[Translation for Reference and Convenience Purposes Only]
Please note that the following is an unofficial English translation of Japanese original text of the Notice ofConvocation of the 82nd Ordinary General Meeting of Shareholders of Kurita Water Industries Ltd. The Company
provides this translation for reference and convenience purposes only and without any warranty as to its accuracy
or otherwise. In the event of any discrepancy between this translation and the Japanese original, the latter shallprevail.

Notice of Convocation
the 82nd Ordinary General Meeting of Shareholders

Kurita Water Industries Ltd.

[Translation for Reference and Convenience Purposes Only]

TABLE OF CONTENTS
Notice of Convocation

Notice of Convocation of the 82nd Ordinary General Meeting of
Shareholders ······································································· 3

Reference Documents for the
General Meeting of Shareholders

Proposal No. 1: Appropriation of Surplus ····································· 5
Proposal No. 2: Election of Twelve (12) Directors ·························· 6
Proposal No. 3: Election of One (1) Substitute Member of the Audit &Supervisory Board ······························································ 19<Reference> Regarding Corporate Governance ··························· 21(Attached documents to the notice of convocation of the 82nd ordinary general meeting of shareholders)Business Report
1. Matters regarding the current status of the Kurita Group ·············· 24
2. Stock of the Company······················································· 34
3. Directors and members of the Audit & Supervisory Board of theCompany ········································································· 36
4. Accounting Auditor ·························································· 40
5. System to ensure that the execution of the duties of directors conforms
with laws, regulations, and the Articles of Incorporation and othersystems to ensure appropriate operations ··································· 41
Consolidated Financial Statements

Consolidated Balance Sheet ··················································· 48
Consolidated Statement of Income ··········································· 49
Consolidated Statement of Changes in Shareholders’ Equity ············ 50

Non-Consolidated Financial
Statements

Non-Consolidated Balance Sheet ············································ 51
Non-Consolidated Statement of Income ···································· 52
Non-Consolidated Statement of Changes in Shareholders’ Equity ······ 53

Audit Report

Accounting Auditor’s Audit Report on the Consolidated Financial
Statements········································································ 55
Accounting Auditor’s Audit Report on the Non-Consolidated Financial
Statements········································································ 56
The Audit & Supervisory Board’s Audit Report ··························· 57–1–

[Translation for Reference and Convenience Purposes Only]

Dear Shareholders,
We would like to express sincere thanks to all our shareholders for the support you provide. The
shareholders of Kurita Water Industries Ltd. are hereby notified of and invited to the 82nd Ordinary
General Meeting of Shareholders to be held on Thursday, June 28, 2018.
This notice details the agenda proposals of the General Meeting of Shareholders and provides an
overview of business operations in the fiscal year ended March 31, 2018. We request that you read it.
June 2018
Sincerely yours,
Michiya Kadota
President and Representative Director

Corporate Philosophy
Study the properties of water, master them,and we will create an environment in which nature and man are in harmony
Kurita Group will contribute to facilitate the coexistence and shared prosperity of the naturalenvironment and human society by creating shared value with society through water.
Kurita Group will generate new functions and value for water, through further exploration andexploitation of the fundamental properties of water.
Each individual of Kurita Group will adopt its customers’ point of view and solve their water andenvironmental issues, by making full use of its unique technologies, products and services.

–2–

[Translation for Reference and Convenience Purposes Only]

Securities Code: 6370
June 8, 2018

Dear Shareholders
Michiya Kadota
President and Representative Director

Kurita Water Industries Ltd.
10-1, Nakano 4-chome, Nakano-ku, TokyoNOTICE OF CONVOCATION OF
THE 82nd ORDINARY GENERAL MEETING OF SHAREHOLDERS
We hereby provide notice that the 82nd Ordinary General Meeting of Shareholders of Kurita Water Industries
Ltd. (the “Company”) shall be held as described below and request your attendance thereat.
If you are unable to attend on the day of the meeting, you may exercise your voting rights in writing or
via the Internet, etc. Please review the attached Reference Documents for the General Meeting of
Shareholders described hereinafter, and exercise your voting rights in accordance with the Guide to
Exercising Your Voting Rights (available only in Japanese), no later than 5:15 p.m. on Wednesday, June27, 2018.
1.

Time and Date:

2.

Place:

3.

4.

10:00 a.m., Thursday, June 28, 2018 (Reception starts at 9:00 a.m.)

10F Conference Room
Kurita Water Industries Ltd.
Nakano Central Park East,
10-1, Nakano 4-chome, Nakano-ku, Tokyo
Objectives of the Meeting:
1. Reports on Business Report and Consolidated Financial Statements, as well as
Reports:
Results of the Audits of the Consolidated Financial Statements by the
Accounting Auditor and the Audit & Supervisory Board for the 82nd Fiscal
Year (From April 1, 2017, to March 31, 2018)
2. Reports on Non-Consolidated Financial Statements for the 82nd Fiscal Year
(From April 1, 2017, to March 31, 2018)
Agenda:Appropriation of Surplus
Proposal No. 1:
Election of Twelve (12) Directors
Proposal No. 2:
Election of One (1) Substitute Member of the Audit & Supervisory Board
Proposal No. 3:

Other Matters Regarding the Convocation of the General Meeting of Shareholders:If your voting rights are exercised in duplicate in writing and via the Internet, etc.:
The exercise of your voting rights that reaches the Company last shall be deemed valid.
Provided, however, that in the event your Voting Rights Exercise Form and your exercise via the Internet,
etc. reach the Company on the same date, the exercise of your voting rights via the Internet, etc. shall bedeemed valid.

–3–

[Translation for Reference and Convenience Purposes Only] If you attend the meeting, we request that you submit the enclosed Voting Rights Exercise Form to thereception desk at the meeting. Any persons other than the shareholders who are entitled to exercise theirvoting rights are not allowed to enter the place of this meeting.
 Notes to consolidated financial statements and notes to non-consolidated financial statements are not statedin accompanying materials of this notice of convocation as they are posted on the Company’s website on
the Internet based on laws and regulations and provisions of Article 14 of the Articles of Incorporation of
the Company. The notes to consolidated financial statements and the notes to non-consolidated financial
statements that are posted on the Company’s website are materials that have been audited by the membersof Audit & Supervisory Board and the Accounting Auditor, and the audit report thereof is as attached to thisnotice of convocation.
 If there are any corrections to the Reference Documents for the General Meeting of Shareholders, theBusiness Report, the Consolidated Financial Statements and/or the Non-Consolidated Financial Statements,
such corrections will be posted on the Company’s website.
 The Company participates in the Electronic Voting Platform operated by ICJ, Inc.
The Company’s website
http://ir.kurita.co.jp/en/shareholders_information/shareholder_meeting/index.html
While the notes to consolidated financial statements and notes to non-consolidated financial statements havenot been translated into English, a portion of the notes to consolidated financial statements is included in the
English translation of the consolidated financial statements viewable via the following link:
http://ir.kurita.co.jp/en/downloads/pdf/immediate_180427_en.pdf[Notice] After the conclusion of the meeting, the shareholder briefing will be held in the same place. We would
very much like you to stay on and attend this briefing.

–4–

[Translation for Reference and Convenience Purposes Only]

Reference Documents for the General Meeting of Shareholders

Proposal No. 1: Appropriation of Surplus
The Company’s basic policy is to pay stable dividends on an ongoing basis. The Company will endeavor to return profits toshareholders by maintaining a dividend increase, setting a consolidated dividend payout ratio of 30% to 50% as a guide andmaking the decision based on consolidated dividend payout ratios for the most recent five years in order to respond flexibly
to changes in the financial results each year.
The Company proposes that the year-end dividend for the current fiscal year be ¥26 per share, an increase of ¥1 per sharefrom a year earlier.
The Company’s annual dividend for the fiscal year under review would be ¥52 per share, including ¥26 per share
distributed as an interim dividend, an increase of ¥1 per share from a year earlier, and the consolidated dividend payout
ratio would be 32.6%.

1.

Type of Property for Dividends

Money

2.

Allotment of Property for
Dividends and Total Amount Thereof

Dividend per share of common
stock of the Company¥26

Total amount of dividends¥2,927,804,412

3.

Effective Date of
the Distribution of Surplus

June 29, 2018–5–

[Translation for Reference and Convenience Purposes Only]

Proposal No. 2: Election of Twelve (12) Directors
The term of office of all ten (10) current Directors will expire at the conclusion of this General Meeting of Shareholders. In
that regard, the Company proposes the election of twelve (12) Directors (including two (2) External Directors) increasing
the number of Directors by two (2) to enhance the management system. The specific reason for this increase is that theCompany plans to increase the number of Directors for the purposes of strengthening the management of overseas business
operations, which have expanded following the purchases in recent years of Water Treatment Chemicals businesses in
Europe and North America, and expanding contract-type service businesses that will contribute to the improved
profitability of domestic business operations. The Company nominates these candidates in accordance with the “Regarding
policies and procedures for nominating candidates for Directors and members of the Audit & Supervisory Board” on page
20.

No.

Name

Positions and Assignments in the Company

Number of years as
Record of attendances
Director
at the Board of(at the conclusion of
Directors meetings
this General Meetingof Shareholders)

Reappointment

In charge of the
Chairman and Director
global business

1

Kouichi Iioka

2

President andMichiya Kadota
Representative Director

100%(12/12)

9 years100%(12/12)

4 years100%(12/12)

9 years100%(12/12)

7 years100%(12/12)

4 years100%(12/12)

4 years100%(12/12)

2 years

―

―

―

―

―

―

Reappointment―
Reappointment

3
4
5
6

Kiyoshi Itou

Takahito Namura

Toshitaka Kodama

Yoshio Yamada

Executive Senior
General Manager ofManaging Director and Corporate Planning
Representative Director Division
Reappointment

Managing Director

General Manager of
Solution Business
Division

Reappointment

Managing Director

General Manager ofSales Division II andin charge of the
facilities business

Reappointment

Managing Director

General Manager ofSales Division I andin charge of thechemicals businessDirector

General Manager ofEngineering Division

Executive officer

General Manager of
East Japan Sales
Group, Sales
Division I

Executive officer

General Manager of
Global Business
Division

Executive officer

General Manager ofGroup Administrative
Division

Reappointment

7
8
9
10

Hirohiko Ejiri

Toshimi Kobayashi

Yasuo Suzuki

Yukihiko Mutou

–6–

New

New

New

[Translation for Reference and Convenience Purposes Only]

No.

Name

Number of years as
Record of attendances
Director
at the Board of(at the conclusion of
Directors meetings
this General Meetingof Shareholders)

Positions and Assignments in the Company

Reappointment

11 Tsuguto Moriwaki

External Director

External
Independent―100%(12/12)

3 years

88.8%
(8/9)

1 yearReappointment

12

Ryoko Sugiyama

External Director

External
Independent―

Note: During the fiscal year under review, the Board of Directors held 12 Board of Directors meetings.
The record of attendances at the Board of Directors meetings for Ms. Ryoko Sugiyama counts only
those meetings held after her appointment on June 29, 2017.

New

External

New candidates for Director

Candidates for External Director–7–

Reappointment

Candidates for reappointment as Director

Independent

Independent Officer as set forth underregulations of the Tokyo Stock Exchange, Inc.

[Translation for Reference and Convenience Purposes Only]
Candidate No.

1

Date of birth
March 5, 1953
65 years old

Kouichi Iioka

Reappointment

Brief personal history, positions and assignments in the Company
Apr. 1975 Joined Kurita Water Industries Ltd.
Jan. 1998 Group Leader of Oil Project, Water Treatment Division
Apr. 2003 General Manager of Sales Dept. I, No. 1 Chemicals Group, Chemicals and Maintenance
Services DivisionJun. 2005 Executive Officer of the Company
Jun. 2005 General Manager of No. 1 Chemicals Group, Chemicals and Maintenance Services
Division
Jun. 2007 Director of the Company
Jun. 2009 General Manager of Facilities for General Industry Group, 1st Facilities DivisionJun. 2011 Retired from the position of Director of the Company
Jun. 2011 President and Representative Director of Kuritec Service Co., Ltd.
Jun. 2013 Managing Director of the Company
Number of the sharesof the Company held
24,700 shares

Jun. 2013 General Manager of Chemicals Division
Apr. 2016 Executive Senior Managing Director and Representative Director of the Company
Apr. 2017 General Manager of Global Business Division and in charge of the chemicals business

Apr. 2018 Chairman and Director of the Company and in charge of the global business (Current
Number of years as
position)
Director
9 years(at the conclusion of this Significant positions concurrently held
General Meeting of
None
Shareholders)Record of attendancesat the Board of
Directors meetings
100% (12/12)

Reasons for deciding to make him a candidate for Director
Mr. Kouichi Iioka became responsible for the Water Treatment Chemicals business in June 2013, after
holding important posts such as those at the sales departments of the Water Treatment Chemicals
business and representative of group companies in Japan and overseas. He served as Director since June
2007. He became Managing Director in June 2013, Executive Senior Managing Director andRepresentative Director in April 2016, and has been serving as Chairman and Director since April 2018.
He has led the overseas expansion of the Kurita Group, contributing to a dramatic expansion of theWater Treatment Chemicals business through M&A conducted in Europe and North America, and he ispresently General Manager of Global Business Division since April 2017. The Company believes that
he is an individual capable of strengthening the function of the Company’s Board of Directors from a
global perspective and has therefore nominated him as a candidate for Director.

–8–

[Translation for Reference and Convenience Purposes Only]
Candidate No.

2

Date of birth
February 16, 1959
59 years old

Michiya Kadota

Reappointment

Brief personal history, positions and assignments in the Company
Apr. 1983 Joined Kurita Water Industries Ltd.
Apr. 2006 General Manager of Business Process Reengineering Dept., Corporate Planning Division
Apr. 2008 General Manager of Internal Auditing Dept.
Apr. 2012 General Manager of Finance and Accounting Dept., Administrative DivisionJun. 2013 Executive Officer of the Company
Jun. 2014 Director of the Company
Jun. 2014 General Manager of Administrative Division
Number of the sharesof the Company held
11,200 shares
Number of years as
Director
4 years(at the conclusion of this
General Meeting of
Shareholders)Record of attendancesat the Board of
Directors meetings
100% (12/12)

Apr. 2016 President and Representative Director of the Company (Current position)
Significant positions concurrently held
None
Reasons for deciding to make him a candidate for Director
Mr. Michiya Kadota has a career mainly in the area of general affairs such as finance and accounting
and was responsible for the Administrative Division from June 2014. He also carried through the
integration of the Water Treatment Chemicals business acquired in Europe in a short period of time as
manager responsible for the integration. He served as Director since June 2014, and has been serving as
President and Representative Director since April 2016. He has been exercising strong leadership in
implementing IT strategy, and reforms of the Kurita Group as a whole, specifically organizational
reforms.

