragraph 1 of the Certified Public Accountants
Act (non-audit services).
(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.

- 44 -

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- 45 -

(iii) Organization Structurea.

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

b.

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

- 46 -

(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 2019 to March 2020) was conducted in April 2020, and based on the results of thatquestionnaire, an analysis/assessment was performed at the Board of Directors meetings in
May and June 2020, 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 indicated the direction andgrowth strategies it should pursue, took appropriate actions to promote and revise theimplementation of these strategies and to improve or revise its internal control system; 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 was judged that the opinions of investors andshareholders were reflected in our management compared with the previous fiscal year. At
the same time, the Company recognized the need to enhance discussions regarding theenhancement of shareholder value and the governance system as a listed subsidiary, and tofurther improve support for Non-Executive Directors and Audit and Supervisory Board
Members.
Regarding efforts made in the current fiscal year, in order to enhance the quality andquantity of deliberations at the Board of Directors meetings, we reviewed the items to bedeliberated and explained, as well as the materials, and improved the environment for web
conferencing and provision of electronic materials. In addition, we have issued a new
integrated report from the perspective of enhancing dialogue with investors andshareholders. The Company will continue to strengthen information disclosure to investors
and shareholders by translating more disclosure materials into English.

Notes:FY2019 (Evaluation period of questionnaire: April 2018 to March 2019)
FY2020 (Evaluation period of questionnaire: April 2019 to March 2020)(2) Basic policy on control of the Company
We currently have no plans to introduce anti-takeover measures.
- 47 -

(3) Policy on determination of dividends of surplus and others
The Company treats the return of profits to shareholders as one of the Company’s most importantmanagement agendas, and it strives to provide distribution of profits taking into account theCompany’s revenue status while adhering to a basic policy of providing stable and continuous
dividends.
The Company will utilize internal reserve funds in business investments and R&D investments, etc.,
to achieve sustainable growth.
The Company has included provisions in the Articles of Incorporation on the payment of dividends,
etc., of surplus by resolution of the Board of Directors. Dividend payments are made twice a year
in interim dividends and year-end dividends, and year-end dividends are in principle a matter for
resolution of the Ordinary General Meeting of Shareholders.

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

- 48 -

Consolidated Balance Sheet(As of March 31, 2021)
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
Raw materials and supplies
Other

Liabilities
89,702Current liabilities
Notes and accounts payable trade
Electronically recorded
obligations - operating

12,80449,517
1,598

Short-term borrowings

9,773
5,448
6,205
1,223
3,172

Allowance for doubtful accounts(39)

Non-current assets
Property, plant and equipment
Buildings and structures
Machinery, equipment andvehiclesLand
Construction in progress

25,30818,974
4,983

Other

(Millions of yen)AmountItem

Income taxes payable
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
Non-current liabilities
Long-term borrowings

690

Deferred tax liabilities

12,279300
720

14,510
2,140
1,226
1,442
241
122
109
2,809
6,905
1,495
11

Total liabilities

47,654
Net assets

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

5,228
1,911
2,977
743
(403)

Shareholders’ equity
Share capital
Capital surplus
Retained earnings
Treasury shares
Accumulated other comprehensive
incomeValuation difference on availablefor-sale securities
Foreign currency translation
adjustment
Remeasure-ments of defined
benefit plans
Non-controlling interests- 49 -

4,589

5,319
79

1,105

115,011

13,556Retirement benefit liability
Other

Intangible assets

Total assets

40,74967,1398,225
7,508
51,902
(495)
74
301
(201)
(25)
143

Total net assets

67,357

Total liabilities and net assets

115,011

Consolidated Statement of Income(From April 1, 2020 to March 31, 2021)(Millions of yen)
Item

AmountNet sales
Cost of sales

100,638
74,311Gross profit
Selling, general and administrative expenses

26,326
16,746

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

9,579
54
39
132
153
74

Non-operating expenses
Interest expenses
Other

117
16

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

7
14

Extraordinary losses
Loss on sales of non-current assets
Loss on abandonment of non-current assets
Loss on valuation of investment securities
Loss on sales of right to use facilities
Loss on valuation of right to use facilities

0
161
59
4
0

454

133
9,900

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

22

227
9,695

2,839
(230)

2,608

ProfitProfit attributable to non-controlling interests

7,086
12

Profit attributable to owners of parent

7,074- 50 -

Balance Sheet(As of March 31, 2021)
Item

AmountAssetsCurrent assets
Cash and deposits
Notes receivable - trade

Liabilities
72,172
7,130

34,394
1,825

2,094

Current liabilities
Notes payable - trade
Electronically recorded
obligations - operating

