Kurita Water Industries Ltd.

URL:http://www.kurita.co.jp/english/

ANNUAL REPORT 2009

Advancing the Science of Water andEnvironmental Management

4-7, Nishi-Shinjuku 3-chome, Shinjuku-ku, Tokyo 160-8383, Japan
Tel: 81 (3) 3347-3111

This annual report is printed using soy ink.
Printed in Japan

Annual Report 2009
For the Year Ended March 31, 2009

Profile & Vision

Advancing the Science of Water
and Environmental Management
Kurita Water Industries Ltd. provides total solutions in the field of water and environmental management,
under the corporate vision of becoming “an advanced water and environmental management company.”
Kurita’s core business is water treatment and related products and services, based on which it provides a
growing range of services in the broader field of environmental management. Consistent with this approach,
Kurita supplies not only products, such as water treatment chemicals and facilities, but also consulting,outsourcing services and other high-value-added solutions that draw on its unique expertise built up overhalf a century. Based on the corporate philosophy, “Study the properties of water, master them, and we will
create an environment in which nature and man are in harmony,” Kurita is committed to realizing its goal of
becoming an advanced water and environmental management company. Through these endeavors, Kurita
aims to contribute broadly to meeting the needs of its customers and society.

CONTENTSCONSOLIDATED FINANCIAL HIGHLIGHTSCHAIRMAN’S MESSAGE 2
OVERVIEW OF THE NEW MEDIUM TERM
MANAGEMENT PLAN 5
AN INTERVIEW WITH THE PRESIDENT 6
KURITA AT A GLANCE 9
REVIEW OF OPERATIONS
Water Treatment Chemicals 10
Water Treatment Facilities 12

1

RESEARCH AND DEVELOPMENT 15
ENVIRONMENTAL INITIATIVES 16
CORPORATE GOVERNANCE 18
BOARD OF DIRECTORS AND CORPORATE AUDITORSFINANCIAL SECTION 21
CORPORATE DATA 53
INVESTOR INFORMATION 54

20

Cautionary Statement with Respect to Forward-Looking Statements
This annual report contains forward-looking statements regarding forecasts, plans, strategies and business performance in the future. These forward-looking
Cautionary
Statement
withto Forward-Looking
statements
represent judgments
madebyRespect
the Company
based on information Statements
currently available to it and involve a variety of risks and uncertainties.
This
annualreportcontains
forward-looking
statements
regardingstatements.
forecasts, plans,
and business include
performancein theThese
forward-looking
Actual results may be materially different from these forward-looking
Such strategies
risks and uncertainties(but arenotfuture.
limitedto) changes
in thestatements represent judgments made by the Company based on information currently available to it and involve a variety of risks and uncertainties.
economic
environment,
businessconditions,market,demandandcurrency
exchange
rates.
Actual results may be materially different from these forward-looking statements. Such risks and uncertainties include (but are not limited to) changes in theeconomic environment, business conditions, market, demand and currency exchange rates.

Consolidated Financial Highlights
Kurita Water Industries Ltd. and Consolidated Subsidiaries
Years ended March 31

Millions of yen 		
2009
2008

Percentage
Change2009/2008

Thousands of
U.S. dollars (Note 1)
2009

For the year:
Net sales
Operating income
Income before income taxes and minority interests
Net income¥199,706
27,935
26,103
16,299¥204,875
30,46831,27918,297

-2.5%
-8.3
-16.5
-10.9

$2,033,047
284,385
265,734
165,933

At year-end:
Total assets
Equity (Note 2)

245,406
177,291

231,498
169,402+6.0+4.7

2,498,288
1,804,861

Yen			

U.S. dollars¥142.21		
32.00		

$1.28
0.34

¥126.69
34.00

Notes: 1. The U.S. dollar amounts are given solely for convenience at the rate of ¥98.23 to US$1, the prevailing rate on the Tokyo Foreign Exchange Market on March 31, 2009.
2. Equity represents net assets less minority interests.

Years ended March 31(Millions of yen)
Years ended March 31(Millions of yen)

Years ended March 31 (Millions of yen)
Years ended March 31 (Millions of yen)

Years ended March 31 (Millions of yen)
Years ended March 31 (Millions of yen)

Operating Income
Operating Income

OrdersOrdersNet Sales
Net Sales

250,000
250,000

250,000
250,000

30,00030,000200,000
200,000

200,000
200,000

24,00024,000

195,065
195,065

199,706
199,706

150,000
150,000

150,000
150,000

18,00018,000100,000
100,000

100,000
100,000

12,00012,00050,00050,00050,00050,000

6,000
6,000

0
0

2005
2005

2006
2006

2007
2007

2008
2008

2009
2009

As of March 31(Millions of yen)
As of March 31(Millions of yen)

0
0

2005
2005

2007
2007

2008
2008

Total Assets
Total Assets

200,000
200,000

250,000
250,000

177,291
177,291

0
0

2009
2009

245,406
245,406

120,000
120,000

150,000
150,000

90
90

80,00080,000100,000
100,000

60
60

40,00040,00050,00050,000

30
30

0
0

0
0

*Equity represents net assets less minority interests.

2006
2006

2007
2007

2006
2006

2007
2007

2008
2008

2009
2009

150
150
120
120

2005
2005

2005
2005

Net Income per ShareNet Income per Share

200,000
200,000

2005 2006 2007 2008 20092005 2006 2007 2008 2009
*Equity represents net assets less minority interests.

27,93527,935

Years ended March 31 (Yen)Years ended March 31 (Yen)

As of March 31 (Millions of yen)
As of March 31 (Millions of yen)

Equity*Equity*160,000
160,000

2006
2006

1

2008
2008

2009
2009

0
0

126.69126.69

2005
2005

2006
2006

2007
2007

2008
2008

2009
2009

KURITA ANNUAL REPORT 2009

Per share of common stock:
Net income
Cash dividends applicable to the year

CONSOLIDATED FINANCIAL HIGHLIGHTS			CHAIRMAN’S MESSAGE

Chairman’s Message

During my six-year tenure aspresident of Kurita,
I oversaw two medium-term
management plans and helped
build the foundations that will drive
future growth. The support
provided by our shareholders andall other investors was invaluable.
I ask sincerely for your unwavering
support and understanding as wemove forward.

KURITA ANNUAL REPORT 2009

2

Hiroshi Fujino,
ChairmanOverview of Operations

supply business also achieved brisk growth by expanding

In the fiscal year ended March 31, 2009, Kurita further

its operations at existing sites and initiating service at new

solidified its earnings foundation even as tumultuoussites. The ultrapure water supply business continued tochange in the operating environment weighed oncontribute to strengthening Kurita’s earnings foundation.

declined 2.5% to ¥199,706 million, operating income fell
8.3% to ¥27,935 million, and net income declined 10.9%
to ¥16,299 million. Kurita increased its annual dividend pershare by ¥2 to ¥34, split equally between interim andyear-end dividends (¥17 each).
In the second half of the fiscal year, the Kurita Group’s
operating environment turned extremely adverse as aresult of the severe global recession triggered by the U.S.
financial crisis. The domestic and overseas electronics
industry sharply curtailed LCD- and semiconductorrelated capital expenditure and reduced capacity
utilization also. In other general industries, companies inmany manufacturing sectors likewise cut capital
expenditure and scaled down capacity utilization.
The Water Treatment Chemicals segment’s earnings
declined as a result of sharp increases in raw material
prices in addition to the impact of customers’ capacity
utilization cutbacks. Even amid such an environment, theWater Treatment Chemicals segment achieved growth insales of products and solutions that contribute to boostingcustomers’ productivity. Its sales of ultrapure waterproduction systems and maintenance services to theelectronics industry declined due to customers’ cutbacks
in capital expenditure and capacity utilization. On theupside, the business increased its maintenance revenues
from general industrial customers by accurately
ascertaining and meeting their needs. The ultrapure water

Initiatives and Results
The fiscal year ended March 31, 2009, was the final yearof the Growth 2008 (G-8) medium-term management
plan inaugurated in April 2006. Kurita has been pursuing
the plan’s priorities of accelerated transition to a service
business model and global expansion.
In service businesses, Kurita has been focusing on
providing high-value-added solutions for productivity
enhancement and environmental mitigation, both of which
are key customer priorities. Kurita also briskly expanded
the ultrapure water supply business by continuing toinvest heavily in the business’s operations at a domestic
large-panel LCD manufacturing complex and elsewhere.
Overseas, Kurita has been laying a foundation for
future growth, mainly in China and Southeast Asia, bydeveloping sales networks and training and deploying
human resources.
As a result of these efforts, the share of total revenues
derived from service businesses (the total of the Water
Treatment Chemicals segment’s sales and service
revenues from the Water Treatment Facilities segment)rose to 79%. Kurita is building a business model capableof generating stable earnings even amid recessions.

3
KURITA ANNUAL REPORT 2009

For the fiscal year as a whole, consolidated orderbookings were down 6.5% to ¥195,065 million, net sales

CHAIRMAN’S MESSAGE

operating performance.

Guided by a corporate vision of becoming “an advanced

New Leadership for Implementing New
Medium-Term Management Plan

water and environmental management company,” theFaced with an extremely adverse environment in the wake

Kurita Group operates with the aim of not only providingof the global recession that began last year, the Group

products such as water treatment chemicals andmust further strengthen its operations. Against such aequipment but also helping customers resolve their core

backdrop, the Group embarked on a new three-year

challenges. Over the six years since I was appointed

management plan entitled Make Progress 2011 (MP-11)

president in June 2003, Kurita successfully carried out twofrom April 2009 and will commemorate the 60th

medium-term management plans—Powerful Advance 2005

anniversary of its founding in July 2009. With the Group(PA-5) and Growth 2008 (G-8)—in pursuit of this vision.

now at such a significant juncture, I felt that the time had

During my tenure as president, Kurita invested morecome for new leadership to help the Group advance into

intensively than ever before in service businesses such as

the future in unity and with a fresh spirit. I therefore decided

ultrapure water supply and tool cleaning in the aim of

to turn over the reins of management to a new president.

achieving both growth and formidable earnings power.

My successor, Hiroshi Saito, is an exceptionally astute

The ultrapure water supply business in particular has a

executive with both an intimate knowledge of front-line

unique business model. Namely, Kurita constructs, owns,

manufacturing operations and a well-balanced

operates, and maintains the ultrapure water production

management sense. I am confident that he will meet yoursystems installed at customers’ premises. This businessexpectations without fail.

model epitomizes Kurita’s approach to simultaneously

In closing, I hope that you—all shareholders and other4

achieving both earnings stability and growth. While I was

stakeholders —will continue to favor Kurita with yourpresident, Kurita invested over ¥100 billion in the ultrapure

undiminished understanding and support.

KURITA ANNUAL REPORT 2009

CHAIRMAN’S MESSAGE

Looking Back on Six Years as President

water supply business, which generated revenues of¥24 billion in the most recent fiscal year, up from less than
¥1 billion in the fiscal year before I became president.

July 2009

Meanwhile, Kurita has also been expanding globally,
mainly in Asia, and proactively strengthening integrated
Group management. Through such efforts, Kurita earned
record profits in the fiscal year ended March 31, 2008, andmade tangible progress toward realizing its corporate
vision. Kurita has also narrowed its focus to selected corebusinesses over the past six years, discontinuing
unprofitable operations and exiting businesses targeted at
public-sector demand. Through these initiatives, I believethat the Group has built a stable earnings foundation wellpositioned for the future. I sincerely thank all shareholders
and other stakeholders for their support of theseendeavors.

Hiroshi Fujino, Chairman

Evolution and Progress
The Kurita Group has launched a new medium-term
management plan, titled Make Progress 2011 (MP-11),
for the period from April 2009 through March 2012.
Our previous medium-term management plan, Growth
2008 (G-8), was aimed at generating growth conducive

Expand and evolve
service businesses

Expand global
operations

to strong earnings power, and we realized definite
positive effects through the plan’s key initiatives ofshifting to a service business model and expanding

New valueandnew functionof water

global operations. With the new plan, we aim to drive
corporate value even higher by building on andreinforcing the previous plan’s successes.

Bolster operating base

Performance Targets 2011
(Fiscal Year Ending March 2012)

Risk management

Develop our people andpursue manufacturing excellence

Net sales¥224 billion
Operating income ¥36 billion
Operating income margin 16%
Key Strategies• Expand and evolve service businesses• Expand global operations• Create and expand into new business areas• Bolster operating bases

Sales Targets and Sales Composition

45.0

63.0

224.0

98.9

116.0

03/2009
Actual03/2012
Projection

Water Treatment Chemicals
Water Treatment Facilities (Services)
Water Treatment Facilities (Hardware)

G-8(Billions of Yen)

58.3

199.7

5

Overseas Sales by Segment(Billions of Yen)

42.5

MP-11

KURITA ANNUAL REPORT 2009

2011

14.9

26.0

11.0

03/2009
ActualWater Treatment Chemicals
Water Treatment Facilities

OVERVIEW OF THE NEW MEDIUM-TERM MANAGEMENT PLAN

Overview of the New Medium-Term Management plan
Make Progress 2011 (MP-11)

32.0
19.5

03/2012
Projection

12.5

An Interview with the President

AN INTERVIEW WITH THE PRESIDENT

I will continue to build on the Kurita Group’s foundations in my new role andguide the new medium-term management plan to success in the ultimate aimof realizing our corporate philosophy: “Study the properties of water, masterthem, and we will create an environment in which nature and man are inharmony.”: First, what do you hope to 		

accomplish as president?

A: I, Hiroshi Saito, became president of Kurita Water
Industries on June 26, 2009, taking over from mypredecessor, Hiroshi Fujino. Capitalizing on the Kurita
Group’s business foundation built by my successive
predecessors, I will spare no effort to win the trust andmeet the expectations of our shareholders and otherstakeholders in the aim of realizing our corporate
philosophy: “Study the properties of water, master them,6and we will create an environment in which nature andKURITA ANNUAL REPORT 2009

man are in harmony.” I am committed to successfully
carrying out the new medium-term management plan welaunched in April this year, Make Progress 2011 (MP-11),
by continuing the expansion of service businesses andglobal operations that former president Fujino
spearheaded for the past six years.
The earth that we inhabit is plagued by various water
problems, most notably shortages and pollution. Water,
being a limited resource, will become increasingly
important. As it does, I believe that water management is
the key to realizing a sustainable society.
I consider the recent rising tide of societal concern
about water to be expectations placed on the Kurita
Group as a provider of advanced water management
solutions. I believe it is my responsibility to grow Kurita intoa group that contributes to society through its operations
even more broadly than it does today.

Hiroshi Saito,
President

including that of the ultrapure water supply business, totranscend conventional delineations among products andbusinesses, such as chemicals and facilities. At the same

A: The operating environment currently remains adverse.

time, we must develop new business models also.

Once the economy recovers, societal conditions are

Global operations also are gaining importance as our

expected to differ substantially from the preceding

major customers expand overseas. We intend to

economic boom. With companies confronting an

strengthen the Group’s global organization and boost its

increasingly diverse range of risks, I believe that only thosecompetitiveness overseas to provide products,

capable of swiftly adapting to risks will survive in thetechnologies, and services of uniform high quality on acoming era. To continue growing, a company mustworldwide basis.

sensitively detect societal changes and strive boldly totransform risks into opportunities.
Based on such a mindset, we adopted “Evolution and
Progress” as the MP-11 plan’s basic theme. This theme
expresses our determination to ceaselessly advance andreform our operations in pursuit of further growth.

: What are your plans regarding

new businesses?