–9–

[Translation for Reference and Convenience Purposes Only]
Candidate No.

3

Date of birth
March 8, 1956
62 years old

Kiyoshi Itou

Reappointment

Brief personal history, positions and assignments in the Company
Apr. 1979 Joined Kurita Water Industries Ltd.
Apr. 2000 General Manager of Legal Dept., Administrative DivisionJun. 2003 General Manager of Personnel and Labor Relations Dept., Administrative DivisionJun. 2007 Executive Officer of the Company
Jun. 2009 Director of the Company
Jun. 2009 General Manager of Administrative DivisionJun. 2013 Managing Director of the Company
Jun. 2013 General Manager of Corporate Planning Division
Apr. 2016 General Manager of Administrative Division
Number of the sharesof the Company held
29,600 shares

Apr. 2018 Executive Senior Managing Director and Representative Director of the Company (Current
position)
Apr. 2018 General Manager of Corporate Planning Division (Current position)

Number of years as
Significant positions concurrently held
DirectorNone
9 years(at the conclusion of this
General Meeting of
Reasons for deciding to make him a candidate for Director
Shareholders)Record of attendancesat the Board of
Directors meetings
100% (12/12)

Mr. Kiyoshi Itou has worked to improve the company quality and enhance the corporate value of theKurita Group as General Manager of Corporate Planning Division of the Company, which he first
assumed in June 2013, after holding important posts in general affairs, such as human affairs and legal
affairs. He served as General Manager of Administrative Division since April 2016 and he has been
serving as General Manager of Corporate Planning Division again since April 2018. He served as
Director since June 2009. He became Managing Director in June 2013 and has been serving as
Executive Senior Managing Director and Representative Director since April 2018. The Company
believes that he is an individual capable of using his highly specialized knowledge and experience tostrengthen the corporate governance of the Kurita Group and has therefore nominated him as a
candidate for Director.

– 10 –

[Translation for Reference and Convenience Purposes Only]
Candidate No.

4

Date of birth
November 27, 1953
64 years old

Takahito Namura

Reappointment

Brief personal history, positions and assignments in the Company
Apr. 1977 Joined Kurita Water Industries Ltd.
Jan. 2000 General Manager of Sales Dept., Hiroshima Office, Water Treatment Division
Apr. 2008 General Manager of Osaka Sales, Group III, Chemicals Division
Apr. 2009 Executive Officer of the Company
Apr. 2009 General Manager of Group III, Chemicals DivisionJun. 2011 Director of the Company
Apr. 2012 General Manager of Sales Group I, Chemicals Division

Number of the sharesof the Company held
16,500 shares
Number of years as
Director
7 years(at the conclusion of this
General Meeting of
Shareholders)Record of attendancesat the Board of
Directors meetings
100% (12/12)

Jun. 2014 General Manager of Research and Development Division
Apr. 2016 Managing Director of the Company (Current position)
Apr. 2018 General Manager of Solution Business Division (Current position)
Significant positions concurrently held
None
Reasons for deciding to make him a candidate for Director
Mr. Takahito Namura has facilitated the development of new products and technologies that will
increase the competitiveness of the Kurita Group as manager responsible for the Research andDevelopment Division from June 2014, after holding important posts at the sales departments of theWater Treatment Chemicals business. He served as Director since June 2011 and has been serving as
Managing Director since April 2016. The Company believes that he is an individual capable ofstrengthening the function of the Company’s Board of Directors with the aim of increasing thecompetitiveness and expanding the market with solution business, leveraging his considerable
experience in sales and perspective on development and has therefore nominated him as a candidate for
Director.

– 11 –

[Translation for Reference and Convenience Purposes Only]
Candidate No.

5Toshitaka Kodama

Date of birth
February 3, 1955
63 years old

Reappointment

Brief personal history, positions and assignments in the Company
Apr. 1977 Joined Kurita Water Industries Ltd.
Apr. 2000 General Manager of Environmental Sales Dept. I, Environmental Water Treatment Division
Jan. 2009 President of Kuritec (Shanghai) Co., Ltd.
Dec. 2009 General Manager of Ultrapure Water Supply Dept., Ultrapure Water Supply Group, 2nd
Facilities Division
Apr. 2011 Executive Officer of the Company
Apr. 2011 General Manager of Water Treatment Facilities Group, Facilities Division
Apr. 2012 Assistant to General Manager of Facilities Division (overseeing China)
Jun. 2013 General Manager of Global Business Group, Facilities DivisionJun. 2014 Director of the Company
Number of the sharesof the Company held
10,700 shares

Jun. 2014 General Manager of Sales Group I and Ultrapure Water Supply Group, Facilities Division
Apr. 2015 General Manager of Facilities Group, Facilities Division
Apr. 2016 Managing Director of the Company (Current position)
Apr. 2016 General Manager of Facilities Division

Number of years as
Apr. 2017 General Manager of Sales Division II and in charge of the facilities business (Current
Directorposition)
4 years(at the conclusion of thisSignificant positions concurrently held
General Meeting of
Shareholders)
None
Record of attendancesat the Board of
Directors meetings
100% (12/12)

Reasons for deciding to make him a candidate for Director
Mr. Toshitaka Kodama served as manager responsible for the Water Treatment Facilities business sinceApril 2016, after holding important posts such as those at the domestic and overseas sales departmentsof the Water Treatment Facilities business and representative of overseas group companies, leading thetransformation of the business model. He served as Director since June 2014 and has been serving as
Managing Director since April 2016. The Company believes that he is an individual capable ofstrengthening the function of the Company’s Board of Directors, leveraging his considerable insights
and experience in the Water Treatment Facilities business and has therefore nominated him as a
candidate for Director.

– 12 –

[Translation for Reference and Convenience Purposes Only]
Candidate No.

6

Date of birthJune 18, 1958
60 years old

Yoshio Yamada

Reappointment

Brief personal history, positions and assignments in the Company
Apr. 1982 Joined Kurita Water Industries Ltd.
Apr. 2004 Group Leader of Paper and Pulp Project, No.1 Chemicals Group, Chemicals andMaintenance Services Division
Apr. 2010 General Manager of Nagoya Sales, Group III, Chemicals DivisionJun. 2011
Jun. 2011

Executive Officer of the Company
General Manager of Planning and Coordination Dept., Chemicals DivisionJun. 2013 General Manager of Sales Group II, Chemicals DivisionJun. 2014 Director of the Company

Number of the sharesof the Company held
12,700 shares

Apr. 2016 General Manager of Sales Group I, Chemicals Division
Apr. 2017 General Manager of Sales Division I
Apr. 2018 Managing Director of the Company (Current position)
Apr. 2018 General Manager of Sales Division I and in charge of the chemicals business (Current
position)

Number of years as
Director
Significant positions concurrently held
4 years(at the conclusion of this None
General Meeting of
Shareholders)Record of attendancesat the Board of
Directors meetings
100% (12/12)

Reasons for deciding to make him a candidate for Director
Mr. Yoshio Yamada held important posts at the sales departments after gaining experience in sales andtechnology development in the Water Treatment Chemicals business. Since April 2017, he has managed
the Water Treatment Chemicals business, leading the initiative to strengthen service business integrating
the water treatment chemicals and maintenance of the water treatment facilities. He served as Director
since June 2014 and has been serving as Managing Director since April 2018. The Company believes
that he is an individual capable of strengthening the function of the Company’s Board of Directors,
leveraging his broad insights and experience in the water treatment chemicals and has therefore
nominated him as a candidate for Director.

– 13 –

[Translation for Reference and Convenience Purposes Only]
Candidate No.

7

Date of birth
October 6, 1962
55 years old

Hirohiko Ejiri

Reappointment

Brief personal history, positions and assignments in the Company
Apr. 1985 Joined Kurita Water Industries Ltd.
Apr. 2005 President of Kurita Europe GmbH
Apr. 2011 General Manager of Sales Dept. for Heavy Industries, Group II, Chemicals Division
Apr. 2014 Executive Officer of the Company
Jun. 2014 General Manager of Sales Group I, Chemicals Division
Apr. 2016 General Manager of Corporate Planning DivisionJun. 2016 Director of the Company (Current position)
Number of the sharesof the Company held
6,600 shares

Apr. 2018 General Manager of Engineering Division (Current position)
Significant positions concurrently held
None

Number of years as
Director
Reasons for deciding to make him a candidate for Director
2 years(at the conclusion of this Mr. Hirohiko Ejiri led the initiative for expansion of the Kurita Group’s business fields andGeneral Meeting oftransformation of revenue structure as General Manager of Corporate Planning Division from April
Shareholders)Record of attendancesat the Board of
Directors meetings
100% (12/12)

2016, after holding important posts such as those at the sales departments of the Water Treatment
Chemicals business and representative of an overseas group company. Since April 2018, he has been
serving as General Manager of Engineering Division. He has been serving as Director since June 2016.
The Company believes that he is an individual capable of strengthening the function of the Company’s
Board of Directors with the aim of expanding the Kurita Group’s business and improving the company
quality, leveraging his extensive experience and track records, and has therefore nominated him as a
candidate for Director.

– 14 –

[Translation for Reference and Convenience Purposes Only]
Candidate No.

8Toshimi Kobayashi

Date of birth
July 12, 1958
59 years old

New

Brief personal history, positions and assignments in the Company
Apr. 1982 Joined Kurita Seibi KK (Note)
Apr. 2005 General Manager of Tokyo Sales Dept. II,
Maintenance Group, Chemicals and Maintenance Services Division of the Company
Apr. 2011 Executive Officer of the Company (Current position)
Apr. 2011 General Manager of Maintenance Group, Facilities Division
Apr. 2017 General Manager of Sales Group I, Sales Division I
Apr. 2018 General Manager of East Japan Sales Group, Sales Division I (Current position)(Note) Kurita Seibi KK was merged to Kurita Water Industries Ltd. in 1997.
Number of the sharesof the Company held
3,400 shares
Number of years as
Director―
Record of attendancesat the Board of
Directors meetings―

Candidate No.

9Significant positions concurrently held
None
Reasons for deciding to make him a candidate for Director
Mr. Toshimi Kobayashi held important posts in the sales departments of the Water Treatment Facilities
business and its maintenance business. Since April 2017, he has promoted business expansion as the
person responsible for the sales department, which integrates the water treatment chemicals and themaintenance of water treatment facilities.
The Company believes that he is an individual capable of utilizing his broad insights and experience inthe services business centered on maintenance to strengthen the function of the Company’s Board of
Directors and has therefore nominated him as a candidate for Director.
Date of birthAugust 16, 1959
58 years old

Yasuo Suzuki

New

Brief personal history, positions and assignments in the Company
Dec. 1997 Joined Kurita Water Industries Ltd.
Apr. 2005 General Manager of Steel and Oil Process Dept., No. 1 Chemicals Group, Chemicals andMaintenance Services Division of the Company
Apr. 2011 President of Kurita Europe GmbH
Apr. 2014 Executive Officer of the Company (Current position)
Apr. 2017 General Manager of Operation Group, Global Business Division
Apr. 2018 General Manager of Global Business Division (Current position)

Number of the sharesof the Company held
1,900 shares
Number of years as
Director―
Record of attendancesat the Board of
Directors meetings―

Significant positions concurrently held
None
Reasons for deciding to make him a candidate for Director
Mr. Yasuo Suzuki has held technology and development roles in the Water Treatment Chemicals
business and served as the representative of an overseas group company. In the acquisition of the Water
Treatment Chemicals business in Europe, he managed the integrated company, putting the acquired
business on track. Since April 2017, he has been the person responsible for the sales department of theoverseas businesses, and he has been promoting the Kurita Group’s overseas development. The
Company believes that he is an individual capable of utilizing his experience from a global viewpoint tostrengthen the function of the Company’s Board of Directors and has therefore nominated him as a
candidate for Director.
(Note) The registered name of the candidate for Director, Yasuo Suzuki, is Yasuo Hatta.

– 15 –

[Translation for Reference and Convenience Purposes Only]
Candidate No.

10

Date of birthJune 19, 1959
59 years old

Yukihiko Mutou

New

Brief personal history, positions and assignments in the Company
Oct. 1991 Joined Kurita Water Industries Ltd.
Jun. 2005 General Manager of Finance and Accounting Dept., Administrative Division of theCompany
Apr. 2012 General Manager of Personnel and Labor Relations Dept., Administrative Division of theCompany
Apr. 2014 General Manager of General Affairs Dept., Administrative Division of the Company
Apr. 2016 Executive Officer of the Company (Current position)
Apr. 2018 General Manager of Group Administrative Division of the Company (Current
position)
Number of the sharesof the Company held
2,700 shares
Number of years as
Director―
Record of attendancesat the Board of
Directors meetings―

Significant positions concurrently held
None
Reasons for deciding to make him a candidate for Director
Mr. Yukihiko Mutou held important posts in general affairs, such as finance and accounting and humanaffairs. In April 2014, he became General Manager of the General Affairs Dept. and promoted thebusiness rationalization of the general affairs departments Administrative Division and theestablishment of the Kurita Group’s management of business continuity, and has been responsible for
the Administrative Division since April 2018. The Company believes that he is capable of utilizing his
abundant knowledge and experience in business management of the Kurita Group to strengthen thefunction of the Company’s Board of Directors and has therefore nominated him as a candidate for
Director.

– 16 –

[Translation for Reference and Convenience Purposes Only]
Candidate No.