1,598

Accounts payable - trade

7,566Electronically recorded monetaryclaims - operating
Accounts receivable - trade

37,099Investments in leases

9,763

Merchandise and finished goods
Work in process
Raw materials and supplies
Advance payments - trade
Prepaid expenses
Short-term loans receivable

4,501
4,550
915
623
242
1,942

Other

1,723

Allowance for doubtful accounts(12)

Non-current assets
Property, plant and equipment
Buildings
Structures
Machinery and equipment

25,41018,372
4,615
113
540

Vehicles(Millions of yen)AmountItem

Short-term borrowings
Current 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

2

Total liabilities

4,589

12,400
600
1,234
1,623
672
1,839
1,000
191
277
109
463
6,640
1,495
5,116
29
41,035Tools, furniture and fixtures

614

Land
Construction in progress
Intangible assets
Software
Other
Investments and other assets
Investment securities
Shares of subsidiaries andassociates
Long-term loans receivable

12,191
294
1,025
864
160
6,011
699

Shareholders’ equity
Share capital
Capital surplus
Legal capital surplus
Other capital surplus
Retained earnings
Legal retained earnings

56,290
8,225
7,508
7,508
0
41,052832

2,315

Other retained earnings

40,220Net assets

300

Guarantee deposits

92

Deferred tax assets

2,727

Other

279

Allowance for doubtful accounts(403)

Total assets

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

97,582- 51 -

14090
31
27,065
12,892
(495)
257
257

Total net assets

56,547

Total liabilities and net assets

97,582

Statement of Income(From April 1, 2020 to March 31, 2021)(Millions of yen)
Item

AmountNet sales
Cost of sales

72,661
52,173Gross profit
Selling, general and administrative expenses

20,48814,177

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

6,311

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

1,280
324
58

1,663

52
109
36
6

204
7,770

14

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

14

160
59
4

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

224
7,560

1,905
(224)

Profit

1,680
5,879

Figures are rounded down to the nearest unit.

- 52 -

(English translation)

Certified copy of Independent Auditor’s audit report on the Consolidated Financial
Statements
Independent Auditor’s Report
May 6, 2021
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
Public[Seal]
Kuwamoto
Accountant

OpinionWe have audited the consolidated financial statements, which comprise the consolidated balance sheet, theconsolidated statement of income, the consolidated statement of changes in net assets and the related notesof ORGANO CORPORATION (“the Company”) and its consolidated subsidiaries (collectively referred toas “the Group”), as at March 31, 2021 and for the year from April 1, 2020 to March 31, 2021 in accordancewith Article 444-4 of the Companies Act.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects,
the consolidated financial position and the results of operations of the Group for the period, for which theconsolidated financial statements were prepared, in accordance with accounting principles generally acceptedin Japan.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of
the Consolidated Financial Statements section of our report. We are independent of the Group in accordancewith the ethical requirements that are relevant to our audit of the consolidated financial statements in Japan,
and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
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 these consolidated financial
statements in accordance with accounting principles generally accepted in Japan. This responsibility includes
the establishment and operation of internal controls deemed necessary by management for the preparation of
consolidated financial statements, free of material misstatement due to fraud or error and the presentation of
appropriate accounting information.
In preparing the consolidated financial statements, management is responsible for assessing the Group’s
ability to continue as a going concern, disclosing, as applicable, matters related to going concern inaccordance with accounting principles generally accepted in Japan 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.

- 53 -

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 report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with auditing standards generally accepted in Japan will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to influence the economic decisions ofusers taken on the basis of these consolidated financial statements.
As part of our audit in accordance with auditing standards generally accepted in Japan, we exercise
professional judgment and maintain professional skepticism throughout the audit. We also:・ Identify and assess the risks of material misstatement due to fraud or error. Design and perform audit
procedures that address the risks of material misstatement. The selection and application of audit
procedures shall be at the discretion of the auditor. In addition, obtain sufficient and appropriate audit
evidence to provide a basis for our opinion.
・ Obtain an understanding of internal control relevant to the audit in order to design audit procedures thatare appropriate in the circumstances, while the objective of the audit is not to express an opinion on theeffectiveness of the Group’s internal control.
・ Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimatesand related disclosures made by management.
・ Conclude on the appropriateness of management’s use of the going concern basis of accounting and basedon the audit evidence obtained, whether a material uncertainty exists related to events or conditions that
may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that amaterial 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, to modify our
opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report.
However, future events or conditions may cause the Group to cease to continue as a going 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 andcontent 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 fairpresentation.
・ Obtain sufficient appropriate audit evidence regarding the financial information of the entities or businessactivities within the Group to express an opinion on the consolidated financial statements. We areresponsible 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 other matters,
the planned scope and timing of the audit, significant audit findings, including any significant deficiencies ininternal 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 Group which is required to be disclosed pursuant to the provisions of theCertified Public Accountants Act of Japan.