With the global population growing, water, food, andenergy supply issues have become shared priorities for allof humanity. These issues are closely intertwined. For: What type of measures do you plan

to implement in accord with thisbasic theme?

example, food production requires water and energy whilealternative energy is produced from foodstuffs and water.
To date, we have been meeting individual customers’
water-related needs by, for example, supplying water for

A: We will further develop and expand the service

fuel cells or bottled water production. Going forward,

businesses and global operations that were the focus of

however, we intend to adopt a more comprehensive

the previous medium-term management plan.

approach in the aim of creating new value from water,

First, in terms of service businesses, with productivity

such as by contributing to resolving food and energy

enhancements and environmental mitigation becoming

problems. To do so, we have consolidated R&D functions

increasingly serious priorities for customers, I believe that

previously spread among different operating divisions into

the Kurita Group’s services must continue to evolve. We

the Research and Development Division.

AN INTERVIEW WITH THE PRESIDENT

behind the new medium-term 		
management plan?

will pursue evolution of existing business models,

7
KURITA ANNUAL REPORT 2009

: What is the fundamental concept

AN INTERVIEW WITH THE PRESIDENTKURITA ANNUAL REPORT 20098

: What is needed to support the 		

initiatives you have planned?
A: First, the Group must become more resilient to risk.
We will strengthen risk-management functions on agroup-wide basis and diligently establish and strengtheninternal controls to execute these functions. We also needto improve the quality, safety, and productivity of the
products, technologies, and services that we provide, andcultivate the requisite human resources to do so. Toward
this end, we will undertake activities to “develop our
people and pursue manufacturing excellence.” I believethat these initiatives will strengthen our management andoperational foundations.

: Lastly, what is your outlook for the

fiscal year ending March 31, 2010?
And what are your plans regarding
future uses of cash?

A : I expect the global recession to persist throughout thecurrent fiscal year. Some customers’ capacity utilization
rates are showing signs of recovering, but I do not
anticipate a strong recovery in capacity utilization.
Meanwhile, customers are likely to continue to clamp
down on capital expenditure. In the current fiscal year, weplan to steadily recoup existing investments and prepare
for future risks. First and foremost, we intend to enhance
our financial strength to enable us to nimbly shift into a
more proactive mode once economic recovery isunderway. We will also resolutely implement the MP-11
plan’s priority measures to transform today’s inclement
operating environment into an opportunity and achieve
formidable earnings power.
In terms of the earnings outlook for the current fiscal
year, I see little prospect of an early earnings recovery
amid the current adverse operating environment.
Nonetheless, we plan to pay annual dividends of ¥34 pershare, unchanged from the previous fiscal year, in accord
with our stable dividend policy.
I would like to sincerely thank you—our shareholders,investors, and other stakeholders—for your long-standing
support of Kurita. We hope to earn your continued support.
July 2009

Hiroshi Saito, President

Kurita at a Glance

Our Main Customer Industries

Pulp & Paper
Steel
Semiconductor
LCD
				

Oil refining& Petrochemical

Pharmaceutical

Food & Beverage

Real Estate

Water Treatment Chemicals

KURITA AT A GLANCE

PRINCIPAL PRODUCTS and SERVICES• Boiler water treatment chemicals• Cooling water treatment chemicals• Wastewater treatment chemicals• Process treatment chemicals• Incinerator chemicals• Equipment and systems for water treatment chemicals• Packaged water treatment management contracts

Water Treatment Facilities (Hardware)

9
KURITA ANNUAL REPORT 2009

PRINCIPAL PRODUCTS• Ultrapure water production systems• Wastewater treatment facilities• Wastewater reclamation systems• Deionized water production systems

Water Treatment Facilities (Service)
PRINCIPAL SERVICES• Maintenance services• Ultrapure water supply business• Tool cleaning service• Soil remediation service• Chemical cleaning service• Operations management and maintenance services

Percentage of Net Sales
Net Sales ¥199.7 billion

Percentage of Orders
Orders ¥195.1 billion

Water Treatment
Chemicals

Water Treatment
Chemicals

Water Treatment
Chemicals

Percentage of Operating Income
Operating Income ¥27.9 billion

29.2%

30.0%

30.1%
70.8%

70.0%

Water Treatment
Facilities

69.9%

Water Treatment
Facilities

Water Treatment
Facilities

Fiscal year ended March 31,2009

REVIEW OF OPERATIONS

Review of Operations

KURITA ANNUAL REPORT 200910

Water Treatment Chemicals
Operating Results
In the fiscal year ended March 31, 2009, water treatment
chemical sales were roughly ﬂat, down 0.5% from thefiscal year ended March 31, 2008. Domestic sales
decreased 0.3% while overseas sales, which accounted
for around 20% of total segment sales, fell 1.5%.
Geographically, overseas sales were down in Asia andEurope but grew elsewhere, most notably Brazil.
Manufacturers, a major source of demand for water
treatment chemicals, drastically curtailed production in
response to the precipitous economic slowdown from thefiscal third quarter. These production cutbacks had amajor adverse effect on demand for water treatment
chemicals. Meanwhile, customers’ cost-cutting initiatives
exerted downward pressure on water treatment chemical
prices. These adverse conditions were seen both
domestically and overseas. In the domestic market, which
accounts for some 80% of water treatment chemicalsales, sales to the electronics and pulp and paperindustries fell particularly steeply in the fiscal second half.
Against such a backdrop, the Kurita Groupendeavored to expand product sales by proposing
solutions that help alleviate environmental burdens andOutlook for the Fiscal Year Ending
March 31, 2010
With customers closing or consolidating facilities andstepping up cost-cutting, the impact of these trends on
the Water Treatment Chemicals segment’s earnings is aconcern, but customers’ depressed capacity utilization
should gradually restabilize.
Amid such an environment, the Kurita Group aims toprofit by qualitatively improving products, services, andtechnologies supplied to customers through a focus on
cultivating human resources and further strengthening
intragroup cooperation both domestically and overseas.
Additionally, the Group aims to boost its competitivenessby consolidating its water treatment chemical production
technologies and know-how in its new manufacturingsubsidiary, Kurita Chemical Manufacturing Ltd.
(established April 1, 2009), and further improving productquality and production efficiency.

REVIEW OF OPERATIONS

boost productivity in response to customers’ strong needto improve production yields and conserve water andenergy. In the domestic steel, oil refining, andpetrochemical industries in particular, the Group achieved
sales growth even in the fiscal second half, when
production cutbacks were rampant, by reliably meetingcustomers’ productivity-enhancement needs.
By product, domestic sales of boiler water treatment
chemicals decreased due to reduction in customers’
capacity utilization. Domestic sales of cooling water
treatment chemicals declined only marginally on a full-yearbasis despite a falloff in demand in the second half.
Domestic sales of wastewater and process treatment
chemicals grew by virtue of customers’ strong interest in
productivity enhancement and environmental mitigation.
The Water Treatment Chemicals segment’s operating
income declined 11.6% versus the previous fiscal year as
cost savings from manufacturing and logistics cost-cutting
were outweighed by sharp increases in raw material
prices.

KURITA ANNUAL REPORT 200911

The Kurita Group endeavored to expand productsales by proposing solutions that help alleviate
environmental burdens and boost productivity inresponse to customers’ strong need to improve
production yields and conserve water and energy.

Years ended March 31 (Millions of yen)

Years ended March 31 (Millions of yen)

Years ended March 31 (Millions of yen)Orders

Sales

Operating Income

60,00060,00010,00050,00050,00040,00040,00030,00030,00020,00020,00010,00010,000

8,000

6,000

4,000
2,000

0

0

2005

2006

2007

2008

2009

0

2005

2006

2007

2008

2009

2005

2006

2007

2008

2009

REVIEW OF OPERATIONS

Review of Operations

KURITA ANNUAL REPORT 200912

Water Treatment Facilities

Operating Results
Overview
The Water Treatment Facilities segment’s sales andoperating income respectively declined 3.3% and 6.8% as
a result of customers’ cutbacks in capital expenditure andcapacity utilization. The segment minimized its earnings
decline by capitalizing on its broadly diversified customer
base and previous shift to a service business model andby continuing to proactively invest in its ultrapure watersupply business.

Hardware
The ultrapure water production systems business saw a
sharp decline in orders from and sales to the electronics
industry both domestically and overseas, partly because ofa lull in capital expenditure among customers that had
invested heavily in such systems in the previous fiscal year.
Another contributing factor is that semiconductor, LCD,
and electronic parts makers clamped down even harderon capital expenditures once they were forced to cut
production in response to the economic downturn from thefiscal second half.

The segment minimized its earnings decline bycapitalizing on its broadly diversified customer baseand previous shift to a service business model and bycontinuing to proactively invest in its ultrapure watersupply business.

Years ended March 31 (Millions of yen)

Years ended March 31 (Millions of yen)

Years ended March 31 (Millions of yen)Orders

Sales

Operating Income

150,000

150,000

25,000120,000

120,000

20,00090,00090,00015,00060,00060,00010,00030,00030,000

5,000

0

0

0

2005

2006

2007

2008

2009

2005

2006

2007

2008

2009

REVIEW OF OPERATIONS

Services
In the ultrapure water supply business, the Group
continued to invest heavily in installing ultrapure waterproduction systems at a large-panel LCD production
complex. The ultrapure water supply business grew solidly,
largely because of commencement of sales to thiscomplex from December 2008. In the fiscal year ended
March 31, 2009, the Group invested ¥52.0 billion in theultrapure water supply business, which increased its

revenues to ¥23.9 billion from ¥16.8 billion in the fiscal year
ended March 31, 2008.
The domestic maintenance business was adversely
affected by deferral of maintenance by customers in theelectronics industry in response to decreased capacity
utilization. Both orders and revenues from the electronics
industry consequently fell substantially. However, thedomestic maintenance business achieved growth inrevenues from its broad array of general industrial
customers by accurately identifying their productivity
enhancement and environmental mitigation needs.
Nevertheless, this sales growth was inadequate to fully
offset the drop in demand from the electronics industry,so the domestic maintenance business’s revenues were
down overall.
In the tool cleaning business, an outsourcing service
that cleans semiconductor and LCD production
equipment’s jigs and parts, both earnings and profit
margins decreased as a result of a drop in revenues
triggered by reduction in customers’ capacity utilization in

13
KURITA ANNUAL REPORT 2009

In general industries, although manufacturers generally
curtailed capital expenditures, the Group benefited from
intensifying solutions-based sales activities to meetcustomers’ needs in terms of improving productivity andmitigating environmental burdens. The Group also
benefited from brisk order bookings from electric utilities
and steelmakers. Sales to general industries grew
substantially, partly by virtue of sales derived from theprevious fiscal year’s order backlog, and this sales growthbuttressed the segment’s overall earnings.

2005

2006

2007

2008

2009

REVIEW OF OPERATIONS

Review of Operations

KURITA ANNUAL REPORT 200914

conjunction with large production cutbacks in the fiscal
second half.
The chemical cleaning business, which cleans boilers
and heat exchangers at thermal power plants and large
industrial plants, achieved growth in both revenues andprofits by virtue of solid demand and continued efforts toimprove efficiency.
The soil remediation business encountered sluggish
demand for both assessment and remediation services in
the wake of the domestic real estate market downturn,but it nonetheless achieved growth in orders versus theprevious fiscal year by meticulously meeting customers’soil remediation needs. Revenues also grew, bolstered bybacklogged orders.

Outlook for the Fiscal Year Ending
March 31, 2010
While customers’ capital expenditure is likely to take quitea while to recover, their capacity utilization in theelectronics, basic materials, and other industries should
gradually restabilize as production recovers from severely
depressed levels. Amid such an operating environment,
the Kurita Group expects orders for and sales of hardware
such as ultrapure water production systems andwastewater treatment systems to decrease for a second
consecutive fiscal year. In service businesses such as
maintenance and tool cleaning, however, the Group
anticipates a gradual pickup in demand. In the ultrapure
water supply business, which began supplying water at a
new site in December 2008, the Group projects solid
growth overall, although growth will be dampened by
reduced operating rates at certain customers’ sites. The
Kurita Group will endeavor to profit from its group-wide
expertise in proposing solutions to customer needs
across all its businesses.

Research & Development

contribute to reducing the total cost of chemicals andwaste treatment.
• Kurita developed water treatment chemicals that
effectively ﬂocculate and eliminate organic substancesthat clog reverse osmosis membranes and degrade
their filtration efficiency.
The Water Treatment Chemicals segment’s R&D
expenses totaled ¥1,233 million.

1) Water Treatment Chemicals
In the Water Treatment Chemicals segment, Kurita isdeveloping chemicals that contribute to energy efficiency,
productivity enhancement, and the reduction ofenvironmental load at customer sites and systems thatmonitor the effect of water treatment.
Major R&D accomplishments during the fiscal year
ended March 31, 2009, include the following.
• Kurita developed wastewater treatment chemicals that
substantially reduce use of inorganic ﬂocculant, which is
the main source of growth in industrial sludge in
wastewater treatment processes. These chemicals also

2) Water Treatment Facilities
In the Water Treatment Facilities segment, Kurita is taking
up the challenge to further improve ultrapure water quality
to enhance productivity in the electronics industry as wellas to develop wastewater treatment and soil remediation
technologies in anticipation of future environmental
regulations. Kurita is also developing technologies for a
resource recycling based society, such as wastewater
reclamation for reuse and sludge volume reduction inindustrial plants.
Major R&D accomplishments during the fiscal year
ended March 31, 2009, include the following.
• Kurita developed equipment to produce and recycle
chemical solutions for resist removal in semiconductor
manufacturing processes. The equipment reduces
semiconductor production’s environmental footprint by
reducing the total quantity of chemicals used inphotoresist stripping processes in comparison toexisting processes.
• Kurita developed a wastewater treatment system for
Integrated Gasification Combined Cycle (a coalgasification technology) plants, which are expected to
be a next-generation power generation technology.
• Kurita developed a technology that utilizes bothchemicals and anaerobic microorganisms to rapidly
decontaminate soil and groundwater contaminated withhigh concentrations of trichloroethylene.
The Water Treatment Facilities segment’s R&D expenses
totaled ¥3,130 million.

15
KURITA ANNUAL REPORT 2009

R&D is conducted mainly by our Research andDevelopment Division and operating divisions’ technology
development units. The Kurita Group has a combined
R&D staff of approximately 150 personnel, equivalent to3.4% of the Group’s total workforce. In the fiscal year
ended March 31, 2009, R&D expenses totaled ¥4,363
million (2.2% of net sales).

RESEARCH & DEVELOPMENT

The Kurita Group is conducting research and development into basic technologies(e.g., analytical technologies, IT controls, technologies for monitoring the effect ofwater treatment) and technologies to create new businesses in addition to thoserelated to its core businesses: boiler and cooling water treatment, ultrapure waterproduction, industrial water and wastewater treatment, wastewater reclamation andsoil remediation.

Environmental Initiatives

The Kurita Group’s most important societal responsibility is helping to build
a sustainable society by providing solutions to the water and environmental
challenges confronting all of humanity.

ENVIRONMENTAL INITIATIVES

Environmental Improvement
Activity Regime

KURITA ANNUAL REPORT 200916

Kurita instituted a Basic Environmental Improvement
Policy in March 2004 and commenced environmental
improvement activities pursuant to this Basic Policy thefollowing month. Kurita extended the Basic Policy toencompass 19 domestic subsidiaries in April 2006 andhas since been continuously endeavoring to better theenvironment. The Group’s environmental activities arecoordinated by the Environmental Improvement
Promotion Committee chaired by Kurita’s director
responsible for environmental improvement activities. The
Committee, which meets monthly, formulates group-widetargets, policies, initiatives, and action plans. Kurita also
semiannually convenes group-wide Environmental
Improvement Activity Promotion Meetings to monitor the
progress of activities and attainment of targets.