11

Date of birth
September 10, 1943
74 years old

Tsuguto Moriwaki

Reappointment
External
Independent

Brief personal history, positions and assignments in the Company
Apr. 1967 Joined Kobe Steel, Ltd.
Jun. 1996 Director
Jun. 1999 Managing Director
Oct. 1999 President and Representative Director, Kobelco Construction Machinery Co., Ltd.
Jun. 2002 Executive Vice President and Representative Director, Kobe Steel, Ltd.
Jun. 2004 President and Representative Director, Shinsho Corporation
Jun. 2010 Adviser, Shinsho Corporation
Jun. 2012 Retired from Shinsho Corporation
Jun. 2015 Director of Kurita Water Industries Ltd. (Current position)
Significant positions concurrently held
None
Number of the sharesof the Company held
3,300 shares

Reasons for deciding to make him a candidate for External Director
Mr. Tsuguto Moriwaki is an individual who possesses a great deal of knowledge about manufacturing
and corporate reform. The Company believes that he is an individual capable of utilizing thisNumber of years as
knowledge as well as his experience of having served in important positions such as representative
Director
director in other companies to deliver opinions from an outside perspective and increase the rationality
3 years
and transparency of the Company’s management and has therefore nominated him as a candidate for(at the conclusion of thisExternal Director.
General Meeting of
Shareholders)Record of attendancesat the Board of
Directors meetings
100% (12/12)

Notes concerning the candidate for External Director
 The Kobelco Group is one of customers of the Kurita Group. However, because the transaction value
with the Kobelco Group is less than 0.2% of consolidated net sales of the Company, it does not fallunder a major customer.
 The Company has entered into an agreement with Mr. Moriwaki that limits liability for damages
stipulated in Paragraph 1, Article 423 of the Companies Act in accordance with the provisions of the
Articles of Incorporation thereof based on the provisions of Paragraph 1, Article 427 of the Act. The
amount stipulated in Paragraph 1, Article 425 of the Act has been set as the maximum liability fordamages based on this agreement. The Company intends to continue this agreement in case this
proposal is approved and adopted at this meeting and Mr. Moriwaki is reappointed as an External
Director of the Company.
 The Company has notified the Tokyo Stock Exchange, Inc. of the appointment of Mr. Moriwaki as anindependent officer as set forth under regulations thereof.

– 17 –

[Translation for Reference and Convenience Purposes Only]
Candidate No.

12

Date of birth
July 27, 1955
62 years old

Ryoko Sugiyama

Reappointment
External
Independent

Brief personal history, positions and assignments in the Company
May 1996 Established Sugiyama & Kurihara Environmental Consultants, Inc., Representative
Director
Aug. 2007 Director of Sugiyama & Kurihara Environmental Consultants, Inc. (Current position)
Apr. 2010 Professor at the Faculty of Social and Environmental Studies, Fuji Tokoha University(current Tokoha University)
Jun. 2010 External Director and Audit and Supervisory Committee Member, LECIP Holdings
Corporation (Current position)
May 2014 Head and Chair of the Board, Gifu Shimbun Co., Ltd. (Current position)
Jun. 2015 External Director, UACJ Corporation (Current position)
Jan. 2016 Director, Gifu Sugiyama Memorial Foundation, a general incorporated foundation (nowGifu Sugiyama Memorial Foundation, a public interest incorporated foundation) (Current
position)
Jun. 2017 Director of Kurita Water Industries Ltd. (Current position)

Number of the sharesof the Company held
400 shares
Number of years as
Director
1 year(at the conclusion of this
General Meeting of
Shareholders)Significant positions concurrently held
Head and Chair of the Board, Gifu Shimbun Co., Ltd.
External Director and Audit and Supervisory Committee Member, LECIP Holdings Corporation
External Director, UACJ Corporation
Director, Gifu Sugiyama Memorial Foundation, a public interest incorporated foundation
Reasons for deciding to make her a candidate for External Director
Ms. Ryoko Sugiyama is an expert in the environment and wastes and has held important positions suchas an external director of listed companies. The Company believes that she is capable of checking theCompany’s management from an outside perspective different from the Company’s and increasing therationality and transparency and therefore nominated her as a candidate for External Director.

Record of attendancesat the Board of
Directors meetings
88.8% (8/9)

Notes concerning the candidate for External Director
 The UACJ Group is one of customers of the Kurita Group. However, because the transaction value
with the UACJ Group is less than 0.1% of consolidated net sales of the Company, it does notconstitute a major customer. LECIP Holdings Group is not a business partner of the Kurita Group.
 The Company has entered into an agreement with Ms. Sugiyama that limits liability for damages
stipulated in Paragraph 1, Article 423 of the Companies Act in accordance with the provisions of the
Articles of Incorporation thereof based on the provisions of Paragraph 1, Article 427 of the Act. The
amount stipulated in Paragraph 1, Article 425 of the Act has been set as the maximum liability fordamages based on this agreement. The Company intends to continue this agreement in case this
proposal is approved and adopted at this meeting and Ms. Sugiyama is reappointed as an External
Director of the Company.
 The Company has notified the Tokyo Stock Exchange, Inc. of the appointment of Ms. Sugiyama as anindependent officer as set forth under regulations thereof.
Notes: 1. No special interest exists between the Company and any of the above candidates for Director.
2. Ages of the candidates indicated are as of the date of the General Meeting of Shareholders.

– 18 –

[Translation for Reference and Convenience Purposes Only]

Proposal No. 3: Election of One (1) Substitute Member of the Audit & Supervisory Board
To prepare for the case where the number of Member of the Audit & Supervisory Board lacks in the number set forth by
the relevant laws and regulations, the Company proposes that Mr. Yoshihiro Tsuji be elected as a Substitute Member of the
Audit & Supervisory Board.
The Audit & Supervisory Board has given its prior consent to this Proposal.
The candidate for Substitute Member of the Audit & Supervisory Board is as follows:
Date of birthJune 7, 1961
57 years old

Yoshihiro Tsuji

External

Brief Personal History, Positions and Assignments in the Company
Apr. 1994 Registered as an attorney
Jun. 2001 Jointly established DAIICHI-CHUO LAW OFFICE (Current position)
Jun. 2006 Substitute Member of the Audit & Supervisory Board of Kurita Water Industries Ltd. (Current position)
Significant positions concurrently held
Attorney, DAIICHI-CHUO LAW OFFICE
Reasons for deciding to make him a candidate for Substitute External Member of the Audit & Supervisory Board
Mr. Yoshihiro Tsuji has expertise as an attorney and a wealth of knowledge about corporate legal affairs. The Company decided
to make him a candidate for Substitute External Member of the Audit & Supervisory Board so that such expertise and knowledge
may be reflected in the Company’s audits.
Notes concerning the candidate for Substitute External Member of the Audit & Supervisory Board Mr. Tsuji was not involved in corporate management in ways other than acting as an external director or an external member ofthe Audit & Supervisory Board in the past. However, the Company believes that he is capable of executing his duties
appropriately in audits because he has expertise as an attorney and sufficient knowledge in corporate legal affairs.
 Mr. Tsuji satisfies the requirements of an independent officer as set forth under the regulations of Tokyo Stock Exchange, Inc.
Number of the shares of the Company held
0 shares
Notes: 1. No special interest exists between the Company and the above candidate for Substitute Member of the Audit &Supervisory Board.
2. Age of the candidate indicated is as of the date of the General Meeting of Shareholders.

– 19 –

[Translation for Reference and Convenience Purposes Only]<Reference> Regarding policies and procedures for nominating candidates for Directors
and members of the Audit & Supervisory Board
1) Policy for nominating candidates for Directors and members of the Audit & Supervisory Board
It is our policy that there should be three or more Directors in total, two or more of whom should be External Directors
to ensure the independence and objectivity of the Board of Directors. We also aim to ensure that, to fulfill the highly
effective supervisory function over the operational execution, the Board of Directors should be organized in a way thatcomplements the necessary knowledge and experience for overall decision-making and consist of personnel with ahigh degree of expertise in various business fields, management planning, finance and accounting, legal affairs, andtechnologies, etc. It is also our policy that there should be three or more members of the Audit & Supervisory Board,
one or more of whom should be a member who specializes in finance and accounting.
2) Procedures for nominating candidates for Directors and members of the Audit & Supervisory Board
When making a proposal of candidates for the Directors, Representative Directors, and Directors with positions ofresponsibility as well as members of the Audit & Supervisory Board, the Chairperson of the Board of Directors willconsult the Nomination and Remuneration Advisory Council in advance. Based on the report given by the Nomination
and Remuneration Advisory Council, the Board of Directors will submit a proposal for recommending the candidates
for the Directors, Representative Directors, and Directors with positions of responsibility as well as members of the
Audit & Supervisory Board to the Board of Directors by stating the reason for recommendation. The Board of
Directors will nominate the candidates after deliberating the proposal. When submitting a proposal for recommending
the candidates for the members of the Audit & Supervisory Board to the Board of Directors, it shall be carried out after
obtaining the consent of the Audit & Supervisory Board in advance.

<Reference> Regarding our criteria for judging independence
The criteria for judging the independence of the Independent External Directors in selecting candidates shall be thatthe candidates for Independent External Directors and their close relatives (*1) must not fall under any of thefollowing items.
a. A person who currently executes the operations of the Company or its subsidiary, or has executed such operations in thepast 10 years
b. A person whose major business partner is currently the Company (*2) or was the Company at some time during the past
year, or an individual who executes the operations of this partyc. A current major business partner of the Company (*3) or a major business partner at some time during the past year, or aperson who executes the operations of the major business partner
d. A consultant, an accountant, or a legal professional who currently receives or has received at some point during the past
year a lot of money or property (*4) other than remuneration for officers from the Company
e. A current major shareholder of the Company (*5) or a person who executes the operations of a major shareholder
f. A person who executes the operations of an organization in which an external officer also currently assumes office (theperson only)
g. A person who executes the operations of an organization to which the Company currently makes a donation (the person
only)
*1
*2
*3
*4
*5

The term “close relatives” means relatives within the second degree of kinship.
The term “person whose major business partner is the Company” means a person whose sales in transactions with
the Company make up 2% or more of that person’s consolidated net sales.
The term “major business partner of the Company” means a business partner with whom the Company’s sales intransactions make up 2% or more of the consolidated net sales of the Company, or a business partner from which
borrowings make up 1% or more of the consolidated total assets of the Company.
The term “a lot of money or property” means money and other property that are equivalent to 10 million yen or
more per year, other than remuneration for officers.
The term “major shareholder of the Company” means a shareholder who has voting rights that account for 10% ormore of the voting rights of the Company.

– 20 –

[Translation for Reference and Convenience Purposes Only]<Reference> Regarding Corporate Governance1. Corporate Governance Policies(1) Basic views
Kurita Water Industries Ltd. and its consolidated subsidiaries (hereinafter the “Kurita Group,” and Kurita Water
Industries Ltd. on a non-consolidated basis shall be hereinafter referred to as the “Company”) aim to contributebroadly to society through corporate activities in the water and environment areas in accordance with the Kurita
corporate philosophy, “Study the properties of water, master them, and we will create an environment in which natureand man are in harmony.” The Kurita Group will make efforts to promote sustainable growth and enhance its corporate
value in the medium and long term, deferring to the rights and position of various stakeholders such as customers,
business partners, employees, shareholders, and local communities while striving to meet their expectations. To thisend, the Kurita Group will establish corporate governance, with the aim of realizing transparent, fair, prompt, anddecisive decision-making measures and highly effective management supervision.

(2) Basic policies
1) Ensuring the rights and equality of shareholders
The Kurita Group will work to develop an environment in which the shareholders are able to appropriately exercise
their rights, such as voting rights at a General Meeting of Shareholders, and provide the information needed toexercise of their rights in a timely and accurate manner in order to secure the substantive equality of the rights ofshareholders, including minority and foreign shareholders.
2) Appropriate level of cooperation with stakeholders other than shareholders
The Kurita Group will work to ensure an appropriate level of cooperation with stakeholders such as customers,
business partners, employees, and local communities under the leadership of the Board of Directors. To achieve thisaim, the Kurita Group will properly respond to issues related to sustainability, and make actions based on compliancewith laws, regulations, and social ethics a prerequisite for all corporate activities.
3) Ensuring appropriate information disclosure and transparency of information
The Kurita Group will develop an environment in which the Audit & Supervisory Board, the members of the Audit& Supervisory Board, and the Accounting Auditor are able to conduct audits properly. It will also disclose
information in accordance with the laws related to information disclosure, such as the Companies Act and the
Financial Instruments and Exchange Act, and regulations for the timely disclosure of corporate information
established by the Tokyo Stock Exchange, Inc. The Kurita Group will actively and fairly disclose financial
information, including information about financial conditions and the results of operations, management strategies,
policies for capital efficiency, etc. This information is deemed to be effective for facilitating understanding of theKurita Group among shareholders and investors.
4) Duties of the Board of Directors and the Audit & Supervisory Board, etc.
The Board of Directors will fulfill its fiduciary responsibility and accountability to shareholders. It will strengthen
the orientation of corporate strategies, decision-making on important matters related to operational execution, thesupervision of overall management, the internal controls and risk management measures that support appropriate
risk-taking, etc. in order to enhance the corporate value and earnings power, as well as improve capital efficiency, etc.
The members of the Audit & Supervisory Board and the Audit & Supervisory Board will fulfill their fiduciary
responsibility to shareholders, and conduct audits in an appropriate manner and express their opinions from an
independent and objective standpoint.
5) Dialogue with shareholders and investors
The Kurita Group aims to conduct management in a way that values shareholders and will make efforts to engage inconstructive dialogue with shareholders and investors, as well as provide them with information in a timely andappropriate manner.
Further details have been made available to the public via the following URL on the Company’s website on the Internet.
(http://ir.kurita.co.jp/en/corporate_governance/governance_policies/index.html)– 21 –

[Translation for Reference and Convenience Purposes Only]

2. Corporate governance organizational structure and conceptual diagram of the Company
The Company adopts the structure of a company with audit & supervisory board. In addition, the Board of Directors, inaccordance with the Kurita corporate philosophy, provides a strategic direction that contributes to the Kurita Group’s
sustainable growth, makes decisions on important matters related to operational execution and performs supervisory
functions over operational execution. The Executive Committee performs operational execution based on the authorities
delegated by the Board of Directors in order to provide support for the Board of Directors to perform more sophisticateddecision-making.
The Nomination and Remuneration Advisory Council, mainly consisting of External Directors and an external member ofthe Audit & Supervisory Board, is in place to enhance the transparency of the decision-making process related to the
remuneration of Directors and the nomination of candidates for Directors/members of the Audit & Supervisory Board.
Furthermore, the E&S (Environmental & Social) Committee, Investment Committee and various other committees are inplace as enterprise-wide organizations which facilitate solutions for management issues faced by the Company.
The members of the Audit & Supervisory Board, while performing the audits undertaken by the Audit & Supervisory
Board in accordance with the audit policy and audit plan determined thereby, also attend important meetings including
meetings of the Board of Directors, Executive Committee and E&S Committee to audit execution of duties by Directors.
(As of March 31, 2018)