- 54 -

(English translation)

Certified copy of Independent Auditor’s audit report
Independent Auditor’s Report
May 6, 2021
To the Board of Directors of
ORGANO CORPORATIONKPMG AZSA LLC
Tokyo Office, Japan
Designated
Limited Liability
PartnerEngagement
Partner
Designated
Limited Liability
PartnerEngagement
Partner

CertifiedMasahikoPublic[Seal]
Kobayashi
Accountant

Certified
Yoshitaka
Public[Seal]
Kuwamoto
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, 2021 and for the year from April 1, 2020 to March 31,
2021 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 in accordancewith the ethical requirements that are relevant to our audit of the financial statements in Japan, and we havefulfilled our other ethical responsibilities in accordance with these requirements. We believe that 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 these non-consolidated financial
statements, etc. in accordance with accounting principles generally accepted in Japan. This responsibility
includes the establishment and operation of internal controls deemed necessary by management for the
preparation of non-consolidated financial statements, etc. free of material misstatement due to fraud or error
and the presentation of appropriate accounting information.
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.
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.

- 55 -

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 in Japan
will always detect a material misstatement when it exists. Misstatements can arise from fraud or error andare considered material if, individually or in the aggregate, they could reasonably be expected to influence
the economic decisions of users taken on the basis of these financial statements and the supplementaryschedules.
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 due to fraud or error. Design and perform audit
procedures that address the risks of material misstatement. The selection and application of audit
procedures shall be at the discretion of the auditor. In addition, obtain sufficient and appropriate audit
evidence to provide a basis for our opinion.
・ Obtain an understanding of internal control relevant to the audit in order to design audit procedures thatare appropriate in the circumstances, while the objective of the audit is not to express an opinion on theeffectiveness of the Company’s internal control.
・ Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimatesand related disclosures made by management.
・ Conclude on the appropriateness of management’s use of the going concern basis of accounting and basedon the audit evidence obtained, whether a material uncertainty exists related to events or conditions that
may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude thata material uncertainty exists, we are required to draw attention in our auditor’s report to the related
disclosures in the financial statements and the supplementary schedules or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to thedate of our auditor’s report. However, future events or conditions may cause the Company to cease tocontinue 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 theunderlying transactions and events in a manner that achieves fair presentation.
We communicate with corporate auditors and the board of corporate auditors regarding, among other matters,
the planned scope and timing of the audit, significant audit findings, including any significant deficiencies ininternal 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.

- 56 -

(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 76th fiscal year from April 1, 2020 toMarch 31, 2021, 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.

- 57 -

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 7, 2021
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]- 58 -

Items Disclosed on the Internet Concerning Notice of the 76th
Ordinary General Meeting of Shareholders

76th fiscal year
(From April 1, 2020 to March 31, 2021)(i). Business Report
Development of systems to ensure the appropriateness ofbusiness operations
Overview of operational status of systems to ensure
appropriateness of business operations(ii). Consolidated Financial Statements
Consolidated Statement of Changes in Equity
Notes to Consolidated Financial Statements(iii). Non-consolidated Financial Statements
Statement of Changes in Equity
Notes to Non-consolidated Financial Statements

ORGANO CORPORATION
The matters from (i) to (iii) above are provided to shareholders by posting them on the Company’s website(https://www.organo.co.jp/) pursuant to the provisions of laws and regulations and Article 16 of theCompany’s Articles of Incorporation.