Characteristics of Kurita’s
Environmental Improvement Activities
In accord with the Basic Policy, the Kurita Group aims tocontribute to building a sustainable society through its
business activities. Its environmental improvement
activities broadly comprise two categories: initiatives that
contribute to environmental improvement on behalf ofcustomers or society at large and initiatives aimed at
reducing the Kurita Group’s own environmental footprint.
The former include initiatives to create new products andtechnologies in response to environmental challenges orto help customers improve the environment by providingthem with products, technologies, and services.

The Kurita Group has developed customer
environmental benefit indicators to quantify the extent towhich its environmental initiatives have reduced
customers’ environmental footprints. The Group utilizes
this indicator to evaluate its environmental activities andimprove their effectiveness from one fiscal year to thenext. Although these indicators have shortcomings (e.g.,they are estimated values and currently do notencompass all of the Group’s activities), Kurita is
endeavoring to improve their effectiveness by making
them more accurate and more comprehensive.

Results of Environmental Activities in
the Year Ended March 31, 2009
For intra-group environmental improvement activities,
Kurita sets numerical targets for reduction of CO2
emissions and waste. For the three years through March
31, 2009, Kurita set targets of reducing CO2 emissions by
5% and limiting growth in waste output to ±0% relative totheir respective per-unit levels in the year ended March 31,
2006. In the fiscal year ended March 31, 2009, Kurita
achieved its CO2 target with an approximately 11%
reduction in CO2 emissions but failed to achieve the target
for waste output, which increased 73% relative to thebase year. The main factor behind the failure to achieve
the waste reduction target was waste output growth
stemming from expansion of cleaning businesses. 		
Kurita will report in detail on its environmental
improvement activities’ results in its annual Environmental
Report scheduled to be published in September 2009.

Activity Plan Revision Coinciding with
the Initiation of the MP-11 Plan
The Kurita Group revised its Environmental Improvement
Activity Plan in conjunction with initiating its new MP-11
medium-term management plan in April 2009.
First, the Group revised its Basic Policy to further
clarify its societal contribution through its businessactivities. Next, the Group newly established Activity
Guidelines to clarify its role in realizing a low-carbon,

Group changed its approach to setting numerical targets.
Specifically, for the reduction of CO2 emissions, theGroups switched from a base-year-based reduction target
to a target of 1% annual reductions in perpetuity in theaim of greater sustainability. For waste reduction, theGroup switched from a per-unit target to an absolutevolume target in the aim of achieving zero growth in waste
output. At the same time, the Group resolved to reduce
waste disposal volume by increasing recycling rates.
Through these activities, the Kurita Group aims to build
a sustainable society.

Basic Environmental Improvement Policy (revised March 2009)
The Kurita Group will conduct business activities based on its corporate philosophy
and will endeavor to solve water and environmental issues with the aim of making broad
contribution to society.

Activity Guidelines

ENVIRONMENTAL INITIATIVES

resource-recycling society in response to societal
demands. Additionally, the Group also embraced
improvement in customers’ productivity, environmental
mitigation, and energy innovation as key themes of the
MP-11 plan.
The Group changed its approach to group-widetargets by making environmental measures more specificand linking them more closely to business activities basedon a trilateral framework of responding to societal needs,
meeting customers’ needs, and pursuing internal reforms.
For the internal reform component, which corresponds
to intra-group environmental improvement activities, the1) We will contribute to the realization of a recycling-based society by developing new products andtechnologies that contribute to environmental improvement.
2) We will strive with our customers to improve their environments by providing them with products,
technologies and services that meet their needs for the improvement of productivity, reduction ofenvironmental impact and creation of new energy.
3) In our daily business activities, we will steadily improve our operations in terms of the 3Rs (Reduce,
Reuse and Recycle), to eventually reduce our environmental impact.
The three aspects of Kurita’s environmental improvement activities.

Customers’ environmental
improvement activities

Kurita’s own environmental
improvement activities

Aspect 1:
Societal needs

Aspect 2:
Customer needs

Aspect 3:
Internal change

Realization of a recycling based society
through the development of new products
and technologies conducive to environmental improvement

Products, technologies
and services that will
enable customers to
help improve the environment

Reduce environmental impact
by putting the 3Rs into practicethrough operational improvement
and innovation

KURITA ANNUAL REPORT 200917

CORPORATE GOVERNANCE

Corporate Governance

KURITA ANNUAL REPORT 200918

Basic Stance

Corporate Auditors and Auditing System

Kurita and Kurita Group companies aim to contributebroadly to society and meet the expectations of theirstakeholders through corporate activities in the fields ofwater and environmental management, in accord with the
Kurita corporate philosophy. To realize these aims, theGroup has adopted a basic corporate governance policy
with two main components. The first is establishingmanagement systems that improve managementtransparency, soundness, and efficiency and steadily
increase corporate value on a long-term basis. The
second is rigorous oversight of management andoperational execution.

Kurita employs a corporate auditor system. Its Board of
Corporate Auditors comprises three corporate auditors,
including two outside auditors. Corporate auditors audit
directors’ execution of their duties, in accord with audit
policies and schedules set by the Board of Corporate
Auditors. Corporate auditors attend Board of Directors’
meetings and other important company meetings andoversee and monitor the Board of Directors’ decisionmaking process and fulfillment of its oversight
responsibilities. Corporate auditors’ other responsibilities
include conducting group-wide asset status surveys,
checking the status of the Board of Directors’ internal
control systems, overseeing accounting auditors’
independence and job performance, and verifying theresults of accounting audits.
The two outside corporate auditors have broad
knowledge and experience in industry and the legal
profession, respectively. Their role is to serve as auditorsfrom an objective standpoint.
Kurita has appointed Grant Thornton Taiyo ASG as its
accounting auditor. Grant Thornton Taiyo ASG audits
Kurita’s accounts and internal controls (the latter
beginning in the fiscal year ended March 31, 2009). The
corporate auditors and the Board of Corporate Auditors
augment these audits by conferring with the accounting
auditor on both a periodic and as-needed basis.

Board of Directors and Management
Decision-Making, Oversight, andExecution
Kurita’s Board of Directors currently comprises 13
directors, including one outside director. Board of
Directors’ meetings are chaired by the president and held
monthly on a regularly scheduled basis and wheneverelse necessary on an ad hoc basis. The Board of
Directors sets management policy, makes management
decisions, and oversees directors’ execution of theirduties. Kurita has also established an Executive
Committee composed of directors with a rank ofmanaging director or above (currently six directors) todeliberate on important management matters and assist
the Board of Directors’ decision-making.
To complement the Board of Directors’ decisionmaking, Kurita has also established an authorization
protocol based on authorization and review regulations. In
terms of operational execution, Kurita has employed an
executive officer system since June 2005 in the aim ofstrengthening executory capabilities and expediting
execution of management decisions. Kurita currently has
six executive directors, who include the general managers
of key operating divisions.

The corporate auditors also endeavor to improve audit
effectiveness and efficiency by reviewing the status andresults of operational audits conducted by the Internal
Auditing Department.

Kurita recognizes that building and operating solid internal
control systems enhances the effectiveness of corporate
governance and helps to improve a company’s credibility.
Based on this recognition, Kurita is steadily implementing
internal control systems.
As previously reported, the Board of Directors
prescribed a Fundamental Policy Regarding theEstablishment of Internal Control Systems in May 2006 in
accord with the requirements of Japan’s Companies Act
and subsequently augmented it with several revisions.
These revisions most notably established internal controls
for financial reporting and prescribed provisions regarding
establishment and augmentation of risk management
systems.

Compliance systems are another key component ofinternal controls. Kurita has established a Compliance
Committee and Group Compliance Committee both
chaired by an executive senior managing director(representative director), conducts group-wide
compliance activities, and endeavors to improve
compliance. Kurita’s organizational units and groupcompanies have formulated Compliance Guidelines
based on the Code of Ethical Conduct prescribed in 2000
and rigorously practice compliance with laws and societal
ethics in their day-to-day business activities. Additionally,
Kurita has prescribed whistleblower protection regulations
and established an internal consultation desk and a liaison
for external consultations and reporting.

The revision that established internal controls overfinancial reporting preceded the internal controls reporting
system mandated by the Financial Instruments andExchange Act effective from April 2008. It designated theInternal Auditing Department as the organizational unit
responsible for monitoring the status of internal controls,
recommending improvements to internal controls, andassisting with such improvements. The revision regarding
risk management systems designated the generalmanager of the Corporate Planning Division as thecorporate officer in charge of group-wide risk oversightand risk management. It also designated the Internal
Auditing Department as the organizational unit
responsible for monitoring risk management and thestatus of improvements to risk management systems.
The president recently evaluated the aforementioned
internal controls over financial reporting, verified that they
are properly implemented and operational as of March 31,
2009, and submitted an internal control report to that
effect to the Financial Services Agency after the report
had been audited by the accounting auditor.
Kurita plans to further augment its risk management
and internal controls pursuant to its new medium-term
management plan.

Information Disclosure
In the aim of gaining societal trust and building fair andtransparent relationships with stakeholders, the Kurita
Group endeavors to adequately disclose information on atimely basis in compliance with the Financial Instruments
and Exchange Act, other applicable laws, and securities
exchanges’ timely disclosure regulations. The Group also
conducts routine investor relations activities in the spirit oftimely disclosure even of information outside the purview
of timely disclosure regulations. The Group endeavors topromptly disclose such information by various means,including press conferences, explanatory meetings, andpublication on the company website.

CORPORATE GOVERNANCE

Compliance Initiatives

19
KURITA ANNUAL REPORT 2009

Internal Control Systems

BOARD OF DIRECTORS AND CORPORATE AUDITORS

Board of Directors and Corporate Auditors

Executive Senior Managing Director*
ChairmanPresident*

Hiroshi Fujino

Hiroshi Saito

Kazufumi Moriuchi
General Manager of 1st Facilities Division

KURITA ANNUAL REPORT 200920
Managing Director

Managing Director

Managing Director

Toshiaki Deguchi

Tetsuo Saeki

General Manager of Chemicals
Division

General Manager of Corporate
Planning Division

Kaoru Kajii

Directors

Corporate Auditors

Tetsuo Kai

Tohru Ishizaka

General Manager of 2nd Facilities Division

Shigeaki Takeda

General Manager of 1st Group, Chemicals Division

Kouichi Iioka

General Manager of Facilities for General Industry Group,
1st Facilities Division

Heiju Maeda

General Manager of 2nd Group, Chemicals Division

Motoyuki Yoda

General Manager of Research and Development Division

Kiyoshi Itou

General Manager of Administrative Division

Noriyuki Hayata (External Director)*Representative Director

General Manager of Facilities
Production Division

Chiaki Kuzuu (External Corporate Auditor)
Tamio Uda (External Corporate Auditor)

Six-Year Financial Summary
Kurita Water Industries Ltd. and Consolidated Subsidiaries
Years ended March 31
Millions of yen

2007

2006

2005

2004

For the year:
Net sales¥199,706 ¥204,875 ¥197,146 ¥173,683 ¥160,896 ¥146,819
Water Treatment Chemicals
58,33158,646
56,66754,54950,63747,442
Water Treatment Facilities
141,374 146,228 140,479 119,133 110,259
99,377
Cost of sales
135,874 138,549 137,819 122,630 112,077 101,433
Selling, general and administrative expenses
35,89635,85735,05033,741
32,86731,895
Operating income
27,93530,46824,276
17,311
15,951
13,490
Income before income taxes and minority interests
26,10331,27924,591
18,20016,376
14,918Net income
16,29918,297
14,207
10,5199,383
8,444
Capital expenditures
56,32224,097
19,563
16,537
6,706
9,718
Research and development (R&D) expenses
4,363
4,551
4,421
4,213
4,228
4,289
Depreciation and amortization
11,716
9,425
6,512
4,906
4,361
3,872
At year-end:
Total current assets
98,689 121,562 137,004 125,231 116,400 118,923
Total current liabilities
47,93549,08065,49654,87744,46542,954Equity177,291 169,402 156,772 145,366 136,366 128,676
Total assets
245,406 231,498 235,137 212,774 192,428 183,620
Number of shares issued outstanding (thousands) 132,800 132,800 132,800 132,800 132,800 132,800
Number of employees (persons)
4,404
4,249
3,992
3,668
3,382
3,383
Amounts per share of common stock (yen):
Net income
126.7
142.2
110.4
81.8
71.8
64.6
Equity1,378.0
1,316.7
1,218.4
1,129.7
1,058.9
999.7
Cash dividends applicable to the year
34.0
32.0
28.0
22.0
18.0
16.0
Ratios:Total assets turnover (times)
0.84
0.88
0.88
0.86
0.86
0.82
Equity ratio (%)
72.2
73.2
66.7
68.3
70.9
70.1
Return on sales (%)
8.2
8.9
7.2
6.1
5.8
5.8
Return on assets (ROA) (%)
6.8
7.8
6.3
5.2
5.0
4.7
Return on equity (ROE) (%)
9.4
11.2
9.4
7.5
7.1
6.8
Notes: Equity represents net assets less minority interests.
Return on Assets = Net Income ÷ Total Assets (Average) × 100

Contents
Management’s Discussion and Analysis 22
Consolidated Balance Sheets 30
Consolidated Statements of Income 32
Consolidated Statements of Changes in Net Assets 33
Consolidated Statements of Cash Flows 34
Notes to Consolidated Financial Statements 35
Report of Independent Certified Public Accountants 52

FINANCIAL SECTION

2008

21
KURITA ANNUAL REPORT 20092009

Management’s Discussion and Analysis

Business Overview

Years ended March 31 (Millions of yen)Orders by Segment
208,689
192,529 149,659 195,065
183,910
136,595
171,334 130,007 135,969
119,213

FINANCIAL SECTION

200,000

150,000

100,000

59,02950,000052,12053,90356,560

2005

2006

2007

2008

58,4702009

Water Treatment Facilities
Water Treatment Chemicals

22

In the first half of the fiscal year ended March 31, 2009, the Japanese economy
experienced moderate growth driven chiefly by overseas demand despite a rapid
rise in crude oil and other commodity prices dating back to 2007. From September,
however, economic conditions rapidly deteriorated as corporate profits fell sharply
and consumers cut back on spending in the wake of a synchronous global
recession triggered by U.S. financial instability.
In the electronics industry, companies substantially curtailed capital expenditure
and also reduced capacity utilization both in Japan and overseas.
In other manufacturing sectors, many manufacturers likewise reduced capacity
utilization in response to decreased capital expenditure.
The fiscal year ended March 31, 2009, was the third and final fiscal year of theG-8 three-year management plan. Kurita endeavored to accelerate its transition toa service business model offering customers productivity enhancement andenvironmental mitigation solutions in the aim of strengthening its earnings power. At
200000 Kurita endeavored to expand global operations also.
the same time,
Kurita invested
more intensively than ever before in growth businesses160000
specifically ultrapure water supply and tool cleaning-in the aim of boosting its
120000growth potential and increasing earnings.
80000
Consolidated
sales and profits declined in the fiscal year ended March 31,
2009.
40000
0

KURITA ANNUAL REPORT 2009

Operating Results
Years ended March 31 (Millions of yen)

Sales by Segment
200,000

150,000

197,146 204,875 199,706
146,228 141,374
173,683 140,479
160,896 119,133
110,259

100,000

50,000050,63754,54956,66758,64658,331

2005

2006

2007

2008

2009

Water Treatment Facilities
Water Treatment Chemicals

200000160000120000
80000
40000
0

a) Orders
In the Water Treatment Chemicals segment, Kurita placed priority on expanding
sales of core products (e.g., boiler water treatment chemicals, cooling water
treatment chemicals) and process chemicals, while also pursuing order bookingsby adopting a more consultative sales approach to help customers successfully
meet challenges such as productivity enhancement and environmental mitigation.
In the Water Treatment Facilities segment, Kurita carried out an
unprecedentedly large-scale capital expenditure program to expand service
Water Treatment Facilities
Treatment Chemicals
businesses,Watermost
notably the ultrapure water supply business. Meanwhile, theWater Treatment Facilities segment likewise pursued order bookings through amore proactive consultative sales approach.
Despite these efforts, order bookings declined versus the fiscal year ended
March 31, 2008, in both the Water Treatment Chemicals and Water Treatment
Facilities segments. Overall order bookings declined 6.5% to ¥195,065 million in
the year ended March 31, 2009.
b) Net Sales
Net sales declined marginally in the Water Treatment Chemicals segment. The
Water Treatment Facilities segment also saw a decrease in net sales in conjunction
with the falloff in orders. Overall net sales declined 2.5% to ¥199,706 million in theyear ended March 31, 2009.