General Meetings of Shareholders
Election & Dismissal

Election & Dismissal

Consultation

Nomination &Remuneration
Advisory Council

Board ofDirectors

Audit

Members of the
Audit &
Supervisory Board

Advisory
Discussion& Report[Business
Operations]Audit &
Supervisory Board

Resolution
Election &Supervision

Audit
Audit Report

Internal Auditing
Department

ReportExecutive
Committee
Discussion& Report

Cooperation

Cooperation

President

E & S (Environmental &Social) Committee,
Investment Committee& Various Committees

Cooperation

Internal Audit

Instruction

Accounting Audit & Internal Control Audit

Operating
Divisions– 22 –

Election &Dismissal

Accounting
Auditor[Translation for Reference and Convenience Purposes Only]

3. Effectiveness of the Board of Directors
All Directors and members of the Audit & Supervisory Board analyzed and evaluated the effectiveness of the Board of
Directors, and the Board of Directors deliberated on the evaluation results. This evaluation was conducted via a written
survey, with each of the respondents identified. The Board of Directors, following the discussion on the aggregate results,
evaluated the effectiveness of the Board of Directors, clarified problems and adopted a resolution on the issue andinitiatives in the future. The evaluation items consisted of six areas, i.e., (i) roles and responsibilities of the Board of
Directors, (ii) collaboration with External Directors and external members of Audit & Supervisory Board, (iii) compositionof the Board of Directors, (iv) operation of the Board of Directors, (v) contributions of individual Directors and membersof the Audit & Supervisory Board, and (vi) dialogue with shareholders, covering the period of one year from January to
December 2017. According to the evaluation results, the average self-evaluation of all Directors and members of the Audit& Supervisory Board was generally good in all six areas, indicating that the effectiveness of the Board of Directors is
ensured.
The areas of “contributions of individual Directors and members of the Audit & Supervisory Board” and “operation of theBoard of Directors” were highly evaluated with less variance of evaluation among Inside Directors, External Directors andmembers of the Audit & Supervisory Board. On the other hand, certain items related to the “roles and responsibilities of theBoard of Directors” were evaluated relatively lower than other items, and especially given a low evaluation by the External
Directors.
The issue and measures to be addressed in fiscal 2018 were resolved to improve such evaluation.
(Issue)More in-depth discussion regarding the selection of successors to Directors is necessary.
(Measures)(1) Various measures relevant to the development and evaluation of successors to Directors will be established in asystematic manner.
(2) Information regarding the selection and evaluation of successors to Directors will be provided to the Nomination andRemuneration Advisory Council in advance, and the contents of deliberation at the Board of Directors meetings basedon the report by said Council will be improved.

4. Results of corporate governance initiatives(1) Reform of Philosophy System and management strategies for corporate value enhancement in the long run
Upon developing the new medium-term management plan, we redefined the corporate vision and reviewed the overallsystem of our corporate philosophy to clearly recapture the state in which the Company should be in the medium term.
Furthermore, we took changes in the management environment into account and clarified the direction for the
medium- to long-term growth of the Kurita Group toward the future, including the positioning of CSR (Corporate
Social Responsibility) as the core of our management strategies and the establishment of the “CSR Policy” with thetarget year of 2030 based on identified material issues (primary focused area) areas of CSR.
(2) Establishment of Investment Committee
We established the Investment Committee in April 2017 so that discussion at the Board of Directors is concentrated onmatters of higher quality. The Investment Committee performs pre-screening of investment and loan projects to be
discussed by the Board of Directors or the Executive Committee, and it reports the pre-screening results and major
issues to Directors/members of the Audit & Supervisory Board. The Committee’s membership has been composed of
the Assistant General Manager of Group Administrative Division as chairperson and other internal experts withinsights necessary for the deliberation of investment projects. The Committee was engaged in pre-screening of 21
projects in the fiscal year ended March 31, 2018 and thereby helped to enhance the quality of discussion by the Boardof Directors and Executive Committee.
(3) Selling of strategic shareholdings in other listed companies
In some cases, the Company holds listed shares as strategic shareholdings to strengthen business relationships, etc. The
Company also performs reviews on a regular or timely basis as to the medium- and long-term economic rationality andrelationship with the investee company for each strategic shareholding. In fiscal 2017, the Board of Directors resolved
the reviews and sold nine issues of shares.

– 23 –

[Translation for Reference and Convenience Purposes Only](Attached documents to the notice of convocation of the 82nd ordinary general meeting of shareholders)Business Report(From April 1, 2017 to March 31, 2018)
1. Matters regarding the current status of the Kurita Group(1) Progress and results of the business
During the fiscal year ended March 31, 2018, the global economy remained firm overall, reflecting the solid
recovery of the U.S. and European economies and the economic pickup in China and other Asian countries.
The Japanese economy continued to show signs of recovery attributed to the picking up of consumer spending andimprovement in corporate earnings associated with the recovery of overseas economies.
Looking at the market environment surrounding the Kurita Group, in Japan, the upward momentum continued in
the production activities of the manufacturing industry on the back of an improvement in exports and picking up
of demand, and capital expenditure also remained firm. Overseas, capital expenditure was robust mainly in theelectronics industry in East Asia.
In this environment, the Kurita Group has been focusing on developing the service business aimed at expanding
its overseas business bases and improving profitability under the basic policy to “improve customer intimacy byproviding customers with best solutions.”
To reinforce overseas business bases, in the U.S., Fremont Industries, LLC, which has newly become a member ofthe Kurita Group, and Kurita America Inc., an existing U.S. subsidiary, jointly facilitated activities to demonstratesynergies. In Europe, to strengthen the production capacity of process treatment chemicals for paper and pulp ofKurita Europe GmbH, the Kurita Group acquired a production plant from Akzo Nobel in France. In Asia, tostrengthen its abilities to provide solutions in South Korea, the Kurita Group additionally acquired shares ofHansu Co., Ltd., an equity method affiliate, and made it a consolidated subsidiary. Regarding developing theservice business, the Kurita Group engaged in the development of a business model using a standardized
wastewater reclamation system that contributes to the reuse of water, combining our proprietary underlying
technologies with respect to water treatment facilities and water treatment chemicals. The Kurita Group alsosought to develop and market competitive products and services using IT and sensing technologies andconsistently promoted proposal sales to customers’ challenges including the reduction of environmental footprints,
energy saving and improvements in productivity.
As a result, total consolidated orders for the Kurita Group in the fiscal year ended March 31, 2018, amounted to251,447 million yen (up 15.0% year on year), and net sales amounted to 236,815 million yen (up 10.6% year onyear). Operating income amounted to 22,475 million yen (up 15.5% year on year). Ordinary income amounted to22,104 million yen (up 10.1% year on year). Profit attributable to owners of parent amounted to 17,897 million
yen (up 23.4% year on year). The Kurita Group recorded a gain on step acquisitions of 2,443 million yen in
extraordinary income associated with the acquisition of additional shares of Hansu Co., Ltd., an equity method
affiliate in South Korea, making the company its consolidated subsidiary. The Kurita Group also recorded gain on
sales of investment securities in extraordinary income of 1,720 million yen from the sale of strategic
shareholdings in other listed companies, etc.

– 24 –

[Translation for Reference and Convenience Purposes Only](2) Status of segment of the Kurita Group
Water Treatment Chemicals business“CK-17” (Competitive Kurita 2017) Medium-term Management Plan, of which the fiscal year under review is the
final year, set forth aims with respect to the Water Treatment Chemicals business that entail rebuilding foundations
for generating profits in the Japanese market, while in overseas markets the plan set forth aims that involve
capturing a greater market share and establishing a global platform built on the four pivotal regions of Japan, Asia,
Europe, and the Americas.
In Japan, we have promoted proposals for comprehensive solutions that address the challenges of our customers
by consolidating the Water Treatment Chemicals business division and the Maintenance Services division in the
Water Treatment Facilities business into a single division and integrating operations of both businesses from thecurrent fiscal year. We also integrated certain sales subsidiaries in order to improve operational efficiency.
Overseas, we have strengthened foundations for our platform built on four pivotal regions through the acquisitionof a production plant in France and conversion of an affiliate in South Korea into a consolidated subsidiary.
Starting from the current fiscal year, we have also taken steps to optimize overseas business operations by
consolidating overseas head office functions for the Water Treatment Chemicals business and the Water Treatment
Facilities business into a single division and we have worked to promote proposals for comprehensive solutions.
As for products and services, we have promoted proposals for the contract-type service business by drawing on
S.sensingTM, which is IT and sensing technologies. We have also engaged in the development of water treatment
chemicals that contribute to technologies to diagnose the effects of treatment, customers’ energy saving andreduction of environmental footprints as well as improvements in productivity.
With respect to orders and sales in Japan, capacity utilization recovered at customers’ plants, and the Kurita Groupsought to gain new customers by proposing solutions using new products and services. This effort produced
growth in our main products, boiler water treatment chemicals and cooling water treatment chemicals. Process
treatment chemicals for paper and pulp and chemicals for iron and steel also grew. As a result, both orders andsales increased in Japan. Overseas, both orders and sales increased, reflecting the consolidation of results at theacquired subsidiary based in the United States from the first quarter of this fiscal year and the conversion of anaffiliate in South Korea into a consolidated subsidiary from the fourth quarter of this fiscal year, in addition tohigher sales in each geographical area. The Water Treatment Chemicals business overall saw a decrease inearnings, reflecting higher selling, general and administrative expenses caused by increases in personnel expenses
due to the active development of overseas businesses, and IT-related expenses despite the effect of the increase insales. As a result, total Group orders for the Water Treatment Chemicals business amounted to 90,358 million yen(up 10.0% year on year) while sales amounted to 90,361 million yen (up 10.4% year on year). Operating income
amounted to 7,180 million yen (down 0.7% year on year).
Water Treatment Facilities business
The CK-17 plan has set forth aims with respect to the Water Treatment Facilities segment that entail pursuit ofsustainable growth of the business through efforts that involve reviewing revenue and cost structures, developing
a framework that will ensure consistent earnings, and creating a new business model that will act as a pillar for
generating such earnings.
In Japan, we have promoted proposals for comprehensive solutions that address the challenges of our customers incollaboration with the Water Treatment Chemicals business division. We have also been making efforts tostreamline production processes by utilizing IT and standardizing designs in order to respond to an increase inlarge projects caused by favorable conditions in the semiconductor-related market and to improve profitability.
Furthermore, we have engaged in efforts to create a new business and business model particularly for the energy
market area by utilizing our technologies. Overseas, we established a local subsidiary and developed our platform
in Taiwan with the aim of improving profitability through the optimization of business operations.
As for products and services, in Japan, we have promoted proposals for the contract-type service businesscentered on Kurita Water Supply Service (KWSS), which is a pure water supply service. We have also taken steps
to optimize operational management using IoT and AI in the ultrapure water supply business. Overseas, we havebeen working to propose “cooling blow-off water reclamation systems” that contribute to the reuse of water andestablish a service contract-oriented business model using the Customized Optimal Ready-made Recycle Systems,
which is a standardized wastewater reclamation system.
With respect to orders and sales in Japan, in the electronics industry area, both orders and sales for water treatment
facilities increased substantially due to orders for large-scale projects and progress in construction work. Both
– 25 –

[Translation for Reference and Convenience Purposes Only]orders and sales also increased in maintenance services due to the strong orders associated with expansion andremodeling projects against a backdrop of a rise in capacity utilization at customers’ plants. In the general industry
area, orders for water treatment facilities decreased, but sales increased. Orders in maintenance services increased
mainly due to demand for the renewal and expansion of facilities at customers’ plants, but sales declined slightly.
Orders for water treatment facilities for electric power declined, but their sales increased. While orders in soil
remediation remained flat, sales declined in relation to the posting of sales of large-scale projects in the previous
fiscal year. Overseas, orders rose significantly on orders for large-scale projects in China and South Korea. Sales
also increased, reflecting progress in construction work for large-scale projects in the current fiscal year. Sales in
the ultrapure water supply business declined due partly to the effect of lower sales resulting from changes incontracts with a customer in the previous fiscal year, despite the posting of sales from expansion projects. The
Water Treatment Facilities segment overall achieved an increase in earnings due to higher sales and better
profitability achieved through thorough process control and cost management in installment in construction work.
As a result, total Group orders for the Water Treatment Facilities segment amounted to 161,088 million yen (up17.9% year on year). Sales amounted to 146,453 million yen (up 10.7% year on year). Operating income
amounted to 15,312 million yen (up 25.3% year on year).
(3) Status of capital expenditure
The Kurita Group carried out capital expenditure amounting to a total of 22,070 million yen (up 12,781 million
yen year on year).
The amount consists of capital expenditure in the Water Treatment Chemicals business largely used for expanding
and upgrading existing facilities of 2,809 million yen (up 986 million yen year on year), and in the Water
Treatment Facilities segment largely used for newly constructing and expanding facilities for the ultrapure watersupply business in Japan and South Korea of 19,261 million yen (up 11,794 million yen year on year).
(4) Status of financing
Not applicable to the Kurita Group.

– 26 –

[Translation for Reference and Convenience Purposes Only](5) Changes in assets and profit and loss
[The Kurita Group]
79th
Fiscal Year
2014

80th
Fiscal Year
2015

81st
Fiscal Year
2016

82nd
Fiscal Year
2017

Orders(Million yen)

181,282

221,273

218,730

251,447

Net sales(Million yen)

189,398

214,372

214,187

236,815

Operating income(Million yen)

19,435

19,833

19,452

22,47518,934

20,43920,074

22,104

Profit attributable toowners of parent(Million yen)

10,434

12,577

14,506

17,897

Net income per share
(Yen)

87.81

108.24125.23

159.37

Total assets(Million yen)

294,492

298,107299,249

323,046

Net assets(Million yen)

223,478

228,964

228,758

240,853

Net assets per share(Yen)

1,907.80

1,961.30

1,991.91

2,126.96

43

45

49

52

6

5

5

4

Classification

Profit andOrdinary income
Loss(Million yen)

AssetsConsolidated
Number of subsidiaries
Companies Equity method
affiliates(Notes)1.
2.
3.

Net income per share is calculated by deducting the number of treasury stock from the average
total number of issued shares during the fiscal year.
Net assets per share is calculated by deducting the number of treasury stock from the total number
of issued shares at the end of the fiscal year.
Treasury stock includes 333,000 shares of treasury stock for performance-linked stockcompensation to Directors, held by Japan Trustee Services Bank, Ltd. (Trust Account).