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

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

 The Company will establish the Organo Group Company Code of Conduct and theCompliance Regulations and will ensure that all officers and employees of the Company
are aware of them.
 To promote compliance, the Company will establish the Compliance Committee toformulate a compliance education plan, establish a compliance system, and enact othercompany-wide initiatives.
 The Company has established the Whistleblowing Regulations in order to ensure theeffectiveness of compliance, and the system allows the Company’s officers andemployees to directly report to or consult with the Company’s Legal Division, the Audit
and Supervisory Board Members, or external lawyers about systematic or personal legal
violations, etc.
 The Company will seek to raise awareness of compliance by providing compliancetraining to the Company’s officers and employees as necessary.
 The Internal Auditing Dept. will perform periodic audits concerning the performance of
duties and compliance practices.
 In order to carry out appropriate financial reporting for the Group, the Internal Control
Division, the division which establishes control systems, serves as a center in promoting
maintenance activities, and the Internal Auditing Dept., the assessment division, performs
independent assessments in accordance with “Internal Controls over Financial Reports”
stipulated in the Financial Instruments and Exchange Act.
(ii) System for retaining and managing information pertaining to the performance of duties
by Directors
 The Company will appropriately retain and manage documents and other information
concerning the performance of duties by Directors in accordance with internal rules suchas the Documents and Information Management Regulations, the Corporate Information
Basic Management Regulations, etc.
 The Directors and the Audit and Supervisory Board Members may inspect such
documents and other information as necessary.
(iii) Rules and other systems for management of risk of loss The Company will establish various rules, including the Crisis Management Basic
Regulations, and establish and operate a risk management system in order to respond tothe various risks in business activities.
 Each division will independently manage the risks of daily business activities, such as
economic risks and financial risks relating to regular transactions, under the guidance ofthe supervising Director.
(iv) Systems to ensure efficiency of the performance of duties by Directors
 The Company will ensure to establish the system that enables appropriate and efficientperformance of duties. Specifically, among others, the Board of Directors makes-1-

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

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

b.

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

c.

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

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



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

d.

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

-2-



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



The Company’s Internal Auditing Dept. will perform audits concerning theperformance of duties and compliance practices of group companies.



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

e.

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

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



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

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



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



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

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

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

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

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

-3-



The Legal Division and external lawyers who serve as contact points for thewhistleblowing system will report to the Audit and Supervisory Board Members of
the Company on the whistleblowing information received from the Directors andemployees of the Company and group companies in accordance with theWhistleblowing Regulations.



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



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

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

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



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



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

-4-

(2) Overview of operational status of systems for ensuring appropriateness of operations
The Company has established the internal control systems listed above, and engaged in thefollowing specific initiatives based on that basic policy.
The Company seeks to raise awareness of compliance, and as efforts to spread legal compliance,
conducted compliance education for new employees in April 2020, and conducted corporate ethics
and compliance education (e-learning) for all employees from March to June 2020.
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. The New Coronavirus Infectious Disease
Countermeasures Headquarters, established in accordance with the Crisis Management Basic
Regulations and the BCP, took the lead in ensuring smooth business continuity by collecting anddisseminating information, planning and instructing the implementation of countermeasures suchas the establishment of a telecommuting environment, and minimizing the human and economic
impact.
In the fiscal year under review, the Company held 14 meetings of the Board of Directors, 22Management Meetings to discuss important management agendas, and continued to strive to ensure
the appropriateness and efficiency of business execution by Directors. In addition, the Monthly
Business Conference was held 12 times (including four Group Liaison Conferences), and progresson goal developed based on the Medium-term Management Plan and the profit plan for the fiscal
year under review was confirmed through the reception of status reports on business by the General
Managers of each division, etc.
The Company’s Audit and Supervisory Board Members participated in meetings of the Board of
Directors, the Management Meeting, the Monthly Business Conference and other important
meetings, established internal controls for the Company, and confirmed the status of operations
through regular reports from the Legal and Patent Dept., Corporate Strategy and Planning Dept.,
Accounting Dept., Internal Auditing Office and other departments pertaining to internal control
while making efforts to improve the efficiency and effectiveness of its audits by exchanging
information and opinions with Independent Auditors as necessary. In addition, in July 2020 andMarch 2021, the Representative Director and the Audit and Supervisory Board Members held
opinion exchanges on overall management and endeavored to ensure the effectiveness of audits.

-5-Consolidated Statement of Changes in Equity(From April 1, 2020 to March 31, 2021)(Millions of yen)
Shareholders’ equity
Share capital

Capital surplus

Retained earnings

Treasury shares

Total
shareholders’equity

8,225

7,508

46,081(537)

61,277

Dividends of surplus--(1,254)-(1,254)

Profit attributable toowners of parent

-

-

7,074

-

7,074

Purchase of treasury
shares

-

-

-

(65)

(65)

Disposal of treasury
shares

-

0

-

107

107

Net changes in items
other than shareholders’equity

-

-

-

-

-

Total changes during
period

-

0

5,820

41

5,861

8,225

7,508

51,902(495)

67,139Balance at beginning of
periodChanges during period

Balance at end of period

Accumulated other comprehensive income
Total
Remeasureme accumulated
nts of definedotherbenefit plans comprehensiv
e income