70,000

50,00066,32563,831

2008

2009

59,32660,00048,81951,052

2005

2006

40,00030,00020,00010,0000

2007

FINANCIAL SECTION

d) Selling, General and Administrative (SG&A) Expenses
SG&A expenses were roughly flat at ¥35,896 million, up 0.1% from ¥35,857 million
in the fiscal year ended March 31, 2008.
As a percentage of sales, SG&A expenses increased to 18.0%, up 0.5
percentage points from 17.5% in the previous fiscal year.

Years ended March 31 (Millions of yen)

Gross Profit

Years ended March 31 (Millions of yen)

SG&A Expensese) Operating Income
Operating income decreased to ¥27,935 million in the year ended March 31, 2009,
down 8.3% from ¥30,468 million in the fiscal year ended March 31, 2008. The
operating margin fell to 14.0% from 14.9% in the previous fiscal year.

40,00032,86733,74135,05035,85735,896

2005

2006

2007

2008

2009

30,00020,000f) Business Results by Segment
Water Treatment Chemicals
Orders and Sales
Domestic orders for and sales of boiler water treatment chemicals, a core product,
decreased versus the fiscal year ended March 31, 2008, as a result of customers’
capacity utilization cutbacks. Wastewater treatment chemical orders and sales, bycontrast, grew modestly while cooling water treatment chemical orders and sales
were roughly unchanged versus the previous fiscal year. Among other products,
packaged water treatment management contracts decreased, but orders for andsales of process chemicals for oil refineries and other industrial facilities increased byvirtue of strong demand for productivity-boosting solutions.
Overseas orders and sales were flat year on year.
Profits
The Water Treatment Chemicals segment continued its efforts to cut manufacturing
and logistics costs, but these efforts were negated by raw material price inflation.
Overall, the Water Treatment Chemicals segment booked orders of ¥58,470
million (down 0.9% year on year) and earned operating income of ¥8,417 million(down 11.6%) on sales of ¥58,331 million (down 0.5%). Its decline in operating
income was largely attributable to raw material price inflation.

10,000

0

40000
35000
30000
Years ended March
31 (Millions of yen)
25000
Operating
Income by Segment
20000

30,00015000

25,000

10000

30,46820,93924,276
15,471

5000

20,00015,00015,951
8,515

017,311

9,349

10,0005,000
027,935
19,517

7,433

7,961

8,806

9,525

2005

2006

2007

2008

Water Treatment Facilities
Water Treatment Chemicals

30000
25000

8,417

2009

23
KURITA ANNUAL REPORT 2009c) Cost of Sales and Gross Profit
Cost of sales decreased in tandem with the decline in net sales, down 1.9% to¥135,874 million from ¥138,549 million in the fiscal year ended March 31, 2008.
As a percentage of sales, cost of sales rose to 68.0% in the year ended March
31, 2009, up 0.4 percentage points from 67.6% in the previous fiscal year. In the
Water Treatment Chemicals segment, the main factors behind the cost-of-sales
ratio’s rise were raw material price inflation and an adverse shift in the sales mix. In
the Water Treatment Facilities segment, the cost-of-sales ratio’s increase waschiefly attributable to a substantial decrease in sales to the electronics industry,
which generally have higher margins than sales to other industries.
Gross profit consequently fell to ¥63,831 million, down 3.8% from ¥66,325
million in the previous fiscal year.

Years ended March 31 (%)

Operating Income Ratio by Segment

FINANCIAL SECTION

16

KURITA ANNUAL REPORT 2009

24

14.7

7

4

14.9
12.3

13

10

16.2

15.5

14.6

14.3

14.4
14.0
13.8

11.0
9.9

10.0

7.7

7.8

2005

2006

2007

2008

Water Treatment Chemicals
Total
Water Treatment Facilities

Fiscal year ended March 31, 2009

Percentage of Net Sales
16

Domestic
Overseas
13
87.0%
13.0%
10

2009

Water Treatment Facilities
OrdersOrders for core ultrapure water production systems for the electronics industry
decreased both domestically and overseas as a result of major reductions insemiconductor- and LCD-related capital expenditures.
The tool cleaning service business’s orders decreased due to major cutbacks incapacity utilization but the ultrapure water supply business’s orders grew
substantially, bolstered by new contracts.
Orders for water treatment systems from general industrial customers declinedmodestly due to curtailment of capital expenditure in general.
Orders for maintenance services decreased in response to large capacity
utilization reductions.
Sales
Sales of hardware, maintenance services, and tool cleaning services to theelectronics industry declined, but the ultrapure water supply business increased its
revenues.
Sales of hardware, maintenance services, and soil remediation services togeneral industrial customers all increased.
Profits
Despite continued efforts to qualitatively improve design and construction
operations and boost their productivity, the Water Treatment Facilities segment’s
profits declined due to the large falloff in sales to the electronics industry.
The Water Treatment Facilities segment booked orders of ¥136,595 million(down 8.7% year on year) and earned operating income of ¥19,517 million (down
6.8%) on sales of ¥141,374 million (down 3.3%).

Business Segment Information
Years ended March 31

7

4Millions of yen

Orders (Note)
Water Treatment Chemicals
Water Treatment Facilities
Total
Sales
Water Treatment Chemicals
Water Treatment Facilities
Total
Operating income
Water Treatment Chemicals
Water Treatment Facilities
Elimination or Corporate
Total

2009

2008

2007

2006

2005

¥ 58,470
136,595¥195,065¥ 59,029
149,659¥208,689¥ 56,560
135,969¥192,529¥ 53,903
130,007¥183,910¥ 52,120
119,213¥171,334¥ 58,331
141,374¥199,706¥ 58,646
146,228¥204,875¥ 56,667
140,479¥197,146¥ 54,549
119,133¥173,683¥ 50,637
110,259¥160,896

¥

¥

¥

¥

¥

8,417
19,5170¥ 27,935

9,525
20,9392¥ 30,468

8,806
15,471(1)¥ 24,276

7,961
9,349
0
¥ 17,311

7,433
8,515
1
¥ 15,951

Note: Orders are not included in the consolidated statements of income and shown for reference purposes only.

g) Overseas Sales
Overseas Sales by Region
Overseas sales fell 17.1% to ¥25,955 million in the year ended March 31, 2009.
Overseas sales’ share of consolidated net sales decreased to 13.0% from 15.3%
in the fiscal year ended March 31, 2008.
By region, Asian sales were down 15.4% to ¥20,070 million, equivalent to77.3% of total overseas sales; North America sales declined 50.3% to ¥1,371 million, 5.3% of total overseas sales; European sales fell 9.2% to ¥1,576 million, 6.1%of total overseas sales; and sales to the rest of the world decreased 5.5% to¥2,936 million, 11.3% of total overseas sales.

Fiscal year ended March 31, 2009

Overseas Sales by Area
Europe
6.1%

Other
11.3%
Asia
77.3%

i) Income before Income Taxes and Minority Interests
Income before income taxes and minority interests fell 16.5% to ¥26,103 million
from ¥31,279 million in the fiscal year ended March 31, 2008.
Pretax profit margin consequently decreased to 13.1% from 15.3% in theprevious fiscal year.

Years ended March 31 (Yen)Net Income per Share150

142.21

120

126.6925

2009

KURITA ANNUAL REPORT 2009h) Other Income and Expenses
Other income and expenses netted out to a loss of ¥1,831 million in a reversal fromthe previous fiscal year’s ¥811 million in income.
This reversal was mainly attributable to two factors. First, net financial income(interest and dividend income net of interest expense) decreased to ¥537 million
from ¥606 million in the previous fiscal year as a result of a reduction in interest anddividend income. Second, valuation losses on investment securities increased to¥2,018 million from ¥103 million in the previous fiscal year.

FINANCIAL SECTION

North America
5.3%

110.42

90

81.76

71.76
60
30

j) Net Income
After deducting income taxes and income from minority interests, Kurita earned net
income of ¥16,299 million, a 10.9% decrease from ¥18,297 million in the fiscal year
ended March 31, 2008.
Net income per share fell to ¥126.69 from ¥142.21 in the previous fiscal year.
Net margin decreased to 8.2% from 8.9% in the previous fiscal year.
Return on equity decreased to 9.4% from 11.2% in the previous fiscal year.

0

2005

2006

2007

2008

150
120
Years ended March
31 (Yen)k) Dividend Policy
Kurita’s basic policy is to pay stable dividends on an ongoing basis. Kurita strives toincrease its dividends, taking into consideration earnings performance andaccumulation and use of internally retained cash flow.
In light of future growth prospects, Kurita paid annual dividends of ¥34 pershare (of which, ¥17 per share was an interim dividend), ¥2 per share increase
versus the previous fiscal year’s ¥32 per share (of which, ¥15 per share was aninterim dividend).

Dividends per Share
90

35
28
21

34.0

60

28.0

30

18.0

0

32.0

22.0

14
7
0

2005

2006

35
30

2007

2008

2009

Capital Expenditures

Years ended March 31 (Millions of yen)

Capital Expenditures andDepreciation and Amortization
60,00056,322

FINANCIAL SECTION

50,00040,00030,00020,00010,0000

16,537
6,706
4,361
2005

19,563

4,906
2006

24,097

6,512
2007

9,425
2008

11,7162009

Capital Expenditures
Depreciation and Amortization

KURITA ANNUAL REPORT 200926
Years ended March 31 (Millions of yen)

R&D Expenses
5,000

4,228

4,213

2005

2006

4,421

4,551

2007

2008

4,363

4,000
3,000
2,000
1,000
0

The Kurita Group is committed to making necessary investments in technologicalinnovation, expansion of production capacity, and competitiveness enhancement inresponse to intensification of sales competition. In the year ended March 31, 2009,
investment in tangible capital assets totaled ¥55,734 million, a 139.2% year-onyear increase, mainly for acquisition of operational assets. (The difference between
this figure and total capital expenditures represents investment in intangible assets.)
The Water Treatment Chemicals segment reduced its investment in tangible
capital assets 7% year on year to ¥1,174 million, most of which was for
replacement of chemical production equipment and acquisition of analyticalequipment for the water-quality analysis service.
The Water Treatment Facilities segment increased its investment in tangible
capital assets 147.5% year on year to ¥54,560 million, largely to newly install andexpand ultrapure water supply and tool cleaning facilities.
Depreciation (i.e., excluding amortization of intangible assets) increased 28.6%
to ¥10,916 million in the year ended March 31, 2009.

2009

Research and Development
Kurita conducts R&D mainly through its Research and Development Division andoperating divisions’ respective technical development organizations.
In the year ended March 31, 2009, total R&D expenses decreased 4.1% to¥4,363 million, equivalent to 2.2% of net sales.
The Kurita Group employs approximately 150 R&D personnel, equivalent to3.4% of its total workforce (4,404 personnel on a consolidated basis).
The Water Treatment Chemicals segment’s R&D activities were predominantly
focused on developing technologies for monitoring water treatment effectivenessand products that help customers improve energy efficiency, boost productivity,
and reduce their environmental footprint. Its R&D expenditures totaled ¥1,233
million, a 12.2% decrease versus the fiscal year ended March 31, 2008.
The Water Treatment Facilities segment’s R&D activities were primarily focusedon further improving ultrapure water quality, developing environmental preservation
technologies (e.g., for soil remediation, wastewater treatment that surpasses
existing regulatory requirements), and developing technologies conducive to a
resource-recycling society, including wastewater reclamation and recycling
technologies. Its R&D expenditures totaled ¥3,130 million, a 0.5% decrease versus
the previous fiscal year.

Current Assets
Current assets at March 31, 2009, totaled ¥98,689 million, a decrease of ¥22,873
million from ¥121,562 million at March 31, 2008.
The decrease was attributable to decreases in trade receivables andmarketable securities of ¥11,435 million and ¥22,911 million, respectively, partially
offset by a ¥15,744 million increase in cash and time deposits.
The decrease in trade receivables resulted from collection of accounts
receivable coupled with decreased sales. The decrease in marketable securities
was mainly due to redemptions. The increase in cash and time deposits was largely
attributable to collection of accounts receivable and redemption of marketablesecurities. In aggregate, however, cash, time deposits, and marketable securities
decreased as a result of large expenditures to acquire tangible fixed assets.

250,000
200,000

192,428

235,137 231,498

212,774

245,406

150,000
100,000
50,000
0

2005

2006

2007

2008

2009

FINANCIAL SECTIONa) Total Assets
At March 31, 2009, Kurita had total assets of ¥245,406 million, an increase of¥13,908 million from ¥231,498 million at March 31, 2008.

As of March 31 (Millions of yen)

Total Assets

As of March 31 (Millions of yen)

Inventories

Fixed Assets (Property, Plant and Equipment, Intangible Assets, and ­Investments
and Long-term Receivables)
At March 31, 2009, property, plant and equipment totaled ¥126,063 million, an
increase of ¥44,079 million from ¥81,984 million at March 31, 2008. The increase
stemmed chiefly from growth in capital investment.
Investments and long-term receivables ended March 31, 2009, at ¥18,368
million, a decrease of ¥7,086 million from ¥25,454 million a year earlier. The
decrease was mainly attributable to a decrease in investment security holdings due
largely to a decline in market values.

15,00012,06512,000
9,000

8,075

8,070

2005

2006

10,921

27
7,149

6,000
3,000
0

2007

2008

2009

b) Liabilities
At March 31, 2009, liabilities totaled ¥66,779 million, an increase of ¥6,342 million
from ¥60,437 million at March 31, 2008.
Current Liabilities
Current liabilities at March 31, 2009, were ¥47,935 million, a decrease of ¥1,144
million from ¥49,080 million at March 31, 2008.
The decrease was mainly due to a ¥4,334 million reduction in trade payables,¥4,346 million decrease in taxes payable, and ¥818 million decrease in advances
received, partially offset by a ¥8,780 million increase in non-trade accounts
payable.
The decrease in trade payables was chiefly attributable to the decline in sales in
the fiscal second half.
Growth in non-trade accounts payable was mainly associated with acquisitionof property, plant and equipment.

As of March 31 (Millions of yen)

Equity200,000

150,000

136,366

145,366

156,772

169,402177,291

100,000

50,000

0

2005

2006

2007

2008

2009

Note: Equity represents net assets less minority interests.

200000150000KURITA ANNUAL REPORT 2009

Financial Position

Long-term Liabilities
Long-term liabilities at March 31, 2009, were ¥18,844 million, an increase of¥7,487 million from ¥11,357 million at March 31, 2008. The increase was due
mainly to newly incurred lease liabilities related to buildings occupied by theultrapure water supply business.

Years ended March 31 (%)

Return on Equity
16

13

11.2
9.4

10

9.4
7

4

7.1

7.5

2005

2006

2007

2008

2009

FINANCIAL SECTION

Note: Equity represents net assets less minority interests.