– 27 –

[Translation for Reference and Convenience Purposes Only](6) Issues to be addressed
In the CK-17 plan, the Kurita Group engaged in expanding overseas business, improving profitability throughbusiness process reform, and creating new products, services and business models. It did this by setting the basic
policy for the first and second years as “conduct a radical review of every operation to provide high added value
for our customers” and the basic policy for the fiscal year under review as “improve customer intimacy byproviding customers with best solutions.”
In respect of expanding our business overseas, we enlarged and reinforced our business foundations throughmeasures including acquisition of a Water Treatment Chemicals businesses in the U.S. and Europe,
reorganization of our overseas operational companies and establishment of a R&D center in Singapore, resulting
in overseas sales doubling in the past three years. As regards improving profitability, we are still in the middle ofthe business process reform and have not achieved a sufficient improvement yet although profitability inconstruction projects in the Water Treatment Facilities business got better through thorough cost control andstandardization of designing and other measures. With respect to the creation of new products, services andbusiness models, although we established the Solution Promotion Department and rolled out products andservices that used IT and sensing technologies, we are still short of making a shift to an overwhelmingly superiorbusiness model.
We position the present priority of the Kurita Group as accelerating the business process and business model
reforms toward enhancement of customer intimacy and a shift to a highly profitable structure.
Based on the above, when formulating the new medium-term management plan “MVP-22” (Maximize Value
Proposition 2022), which started in the fiscal year ending March 31, 2019, we aimed to achieve challenging andhigh goals. In order to do this, we extended the duration of the plan to five years from the current three years andrevised the corporate vision to “a ‘Creator of unique value to the solution of water and environment’ contributing
to the realization of a sustainable society,” thereby positioning CSR (Corporate Social Responsibility) activities
as the core of the management strategy.
In MVP-22 plan, we aim to become a Kurita Group that has high profitability and growth potential and isequipped with the ability to solve social challenges by means of creating and implementing new businessprocesses that exponentially enhance quality and speed and shifting to a business model that creates andprovides customer value and shared value with society.
MVP-22 plan is outlined as below:
New Medium-Term Management Plan “MVP-22” (Maximize Value Proposition 2022)(Period: from the fiscal year ending March 31, 2019 to the fiscal year ending March 31, 2023)
Basic policy: Maximize customer intimacy by redefining preconceived ideas and dramatically raising the quality
and speed of our work.
Management targets:
Annual average growth rate of net sales: 3% or more(organic growth excluding that from M&A and so on)
Operating income margin: 15%
Return on equity (ROE): 10% or more
Priority Measures:
1) Developing CSV (creating share value) business
Expand revenue with highly unique technologies, products and services that will contribute to the naturalenvironment, industry and people’s lives.
2) Enhancement of total solutions
Quickly provide customers with total solutions by making excellent use of water treatment chemicals, water
treatment facilities and maintenance technologies, products and services.
– 28 –

[Translation for Reference and Convenience Purposes Only]

3) Rebuilding of production system at Plants
Dramatically boost the quality and speed of production activities by fundamentally reviewing the production
system and process.
4) Creation of new businesses and the promotion of innovation
Expand and enhance existing business fields and create new ones that will become pillars for revenue5) Strengthening the foundation and promotion of research and development
Promote leading-edge research and development by building a solid foundation as a technology-oriented
company.
6) Establishment of Group governance system
Improve the effectiveness of internal control in the Group companies.

– 29 –

[Translation for Reference and Convenience Purposes Only](7) Principal businesses (As of March 31, 2018)
Since its founding, the Kurita Group has contributed to developing industry and society and conserving theenvironment through various business activities in the water and environment areas.
Major Principal products in each business segment of the Kurita Group are as follows:
Segment

Principal products

Boiler water treatment chemicals, cooling water treatment chemicals, airconditioning-related water treatment chemicals, process treatment
chemicals for oil refining and petrochemicals, process treatment chemicals
for paper and pulp, process treatment chemicals for steel, marine vesselrelated water treatment chemicals, wastewater treatment chemicals, sludge
Water Treatment Chemicals
dehydrating water treatment chemicals, civil engineering and construction
related treatment chemicals, dioxin treatment chemicals, heavy metalstabilizers, reverse osmosis membrane water treatment chemicals, chemical
dosing systems, ion exchanger resin, maintenance services and water
analysis

Water Treatment Facilities

Ultra-pure water production systems, pharmaceutical-use water production
systems, demineralizer, condensate demineralizers, filtration systems,
standard-type products (deionizers, wastewater treatment systems, various
water treatment systems), water and wastewater treatment systems forvarious industries (electronics, steel, oil refining, petrochemicals, electric
power, paper, pulp, pharmaceuticals, food products, etc.), wastewater
reclamation systems, high-performance liquid chromatography systems forindustrial use, marketable substance recovery systems, equipment for
generating biogas, seawater desalting equipment, swimming pool-related
equipment, ion exchanger resin, reverse osmosis membranes, ultrafiltration
membranes, functional water production equipment for the semiconductor
manufacturing process, water purifiers, ultrapure water supply,
maintenance services, tool cleaning services, chemical cleaning services,
operation and maintenance of water treatment facilities, soil andgroundwater remediation and household drinking water– 30 –

[Translation for Reference and Convenience Purposes Only](8)

Principal offices (As of March 31, 2018)
Head Office10-1, Nakano 4-chome, Nakano-ku, Tokyo

Osaka Office2-22, Kitahama 2-chome, Chuo-ku, Osaka-shi, Osaka

Branch Office
The Company

Production, R&D
facilities

Japan

Subsidiary
Overseas(Note)

Tohoku Office (Aoba-ku, Sendai-shi, Miyagi)
Nagoya Office (Naka-ku, Nagoya-shi, Aichi)
Hiroshima Office (Naka-ku, Hiroshima-shi, Hiroshima)
Kyushu Office (Hakata-ku, Fukuoka-shi, Fukuoka)
Shizuoka Plant (Yoshidacho, Haibara-gun, Shizuoka)
Tsuruga Plant (Tsuruga-shi, Fukui)
Yamaguchi Plant (Yamaguchi-shi, Yamaguchi)
Toyoura Plant (Shimonoseki-shi, Yamaguchi)
Kurita Global Technology Center (Nogi-machi, Shimotsuga-gun,Tochigi)
Kurita Chemical Manufacturing Ltd. (Ibaraki and others)
Kuritaz Co., Ltd. (Tokyo, Osaka and others)
Kuritec Service Co., Ltd. (Osaka and others)
Kurita Engineering Co., Ltd. (Osaka and others)
Hansu Technical Service Ltd. (South Korea)
Hansu Co., Ltd. (South Korea)
Kurita Water Industries (Dalian) Co., Ltd. (China)
Kurita Water Industries (Jiangyin) Co., Ltd. (China)
Kurita Water Industries (Suzhou) Ltd. (China)
Kurita (Singapore) Pte.Ltd. (Singapore)
Kurita Europe GmbH (Germany and others)
Kurita do Brasil Ltda. (Brazil)
Kurita America Inc. (United States)
Fremont Industries, LLC (United States)

The Company has 29 sales branch offices in addition to those listed above (including the Taiwan
Branch).

– 31 –

[Translation for Reference and Convenience Purposes Only](9)

Important subsidiaries (As of March 31, 2018)
Capitalization(In millions)Company name

Ownership(%)

Kurita Europe GmbHEUR 20100

Kurita Water Industries (Jiangyin)Co., Ltd.

USD 16100

Hansu Technical Service Ltd.

KRW 26,400

100

Hansu Co., Ltd.,KRW 2,500

87.1

Kuritaz Co., Ltd.

JPY 220

100

Kurita Engineering Co., Ltd.
Kuritec Service Co., Ltd.
Kurita Chemical Manufacturing
Ltd.

JPY 160
JPY 50100
100

JPY 50100

Principal business
Manufacture and sale of water
treatment chemicals
Manufacture and sale of water
treatment chemicals
Manufacture and sale of water
treatment facilities
Operation and maintenance of water
treatment facilities
Manufacture and sale of water
treatment chemicals
Operation and maintenance of water
treatment facilities
Chemical cleaning services
Tool cleaning services
Manufacture of water treatment
chemicals(10) Employees (As of March 31, 2018)[The Kurita Group]
Number of employees

Year-on-year change

6,011

+ 357

[The Company]
Number of employees

Year-on-year change

Average age

Average length of service

1,516

- 20

42.2

17 years and 1 month– 32 –

[Translation for Reference and Convenience Purposes Only](11) Important matters concerning the Kurita Group
1) Turning equity method affiliate Hansu Co., Ltd. into a consolidated subsidiary
As a measure for strengthening business in South Korea, one of the strategically important markets in Asia,
we acquired approximately 50% of the issued shares of Hansu Co., Ltd., an equity method affiliate in South
Korea, on November 30, 2017. As a result of the acquisition, our equity stake in Hansu Co., Ltd. increased
to 85%, and the company became our consolidated subsidiary.
Hansu Co., Ltd. was established in 1974 as a joint venture company of the Company, and has beendeveloping the Water Treatment Chemicals business in South Korea for more than 40 years. It has built
community-based sales and service networks and customer base and has a number of staff with knowledge
about water treatment in the electronics and other manufacturing industries.
In the South Korean market, there are growing fields including the electronics industry, allowing
expectations for the medium- and long-term expansion of domestic demand and further economic growth.
We will use the shift of Hansu Co., Ltd. to a consolidated subsidiary as an opportunity to facilitate theintegrated management of the Kurita Group, aiming to improve our cost competitiveness and strengthen ourmerchandising power. At the same time, we will provide high-value added water treatment solutions by
combining the distinctive technologies and services of the Kurita Group. We will also bolster cooperation
with Hansu Technical Service Ltd., which operates the Water Treatment Facilities business in South Korea,
to create various synergies by taking advantage of the Kurita Group’s comprehensive capabilities. We will
thereby increase our customer intimacy further with the aim of achieving a continuous increase in business.
2) Establishment of Kurita R&D Asia Pte. Ltd.
We established a new company, Kurita R&D Asia Pte. Ltd., in Singapore on April 29, 2017 to strengthen our
global research and development system.
As demand for water rises worldwide, water resources need to be used effectively. In this environment, weare focusing on developing technologies for desalination and the recycling of wastewater. Singapore has aconcentration of universities, research institutions, and corporate research and development facilities that are
involved in researching technologies related to water and the environment. By taking advantage of the meritof Singapore, we aim to expedite development and strengthen our technological capabilities.

– 33 –

[Translation for Reference and Convenience Purposes Only]

2.

Stock of the Company (As of March 31, 2018)(1)

Total number of issuable shares
531,000,000 shares(2)

Total number of issued shares
116,200,694 shares (including 3,592,832 shares of treasury stock)(3)

Number of shareholders as of March 31, 2018
22,467 persons(4)

Major shareholders (Top 10 shareholders)Name of shareholder

Number of shares
thousand shares

Ratio of shareholding%

Japan Trustee Services Bank, Ltd. (Trust Account)

7,518

6.67

Nippon Life Insurance Company

5,979

5.31

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

4,634

4.11

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

3,170

2.81

BNYMSANV AS AGENT/CLIENTS LUX UCITS NON
TREATY 1

2,482

2.20

Tokio Marine & Nichido Fire Insurance Co., Ltd.

2,155

1.91

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

2,068

1.83

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

2,056

1.82

State Street Bank West Client-Treaty 505234

1,841

1.63

Bank Julius Bär & Co. AG

1,784

1.58

(Notes)1.
2.
3.

Treasury stock held by the Company is omitted from the above table.
Ratio of shareholding is calculated based on the number of shares after deduction of the number oftreasury stock from the total number of issued shares.
Treasury stock does not include 333,000 shares of treasury stock for performance-linked stockcompensation to Directors, held by Japan Trustee Services Bank, Ltd. (Trust Account).

– 34 –

[Translation for Reference and Convenience Purposes Only](5)

Other important matters regarding stock1) Holdings of the Company stock by means of a trust pertaining to the performance-linked stockcompensation plan
As of March 31, 2018, holdings of 333,566 shares of the Company stock have been acquired by the stock
distribution trust established with monetary funds contributed by the Company on the basis of the performancelinked stock compensation plan which was adopted upon resolution made at the 80th Ordinary General Meetingof Shareholders held on June 29, 2016 and held by Japan Trustee Services Bank, Ltd. (Trust Account).
2) Market purchase of treasury stock
At a meeting of the Board of Directors held on February 28, 2017, the Company resolved to acquire its own
shares based on the provisions of Article 156 of the Companies Act, as applied by replacing the relevant terms
based on the provisions of Paragraph 3, Article 165 of the Act, with the aim of improving capital efficiency andensuring a flexible capital strategy in response to a changing business environment. In accordance with that
resolution, the Company acquired 2,004,400 shares of treasury stock (total amount of acquisition: 5,586,909,400yen), by means of market purchase on the Tokyo Stock Exchange during the period from April 1, 2017, to May
25, 2017. The total acquisition amounts to 9,999,899,600 yen, consisting of 3,586,300 shares of treasury stockacquired during the period from March 2, 2017 to May 25, 2017 (final day of the acquisition period).
3) Cancellation of treasury stock
By resolution of the Board of Directors on January 30, 2015, the Company acquired 2,963,900 shares of treasury
stock. However, the same resolution concurrently stipulated that “the Company shall keep the disposition of theacquired treasury stock in preparation for the use of it as cash considerations for possible M&A and shall make adecision about the disposition of the treasury stock by March 31, 2017.” With that deadline looming, theCompany resolved to cancel the treasury stock pursuant to Article 178 of the Companies Act at a meeting of theBoard of Directors held on March 30, 2017, considering factors such as cash flows, the future development ofoperations, shareholder returns, capital efficiency, and capital policy, and in order to alleviate shareholder
concerns over the dilution of stock value. As of April 6, 2017, the Company cancelled treasury stock amounting
to 2,963,900 shares (equivalent to 2.49% of total number of issued shares before the cancellation), in accordancewith that resolution. There is a total of 116,200,694 issued shares subsequent to the cancellation.