Noncontrollinginterests

Valuationdifference on
available-forsale securities

Foreigncurrencytranslation
adjustment

143

(178)

(525)

(560)

140

60,857

Dividends of surplus

-

-

-

-

-

(1,254)

Profit attributable toowners of parent

-

-

-

-

-

7,074

Purchase of treasury
shares

-

-

-

-

-

(65)

Disposal of treasury
shares

-

-

-

-

-

107

Net changes in items
other than shareholders’equity

158

(23)

499

635

2

637

Total changes during
period

158

(23)

499

635

2

6,499

Balance at end of period

301

(201)

(25)

74

143

67,357

Balance at beginning of
periodTotal net
assetsChanges during period-6-Notes to Consolidated Financial Statements
1. Notes on significant matters for the basis of the preparation of consolidated financial statements(1) Scope of consolidation(i) Status of consolidated subsidiaries
・ Number of consolidated subsidiaries:
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 thescope to which 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.

-7-(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 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 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-8-

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 follows a method of accounting net sales andcost of sales at the time of receiving lease fees.
(v) Method of significant hedge accounting
a. Method of hedge accounting
Principally, accounted for with deferred hedge accounting. The designated hedge
accounting (the “Furiate-shori”) is applied to forward exchange contracts that satisfy
requirements for such accounting, and the exceptional treatment (the “Tokurei-shori”) isapplied to interest rate swaps that satisfy the requirements for such treatment.
b. Hedging instruments and hedged items
Hedging instruments: Forward exchange contracts and interest rate swaps
Hedged items: Foreign currency-denominated monetary claims and obligations,borrowingsc. 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.

-9-

(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 statement of income)“Compensation for damage” (¥6 million in the fiscal year under review) was presented separately until
the previous fiscal year, but it is included in “Other” under non-operating expenses from the fiscal year
under review, as it has become insignificant in terms of quantitative materiality.
(Application of the Accounting Standard for Disclosures of Accounting Estimates)
The Accounting Standard for Disclosures of Accounting Estimates (ASBJ Statement No. 31, March 31,2020) was applied from the current consolidated fiscal year, and “3. Notes to accounting estimates” isindicated in the Notes to Consolidated Financial Statements.
3.

Notes to accounting estimates
Accounting estimates are reasonable amounts calculated based on information available at the time of
preparation of the consolidated financial statements. Of the amounts recorded in the consolidated
financial statements for the current fiscal year that are based on accounting estimates, the following
items have the risk of having a material impact on the consolidated financial statements for thefollowing fiscal year.
(Application of the percentage-of-completion method to the water treatment engineering business unit)(1) Amount recorded in the consolidated financial statements for the fiscal year under review
In the consolidated statement of income, the Company recorded 43,205 million yen of
construction revenue based on the percentage-of-completion method in the water treatment
engineering business unit for the fiscal year under review.
(2) Information on the details of significant accounting estimates for identified items
The Company applies the percentage-of-completion method to construction contracts whose
outcome from the completed portion is deemed definite by the end of the consolidated fiscal
year. The Company makes a reasonable estimate of the total amount of construction revenue,
the total amount of construction cost, and the degree of completion at the end of theconsolidated fiscal year, and records construction revenue using the cost-to-cost method.
The Company estimates the total amount of construction cost, which is the basis for therecognition of revenue under the percentage-of-completion method, as the expected cost foreach contract. However, the content of the work may change due to an increase in the number- 10 -

of man-hours or changes in site conditions caused by facts that become known after the start ofthe construction contract. In particular, large-scale construction projects require a long time tocomplete, and therefore there is a high degree of uncertainty in estimating the work content andman-hours required for completion.
More specifically, the estimate of the total cost of construction at the end of the consolidated
fiscal year will be significantly affected by the identification of the work required for thecompletion of a construction contract, the estimation of the cost of that work, and the timely
and appropriate reflection of changes in the work due to changes in conditions after the start ofconstruction.
4. Additional Information(Impact arising due to the proliferation of COVID-19)
The Company expects that it will be some time before COVID-19 infections subside and the global
economy fully recovers, and made accounting estimates based on the assumption that the impact on theGroup’s business performance will be limited based on the current status of investment projects, theoperation status of customer plants, and the outlook for progress in backlog projects.
The assumptions made above are highly uncertain, and depending on the situation of the spread of
COVID-19 and its impact on the economy, there may be a significant impact on the consolidated
financial statements for the next and subsequent fiscal years.
5.