KURITA ANNUAL REPORT 200928

12
Years ended March 31 (Millions of yen)

Cash Flows from
10
Operating Activities
40,000830,000

6

20,0004

33,65827,07020,38013,856
10,000

0

8,297

2005

2006

2007

2008

2009

25000
20000
As of March 3115000(Millions of yen)

Cash and Cash Equivalents at
10000
End of Year

30,0005000

30,365037,44230,36029,871

25,26220,00010,000

0

2005

2006

2007

2008

Cash Flows
Cash Flows from Operating Activities
Operating activities provided net cash of ¥33,658 million in the fiscal year ended
March 31, 2009, an increase of ¥13,278 million versus the previous fiscal year
(ended March 31, 2008). The main factors that contributed to positive operating
cash flow were income before income taxes and minority interests, growth indepreciation and amortization, and a decrease in trade receivables. Factors thatdetracted from positive operating cash flow include income taxes paid and areduction in trade payables.
Cash Flows from Investing Activities
Investing activities used net cash of ¥32,922 million, an increase of ¥9,766 million
versus the previous fiscal year. The main uses of net cash were outlays to acquire
property, plant and equipment, most notably equipment for the ultrapure watersupply business.

30000

40,000c) Net Assets
At March 31, 2009, net assets totaled ¥178,626 million, a ¥7,565 million increase
from ¥171,061 million at March 31, 2008. The increase resulted from a ¥11,917
million increase in retained earnings derived from Kurita’s annual net income of¥16,299 million, partially offset by a ¥4,008 million decrease in valuation andcurrency translation adjustment accounts due to a decline in the market value ofinvestment securities holdings and a reduction in the yen-equivalent value ofoverseas subsidiaries and affiliates’ net assets as a result of yen appreciation.
At March 31, 2009, Kurita had an equity ratio of 72.2%, down 1 percentage
point from 73.2% a year earlier.
Equity per share at March 31, 2009, was ¥1,378.04, an increase of ¥61.39
from ¥1,316.65 a year earlier.
Equity is defined as net assets less minority interests.

2009

Cash Flows from Financing Activities
Financing activities used net cash of ¥4,713 million, an increase of ¥348 million
increase versus the previous fiscal year. The main use of cash was dividend
payments.
Cash and Cash Equivalents’ Ending Balance
At March 31, 2009, Kurita had cash and cash equivalents of ¥25,262 million, adecrease of ¥5,097 million versus March 31, 2008.

Business Risks

Water Treatment Facilities
Operating performance is affected by fluctuations in demand due to capital
expenditure trends in electronics and other industries that are the main sources ofdemand for the Water Treatment Facilities segment’s products and services.
Changes in hardware production costs due to changes in construction material
prices and outsourcing costs also affect operating performance.
(2) Currency Risk
The Kurita Group considers its earnings’ sensitivity to exchange rate movements tobe minor because foreign currency-denominated transactions account for only asmall share of the Group’s total sales and purchases.

29
KURITA ANNUAL REPORT 2009

(1) Factors That May Affect Operating Performance
Water Treatment Chemicals
Operating performance is affected by fluctuations in demand depending on
capacity utilization rates in industries that are the major sources of demand for the
Water Treatment Chemicals segment’s products and services, including the steel,oil refining, petrochemical, and pulp and paper industries. Changes in prices of key
raw materials in response to movements in crude oil and other commodity prices
also affect operating performance.

FINANCIAL SECTION

Major risk factors that affect the Kurita Group’s operating performance include
domestic and overseas economic trends, customers’ capacity utilization rates andlevel of capital expenditure related to water treatment, and movements in prices ofcrude oil and raw materials. Risks facing the Group, some of which are
unpredictable, are not limited to those specified herein.

Consolidated Balance Sheets
Kurita Water Industries Ltd. and Consolidated Subsidiaries
As of March 31, 2009 and 2008
		Millions of yen

Assets

2009

2008

2009

¥ 26,061
60,397
(104)
1,033
7,149
2,635
1,552
98,689¥ 10,316
72,215(159)
23,945
10,921
2,912
1,410
121,562$  265,311
614,858(1,432)
10,51972,782
26,82515,8091,004,673

Investments and long-term receivables:
Investment securities (Note 4)
Investments in non-consolidated subsidiaries and affiliates
Deferred tax assets (Note 7)
Other investments
Allowance for doubtful accounts
Total investments and long-term receivables

9,612
1,175
5,677
2,053
(152)
18,36815,319
3,109
3,127
3,991
(93)
25,454

97,861
11,97157,802
20,908(1,548)
186,994

Property, plant and equipment, at cost:
Land (Note 11)
Buildings and structures
Machinery and equipment
Construction in progress
Other facilities
Leased assets (Note 9)
Total
Accumulated depreciation
Property, plant and equipment, net

13,89563,872
72,813
11,448
11,234
7,370
180,636(54,572)
126,063

13,96543,711
53,744
4,664
11,125—
127,212(45,227)
81,984141,460
650,237
741,258
116,551
114,372
75,035
1,838,917(555,562)
1,283,354

Intangible assets
Total assets

2,285¥245,406

2,497¥231,498

23,267$2,498,288

FINANCIAL SECTION

Current assets:
Cash and time deposits (Note 3)
Notes and accounts receivable, trade
Allowance for doubtful accounts
Marketable securities (Note 4)Inventories (Note 5)
Deferred tax assets (Note 7)
Other current assets
Total current assets

KURITA ANNUAL REPORT 200930

Thousands of
U.S. dollars (Note 1)

The accompanying notes are an integral part of these statements.

2009

2008

2009

Current liabilities:
Short-term borrowings and current portion of long-term liabilities (Note 6)
Notes and accounts payable, trade
Accounts payable, other
Income taxes payable
Advances received
Accrued employees’ bonuses
Provision for product warranties
Other current liabilities
Total current liabilities¥    420
18,83016,893
3,781
2,766
2,372
937
1,932
47,935¥    102
23,334
8,113
8,128
3,584
2,401
1,131
2,283
49,080$    4,284
191,698
171,982
38,494
28,162
24,153
9,543
19,674
487,994

Long-term liabilities:
Lease obligation (Note 6)
Accrued employees’ retirement benefits (Note 8)
Accrued retirement benefits for directors and corporate auditors
Deferred tax liabilities on revaluation of land (Note 11)
Other long-term liabilities (Note 6)
Total long-term liabilities
Total liabilities

7,183
8,644
738
1,519
759
18,844
66,779

0
8,358
709
1,519
768
11,35760,437

73,12687,997
7,513
15,465
7,735
191,838
679,832

13,45011,426
159,792

13,45011,426
147,874

136,931
116,326
1,626,713(4,847)
179,821(4,827)
167,924(49,351)
1,830,620

170
(750)
(1,950)(2,530)
1,335
178,626¥245,406

1,773
(750)
455
1,478
1,658
171,061¥231,498

1,738(7,645)(19,852)(25,758)
13,594
1,818,455$2,498,288

Net assets:
Shareholders’ equity (Note 10):
Common stock, 2009 and 2008
		 Authorized: 531,000,000 shares
		 Issued:12009–132,800,256 shares					 1 2008–132,800,256 shares
		 Capital surplus
		 Retained earnings
		 Treasury stock, at cost				 2009–4,145,400 shares			 2008–4,138,621 shares
		 Total shareholders’ equity
Valuation and translation adjustments:
Unrealized gains on available-for-sale securities
Unrealized losses on revaluation of land (Note 11)
Foreign currency translation adjustments
		 Total valuation and translation adjustments
Minority interests
		 Total net assets
		 Total liabilities and net assets
The accompanying notes are an integral part of these statements.

FINANCIAL SECTION

Liabilities and Net Assets

Thousands of
U.S. dollars (Note 1)

31
KURITA ANNUAL REPORT 2009

		Millions of yen

Consolidated Statements of Income
Kurita Water Industries Ltd. and Consolidated Subsidiaries
For years ended March 31, 2009, 2008 and 2007
		Millions of yen			Thousands of
U.S. dollars (Note 1)

2009

2008

2007

2009

Net sales (Note 13)¥199,706¥204,875¥197,146$2,033,047

Cost of sales

135,874

138,549

137,819

1,383,229

		 Gross profit

63,831

66,32559,326

649,817

Selling, general and administrative expenses (Note 12)35,89635,85735,050365,432

		 Operating income (Note 13)

27,93530,46824,276284,385

Interest and dividend income

573

652

566

5,837

Interest expense

(36)

(45)

(50)

(369)

Gain on sale of properties

21

204

—

219

Gain on sale of investment securities

—

97

—

—

Equity in earnings of non-consolidated subsidiaries and affiliates

269

115

172

2,745

Loss on disposal of properties

(100)

(162)

(145)

(1,026)

—

(108)

(61)

—

(2,018)(103)—(20,550)

—

—

(488)

—

FINANCIAL SECTION

Other income (expenses):

KURITA ANNUAL REPORT 200932

Loss on sale and disposal of inventories
Loss on valuation of investment securities
Surcharges and penalties

(540)

161

322

(5,507)

			

(1,832)811

315(18,651)

Income before income taxes and minority interests

26,10331,27924,591

265,734

Current

10,68913,113

11,131

108,824Deferred

1,160

(469)

(1,061)

11,809			

9,529

12,644

10,07097,014

Minority interests in earnings of consolidated subsidiaries

(273)

337

314

(2,786)¥ 16,299¥ 18,297¥ 14,207$  165,933

Other, net

Income taxes (Note 7):

Net income

		
Yen

			

U.S. dollars(Note 1)

2009

2008

2007

2009

¥126.69¥142.21¥110.42

$1.28

34.00

32.00

28.00

0.34

Per share of common stock:
Net income
Cash dividends applicable to the year
The accompanying notes are an integral part of these statements.

Consolidated Statements of Changes in Net Assets
Kurita Water Industries Ltd. and Consolidated Subsidiaries
For years ended March 31, 2009, 2008 and 2007
Millions of yen
Evaluation and translation adjustments

Capitalsurplus

Balance as of March 31, 2006
¥13,450 ¥11,426
Changes during the year
Cash dividends paid
Bonuses to directors and corporate auditors
Contribution to employees’ incentive and welfare fundNet income for the year
Acquisition of treasury stock
Net changes of net assets other thanshareholders’ equity
Total changes during the year——
Balance as of March 31, 2007
¥13,450 ¥11,426
Changes during the year
Cash dividends paid
Bonuses to directors and corporate auditors
Reversal of unrealized gains (losses) onrevaluation of land
Contribution to employees’ incentive and welfare fundNet income for the year
Acquisition of treasury stock
Net changes of net assets other thanshareholders’ equity
Total changes during the year——
Balance as of March 31, 2008
¥13,450 ¥11,426
Changes during the year
Cash dividends paid
Bonuses to directors and corporate auditors
Contribution to employees’ incentive and welfare fundNet income for the year
Acquisition of treasury stock
Net changes of net assets other thanshareholders’ equity
Total changes during the year——
Balance as of March 31, 2009
¥13,450 ¥11,426

Retainedearnings

Total
Treasury shareholders’stockequity¥122,350 ¥(4,793) ¥142,434(3,088)(8)(15)
14,207(10)

Capitalsurplus¥3,873¥(740)¥(200)¥2,932 ¥1,295(3,088)(8)(15)
14,207(10)

11,095(10)
11,085¥133,446 ¥(4,803) ¥153,519

Total net
assets¥146,662(3,088)(8)(15)
14,207
(10)

(210)
(210)
¥ 3,662——¥(740)

530
530
¥ 330

320
132
320
132
¥ 3,252 ¥1,427

452
11,538¥158,200(3,859)(9)(3,859)(9)(3,859)
(9)

10
(10)
18,29710(10)
18,297
(24)

10
(10)
18,297(24)(24)

14,428(24)
14,404¥147,874 ¥(4,827) ¥167,924(4,374)(6)(1)
16,299(19)

Retainedearnings(10)(10)¥(750)

124
124
¥ 455

(1,774)230(1,774)230¥ 1,478 ¥1,658(1,543)
12,860¥171,061(4,374)(6)(1)
16,299(19)(1,603)(1,603)¥ 170——¥(750)(2,405)(2,405)¥(1,950)(4,008) (323)(4,331)(4,008) (323)
7,565¥(2,530) ¥1,335 ¥178,626

Thousands of U.S. dollars (Note 1)
Evaluation and translation adjustments

Total
Treasury shareholders’stockequityBalance as of March 31, 2008
$136,931 $116,326 $1,505,395 $(49,149) $1,709,503
Changes during the year
(44,532)(44,532)
Cash dividends paid
Bonuses to directors and corporate auditors
(70)
(70)
Contribution to employees’ incentive and welfare fund
(11)
(11)
Net income for the year
165,933
165,933
Acquisition of treasury stock
(202)
(202)
Net changes of net assets other thanshareholders’ equity
Total changes during the year—
— 121,318(202) 121,116
Balance as of March 31, 2009
$136,931 $116,326 $1,626,713 $(49,351) $1,830,620
The accompanying notes are an integral part of these statements.

(1,889)(1,889)¥ 1,773(4,374)(6)(1)
16,299(19)

11,917(19)
11,897¥159,792 ¥(4,847) ¥179,821

Shareholders’ equity (Note 10)
Commonstock

Unrealized Unrealized
Total
Foreign
gains on gains (losses) currency
evaluation Minority
interests
available- on revaluation translation
andfor-saleof landtranslation
adjustment
securities(Note 11)adjustments

Unrealized Unrealized
Total
Foreign
gains on gains (losses) currency
evaluation Minority
interests
available- on revaluation translation
andfor-saleof landtranslation
adjustment
securities(Note 11)adjustments$ 18,057

Total net
assets$(7,645) $ 4,635 $ 15,048 $16,883 $1,741,435(44,532)(70)(11)
165,933(202)(16,318)(16,318)$ 1,738— (24,488) (40,807) (3,288) (44,096)— (24,488) (40,807) (3,288)
77,020$(7,645) $(19,852) $(25,758) $13,594 $1,818,455

FINANCIAL SECTION

Commonstock

33
KURITA ANNUAL REPORT 2009

Shareholders’ equity (Note 10)

Consolidated Statements of Cash Flows
Kurita Water Industries Ltd. and Consolidated Subsidiaries
For years ended March 31, 2009, 2008 and 2007
		Millions of yen

FINANCIAL SECTION

			KURITA ANNUAL REPORT 2009

34

I. Cash flows from operating activities:
		 Income before income taxes and minority interests
		 Depreciation and amortization (Note 13)
		 Increase (decrease) in accrued employees’ retirement benefits
		 Gain on sale of investment securities
		 Equity in earnings of non-consolidated subsidiaries and affiliates
		 Interest and dividend income
		 Interest expense
		 Payments of bonuses to directors and corporate auditors
Increase (decrease) in accrued employees’ bonuses
		 Increase (decrease) in other allowances, accrual and non-cash items, net
		 Changes in assets and liabilities:			  Decrease in trade receivables		  (Increase) decrease in inventories
		  Increase (decrease) in trade payables
		  Others, net					1
		 Interest and dividends received
		 Interest paid
		 Income taxes paid		 Others, net			  1 Net cash provided by operating activities
II. Cash flows from investing activities:
		 (Increase) decrease in time deposits, net
		 Payments for purchase of property, plant and equipment
		 Proceeds from sale of property, plant and equipment
		 Payments for purchase of marketable securities
		 and investment securities
		 Proceeds from sale and redemption of marketable		 securities and investment securities
		 Others, net			  1 Net cash used in investing activities
III. Cash flows from financing activities:
		 Increase (decrease) in short-term borrowings, net
		 Decrease in long-term borrowings, net
		 Cash dividends paid
		 Cash dividends paid to minority shareholders of		 consolidated subsidiaries
		 Payments for lease obligations
		 Payments for purchase of treasury stock, net
		  1 Net cash used in financing activities
IV. 1 Effect of exchange rate changes on cash and cash equivalents
V.		1 Net increase (decrease) in cash and cash equivalents
VI.1 Cash and cash equivalents at beginning of year (Note 3)
VII.1Cash and cash equivalents of newly consolidated					1 subsidiaries, net of excluded subsidiaries from consolidation
VIII.1Cash and cash equivalents at end of year (Note 3)
The accompanying notes are an integral part of these statements.