– 35 –

[Translation for Reference and Convenience Purposes Only]

3. Directors and members of the Audit & Supervisory Board of the Company (As of March 31, 2018)(1)

Directors and members of the Audit & Supervisory Board
Name

Responsibility andimportant concurrent positions

Position

Michiya Kadota

President andRepresentative Director

Kouichi Iioka

Executive Senior Managing
Director and Representative
Director

General Manager of Global Business Division andin charge of the Chemicals Division

Kiyoshi Itou

Managing Director

General Manager of Group Administrative
Division

Takahito Namura

Managing Director

General Manager of Research and Development
Division

Toshitaka Kodama

Managing Director

General Manager of Sales II Division and in
charge of the facilities businessYoshio Yamada

Director

General Manager of Sales I Division

Ikuo Ishimaru

Director

General Manager of Group Quality & Production
Division

Hirohiko Ejiri

Director

General Manager of Corporate Planning Division

Tsuguto Moriwaki

Director(External Director)

Ryoko Sugiyama

Director(External Director)

Shiro Hayashi

Full-time member of the Audit& Supervisory Board

Kenjiro Kobayashi

Full-time member of the Audit& Supervisory Board(External member of the Audit& Supervisory Board)

Shigekazu TorikaiMember of the Audit &Supervisory Board(External member of the Audit& Supervisory Board)(Notes)

1.

2.

3.
4.

5.

Head and Chair of the Board, Gifu Shimbun Co.,Ltd.
External Director and Audit and Supervisory
Committee Member of LECIP Holdings
Corporation
External Director of UACJ Corporation
Director, Gifu Sugiyama Memorial Foundation, apublic interest incorporated foundation

Representative Lawyer, Torikai Law Office
External Director of United Super Markets
Holdings Inc.
Representative Director, Nikkeizei Co., Ltd.

Ms. Ryoko Sugiyama was newly elected as a Director and Mr. Shigekazu Torikai was newly
elected as a member of the Audit & Supervisory Board at the 81st Ordinary General Meeting of
Shareholders held on June 29, 2017.
Messrs. Toshiyuki Nakai and Seiji Nakamura retired from the office of Director, and Mr. Tamio
Uda retired from the office of member of the Audit & Supervisory Board at the conclusion of the
81st Ordinary General Meeting of Shareholders held on June 29, 2017.
Directors Tsuguto Moriwaki and Ryoko Sugiyama are External Directors of the Company under
Item 15, Article 2 of the Companies Act.
Members of the Audit & Supervisory Board Kenjiro Kobayashi and Shigekazu Torikai are external
members of the Audit & Supervisory Board of the Company under Item 16, Article 2 of theCompanies Act.
Member of the Audit & Supervisory Board Kenjiro Kobayashi has considerable insight withrespect to finance and accounting, having handled operations that include the investment and loan
– 36 –

[Translation for Reference and Convenience Purposes Only]

6.

business of Japan Development Bank (currently, Development Bank of Japan Inc.) for 27 years
until his appointment as a member of the Audit & Supervisory Board of the Company.
On April 1, 2018, the following changes were made in the position and responsibility of Directors.
Name

Position

Responsibility and important concurrent positions

Kouichi Iioka

Chairman and Director In charge of Global Business Division

Kiyoshi Itou

Executive Senior
Managing Director
and Representative
Director

General Manager of Corporate Planning Division

Takahito Namura

Managing Director

General Manager of Solution Business Division

Yoshio Yamada

Managing Director

Ikuo Ishimaru

Director

Hirohiko Ejiri

Director

7.

General Manager of Sales I Division and in
charge of the chemicals business(part time)
President and Representative Director of Kurita
Engineering Co., Ltd.
General Manager of Group Quality & Production
Division

The Company has registered the following individuals as independent officers with the Tokyo
Stock Exchange, Inc.
Director
Tsuguto Moriwaki
Director
Ryoko Sugiyama
Member of the Audit & Supervisory Board
Kenjiro Kobayashi
Member of the Audit & Supervisory Board
Shigekazu Torikai(2) Outline of agreements for limitation of liability with external officers
The Company has entered into an agreement with External Directors Tsuguto Moriwaki and Ryoko Sugiyama,
and an external member of the Audit & Supervisory Board Shigekazu Torikai that limits liability for damages
stipulated in Paragraph 1, Article 423 of the Companies Act in accordance with the provisions of the Articles ofIncorporation thereof based on the provisions of Paragraph 1, Article 427 of the Act. The amount stipulated in
Paragraph 1, Article 425 of the Act has been set as the maximum liability for damages based on this agreement.
(3)

Policies and procedures for determining the remuneration of the Directors and the members of the
Audit & Supervisory Board
The remuneration system for the Company’s Directors (excluding the External Directors) consists of fixed
remuneration as the basic remuneration and incentive remuneration that reflects performance. The remuneration
system for External Directors with supervising functions and members of the Audit & Supervisory Board is a
fixed remuneration system. The fixed remuneration is a fixed amount by position for the Directors and by working
form for the members of the Audit & Supervisory Board, and a portion thereof is appropriated for the Directors’
and the members of the Audit & Supervisory Board’s Shareholding Scheme for the purchase of the Company’s
shares so that the Directors and the members of the Audit & Supervisory Board share the risks of share pricefluctuations with the shareholders. The incentive remuneration consists of short-term incentive remuneration,
which increases or decreases depending on factors such as the level of attainment of the annual business plan or
the evaluation of each individual’s performance of his or her duties and long-term incentive remuneration,
whereby shares are issued to retiring directors according to their performance while in office and their title. The
incentive remuneration is intended to motivate Directors (excluding the External Directors) to continuously
improve the Kurita Group’s business results for the enhancement of corporate value.
Regarding the remuneration system and the remuneration level of the Directors and the members of the Audit &Supervisory Board and the performance evaluation of the Directors (excluding External Directors), theChairperson of the Board of Directors will consult the Nomination & Remuneration Advisory Council in advance.
Based on the report given by the Nomination & Remuneration Advisory Council, the Board of Directors will
decide the remuneration of the Directors within the total amount determined by a General Meeting of
Shareholders. The Nomination and Remuneration Advisory Council consists of the four members of two External– 37 –

[Translation for Reference and Convenience Purposes Only]

Directors, one full-time external Member of the Audit & Supervisory Board, and the President and is chaired by
an External Director. The allocation of remuneration to each member of the Audit & Supervisory Board shall bedecided through discussions among members of the Audit & Supervisory Board.
(4)

Remuneration of Directors and members of the Audit & Supervisory Board during the fiscal year
under review
Classification

Number of payees

Amount of remuneration

Director

12(including three External
Directors)

540 million yen

Member of the Audit &Supervisory Board

4(including three external membersof Audit & Supervisory Board)

81 million yen

External officers

6

75 million yen(Notes)

1.
2.
3.

4.

5.

6.
7.

(5)

The above includes two Directors and one member of the Audit & Supervisory Board who retired
at the conclusion of the 81st Ordinary General Meeting of Shareholders held on June 29, 2017.
Remunerations for the Directors do not include the employee salaries paid to the Directors who
concurrently serve as employees.
At the 72nd Ordinary General Meeting of Shareholders held on June 27, 2008, a resolution was
passed to set the amount of remuneration for Directors (excluding External Directors) at a
maximum of an annual 800 million yen (excluding the employee salaries paid to Directors who
concurrently serve as employees).
At the 80th Ordinary General Meeting of Shareholders held on June 29, 2016, a resolution wasmade to pay performance-linked stock compensation (long-term incentive remuneration) to
Directors (excluding External Directors) from a separate fund from that shown in 3. above.
From the fiscal year ended March 31, 2018, the Company will record the estimates of money to be
paid for short-term incentive remuneration and long-term incentive remuneration as provisions asof March 31, 2018. The amounts of remuneration paid to Directors stated above include 145
million of provision for short-term incentive remuneration for the fiscal year under review and 104
million of provision for long-term incentive remuneration for the fiscal year under review.
In addition to the above-stated remuneration paid to Directors, 84 million yen of short-term
incentive remuneration for the previous fiscal year has been paid to Directors.
In addition to the above-stated remuneration paid to Directors, 92 million yen of provision for
long-term incentive remuneration for the previous fiscal year has been recorded in May 2017.

External Directors and external members of the Audit & Supervisory Board

1) The important concurrent positions that External Directors and external members of the Audit &Supervisory Board hold at other companies are described in the aforementioned “(1) Directors and membersof the Audit & Supervisory Board.”– 38 –

[Translation for Reference and Convenience Purposes Only]

2) Principal activities of External Directors and external members of the Audit & Supervisory Board
Name

Position

Principal Activities

External Director

Mr. Moriwaki attended all 12 Board of Directors
meetings (attendance rate: 100%) held during the fiscal
year under review.
He questions and expresses his opinions from his
professional standpoint as an external director over thecourse of deliberations on proposals and confirmationsof matters reported, drawing on his career backgroundacting as representative director of listed companies indifferent industries and based on his experience andinsight with respect to manufacturing and corporate
reform.

Ryoko Sugiyama

External Director

Ms. Sugiyama attended 8 of 9 Board of Directors
meetings (attendance rate: 88.8%) held after she wasappointed as a Director at the 81st Ordinary General
Meeting of Shareholders on June 29, 2017.
She poses questions and expresses her opinions overthe course of deliberations on proposals andconfirmations of matters reported from an outsider’s
perspective in general, drawing on her careerbackground acting as an external director, etc. at listedcompanies in other industries in addition to hersignificant knowledge of the environment and waste.

Kenjiro Kobayashi

Mr. Kobayashi attended all 12 Board of Directors
meetings and all 12 Audit & Supervisory Board
meetings (each attendance rate: 100%) held during the
fiscal year under review.
External member of the
He conducts daily audits as a full-time member of the
Audit & Supervisory Board Audit & Supervisory Board, and expresses his
opinions in the Board of Directors meetings, Audit &Supervisory Board meetings and other important
meetings, in part based on his expert perspective infinance and accounting.

Shigekazu Torikai

Mr. Torikai attended all 9 Board of Directors meetings
and all 9 Audit & Supervisory Board meetings (eachattendance rate: 100%) held after he was appointed asa member of the Audit & Supervisory Board at the 81stExternal member of the
Audit & Supervisory Board Ordinary General Meeting of Shareholders on June 29,
2017.
He expressed his opinions from his professional
standpoint as an attorney at law.

Tsuguto Moriwaki– 39 –

[Translation for Reference and Convenience Purposes Only]

4. Accounting Auditor(1)

Name of Accounting Auditor
Grant Thornton Taiyo LLC(2)Remuneration to Accounting Auditor for the fiscal year under review
Amount of
remuneration

Classification
Amount of Remuneration paid by the Company for the fiscal year underreview

49 million yen

Sum of the amount of money and other material advantage to be paid by theCompany and its subsidiaries to Accounting Auditor

62 million yen(Notes)(3)

1.

The amount of remuneration listed above in the row “Amount of Remuneration paid by theCompany for the fiscal year under review” has been determined on the basis of the audit agreement
entered into between the Company and the Accounting Auditor. The above paid amount is the totalof payments since the remuneration from audits pursuant to the Companies Act and Financial
Instruments and Exchange Act are not clearly divided or cannot be practically divided.

2.

The amount listed in the row, “Sum of the amount of money and other material advantage to be
paid by the Company and its subsidiaries to Accounting Auditor” includes remuneration for nonaudit services involving preparation of application forms and certificates.

3.

The Audit & Supervisory Board has furnished its consent with respect to remuneration, etc. of the
Accounting Auditor, upon having conducted requisite validation of the audit plan of the
Accounting Auditor, evaluations of results of prior fiscal year audits, status of executing duties, andrationale used for calculating quotations for remuneration.

4.

Among the Company’s significant subsidiaries, Kurita Europe GmbH, Kurita Water Industries(Jiangyin) Co., Ltd., Hansu Technical Service Ltd. and Hansu Co., Ltd are audited by Certified
Public Accountants or audit corporations (including persons or entities with equivalentqualifications overseas) other than the Company’s Accounting Auditor.

Policy on decision to dismiss or not reappoint Accounting Auditor

Where the Audit & Supervisory Board deems the Accounting Auditor corresponds to the provisions ofParagraph 1, Article 340 of the Companies Act based on the agreement of the all members of Audit &Supervisory Board, the Accounting Auditor will be dismissed.
Moreover, the Audit & Supervisory Board evaluates the Accounting Auditor in terms of its auditing frameworks,
independence and expertise, and if deemed necessary, determines the content of proposals calling for the dismissal
or non-reappointment of the Accounting Auditor, particularly if the Audit & Supervisory Board finds it difficult
for the Accounting Auditor to execute its duties appropriately. Meanwhile, the Board of Directors submits suchproposals to general meetings of shareholders, pursuant to such decision by the Audit & Supervisory Board.

– 40 –

[Translation for Reference and Convenience Purposes Only]

5. System to ensure that the execution of the duties of Directors conforms with laws, regulations, and the
Articles of Incorporation and other systems to ensure appropriate operations
The Kurita Group’s Basic Policies for Constructing an Internal Control System (May 19, 2017 Partial Revision)
are as follows.
(1)

System to ensure that the execution of the duties of Directors and employees conforms with laws,
regulations, and the Articles of Incorporation

1)

The Company and its consolidated subsidiaries (the “Group Companies”), have set “compliance with laws
and regulations in accordance with social ethics and the construction of transparent and fair relationships
with shareholders, customers, employees, local communities, and trade partners at all places in whichbusiness activities are conducted” as one of the management guidelines, and have specified actions basedon compliance with laws, regulations, and social ethics as a prerequisite for corporate activities. Based on
this management guidelines, we have established Core Values (fairness, transparency, integrity, safety andcompatibility) that officers and employees should emphasize, and the Kurita Group Code of Conduct withwhich officers and employees should comply, transcending differences in their language, custom andcultural background, to fully enforce actions based on compliance with laws, regulations and social ethics
in our daily business activities. In addition, the Company and the Group Companies will stand up to
antisocial forces that potentially pose a threat to social order and safety with a resolute attitude, and work
to fight off the unjustified claims of antisocial forces in a determined manner.

2)

The Company sets up the E&S (Environmental & Social) Committee, which is chaired by the Director, and
the Group E&S Committee, which is also chaired by the same Director and whose members are therepresentatives of the Group Companies. In these Committees, the members set out policies and importantmeasures for compliance activities, and convey them to all employees through the divisions, the businessdivisions, and the department committees of the Group Companies. The Company will also work
continuously to raise the compliance level by regularly reporting the status of activities and their results to
the Board of Directors. If the Chairman of these Committees determines that there is a serious problem or a
doubt related to compliance, the Chairman will immediately report it to the President and Representative
Director, and then formulate and implement remedial actions and preventive measures. The President andRepresentative Director or the Chairman of these Committees will report these events to the Board of
Director and the Audit & Supervisory Board whenever appropriate.

3)

The Company establishes the Internal Auditing Department, which is placed under the direct control of the
President and Representative Director, to conduct internal audits on matters such as those related tocompliance activities.