Notes to the consolidated balance sheet(1) Accumulated depreciation for property, plant and equipment(2) Contingent liabilities¥22,181 million

Guarantee obligation for bank loans of employees
Performance bonds
Organo (Vietnam) Co., Ltd.
6.

¥0 million¥30 million

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

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

Increase in number ofshares during theperiod(Thousands of shares)

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

Number of shares at
end of period(Thousands of shares)
11,589(2) Number of treasury sharesClass of shares
Common shares

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

Increase in number ofshares during theperiod(Thousands of shares)

136

10

Decrease in number ofshares during theperiod(Thousands of shares)

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

34

112

Notes: 1. The increase of 10 thousand shares in the number of treasury shares reflects the acquisition of 9 thousand
shares by the Officer Share Delivery Trust and the increase of 0 thousand shares due to the purchase of sharesless than one unit.
2. The decrease of 34 thousand shares in the number of treasury shares reflects the decrease of 34 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 29 thousand shares of theCompany held by the Officer Share Delivery Trust.

(3) Dividends of surplus(i) Dividends paid, etc.
a. Dividends resolved at the meeting of the Board of Directors held on May 12, 2020
 Total dividends:¥655 million
 Dividend per share:¥57- 11 -

 Record date: Effective date:
Note

March 31, 2020
June 11, 2020

Total dividends resolved at the meeting of the Board of Directors held on May 12, 2020 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 October 29, 2020
 Total dividends:¥598 million
 Dividend per share:¥52
 Record date:
September 30, 2020
 Effective date:
December 7, 2020
Note

Total dividends resolved at the meeting of the Board of Directors held on October 29, 2020 include ¥1
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 76th Ordinary General Meeting of
Shareholders, scheduled for June 29, 2021.
 Total dividends:¥713 million
 Source of dividends:
Retained earnings
 Dividend per share:¥62
 Record date:
March 31, 2021
 Effective date:June 30, 2021
Note

7.

Total dividends include ¥1 million in dividends for shares of the Company held by the Officer Share
Delivery Trust.

Notes to financial instruments(1) Status of financial instruments(i) Policy for handling financial instruments
The Organo Group procures long-term capital and short-term operating capital from banks inaccordance with its capital investment plan, etc.
Derivatives are used to hedge the various risks as described in detail below, and theCompany does not enter into derivatives for trading or speculative purposes.
(ii) Details of financial instruments and associated risks
Notes and accounts receivable - trade, electronically recorded monetary claims - operating,and investments in leases, all of which are trade receivables, are exposed to credit risks ofcustomers. Although foreign currency-denominated trade receivables that arise in
conducting business in overseas are exposed to foreign exchange rate fluctuation risk, theCompany hedges the risk with the use of forward exchange contracts as necessary.
Investment securities are mainly shares held to strengthen relationships with business
partners or purely for investment. These are exposed to market price fluctuation risk.
Notes and accounts payable - trade and electronically recorded obligations - operating thatare trade payables are mainly due within one year. Furthermore, these include foreign
currency-denominated payables associated with imports, which are exposed to foreignexchange fluctuation risk. However, these are hedged as necessary using forward exchange
contracts.
Borrowings are mainly for the purpose of procuring capital needed for capital investment
and short-term operating capital. Although some of them have floating rates and are exposed
to interest rate risks, they are hedged through derivatives (interest rate swaps).
Derivatives are forward exchange contracts executed for the purpose of hedging foreignexchange rate fluctuation risk associated with foreign currency-dominated trade receivables
and payables, interest rate swaps executed for the purpose of hedging interest rate
fluctuation risk associated with borrowings. With respect to hedging instruments and hedged
items, hedging policy and method of assessing hedge effectiveness, please refer to “1. Notes- 12 -

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.
(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.
(v) Concentration of credit risks
Of the trade receivables as of the consolidated balance sheet date for the current fiscal year,
40.7% are those from the top three companies.

- 13 -

(2) Fair value of financial instruments
Amount on the consolidated balance sheet as of March 31, 2021, 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)
(iv)

Differences

12,804

12,804-49,51749,517

-

1,598

1,598

-

9,773
759

9,773
759

-

74,45274,452-

13,556

13,556

-

4,589

4,589

-

13,91013,910

-

2,095

2,101

6

Total liabilities

34,151

34,157

6

Derivatives [*]

-

-

-

Total assets(i)