Thousands of
U.S. dollars (Note 1)

2009

2008

2007

2009

¥ 26,103
11,716
332
12
(269)
(573)
36
(11)
(23)
2,546

¥ 31,279
9,425
(42)
—
(115)
(652)
45
(14)
59
(329)

¥ 24,591
6,512
103
—
(172)
(566)
50
—
(66)
1,294

$ 265,734
119,272
3,389
131(2,745)(5,837)
369
(117)
(234)
25,928

10,778
3,086(4,110)(1,250)48,374
1,094(32)(15,249)(528)
33,6583,648
1,073(11,203)(1,216)
31,957747(45)(12,475)
196
20,3803,555(3,945)
2,192
1,124
34,673649(45)(8,032)(175)
27,070109,729
31,422(41,848)(12,734)
492,459
11,146(330)(155,238)(5,383)
342,652

1,230(38,291)47(34)(26,101)
350(78)(18,846)43

12,522(389,818)
484(5,145)(12,043)(12,349)(52,381)

9,959
(722)
(32,922)

15,213(539)(23,156)

15,358(581)(16,453)

101,386(7,352)(335,157)

0(92)(4,370)

(235)
(139)
(3,857)(81)(192)(3,086)(1)(945)(44,496)

(98)
(131)
(19)
(4,713)(1,119)(5,097)30,360

(108)
—
(24)
(4,365)(18)(7,160)37,442(88)—(10)(3,458)280
7,438
29,871(1,000)(1,339)(202)(47,985)(11,400)(51,892)
309,072

0¥ 25,26278¥ 30,360

132¥ 37,442

0$ 257,180

Notes to Consolidated Financial Statements
Kurita Water Industries Ltd. and Consolidated Subsidiaries

2. Significant accounting policies(1) Consolidation
Scope of consolidation
The consolidated financial statements included the accounts of the Company and its significant subsidiaries. For theyears ended March 31, 2009 and 2008, 38 subsidiaries were consolidated. All significant inter-company transactions
and balances have been eliminated in consolidation.
Names of principal consolidated subsidiaries: Kuritaz Co., Ltd., Kurita Engineering Co., Ltd., and Kuritec Service Co. Ltd.
Combined assets, net sales, net income (the proportion of the Company’s interest) and retained earnings (theproportion of the Company’s interest) of all the non-consolidated subsidiaries in the aggregate are not significant interms of the consolidated financial statements.
Revaluation of assets and liabilities of the consolidated subsidiaries in the consolidation process
In the elimination of investments in subsidiaries, the assets and liabilities of the subsidiaries, including the portions
attributable to the minority shareholders, are evaluated using the fair value at the time the Company acquired control of
the respective subsidiaries.
Fiscal year of consolidated subsidiaries
The fiscal years of Kurita (Singapore) Pte. Ltd. and 14 other consolidated subsidiaries end on December 31. For these
consolidated subsidiaries, the financial statements as of December 31 were used for consolidation purposes. However,material transactions that have occurred during the three-month period from January 1 to March 31 of the following
year have been adjusted as necessary for consolidation.

35
KURITA ANNUAL REPORT 2009

Kurita Water Industries Ltd. (the “Company”) and its domestic subsidiaries maintain their books of account and prepare
their financial statements in accordance with accounting principles and practices generally accepted in Japan, while its
foreign subsidiaries maintain their books of account and prepare their financial statements in conformity with those of thecountries of their domicile. Certain accounting principles and practices generally accepted in Japan are different fromInternational Financial Reporting Standards and standards in other countries in certain respects as to application anddisclosure requirements. Accordingly, the accompanying consolidated financial statements are intended for use by those
who are informed about Japanese accounting principles and practices.
The Company’s consolidated financial statements, prepared in accordance with accounting principles andpractices generally accepted in Japan, were originally filed with the Japanese Ministry of Finance and the Tokyo Stock
Exchange as required by the Financial Instruments and Exchange Law of Japan.
Certain reclassifications of accounts and modifications have been made in the accompanying consolidated
financial statements to facilitate understanding by readers outside Japan. These reclassifications and modifications
have no effect on net income or shareholders’ equity.
All figures in the consolidated financial statements and notes are stated in millions of Japanese yen by discarding
fractional amounts of less than ¥1 million. As a result, the totals shown in the consolidated financial statements arenotes in yen do not necessarily agree with the sum of the individual amounts.
The translation of yen amounts as of or for the year ended March 31, 2009 into U.S. dollars is included solely forthe convenience of readers and has been made, as a matter of arithmetical computation only, at the rate of ¥98.23 to
US$1, the prevailing rate on the Tokyo Foreign Exchange Market on March 31, 2009. The translation should not be
construed as a representation that yen amounts have been, could have been or could in the future be converted into
U.S. dollars at the above or any other rate.

FINANCIAL SECTION

1. Basis of presenting consolidated financial statements

Amortization of goodwill
The goodwill and negative goodwill are amortized using the straight-line method, over practically estimated effective
years where applicable or, otherwise, three years, except for minor amounts that are charged to income in the periodof acquisition.

FINANCIAL SECTION(2) Equity method
Scope of equity method application
Significant investments in non-consolidated subsidiaries and affiliated companies over which the Company has theability to exercise significant influence with regard to the operating and financial policies of the investees, are accounted
for by the equity method. For the years ended March 31, 2009, and 2008, 3 companies were accounted for by theequity method.
Name of principal company applying the equity method: Kurita Sogo Service Co., Ltd.

KURITA ANNUAL REPORT 200936

In the year ended March 31, 2009, a company was excluded from the scope of equity method application, as it
was liquidated and a company was newly included in the scope of equity method since the materiality increased.
Kurita Chemical Kumamoto Co., Ltd. and other non-consolidated subsidiaries which are not accounted for by theequity method were excluded from the scope of equity method application, because such exclusion has minimal
impact to net income (the proportion of the Company’s interest) and retained earnings (the proportion of theCompany’s interest) of the consolidated financial statements and is considered immaterial as a whole.
Fiscal year of companies accounted for by the equity method
Adjustments were made to the financial statements of the companies accounted for by the equity method whose fiscal
year-ends were not identical to the Company.
(3) Cash and cash equivalents
Cash and cash equivalents in the consolidated statements of cash flows are composed of cash on hand, readily
available bank deposits and short-term investments with an original maturity of three months or less and subject to aminor risk of fluctuations in value.
(4) Available-for-sale securities
Available-for-sale securities that have available fair values are stated at fair value at the balance sheet date, withresulting unrealized holding gains and losses reported as a separate component of net assets. Available-for-salesecurities with no available fair values are stated at cost computed by the moving-average method. The cost of soldsecurities is computed by the moving-average method.
(5) Inventories
Prior to April 1, 2008, inventories were stated at cost determined by the moving-average method, except for work inprocess whose costs were determined by the specific-identification method. In July 2006, the ASBJ issued ASBJ
Statement No.9, “Accounting Standard for Measurement of Inventories”. This standard requires that inventories held
for sale in the ordinary course of business are measured at the lower of cost or net selling value, which is defined as
the selling price less incremental estimated manufacturing costs and estimated direct selling expenses. The Company
applied this new accounting standard for measurement of inventories effective April 1, 2008. The effect of this change
on income or loss for the year ended March 31, 2009 is insignificant.

Additional information on depreciation
From the year ended March 31, 2009, pursuant to the revision to the Corporation Tax Law, the Company and its
domestic consolidated subsidiaries reduced the useful lives of certain assets after having reviewed the status of theuse of machinery and equipment. As a result of the change in useful lives, income before income taxes and minority
interests decreased by ¥113 million ($1,154 thousand) for the year ended March 31, 2009.
(8) Impairment of long-lived assets
The Company reviews its long-lived assets for impairment in accordance with the accounting standards for impairmentof fixed assets whenever events or changes in circumstances indicate the carrying amount of an asset or asset group
may not be recoverable. An impairment loss would be recognized if the carrying amount of an asset or asset groupexceeds the sum of the undiscounted future cash flows expected to result from the continued use and eventual
disposition of the asset or asset group. The impairment loss would be measured as the amount by which the carrying
amount of the asset exceeds its recoverable amount, which is the higher of the discounted cash flows from thecontinued use and eventual disposition of the asset or the net selling price at disposition.
(9) Accrued employees’ bonuses
The Company and its domestic subsidiaries accrue the amount of employees’ bonuses based on the anticipatedbonus payments to employees.
(10) Accrued employees’ retirement benefits
Accrued employees’ retirement benefits are recorded based on the estimated amount of projected benefit obligation at
the balance sheet date by the Company, certain of its domestic subsidiaries and certain consolidated foreignsubsidiaries and, based on the estimated amounts of projected benefit obligation and pension plan assets, at the37
KURITA ANNUAL REPORT 2009

(7) Depreciation of property, plant and equipment
Property, plant and equipment is depreciated by the declining-balance method for the Company and its domestic
consolidated subsidiaries, except for buildings (other than building equipment) acquired on and after April 1, 1998, andultrapure water supply equipment located at the clients’ sites, for which the straight-line method is applied. The
straight-line method is applied by foreign consolidated subsidiaries.
The estimated useful lives of these assets are as follows:		
Buildings and structures 2–65 years
		
Machinery and equipment 2–13 years
Leased assets other than those that are deemed to transfer ownership of the leased assets are depreciated overrespective lease period by the straight-line method without salvage value.

FINANCIAL SECTION(6) Derivative transactions
Derivative transactions utilized by the Company and its subsidiaries are composed of only forward currency contracts
entered into when necessary to hedge the risk, as the Company maintains the policy not to engage in speculativetransactions. The Company believes that the risk of counterparty default is negligible because its forward currency
contracts are entered into only with banks with high credit ratings. In addition, transactions in forward currency
contracts are executed and managed by the finance and accounting department on a contract-by-contract basis after
they have been approval by prescribed internal procedures.

FINANCIAL SECTION

balance sheet date by other domestic subsidiaries. Actuarial differences are subject to amortization over a period of
1-2 years from the year when they are incurred.
Additional information
4 domestic consolidated subsidiaries adopted qualified pension plans until the year ended March 31, 2008, but during
the fiscal year ended March 31, 2009, they transferred qualified pension plans to defined contribution pension plans (1company transferred effective April 1, 2009). As a result, loss on transfer of these pension plans was recorded in an
amount of ¥215 million ($2,188 thousand).

KURITA ANNUAL REPORT 200938(11) Leases
On March 30, 2007, the ASBJ issued ASBJ Statement No.13, “Accounting Standard for Lease Transactions”, whichrevised the previous accounting standard for lease transactions issued in 1993. The revised accounting standard forlease transaction became effective for the fiscal years beginning April 1, 2008. Under the previous accounting
standard, finance leases that are deemed to transfer the ownership of the leased assets to lessees were to becapitalized, but other finance leases were permitted to be accounted for as operating lease transactions if certain “as if
capitalized” was described in the notes to the lessee’s financial statements. The revised accounting standard requiresthat all lease transactions should be capitalized to recognized leased assets and lease obligations in the balance sheet.
The revised accounting standard permits lease arrangements which commenced prior to April 1, 2008 and do nottransfer ownership of the leased property to be accounted for as operating lease transactions. Accordingly, theCompany accounted for leases which commenced prior to April 1, 2008 and do not transfer ownership of the leased
property to the lessee as operating leases. As a result of this accounting change, leased assets amounting to ¥7,254
million ($73,856) were recognized under “Property, plant and equipment” in the accompanying balance sheet at March
31, 2009, but there was no effect on income or loss for the year then ended .
(12) Consumption taxes
Consumption taxes are accounted for separately from transaction prices and are not reflected in the consolidated
statements of income.
(13) Foreign currency translation
Monetary receivables and payables denominated in foreign currency are translated using the spot exchange rate
prevailing at the balance sheet date, and the differences are charged to income as foreign exchange gains or losses.
Foreign subsidiaries’ assets and liabilities are translated using the spot exchange rate at their balance sheet date
and their income and expenses are translated using the average exchange rate during the year. The translationdifferences are recorded in “Foreign currency translation adjustments” and “Minority interests” in net assets.
(14) Appropriations of retained earnings
The accompanying consolidated statements of changes in net assets reflect the appropriations of retained earnings of
the Company in the fiscal year in which the appropriations are approved at the general shareholders’ meeting.
(15) Earnings per share
Earnings per share are computed using the weighted-average number of common shares outstanding.
(16) Reclassifications
Certain prior year amounts have been reclassified to conform to the presentation for the year ended March 31, 2009.

These changes had no impact on previously reported results of operations.

Accounting Standard for Lease Transactions
On March 30, 2007, the ASBJ issued ASBJ Statement No.13, “Accounting Standard for Lease Transactions”, whichrevised the previous accounting standard for lease transactions issued in 1993. The revised accounting standard forlease transaction became effective for the fiscal years beginning April 1, 2008. Under the previous accounting
standard, finance leases that are deemed to transfer the ownership of the leased assets to lessees were to becapitalized, but other finance leases were permitted to be accounted for as operating lease transactions if certain “as if
capitalized” was described in the notes to the lessee’s financial statements. The revised accounting standard requiresthat all lease transactions should be capitalized to recognized leased assets and lease obligations in the balance sheet.
The revised accounting standard permits lease arrangements which commenced prior to April 1, 2008 and do nottransfer ownership of the leased property to be accounted for as operating lease transactions. As a result of thisaccounting change, leased assets amounting to ¥7,254 million ($73,856) were recognized under “Property, plant andequipment” in the accompanying balance sheet at March 31, 2009, but there was no effect on income or loss for theyear then ended.

3. Reconciliation between cash and cash equivalents
The reconciliation between the fiscal year-end cash and cash equivalents (See Note 2 (3)) in the consolidated
statements of cash flows and cash and time deposits in the consolidated balance sheet items is as follows:
Thousands of
U.S. dollars

Millions of yen

Cash and time deposits
Time deposits with original maturity of more than three months
Certificates of deposit included in marketable securities
Cash and cash equivalents

2009

2008

2007

2009

¥26,061¥10,316¥37,761$265,311(1,032)

(343)

(319)

(10,513)234

20,386—

2,382¥25,262¥30,360¥37,442$257,180

39
KURITA ANNUAL REPORT 2009

Unification of accounting policies applied to foreign subsidiaries for the consolidated financial statements
In May 2006, the ASBJ issued ASBJ Practical Issues Task Force (PITF) No.18, “Practical Solution on Unification of
Accounting Policies Applied to Foreign Subsidiaries for the Consolidated Financial Statements”. Pursuant to thisaccounting standard, the Company made necessary adjustments effective the fiscal year ended March 31, 2009, but
the effect of this change on income or loss is insignificant.

FINANCIAL SECTION(17) Changes during the year ended March 31, 2009
Tax effect accounting in balance sheets
Since the Corporate Tax Law which was revised on March 31, 2009 introduced the exclusion of the dividends received
from certain foreign subsidiaries from taxable income, deferred tax liabilities recognized on retained earnings of foreign
consolidated subsidiaries which had been recorded in prior years were reversed and deferred tax liabilities wererecorded based on the Accounting System Committee Report No.6, “Practical Guideline on Tax Effect Accounting in
the Balance Sheet”. This accounting change caused an increase in net income for the year ended March 31, 2009 by¥558 million ($5,685 thousand), compared to the previous method.