4)

The Company establishes the Public Interest Whistle-Brower Protection Regulations as a mechanism forthe employees of the Company and the Group Companies to directly provide information about legally
doubtful conducts, etc. In conjunction with these regulations, the Company also establishes theCompliance Counselling Office. The Company also works to ensure the fairness and transparency of the
management of the Company and the Group Companies by regularly reporting the status of the operationof the contact for Public Interest Whistle-Blowing to the Board of Directors.

5)

The Company develops and operates the “Internal Control Reporting System” in accordance with the
Financial Instruments and Exchange Act to ensure the accuracy of the financial reporting of the Company
and the Group Companies. Monitoring, recommendations for improvement, and support for improvement
for the operation of the System are implemented, with the Internal Auditing Department as the responsible
department. In addition, the Accounting Department in the Corporate Planning Division shares
responsibility for monitoring, recommendations for improvement, and support for improvement related to
the “operations process control inside the Company” and the “financial reporting process control ofconsolidated subsidiaries from a company-wide perspective.”

6)

In response to the “Corporate Governance Code” set forth in the Securities Listing Regulations of Tokyo
Stock Exchange, Inc., the Company establishes policies for corporate governance and strengthens its– 41 –

[Translation for Reference and Convenience Purposes Only]

corporate governance, with the aim of realizing transparent, fair, prompt, and decisive decision-making andmore effective management supervision of the Company and the Group Companies.
Outline of operational status(a)

Having defined the objective of initiatives on CSR as “creating and maximizing shared value for the Kurita
Group and society” and “identifying, preventing and mitigating possible adverse impacts by the Kurita
Group,” the Company identified seven material issues (primary focused area) related to CSR and finalized
them as “CSR Policy” in January 2018, including what we should be like and the frame of mind that weshould maintain firmly in 2030.

(b)

To enhance the effectiveness of the Kurita Group Code of Conduct formulated on October 1, 2016, theCompany set forth the Group Companies’ shared policies on human rights, the environment, compliancewith competition laws and personal information management, thereby promoting the establishment of theKurita Group Business Policy in the fiscal year ended March 31, 2018.

(c)

The Company, on November 1, 2017, formulated and is operating the Regulation for Responding to Antisocial Forces that prescribes matters relating to an organizational structure and other approaches to cutting
any relations with anti-social forces.

(d)

The E&S Committee holds meetings regularly to check the state of progress of key measures and issues.

(e)

The Company and the Group Companies have been conducting questionnaires on compliance on an annual
basis. They have been drawing on questionnaire results to monitor progress with respect to improvements,
pinpointing issues, and then reflecting those finding in activity policies for the subsequent fiscal year.

(f)

The Company and the Group Companies have been operating whistle-blowing system of internal control.
They have accordingly established the Public Interest Whistle-Blower Protection Regulations and have set
up consultation desk and reporting desk operated by outside organizations.

(g)With respect to internal controls for financial reporting, a team dedicated to such tasks from the Internal
Auditing Department has been engaging in monitoring in accordance with fiscal year plans, and the
Accounting Department in the Corporate Planning Division has also been taking on some responsibility inthat regard. The Company has also been monitoring the effectiveness of respective controls.

(h)

The Company revises our policies on corporate governance regularly (at least once a year) or as necessary
and tightened the criteria for judging the independence of Independent External Directors in the fiscal year
ended March 31, 2018.

(2)

System to store and manage information about the execution of the duties of Directors

Information about the execution of the duties of Directors is recorded and stored in documents or electromagnetic
media in accordance with the Document Regulations and the Confidential Information Management Regulations
established by the Board of Directors. The Directors and members of the Audit & Supervisory Board may inspectthese documents, etc. when necessary.
Outline of operational status
Original copies of such information are being stored in vaults, and duplicates are being kept in locked document
cabinets under stringent control. In addition, the Company has stipulated that those who have been granted
permission to view documents must follow certain procedures in that regard, under the Company’s regulations.
(3)Regulations and other systems for managing the risk of loss

1)

Risks pertaining to the Company and the Group Companies are monitored and risk management is
promoted, with the General Manager of the Corporate Planning Division acting as the officer in charge.
The General Manager of the Corporate Planning Division regularly analyzes and assesses the risks of theCompany and the Group Companies, and makes efforts to prevent the occurrence of risks throughcontinuous monitoring. If a risk that may have a material impact on management arises, the General
Manager of the Corporate Planning Division will appoint a responsible official, draw up a system toaddress the risk, and immediately issue a command after gaining the approval of the President andRepresentative Director. The responsible official will immediately implement countermeasures and report– 42 –

[Translation for Reference and Convenience Purposes Only]

the impact of the risk, the status of correcting the risk, and the measures for preventing the risk to the
President and Representative Director and the General Manager of the Corporate Planning Division.
2)

In regards to serious risks, the Chairman of the E&S Committee will be the responsible official for risks
related to compliance, and the Chairman of the Headquarters Health and Safety Committee will be theresponsible official for risks related to health, safety, and disasters. Risks that are directly related to daily
business activities are addressed by the general manager of each business division and division, who acts
as the responsible official. Other day-to-day risks related to quality, the environment, information security,and export regulations, etc. are addressed by their respective departments.

3)

The General Manager of the Corporate Planning Division, the Chairmen of the Committees, and thegeneral managers of the business divisions and divisions regularly report the status of activities to promoterisk management and compliance to the Board of Directors, and report the occurrence and result ofmaterial risks to the Board of Directors and the Audit & Supervisory Board whenever appropriate.

4)

The status of the implementation of risk management and improvements is monitored, with the Internal
Auditing Department acting as the responsible department.

Outline of operational status(a)

The Company and the Group Companies have adopted risk management systems whereby risk is
categorized either as “Group-wide risk” which must be addressed by the entire Kurita Group such as in theevent of an earthquake or other disaster, or as “business risk” which derives directly from daily businessaffairs. The Company and the Group Companies have also been conducting review on an annual basis ofrisk maps. The risk maps indicate probabilities of risks materializing, profile the impact and magnitude of
impact that a risk event would pose, and assess the significance of such situations. To such ends, theCompany and the Group Companies have been striving to prevent risk from materializing by implementing
prevention measures, and otherwise have been preparing themselves to address unforeseen circumstancesby establishing action plans for risk events.

(b)

The Company and the Group Companies have established legal violation risk maps, and accordingly
engage in practices that involve identifying major risks of legal violation and regularly monitoring
implementation of initiatives in that regard.

(c)

The Board of Directors has been regularly receiving reports regarding the promotion status of risk
management and compliance activities, and the Board of Directors and the Audit & Supervisory Board
have been receiving reports whenever appropriate with respect to the occurrence and materializing ofsignificant risk events.

(d)

The status of the implementation of risk management and improvements is monitored, with the Internal
Auditing Department acting as the responsible department.

(4)

System to ensure the efficient execution of duties by the Directors

The Company will improve the efficiency of the execution of duties of the Directors based on the following
management control system and mechanism.
1)

The Board of Directors specifies the operations delegated to the Directors, the executive officers, and the
responsible officials of organizations (managerial personnel with the rank higher than general manager of adivision or an office).

2)

The Board of Directors formulates a long-term vision, a medium-term management plan, and a businessplan for a single fiscal year, and sets out the targets, policies, and focused measures for each organization.
The Board of Directors also implements monthly and quarterly business controls in relation to theconsolidated and non-consolidated targets of the Company and the business departments.

3)

The final decision application system is set up, in line with the Executive Committee and the Final
Decision and Examination Regulations, as a decision-making system to complement the resolutions madeat the Board of Directors meetings.

4)

The Executive Committee makes decisions and conducts a review of matters resolved at the Board of
Directors meetings and the Executive Committee to facilitate the decision-making progress when necessary.
– 43 –

[Translation for Reference and Convenience Purposes Only]

The Executive Committee consists of the President and Representative Director, Directors with a rank ofManaging Director or above, the General Manager of the Corporate Planning Division, and the Directors
and executive officers appointed by the President and Representative Director. The committee meets twicea month in principle, and on a temporary basis when necessary. In the Executive Committee, the members
deliberate matters related to the management of the Company and the Kurita Group, conduct a monthly
and quarterly check of whether targets have been achieved and the status of implementation of policies andmeasures, and give the Directors and the executive officers in charge instructions to correct deviations. The
members of the Audit & Supervisory Board may attend the Executive Committee.
5)

The decision to establish, revise, or abolish the Final Decision and Examination Regulations is made by the
Board of Directors. For the Directors and the executive officers to conduct their duties more efficiently,internal regulations conforming to the Final Decision and Examination Regulations are established andimplemented.

Outline of operational status(a)

To enable the Board of Directors to better provide strategic direction that contributes to the Kurita Group’s
sustainable growth, make decisions on important matters related to operational execution, and exercise
supervisory functions over the execution of duties, the Company, in April 2017, reviewed and is operating
the Final Decision and Examination Regulations including delegation of authority to the Executive
Committee related to execution of duties and a reduction of reporting items on the state of execution ofduties.

(b)

The Executive Committee has been making judgments and decisions on matters that have been delegatedto it by the Board of Directors, and has been conducting review with respect to agenda items for meetingsof the Board of Directors. Executive Committee members include the President and Representative
Director, Directors with a rank of Managing Director or above, the General Manager of the Corporate
Planning Division, and the Directors and executive officers appointed by the President and Representative
Director. The committee has been meeting twice a month in principle, and on a temporary basis whennecessary. The full-time members of the Audit & Supervisory Board have been attending meetings of the
Executive Committee.

(5)

System to ensure the accuracy of operations in a corporate group consisting of the Company and its
subsidiaries

The Company and the Group Companies perform operations appropriately by the following systems and theframeworks that are in place.
1)

The Company and the Group Companies set a medium-term management plan and a business plan for asingle fiscal year based on a unified outline for formulating plans.

2)

The overall management of the Group Companies is controlled by the Corporate Planning Division. In
addition, an officer and a department of the Company in charge of each Group Company are appointed toregularly determine the status of the business performance achieved and the status of risk management
based on the medium-term management plan and the business plan for a single fiscal year, and to provide
the Group Companies with guidance.

3)

A Board of Directors is set up in each Group Company, and the Company or the Group Companies
dispatch a (non-standing) Director and (non-standing) member of the Audit & Supervisory Board tomonitor the management, business performance, settlement of accounts, and risks. If a decision needs to bemade as the Group, the Executive Committee of the Company deliberates the matter and makes thedecision in accordance with “7. Matters related to subsidiaries and associates in Japan and overseas,” anappendix of the Final Decision and Examination Regulations of the Company, or the Board of Directors or
the Executive Committee of the Company makes the decision.

4)

In regards to the Group Companies’ efforts related to compliance, the Group E&S Committee stated in
Paragraph 2, Article 1 of the Basic Polices for Constructing an Internal Control System sets out policies
and implements specific measures. In addition, the system for ensuring the accuracy of the financial– 44 –

[Translation for Reference and Convenience Purposes Only]

reporting by the Group is considered and established as part of the approaches stated in Paragraph 5,
Article 1.
5)

The Group Companies report the status of their management, sales activities, manufacturing, and risk
management, etc. to the Company regularly, such as on a monthly or quarterly basis.

Outline of operational status(a)

The Company and the Group Companies have set a medium-term management plan and a business plan
for a single fiscal year based on a unified outline for formulating plans. Meanwhile, the President andRepresentative Director of the Company has been holding management plan review sessions withrespective Group Companies, and has been making decisions on general matters with respect to the fiscal
year and plans for the subsequent fiscal year. The overall management of Group Companies is controlled
by the Corporate Planning Division.

(b)

The Group E&S Committee, the Group Health and Safety Committee, and other such bodies have been
regularly providing an understanding of circumstances with respect to compliance and risk management ofGroup Companies, and have been providing necessary guidance in that regard.

(c)Members of the Audit & Supervisory Board have been conducting audits and surveys with respect to theCompany and the Group Companies in accordance with audit policies and audit plans, etc. established by
the Audit & Supervisory Board.

(6)

Matters related to an employee if a member of the Audit & Supervisory Board requests theassignment of the employee to assist him/her, matters related to the independence of the employee
from the Directors, and matters related to ensuring the effectiveness of instructions issued to theemployee

1)

The Audit & Supervisory Board of the Company may appoint a full-time assistant. If a full-time assistant is
not appointed, a member of the Audit & Supervisory Board may instruct a certain employee who belongs
to the Internal Auditing Department to assist his/her auditing work as necessary.

2)

The employee who assists the auditing work of the member of the Audit & Supervisory Board inaccordance with the instruction described in the preceding paragraph provides assistance independent of
the Directors and within the necessary scope of assistance. In addition, the opinions of the member of the
Audit & Supervisory Board are respected regarding personnel changes and evaluations, etc. of theemployee.

3)

The employee who assists the auditing work of the member of the Audit & Supervisory Board may
regularly attend places where opinions are exchanged between the Representative Director and the
Accounting Auditor within the company of the member of the Audit & Supervisory Board.

Outline of operational status
The Audit & Supervisory Board of the Company has no full-time assistant. However, to help members of the
Audit & Supervisory Board perform sufficient audit work, the General Manager of Internal Auditing Department
supports the Audit & Supervisory Board in audit work as the secretariat of the Audit & Supervisory Board, andmembers of the Audit & Supervisory Board give instructions to specific employees in the Internal Auditing
Department to assist audit work as necessary.
(7)

System for the Directors and employees of the Company and Group Companies to report to the Audit& Supervisory Board, and other systems for reporting to the Audit & Supervisory Board

1)

In order to regularly confirm that the Directors and employees of the Company perform operations
appropriately, the members of the Audit & Supervisory Board are required to attend the Board of Directors
meetings. They may also attend the Executive Committee and the E&S Committee, etc.

2)

The members of the Audit & Supervisory Board of the Company may inspect documents, etc. necessary
for their auditing work at any time, irrespective of the provisions of the Document Regulations, theConfidential Information Management Regulations, and other regulations.
– 45 –

[Translation for Reference and Convenience Purposes Only]

3)

The Directors of the Company report important matters related to the execution of duties to the members of
the Audit & Supervisory Board or the Audit & Supervisory Board whenever appropriate through the Boardof Directors meetings and other important meetings.

4)

The employees of the Company and the Directors, the members of the Audit & Supervisory Board, and theemployees of the Group Companies report matters stipulated in laws and regulations as well as cases ofcompliance violations, cases in dispute, the occurrence of material risks, and matters related to accounting
and the settlement of accounts, etc. to the respective departments in charge within the Company. The
departments in charge report the details of reports from the employees of the Company and the Directors,
the members of the Audit & Supervisory Board and employees of Group Companies to the members of the
Audit & Supervisory Board or the Audit & Supervisory Board when necessary. In addition, thedepartments in charge also make necessary reports at the request of a member of the Audit & Supervisory
Board.