Fair value

Notes and accounts payable trade
Electronically recorded
obligations - operating
Short-term borrowings
Long-term borrowings(including current portion of
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
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 all deposits are matured in short term.
(ii) Notes and accounts receivable - trade, and (iii) Electronically recorded monetary claims - operating
For items with a collection period of one year or less, the book values are used as the fair values of theseliabilities, given that the fair values are almost the same as the book values. For items with a collection periodof more than one year, the present value was calculated by discounting the amount of receivables by theinterest rate that takes into account the period until maturity and credit risk for each receivable classified by acertain period.
(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, (ii) Electronically recorded obligations - operating, and (iii) Short-termborrowings
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.
(iv) Long-term borrowings (including current portion of 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 long-term borrowings with floating rates towhich exceptional treatment of interest rate swaps is applied is calculated by discounting the sum of principal
and interest, which is treated in combination with the said interest rate swap, at a reasonably estimated rateapplied to a similar new borrowing.

- 14 -

Derivatives(1) Forward exchange contracts
Fair values are measured based on prices presented by financial institutions with which the Company
does business.
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.
(2) 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 long-term borrowings that are deemed as hedged items, fair values of the interest rate
swaps are included in the fair values of the long-term 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

1,151

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.

8.

Notes to per share information
Net assets per share
Basic earnings per share¥5,856.25¥616.72

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 (29 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 (35 thousand shares in the fiscal year under review).

9.

Significant subsequent events
Not applicable.

- 15 -

Statement of Changes in Equity(From April 1, 2020 to March 31, 2021)(Millions of yen)
Shareholders’ equity
Capital surplus
SharecapitalBalance at beginning of
periodLegalcapitalsurplusRetained earnings

Other
capitalsurplusLegalretainedearnings

Otherretainedearnings

TreasurysharesTotalshareholders’ equity

8,225

7,508

-

832

35,595(537)

51,623

Dividends of surplus

-

-

-

-

(1,254)-(1,254)

Profit

-

-

-

-

5,879

-

5,879

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

-

-

-

-

-

-

-

Purchase of treasury
shares

-

-

-

-

-

(65)

(65)

Disposal of treasury
shares

-

-

0

-

107

107

Net changes in items
other thanshareholders’ equity

-

-

-

-

-

-

-

-

-

0

-

4,625

41

4,667

8,225

7,508

0

832

40,220(495)

56,290Changes during period

Total changes during
periodBalance at end of period

Valuation and translation adjustments
Valuation difference
on available-for-salesecurities

Total valuation andtranslation
adjustments

Total net assets

120

120

51,743

Dividends of surplus--(1,254)

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

-

-

5,879

-

-

-

-

-

(65)

-

-

107

136

136

136

136

136

4,803

257

257

56,547

Balance at beginning of
periodChanges during period- 16 -

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

Reserve forresearch anddevelopment

Reserve fortax purpose
reduction
entry of noncurrent assets

140

90

33

27,0658,266

35,595

Dividends of surplus

-

-

-

-

(1,254)(1,254)

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

-

-

-

-

5,879

5,879

-

-

(1)

-

1

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

(1)

-

4,626

4,625

140

90

31

27,065

12,89240,220

Balance at beginning of
periodChanges during period- 17 -

Generalreserve

Retainedearnings
brought
forwardTotal

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
Tools, furniture and fixtures: 2 to 20 years(ii) Intangible assets
Depreciated using the straight-line method.
Software for internal use is amortized using the straight-line method over the internally
expected useful life (five years).
(3) Standards for recognition of allowances and provisions(i) Allowance for doubtful accounts
To prepare for losses from bad debt, an estimated uncollectible amount is recorded at theamount estimated by using the historical rate of credit loss for ordinary receivables, andbased on individual consideration of collectability for specific receivables such as highly
doubtful receivables.
(ii) Provision for bonuses
To prepare for payment of employee bonuses, of the estimated future bonus payment, anamount to be borne during the fiscal year under review is recorded.
- 18 -

(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- 19 -

(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(Statement of Income)“Compensation for damage” (¥1 million in the fiscal year under review) was presented separately until
the previous fiscal year, but it is included in “Other” under non-operating expenses from the fiscal year
under review, as it has become insignificant in terms of quantitative materiality.
(Application of the Accounting Standard for Disclosures of Accounting Estimates)
The Accounting Standard for Disclosures of Accounting Estimates (ASBJ Statement No. 31, March 31,2020) was applied from the current fiscal year, and “3. Notes to accounting estimates” is indicated in
the Notes to Non-consolidated Financial Statements.
3. Notes to accounting estimates
Accounting estimates are reasonable amounts calculated based on information available at the time of
preparation of the non-consolidated financial statements. Of the amounts recorded in the nonconsolidated financial statements for the fiscal year under review that are based on accounting
estimates, the following items have the risk of having a material impact on the non-consolidated
financial statements for the following fiscal year.
(Application of the percentage-of-completion method to the water treatment engineering business unit)(1) Amount recorded in the non-consolidated financial statements for the fiscal year under review
In the non-consolidated statement of income, the Company recorded 25,109 million yen of
construction revenue based on the percentage-of-completion method in the water treatment
engineering business unit for the fiscal year under review.
(2) Information on the details of significant accounting estimates for identified items
The details are the same as those described in “(2) Information on the details of significant
accounting estimates for identified items” in “3. Notes to accounting estimates” of Notes toConsolidated Financial Statements.
4. Additional Information(Impact arising due to the proliferation of COVID-19)- 20 -