4. Marketable securities and investment in securities(1) Available-for-sale securities with fair value at March 31, 2009 and 2008 are summarized as follows:
Millions of yen

At March 31, 2009

Acquisition cost

Book value

Difference¥3,478¥ 4,590¥1,111

Corporate bond

300

300

0

Other

—

—

—

3,778

4,890

1,111

5,538

4,678

(859)

Corporate bonds

500

499

(0)

Other

—

—

—

6,038

5,177

(860)

¥9,816¥10,068¥ 251

Book value exceeding acquisition cost:
StocksBonds:

Subtotal

FINANCIAL SECTION

Book value not exceeding acquisition cost:
StocksBonds:

Subtotal
Total

40
KURITA ANNUAL REPORT 2009

Millions of yen
Acquisition cost

Book value¥ 7,696¥11,040¥3,343

Corporate bond

300

300

0

Other

999

999

0

8,995

12,339

3,343

3,228

2,895

(333)

2,625

2,549

(76)

998

998

(0)

6,853

6,443

(410)

¥15,849¥18,782¥2,933At March 31, 2008

Book value exceeding acquisition cost:

Difference

StocksBonds:

Subtotal
Book value not exceeding acquisition cost:
StocksBonds:
Corporate bonds
Other
Subtotal
Total

Thousands of U.S. dollars

At March 31, 2009

Book value exceeding acquisition cost:

Acquisition cost

Book value

Difference$35,416$ 46,732$11,316

3,054

3,055

1

—

—

—

38,47049,778

11,31856,37847,628(8,750)

5,090

5,081

(8)

—

—

—

61,46852,709(8,759)$99,938$102,498$ 2,559

StocksBonds:
Corporate bonds
Other
Subtotal
Book value not exceeding acquisition cost:
StocksOther
Subtotal
Total

(2) A
 vailable-for-sale securities sold during the years ended March 31, 2009, 2008 and 2007 are summarized
as follows:
Thousands of
U.S. dollars

Millions of yen

2009

2008

2009

2007

¥110

¥578

¥—

$1,125

Total gains on sales

—

61

—

—

Total losses on sales

¥ 12

0

¥—

$ 128

Sales amount

¥

(3) T
 he schedule for the redemption of available-for-sale securities with maturities at March 31, 2009 and 2008is summarized as follows:
Millions of yen
March 31, 2009
Within 1 year

Thousands of U.S. dollars
March 31, 2009

March 31, 2008

1 to 5 years

Within 1 year

1 to 5 years

Within 1 year

1 to 5 years

Bonds:
Corporate bonds
Other

¥ 799

¥—

¥ 1,398¥1,450$ 8,136

$—

—

—

1,998

—

—

—

234

—

20,386

—

2,382

—

¥1,033¥—¥23,783¥1,450$10,519$—

Other:
Certificates of deposit(See Note 2 (3) and Note 3)
Total

41
KURITA ANNUAL REPORT 2009

Corporate bonds

FINANCIAL SECTION

Bonds:

(4) Available-for-sale securities with no available fair value at March 31, 2009 and 2008 are summarized asfollows:
Thousands of
U.S. dollars

Millions of yen

2009

2008

2009

Available-for-sale securities:
Certificates of deposit (See Note 3)¥234¥20,386$2,382Unlisted stocks

343

94

3,500

Unlisted stocks¥577¥20,481$5,882

FINANCIAL SECTION

5. Inventories

KURITA ANNUAL REPORT 200942

Inventories at March 31, 2009 and 2008 consist of the following:Thousands of
U.S. dollars

Millions of yen

2009

2008

2009

Finished products¥1,414¥ 1,428$14,404

Raw materials

1,440

1,365

14,668Work in process

4,293

8,128

43,708¥7,149¥10,921$72,782

Total

6. Short-term and long-term borrowings and lease obligations(1) Short-term borrowings and current portion of long-term borrowings and lease obligations
The short-term borrowings and current portion of long-term borrowings and lease obligations at March 31, 2009 and2008 consist of the following:Thousands of
U.S. dollars

Millions of yen

2009

2008

2009

¥   0

¥   1

$    8Current portion of long-term borrowings

—

101

—

Current portion of lease obligations

420

—

4,284

¥420

¥102

$4,293

Short-term borrowings

Total

The weighted-average annual interest rate of short-term borrowings for the year ended March 31, 2009 is 1.95%

(2) Long-term borrowings and lease obligations
Long-term borrowings and lease obligations at March 31, 2009 and 2008 are summarized as follows:
Thousands of
U.S. dollars

Millions of yen

2009

—

¥102

7,603

—

77,411

420

101

4,284

¥7,183¥   0$73,126

Millions of yen

Thousands of
U.S. dollars

2010

¥ 420

$ 4,284

2011

412

4,202

2012

407

4,146

2013

402

4,093

2014 and thereafter

5,962

60,683

Total¥7,603$77,411

Loan from banks at weighted-average annual interest rates of:

¥

2009

2008

$

—

Less: Current portion
Total

Annual maturities of lease obligations at March 31, 2009 are as follows:

Years ending March 31,(3) Other long-term liabilities
Other than the short-and long-term borrowings described above, ¥728 million (US$7,415 thousands) and ¥719 millionof interest-bearing long-term deposits received were included in other long-term liabilities as of March 31, 2009 and2008, respectively. The weighted-average annual interest rates for such deposits received for the years ended March
31, 2009 and 2008 were 0.37% and 0.92%, respectively.

43
KURITA ANNUAL REPORT 2009

Less: Obligations

FINANCIAL SECTION

2008–10.25%

7. Income taxes
Significant components of the deferred tax assets and liabilities as of March 31, 2009 and 2008 are as follows:
Thousands of
U.S. dollars

Millions of yen

2009

2008

2009

¥ 3,462¥ 3,361$ 35,245

Excess depreciation of property, plant and equipment

2,731

1,989

27,809

Excess provision for accrued bonuses to employees

949

947

9,670

Excess portion of design expenses

565

653

5,757

Accrued enterprise taxes not deductible

374

466

3,811

Excess provision of allowance for product warranty

362

391

3,690

Impairment loss

319

312

3,249

Accrued retirement benefits for directors and corporate auditors

293

273

2,985

Loss on revaluation of investment securities

277

—

2,824

Loss on revaluation of golf membership

125

—

1,275

Other

920

1,045

9,370

10,381

9,437

105,690

Valuation allowances

(660)

(430)

(6,726)

Total deferred tax assets

9,721

9,007

98,964

Unrealized gain on available-for-sale securitie(116)(1,191)(1,188)Estimated income taxes pertaining to retained earnings of overseas consolidated subsidiaries(554)(1,034)(5,647)

Capital gain on properties deferred for tax purposes

(736)

(740)

(7,500)Total deferred tax liabilities(1,408)(2,966)(14,337)

Deferred tax assets, net¥ 8,312¥ 6,040$ 84,627

Deferred tax assets:

FINANCIAL SECTION

Excess provision for accrued employees’ retirement benefits

Subtotal

KURITA ANNUAL REPORT 200944

Deferred tax liabilities:

A reconciliation between the normal effective statutory tax rate and the effective income tax rate as a percentage ofincome before income taxes and minority interests for the year ended March 31, 2009 was as follows:2009

Normal effective statutory tax rate

40.6%

Loss on revaluation of investment securities

0.9

Expenses not deductible for income tax purposes

0.6

R&D expense tax credit(0.9)

Dividend income not taxable for income tax purposes(1.6)

Reversal of deferred tax liabilities on retained earnings of foreign consolidated subsidiaries

(1.8)

Other

(1.3)

Actual effective tax rate

36.5%

8. Retirement benefits and pension plans
The Company provides both lump-sum retirement benefit plan and a defined contribution pension plan. Of theconsolidated subsidiaries, 25 companies (20 domestic and 5 overseas companies) provide lump-sum retirement
benefit plans, qualified pension plans or defined contribution plans, 3 domestic companies provide both lump-sum
benefit and defined contribution pension plans, 4 domestic companies have only qualified pension plans and 1
overseas consolidated subsidiary has only defined contribution pension plan. In addition, as in Note 2(10), 4
consolidated subsidiaries transferred qualified pension plans to defined contribution plans during the fiscal year ended
March 31, 2009 (1 company transferred effective April 1, 2009).
(1) Benefit obligations

2009

2008

2009

¥(18,796)¥(19,586)$(191,355)

Fair value of pension plan assets

10,153

11,264

103,367

Unfunded retirement benefit obligations(8,643)(8,322)(87,988)

(0)

(35)

(9)

¥ (8,644)¥ (8,358)$ (87,997)

Retirement benefit obligation

Unrecognized actuarial (gain) loss
Accrued employees’ retirement benefits

FINANCIAL SECTION

Thousands of
U.S. dollars

Millions of yen

45

Thousands of
U.S. dollars

Millions of yen

2009

2008

2007

2009

Service cost¥  923¥  968¥1,344$ 9,401

Interest cost

242

258

535

2,463

Expected return on plan assets

—

—

(85)

—

Amortization of actuarial differences

57

(34)

138

580

Additional retirement payments

4

7

31

47

Profit at transition to defined contribution pension plan

215

(17)

—

2,188

Other

482

471

—

4,913

¥1,924¥1,654¥1,964$19,595

Net periodic benefit cost

In the above table, benefit cost incurred for the domestic consolidated subsidiaries which use the simplified method forcomputing benefit obligations is included in “Service cost,” and “Other” represents contribution to the defined
contribution pension plan.

KURITA ANNUAL REPORT 2009

(2) Net periodic benefit costs

(3) Assumptions to determine above obligation and cost:2009

Periodic allocation of projected benefit obligation

2008

Equal amount over each period Equal amount over each period
2.5%

2.5%

Expected rate of return on plan assets

0.0–0.8%

0.0%

Amortization period of actuarial differences

1–2 years

1–2 years

Discount rate

9. Leases

FINANCIAL SECTION(1) Leased assets
Leased assets are mainly mountings for piping used in the ultrapure water supply business

KURITA ANNUAL REPORT 200946(2) Depreciation of leased assets
The leased assets are depreciated over respective lease period by the straight-line method without residual value.

10. Unrealized gains on revaluation of land
The Company implemented a revaluation of land for business use in accordance with the Land Revaluation Law(enacted on March 31, 1998). The revaluation difference, net of taxes is stated as “Unrealized gains (losses) onrevaluation of land “in the valuation and translation account in net assets. The tax equivalent is stated as deferred tax
assets or liabilities in long-term liabilities.
When any revaluated land is sold, the related unrealized gain or loss on revaluation of land is transferred to retained
earnings.
Revaluation method: The revaluation of land was computed in accordance with Article Two, Item One of the Land
Revaluation Law Enforcement Order.
Revaluation date: March 31, 2002

11. Selling, general and administrative expenses
Selling, general and administrative expenses for the years ended March 31, 2009, 2008 and 2007 consist of thefollowing:Thousands of
U.S. dollars

Millions of yen

Salaries and allowances
Provision for employees’ bonuses
Retirement benefit expenses
Travel expenses

2009

2008

2007

2009

¥12,999¥12,804¥12,780$132,340

1,561

1,648

1,242

15,892

861

825

1,153

8,768

2,542

2,642

2,527

25,886

Research and development expenses

4,363

4,551

4,421

44,425

Other

13,567

13,384

12,925

138,117¥35,896¥35,857¥35,050$365,432

Total

12. Segment information(1) Business segment information
The business segment information of the Company and its consolidated subsidiaries for the years ended March 31,
2009, 2008, and 2007, is outlined as follows:
Millions of yen
Water Treatment
Chemicals

Water Treatment
Facilities

Total¥58,331¥141,374¥ 199,706

353

102

58,685

Operating costs and expenses
Operating income

Year ended March 31, 2009

Elimination or
corporate

Consolidated¥—¥ 199,706

455

(455)

—

141,476

200,162(455)

199,706

50,267

121,959

172,226(455)

171,771¥ 8,417¥ 19,517¥ 27,935¥0¥ 27,935

I. Sales and operating income

2) Intersegment sales
Total

II. Assets, depreciation and capital expenditures¥34,476¥180,626¥ 215,102¥30,304¥ 245,406

Depreciation and amortization

1,745

9,970

11,716—

11,716

Capital expenditures

1,432

54,88956,322—56,322

AssetsMillions of yen
Water Treatment
Chemicals

Water Treatment
Facilities

Total¥58,646¥ 146,228¥204,875

310

8758,957

Operating costs and expenses
Operating income

47

Elimination or
corporate

Consolidated¥—¥204,875

397

(397)

—

146,315205,272(397)

204,875

49,431

125,375

174,807(400)

174,407¥ 9,525¥ 20,939¥ 30,465¥

2¥ 30,468¥37,791¥ 150,225¥ 188,017¥43,481¥231,498

Depreciation and amortization

1,732

7,692

9,425

—

9,425

Capital expenditures

1,617

22,48024,097—24,097

Year ended March 31, 2008

I. Sales and operating income
Sales1) Sales to outside customers
2) Intersegment sales
Total

II. Assets, depreciation and capital expenditures
AssetsKURITA ANNUAL REPORT 20091) Sales to outside customers

FINANCIAL SECTION

Sales

Millions of yen
Elimination or
corporate

Consolidated¥—¥ 197,146

340

(340)

—

140,557

197,487(340)

197,146

48,123125,086

173,209(339)

172,870

8,806¥ 15,471¥ 24,278¥(1)¥ 24,276¥37,726¥ 141,952¥ 179,679¥ 55,458¥ 235,137

Depreciation and amortization

1,648

4,864

6,512

—

6,512

Capital expenditures

1,324

18,23819,563—

19,563Elimination or
corporate

Consolidated

Year ended March 31, 2007

Water Treatment
Chemicals

Water Treatment
Facilities

Total¥ 56,667¥ 140,479¥ 197,146

262

78

56,930I. Sales and operating income
Sales1) Sales to outside customers
2) Intersegment sales
Total
Operating costs and expenses
Operating income¥

II. Assets, depreciation and capital expenditures

FINANCIAL SECTION

Assets48

Thousands of U.S, dollars

Year ended March 31, 2009

Water Treatment
Facilities

Total

I. Sales and operating income
Sales1) Sales to outside customers

KURITA ANNUAL REPORT 2009

Water Treatment
Chemicals$593,829$ 1,439,217 $ 2,033,047$— $ 2,033,047

3,595

1,044

4,640

(4,640)—597,425

1,440,262

2,037,688(4,640)2,033,047

Operating costs and expenses

511,734

1,241,568

1,753,303(4,640)1,748,662

Operating income$ 85,691$ 198,694$ 284,385$

0$ 284,385$ 350,974$ 1,838,809$ 2,189,783$ 308,504$ 2,498,288

Depreciation and amortization

17,767

101,504

119,272—

119,272

Capital expenditures

14,579558,789

573,368—

573,368

2) Intersegment sales
Total

II. Assets, depreciation and capital expenditures
Assets

Notes:
1. Principal products and services of each segment are as follows:
Water Treatment Chemicals
	Boiler water treatment chemicals, cooling water treatment chemicals, wastewater treatment chemicals, process treatment
chemicals used in the oil refining and pulp and paper incinerator chemicals, equipment and systems for water treatment
chemicals, packaged water treatment management contracts, including a steam supply contract and blanket contracts forfactories, water analysis services, chemical injection and dosing equipment and ion exchange resin.
Water Treatment Facilities
For the electronics industry:	Ultrapure water production systems, wastewater reclaim systems, wastewater treatment systems, tool cleaning, operation andmaintenance services, and ultrapure water supply businessFor general industries:	Pure water production systems, wastewater treatment systems, soil remediation, chemical cleaning, maintenance services andhome-use water purifier2.	There were no costs and expenses included in “Elimination or corporate” that cannot be allocated to business segments for theyears ended March 31, 2009 and 2008.
3.	Total assets under “Elimination or corporate” include corporate assets, consisting primarily of deposits with banks, marketableportfolio securities and long-term investment funds (deposits, marketable securities and investment securities). Such corporate
assets as of March 31, 2009 and 2008 amounted to ¥30,353 million (US$309,002 thousand) and ¥43,547 million, respectively..

(2) Geographic segment information
Geographic segment information for the year ended March 31, 2007 is not shown since the amounts of net sales andassets in Japan exceeded 90% of the amount of combined net sales and assets of all segments.
Geographical segment information for the years ended March 31, 2009 and 2008 is as follows:

Elimination or
corporate

Consolidated¥—¥ 199,706

2,490(2,490)—20,413202,197(2,490)199,706

155,950

18,679174,629(2,858)

171,771¥ 25,833¥ 1,734¥ 27,567¥

367¥ 27,935¥ 198,465¥ 8,683¥ 207,148¥38,258¥ 245,406

Elimination or
corporate

Consolidated¥—¥204,875

Japan

Other regions

Total¥ 179,726¥19,980¥ 199,706

2,057

433

181,783

Operating costs and expenses
Operating income

I. Sales and operating income
Sales1) Sales to outside customers
2) Intersegment sales
Total

II. Assets

Millions of yen

Year ended March 31, 2008

Japan

Other regions

Total¥183,867¥ 21,007¥204,875

2,272

802

3,075

(3,075)—

186,139

21,810207,950(3,075)

204,875

Operating costs and expenses

158,222

19,600177,822(3,415)

174,407

Operating income¥ 27,917¥ 2,210¥ 30,127¥340¥ 30,468¥178,960¥ 10,028¥ 188,989¥ 42,509¥231,498

I. Sales and operating income
Sales1) Sales to outside customers
2) Intersegment sales
Total

II. Assets

49
KURITA ANNUAL REPORT 2009

Year ended March 31, 2009

FINANCIAL SECTION

Millions of yen

Thousands of U.S, dollars

Year ended March 31, 2009

Elimination or
corporate

Consolidated$—$2,033,047

25,357(25,357)—

207,813

2,058,405(23,357)

2,033,047

1,587,600

190,157

1,777,758(29,095)

1,748,662$ 262,991$ 17,655$ 280,647

$

3,738

$ 284,385$2,020,414$ 88,397$2,108,811$ 389,476$2,498,288

Japan

Other regions

Total$1,829,646$ 203,400$2,033,047

20,9454,412

1,850,592

Operating costs and expenses
Operating income

I. Sales and operating income
Sales1) Sales to outside customers
2) Intersegment sales
Total

FINANCIAL SECTION

II. Assets

KURITA ANNUAL REPORT 200950

Notes:
1. Countries and regions are classified into segments according to geography and proximity.
2.	“Other regions” are comprised primarily of Asia.
3.	There were no costs and expenses under “Elimination or corporate” that cannot be allocated to geographical segments.
4.	Assets under “Elimination or corporate” include corporate assets, the amount and components of which are the same as those
provided in Note 3 to the above (1) Business segment information.

(3) Overseas sales
Thousands of
U.S. dollars

Millions of yen

For the year ended March 31, 2009

Overseas net sales

Asia

North America

EuropeOther¥20,070¥1,371¥1,576¥2,936————

199,706

2,033,047

10.0%

0.7%

0.8%

1.5%

13.0%

13.0%

Asia

North America

Europe

Other

Total

¥23,723¥2,759¥1,736¥3,107¥ 31,327

—

—

—

—

204,875

11.6%

1.3%

0.9%

1.5%

15.3%

Consolidated net sales
Percentage of overseas net sales toconsolidated net sales

Total

Total

¥ 25,955 $ 264,232

Millions of yen

For the year ended March 31, 2008

Overseas net sales
Consolidated net sales
Percentage of overseas net sales toconsolidated net sales

Millions of yen

For the year ended March 31, 2007

Overseas net sales
Consolidated net sales
Percentage of overseas net sales toconsolidated net sales

Asia

North America

Europe

Other

Total

¥22,635¥3,424¥1,296¥2,171¥ 29,528

—

—

—

—

197,146

11.5%

1.7%

0.7%

1.1%

15.0%

Notes:
1. Countries and regions are classified according to geography and proximity.
2.	The major countries or regions included in respective categories are as follows:	Asia: South Korea, China, Taiwan, Singapore, Indonesia, Thailand / North America: United States of America / Europe: Germany /Other: Brazil
3.	Overseas net sales refers to sales outside Japan generated by the Company and its consolidated subsidiaries.

13. Subsequent events
Appropriation of retained earnings
The following appropriation of retained earnings for the year ended March 31, 2009 was approved at the ordinary
general meeting of shareholders of the Company held on June 26, 2009.

Cash dividends (year-end dividends)

Millions of yen

Thousands of
U.S. dollars¥2,187$22,265

14. Per share information

Net income per share (EPS)

2007

2009

¥1,378.04¥1,316.65¥1,218.42$14.03126.69142.21110.42

1.29

Basis of calculation for EPS is as follows:
Thousands of
U.S. dollars

Millions of yen

2009

2008

2007

2009

Net income¥16,299¥18,297¥14,207$165,933

Net income attributable to common stock

16,29918,297

14,207

165,933

128,658,142

128,664,115

128,670,582

128,658,142

Average number of shares outstanding(The Company has no dilutive shares.)

FINANCIAL SECTION

Net assets per share

U.S. dollars

2008

51
KURITA ANNUAL REPORT 2009

Yen

2009

Report of Independent Certified Public Accountants

FINANCIAL SECTION

To the Board of Directors ofKurita Water Industries Ltd.

KURITA ANNUAL REPORT 200952

We have audited the accompanying consolidated balance sheets of Kurita Water Industries Ltd. and subsidiaries
as of March 31, 2009 and 2008, and the related consolidated statements of income, changes in net assets and cash
flows for each of the three years in period ended March 31, 2009, expressed in Japanese yen. These consolidated
financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in Japan. Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements arefree of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts anddisclosures in the financial statements. An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above preset fairly, in all material respects, theconsolidated financial position of Kurita Water Industries Ltd. and subsidiaries as of March 31, 2009 and 2008, and theconsolidated results of their operations and their cash flows for each of the three years in the period ended March 31,
2009 in conformity with accounting principles generally accepted in Japan as described in Note 1 to the consolidated
statements.
The consolidated financial statements as of and for the year ended March 31, 2009 have been translated into
United States dollars solely for the convenience of the reader. We have recomputed the translation and, in our opinion,
the consolidated financial statements expressed in Japanese yen have been translated into United States dollars on
the basis set forth in Note 1 to the consolidated financial statements.

Tokyo, Japan
June 26 2009

Corporate Data
As of March 31, 2009

Address
4-7, Nishi-Shinjuku 3-chome,	Shinjuku-ku, Tokyo 160-8383,
Japan
Paid-in Capital¥13,450,751,434

Date of Establishment July 13, 1949
Number of Employees 4,404 (on a consolidated basis)

Overseas Offices

Domestic Offices
Head Office: 4-7, Nishi-Shinjuku
	3-chome, Shinjuku-ku, Tokyo
160-8383
Tel.: 81 (3) 3347-3111
Osaka Branch: 2-22, Kitahama	2-chome, Chuo-ku, Osaka
541-0041
Tel.: 81 (6) 6228-4800

Taiwan Branch:
5F-3, No. 295, Section 2,
Kuang-Fu Road,(Empire Commercial Bldg.)
Shinchu, Taiwan, R.O.C.
Tel.: 886 (3) 575-1157

Major Consolidated Subsidiaries and Affiliated Company
		Company Name

Paid-in
EquityCapital (Millions) Ownership (%)

53
Main Business

OVERSEAS■ North America & South America
Kurita America Inc.
US$3.0100.0
Manufacture & sale of water treatment facilities, operation & 						
maintenance of systems and facilities
Kurita do Brasil LTDA.
R$6.986
100.0
Manufacture & sale of water treatment chemicals■ Europe
Kurita Europe GmbH
EUR2.301
95.0
Manufacture & sale of water treatment chemicals■ AsiaKurita Water Industries (Dalian) Co., Ltd. ¥550
90.1
Manufacture & sale of water treatment chemicals
Kuritec (Shanghai) Co., Ltd.
¥30
100.0
Operation & maintenance of systems and facilities
Kurita Water Industries (Suzhou) Ltd.
¥100
100.0
Manufacture & sale of water treatment facilities
Kurita (Taiwan) Co., Ltd.
NT$20
95.0
Manufacture & sale of water treatment chemicals
Hansu Ltd.
W2,50033.2
Manufacture & sale of water treatment chemicals
Hansu Technical Service Ltd.
W400
59.4
Manufacture & sale of water treatment facilities
Kurita-GK Chemical Co., Ltd.
BAHT9285.0
Manufacture & sale of water treatment chemicals
Kurita (Singapore) Pte. Ltd.
S$4.0
100.0 	Manufacture & sale of water treatment chemicals and water
treatment facilities
Kuritec Singapore Pte. Ltd.
S$1.49100.0
Ultrapure water supply for specified customer
Kurita Water (Malaysia) Sdn. Bhd.
RM$0.683.3 	Sale of water treatment chemicals and water treatment
facilities
P.T. Kurita Indonesia
US$2.092.5
Manufacture & sale of water treatment chemicals
DOMESTIC
Kurita Creation Co., Ltd.
Kuritec Service Co. Ltd.
Kuritaz Co., Ltd.
Kurita Engineering Co., Ltd.
Land Solution Inc.
Kurita Chemical Manufacturing Ltd.

¥160
¥50
¥220
¥160
¥450
¥50

100.0
100.0
100.0
100.0
51.0
100.0

FINANCIAL SECTION

Kurita Global Technology Center:
1-1, Gochoyama, Kawada,
Nogi-machi, Shimotsuga-gun,Tochigi 329-0105
Tel.: 81 (280) 54-1511
Offices:
Sapporo, Tohoku, Nagoya,
Hiroshima and Kyushu

Kurita Water Industries Ltd.

Manufacture & sale of water purifiers
Tool cleaning
Operation & maintenance of water treatment facilities
Chemical cleaning
Soil remediation
Manufacture of water treatment chemicals

KURITA ANNUAL REPORT 2009

Company NameInvestor Information
As of March 31, 2009

Stock Exchange Listings First Section of the Tokyo Stock ExchangeFirst Section of the Osaka Securities Exchange
Common Stock

Authorized: 531,000,000 shares
Issued: 132,800,256 shares(Stock trading unit: 100 shares)

Number of Shareholders 36,445
Independent Auditor

Grant Thornton Taiyo ASG
Akasaka DS Bldg. 9F, 8-5-26, Akasaka, Minato-ku, Tokyo 107-0052, Japan

Transfer Agent

The Chuo Mitsui Trust and Banking Co., Ltd.
33-1, Shiba 3-chome, Minato-ku, Tokyo 105-8574, Japan
Distribution of Shares

FINANCIAL SECTION

Main Shareholders

KURITA ANNUAL REPORT 200954

Shareholdings(Thousands of Shares)

Percentage of
total shares issued (%)

Itochu Corporation

10,268

7.73

Japan Trustee Services Bank, Ltd. (Trust Account)

8,032

6.04

Japan Trustee Services Bank, Ltd. (Trust Account 4G)

7,463

5.61

Nippon Life Insurance Company

7,284

5.48

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

5,087

3.83

Tokio Marine & Nichido Fire Insurance Co., Ltd.

4,311

3.24

Kurita Water Industries Ltd.

4,145

3.12

State Street Bank and Trust Company 505041

2,956

2.22

The Bank of Tokyo Mitsubishi UFJ, Ltd.

2,936

2.21

Pictet & Cie (Europe) S.A.

2,672

2.01

Treasury Stock
4,145,419
3.1%

Individuals
17,732,458
13.4%

Financial Institutions
47,694,721
35.9%
Foreigners
43,405,377
32.7%

Securities Firms
830,399
0.6%
Other Domestic Firms
18,989,882
14.3%

Stock price (Yen)

TOPIX (Points)

5,000

5,000

Stock Price Range (Tokyo Stock Exchange)
4,000

4,000

3,000

3,000

2,000

2,000

1,000

1,000
Tokyo stock price indexes and average (TOPIX)

0
Jan. ’07

June ’07

Jan. ’08

June ’08

Jan. ’09

0June ’09

Jan. ’08

June ’08

Jan. ’09

June ’09

Trading volume (Hundreds of shares)

600,000
500,000
400,000

Trading Volume (Tokyo Stock Exchange)

300,000
200,000
100,000
0

Jan. ’07

June ’07

Profile & Vision

Advancing the Science of Water
and Environmental Management
Kurita Water Industries Ltd. provides total solutions in the field of water and environmental management,
under the corporate vision of becoming “an advanced water and environmental management company.”
Kurita’s core business is water treatment and related products and services, based on which it provides a
growing range of services in the broader field of environmental management. Consistent with this approach,
Kurita supplies not only products, such as water treatment chemicals and facilities, but also consulting,outsourcing services and other high-value-added solutions that draw on its unique expertise built up overhalf a century. Based on the corporate philosophy, “Study the properties of water, master them, and we will
create an environment in which nature and man are in harmony,” Kurita is committed to realizing its goal of
becoming an advanced water and environmental management company. Through these endeavors, Kurita
aims to contribute broadly to meeting the needs of its customers and society.

CONTENTSCONSOLIDATED FINANCIAL HIGHLIGHTSCHAIRMAN’S MESSAGE 2
OVERVIEW OF THE NEW MEDIUM TERM
MANAGEMENT PLAN 5
AN INTERVIEW WITH THE PRESIDENT 6
KURITA AT A GLANCE 9
REVIEW OF OPERATIONS
Water Treatment Chemicals 10
Water Treatment Facilities 12

1

RESEARCH AND DEVELOPMENT 15
ENVIRONMENTAL INITIATIVES 16
CORPORATE GOVERNANCE 18
BOARD OF DIRECTORS AND CORPORATE AUDITORSFINANCIAL SECTION 21
CORPORATE DATA 53
INVESTOR INFORMATION 54

20

Cautionary Statement with Respect to Forward-Looking Statements
This annual report contains forward-looking statements regarding forecasts, plans, strategies and business performance in the future. These forward-looking
Cautionary
Statement
withto Forward-Looking
statements
represent judgments
madebyRespect
the Company
based on information Statements
currently available to it and involve a variety of risks and uncertainties.
This
annualreportcontains
forward-looking
statements
regardingstatements.
forecasts, plans,
and business include
performancein theThese
forward-looking
Actual results may be materially different from these forward-looking
Such strategies
risks and uncertainties(but arenotfuture.
limitedto) changes
in thestatements represent judgments made by the Company based on information currently available to it and involve a variety of risks and uncertainties.
economic
environment,
businessconditions,market,demandandcurrency
exchange
rates.
Actual results may be materially different from these forward-looking statements. Such risks and uncertainties include (but are not limited to) changes in theeconomic environment, business conditions, market, demand and currency exchange rates.

Kurita Water Industries Ltd.

URL:http://www.kurita.co.jp/english/

ANNUAL REPORT 2009

Advancing the Science of Water andEnvironmental Management

4-7, Nishi-Shinjuku 3-chome, Shinjuku-ku, Tokyo 160-8383, Japan
Tel: 81 (3) 3347-3111

This annual report is printed using soy ink.
Printed in Japan

Annual Report 2009
For the Year Ended March 31, 2009