The Company expects that it will be some time before COVID-19 infections subside and the global
economy fully recovers, and made accounting estimates based on the assumption that the impact on
the Company’s business performance will be limited based on the current status of investment
projects, the operation status of customer plants, and the outlook for progress in backlog projects.
The assumptions made above are highly uncertain, and depending on the situation of the spread of
COVID-19 and its impact on the economy, there may be a significant impact on the non-consolidated
financial statements for the next and subsequent fiscal years.
5. Notes to the non-consolidated balance sheet(1) Accumulated depreciation for property, plant and equipment(2) Contingent liabilities¥21,256 million

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 (Vietnam) Co., Ltd.

¥0 million¥1,430 million¥90 million¥199 million¥30 million(3) Monetary claims and obligations to subsidiaries and associates
Short-term monetary claims
Long-term monetary claims
Short-term monetary obligations¥5,780 million¥300 million¥4,470 million

6. Notes to the non-consolidated statement of income
Total transactions with subsidiaries and associates
Operating transactions (income)Operating transactions (payment)
Transactions other than operating transactions (income)Transactions other than operating transactions (payment)¥4,633 million¥15,249 million¥1,586 million¥11 million

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

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

Increase in number ofshares during theperiod(Thousands of shares)

136

10

Decrease in number ofshares during theperiod(Thousands of shares)
34

Number of shares at
end of period(Thousands of shares)
112

Notes: 1. The increase of 10 thousand shares in the number of treasury shares reflects the acquisition of 9 thousand sharesby the Officer Share Delivery Trust and the increase of 0 thousand shares due to the purchase of shares less than
one unit.
2. The decrease of 34 thousand shares in the number of treasury shares reflects the decrease of 34 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 29 thousand shares of theCompany held by the Officer Share Delivery Trust.

- 21 -

8. Note to tax-effect accounting
Breakdown of deferred tax assets and liabilities by main cause(Millions of yen)
Deferred tax assets
Provision for bonuses
Enterprise tax payable
Provision for retirement benefits
Provision for product warranties
Provision for loss on construction contracts
Provision for share-based remuneration for directors (and other officers)
Testing and research facilities
Allowance for doubtful accounts
Loss on valuation of right to use facilities
Loss on valuation of shares of subsidiaries and associates
Other
Subtotal deferred tax assets
Valuation allowance
Total deferred tax assets
Deferred tax liabilities
Valuation difference on available-for-sale securities
Reserve for tax purpose reduction entry of non-current assets
Total deferred tax liabilities
Net deferred tax assets- 22 -

306
109
1,565
58
84
33
116
127
70
268
582
3,323
(469)
2,854
(113)
(13)
(127)
2,727

9. 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.

Notes

Jiangsu,
China

Share capital¥93 million

US$5,000thousand

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

Voting rights
ownership
ratio

Directownership
100.0%

Directownership
100.0%

Directownership
100.0%

Transaction
amount(Millions of
yen)

Item

Balance at
end of period(Millions ofyen)

Installationof various
types ofwater
treatment
systems andordering ofsupervision
services
Dispatchingof officers

Installationof various
types ofwater
treatment
systems andordering ofsupervision
services

7,207

Accounts
payable trade

1,540

Deposits of
funds

1,000

Deposits
received

1,000

1,629

-

2,545

Accounts
receivable trade

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

Sales ofvarious types
of watertreatment
systems andrelatedchemicals

-

3,177

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.

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

Details oftransaction

Relationshipwith relatedparties¥4,926.90¥512.56

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 (29thousand shares at the end of the fiscal year under review).
2. When calculating net assets per share, common shares of the Company held by the Officer Share Delivery Trust
have been included in treasury shares excluded from the total number of issued shares at the end of the period (35thousand shares at the end of the fiscal year under review).

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

- 23 -