5)

The Company prohibits those who made a report to a department in charge, a member of the Audit &Supervisory Board, or the Audit & Supervisory Board in accordance with the provisions of the preceding
paragraph from being treated unfavorably on the grounds of making a report, and makes this fact fully
known to the Directors and employees of the Company and the Group Companies.

Outline of operational status(a)

Each member of the Audit & Supervisory Board has been attending the Board of Directors meetings andother important meetings such as those of Executive Committee and E&S Committee, and has been
performing audits of Directors with respect to their execution of duties.

(b)

The Directors of the Company have been reporting important matters related to the execution of duties tothe members of the Audit & Supervisory Board or the Audit & Supervisory Board whenever appropriate,through the Board of Directors meetings and other important meetings.

(c)

The employees of the Company, and the Directors and the employees of the Group Companies report on
the matters stipulated in laws and regulations as well as cases of compliance violations, cases in dispute,the occurrence of material risks, and matters related to accounting and the settlement of accounts, etc. tothe departments in charge within the Company. The departments in charge report on the details of thereports from the employees of the Company, and the Directors and employees of Group Companies to themembers of the Audit & Supervisory Board or the Audit & Supervisory Board when necessary. In addition,
the departments in charge also make the necessary reports at the request of a member of the Audit &Supervisory Board.

(d)In accordance with the Public Interest Whistle-Blower Protection Regulations, the Company and the Group
Companies have prohibited the unfair treatment of those who have reported information set forth in theprevious paragraph, on the ground of having made such a report.

(8)

Other systems to ensure the effective auditing of the Audit & Supervisory Board

1)

A meeting for the President and Representative Director and the members of the Audit & Supervisory
Board or the Audit & Supervisory Board to exchange opinions is held regularly.

2)

The Audit & Supervisory Board establishes standards for appointing, dismissing, and refusing to reappoint
the Accounting Auditor, and nominates a candidate for the Accounting Auditor. The Company and theGroup Companies secure sufficient amount of time for the Accounting Auditor to conduct a high-quality
audit. The members of the Audit & Supervisory Board, the Internal Auditing Department, and the
Accounting Auditor promote a cooperation by mutually checking each other’s audit plans and sharing theirconcerns.

3)

The members of the Audit & Supervisory Board or the Audit & Supervisory Board hold discussions andexchange opinions with the Internal Auditing Department and the Accounting Auditor when necessary.

4)

The Audit & Supervisory Board allocates expenses that are deemed necessary for the execution of duties inadvance. However, the Audit & Supervisory Board may charge the Company postmortem for expenses it
spent on urgent or provisional matters.
– 46 –

[Translation for Reference and Convenience Purposes Only]

Outline of operational status(a)Members of the Audit & Supervisory Board have been regularly holding meetings for exchanging opinionswith the President and Representative Director of the Company in order to facilitate mutual understanding
and further develop relationships of trust.

(b)

The Audit & Supervisory Board establishes standards for appointing, dismissing, and refusing to reappoint
the Accounting Auditor, and nominates a candidate for the Accounting Auditor.

(c)Members of the Audit & Supervisory Board have been holding discussions and exchanging opinions with
the Internal Auditing Department whenever appropriate, and have otherwise been taking steps to promote
cooperation by mutually checking each other’s audit plans and regularly exchanging opinions throughforums such as briefing sessions for reporting on settlement of accounts and audit results.

Basic Policies for Constructing an Internal Control System are made available to the public via the following URL
on the Company’s website on the Internet upon revision by resolution of the Board of Directors.
We made slight changes to meet the formulation of the Kurita Group Philosophy System as of April 1, 2018.
(http://ir.kurita.co.jp/en/corporate_governance/internal_control_system/index.html)– 47 –

[Translation for Reference and Convenience Purposes Only]

Consolidated Financial Statements
Consolidated Balance Sheet (As of March 31, 2018)
Account item

AmountAccount item

AssetsCurrent assets
Cash and deposits
Notes receivable – trade
Accounts receivable – trade162,004
61,086
7,870
78,994

Liabilities
Current liabilities
Notes payable – trade
Accounts payable – tradeMarketable securities
Finished products
Work in process
Raw materials and supplies

3
3,968
3,621
2,800

Deferred tax assets
Other
Allowance for doubtful accounts

1,595
2,528
(464)

Non-current assets
Property, plant and equipment
Buildings and structures

161,042
86,028
11,997(Million yen)Amount56,1492,073
26,801

Accounts payable – other and accrued
expenses

14,088

Income taxes payable
Provision for bonuses
Other

4,806
2,420
5,958

Non-current liabilities
Lease obligations

26,044
4,038

Deferred tax liabilities related torevaluation

1,119

Net defined benefit liability
Other

16,6104,275

Machinery, equipment and vehicles

43,090Total liabilities

82,193Land
Leased assets
Construction in progress
Other

15,596
4,424
7,880
3,037

Net assets
Shareholders’ equity
Common stock
Capital surplus

222,615
13,45010,959Intangible fixed assets
Goodwill

31,003
20,362Retained earnings
Treasury stock

209,149(10,943)

Software

2,111

Other

8,529

Accumulated other comprehensive
income16,187

Investments and other assets
Investment securities
Shares of subsidiaries and associates
Deferred tax assets
Other

44,01034,535
1,147
3,265
5,238

Unrealized gains (losses) on
available-for-sale securities

16,558

Allowance for doubtful accounts(176)

Deferred gains (losses) on hedges
Revaluation reserve for land
Foreign currency translation
adjustments

6

Remeasurements of defined benefit
plans

3

Non-controlling interests
Total assets

323,046

(1)
(380)

2,049

Total net assets

240,853

Total liabilities and net assets

323,046(Note) Figures are rounded down to the nearest millions of yen.

– 48 –

[Translation for Reference and Convenience Purposes Only]

Consolidated Statement of Income(From April 1, 2017 to March 31, 2018)(Million yen)Account item

AmountNet sales

236,815

Cost of sales

160,476

Gross profit

76,338Selling, general and administrative expenses

53,863Operating income

22,475Non-operating income

1,576Interest and dividend income

737

Other

838

Non-operating expenses

1,946Interest expense

352

Other

1,594

Ordinary income

22,104Extraordinary income

4,163

Gain on sales of investment securities

1,720

Gain on step acquisitions

2,443

Extraordinary losses

733

Impairment loss

413

Provision of allowance for building demolition expenses

320

Income before income taxes

25,535

Income taxes
Current

7,906

Deferred(408)

Net income

18,037

Profit attributable to non-controlling interests

139

Profit attributable to owners of parent

17,897(Note) Figures are rounded down to the nearest millions of yen.

– 49 –

[Translation for Reference and Convenience Purposes Only]

Consolidated Statement of Changes in Shareholders’ Equity(From April 1, 2017 to March 31, 2018)(Million yen)
Shareholders’ equity
Common stock

Capital surplus

Retained earnings

Treasury stock

Total shareholders’equity13,45010,993

205,586(13,891)

216,138

Balance as of the
beginning of the fiscal
year
Change during the period
Dividend from surplus
Profit attributable toowners of parent
Purchase of treasury
stock
Disposal of treasury
stock
Retirement of treasury
stock
Reversal of revaluation
reserve for land
Changes of equity
interest in consolidated
subsidiaries
Other
Net change in items
other than shareholders’equity during the period
Total change during theperiod(5,793)(5,793)

17,897

17,897(8,525)(5,592)(5,592)

14

14

8,525

–

(0)

(0)

(33)

(33)
(15)

Balance as of the end of
the fiscal year

(15)

–

(33)

3,563

2,947

6,476

13,45010,959209,149(10,943)

222,615

Accumulated other comprehensive income

Balance as of the
beginning of the fiscal
year
Change during the period
Dividend from surplus
Profit attributable toowners of parent
Purchase of treasury
stock
Disposal of treasury
stock
Retirement of treasury
stock
Reversal of revaluation
reserve for land
Changes of equity
interest in consolidated
subsidiaries
Other
Net change in items
other than shareholders’equity during the period
Total change during theperiodBalance as of the end of
the fiscal year

Unrealized
gains(losses) on
availablefor-salesecurities

Deferred
gains(losses) onhedges

Revaluation
reserve forland

Foreigncurrencytranslation
adjustments

14,792670(380)(3,593)

RemesureTotal
Nonments of accumulated controllingdefinedotherinterests
benefitcomprehenplans
sive income(3)11,484

1,135

Total net
assets228,758(5,793)
17,897(5,592)
14
–
(0)
(33)
(15)
1,766

(671)

0

3,600

7

4,703

914

5,617

1,766

(671)

0

3,600

7

4,703

914

12,094

16,558

(1)

(380)

6

3

16,1872,049

240,853(Note) Figures are rounded down to the nearest millions of yen.
– 50 –

[Translation for Reference and Convenience Purposes Only]

Non-Consolidated Financial Statements
Non-Consolidated Balance Sheet (As of March 31, 2018)
Account item
AssetsCurrent assets
Cash and deposits
Notes receivable – trade
Accounts receivable – tradeFinished products
Work in process
Raw materials
Short-term loans receivable

AmountAccount item
Liabilities
Current liabilities
Accounts payable – trade110,358
45,604
4,867
50,507
557
2,158
218
3,133

Deferred tax assets
Other
Allowance for doubtful accounts

1,064
2,247
(1)

Non-current assets
Property, plant and equipment
Buildings and structures

162,686
63,501
7,651(Million yen)Amount45,886
17,934

Accounts payable – other and accrued
expenses

8,725

Income taxes payable
Deposits received
Provision for bonuses
Other

3,012
12,291
1,187
2,735

Non-current liabilities
Lease obligations

17,494
3,937

Deferred tax liabilities related torevaluation

1,119

Net defined benefit liability
Other

10,666
1,771

Machinery, equipment and vehicles

31,552

Total liabilities

63,381

Land
Leased assets
Construction in progress
Other

11,928
4,251
7,157
960

Intangible fixed assets
Software
Other

4,683
1,848
2,834

Net assets
Shareholders’ equity
Common stock
Capital surplus
Legal capital surplus
Retained earnings
Legal retained earnings

193,562
13,45011,426
11,426
179,628
2,919

Investments and other assets
Investment securities
Shares of subsidiaries and associates

94,50134,334
20,558Other retained earnings

176,709

Investments in capital of subsidiaries
and associates

21,834Long-term loans receivable

11,480

Deferred tax assets
Other
Allowance for doubtful accounts

2,874
3,503
(84)

Reserve for advanced depreciationof non-current assets
General reserve

273,045

163,980

Retained earnings brought forward
Treasury stock

11,510(10,943)

Valuation and translation adjustments

16,101

Unrealized gains (losses) on
available-for-sale securities

16,490

Deferred gains (losses) on hedges
Revaluation reserve for land
Total assets

1,218

(8)
(380)

Total net assets

209,663

Total liabilities and net assets

273,045(Note) Figures are rounded down to the nearest millions of yen.

– 51 –

[Translation for Reference and Convenience Purposes Only]

Non-Consolidated Statement of Income(From April 1, 2017 to March 31, 2018)(Million yen)Account item

AmountNet sales

128,695

Cost of sales

90,618Gross profit

38,077

Selling, general and administrative expenses

26,278Operating income

11,799Non-operating income

5,860Interest and dividend income

3,068

Other

2,792

Non-operating expenses

1,453Interest expense

165

Other

1,288

Ordinary income

16,205Extraordinary income

1,545

Gain on sales of investment securities

1,545

Extraordinary losses

647

Impairment loss

327

Provision of allowance for building demolition expenses

320

Income before income taxes

17,103

Income taxes
Current

4,924

Deferred(620)

Net income

12,800(Note) Figures are rounded down to the nearest millions of yen.

– 52 –

[Translation for Reference and Convenience Purposes Only]

Non-Consolidated Statement of Changes in Shareholders’ Equity(From April 1, 2017 to March 31, 2018)(Million yen)
Shareholders’ equity
CapitalsurplusRetained earnings
Other retained earnings

Commonstock

Balance as of the
beginning of the fiscal
year
Change during the period
Reversal of reserve foradvanced depreciationof non-current assets
Dividend from surplus
Net income
Purchase of treasury
stock
Retirement of treasury
stock
Disposal of treasury
stock
Reversal of revaluation
reserve for land
Net change in items
other than shareholders’equity during the period
Total change during theperiodBalance as of the end of
the fiscal year

13,450Reserve forLegal capital Legal retainedadvancedsurplusearnings
depreciationof non-current
assets11,426

2,919

1,220

Generalreserve

Retainedearnings
brought
forward

Total retained
earnings

163,980

13,027

181,147

1–(5,793)12,800(5,793)12,800(8,525)(8,525)

(0)

(0)

(1)

–

–

–

(1)

–

(1,517)(1,518)13,45011,426

2,919

1,218

163,980

11,510179,628– 53 –

[Translation for Reference and Convenience Purposes Only]

Shareholders’ equity

Balance as of the
beginning of the fiscal
year
Change during theperiodReversal of reserve
for advanced
depreciation of noncurrent assets
Dividend from surplus
Net income
Purchase of treasury
stock
Retirement oftreasury stock
Disposal of treasury
stock
Reversal ofrevaluation reserve
for landNet change in items
other thanshareholders’ equity
during the period
Total change during
the period
Balance as of the endof the fiscal year

Valuation and translation adjustments

Treasury stock

Total
shareholders’equityUnrealized
gains (losses)
on availablefor-salesecurities(13,891)

192,133

14,743

Deferred gains(losses) onhedges–

Revaluation
reserve for
land

(380)

Total
valuation andtranslation
adjustments

Total net
assets

14,362

206,496––(5,793)12,800(5,793)12,800(5,592)(5,592)(5,592)

8,525

–

–

14

14

14

(0)

(0)

1,746

(8)

0

1,738

1,738

2,947

1,428

1,746

(8)

0

1,738

3,167

(10,943)

193,562

16,490(8)(380)

16,101

209,663(Note) Figures are rounded down to the nearest millions of yen.

– 54 –

[Translation for Reference and Convenience Purposes Only]

Audit Report
Accounting Auditor’s Audit Report on the Consolidated Financial Statements
Report of Independent Auditor
May 21, 2018
The Board of Directors
Kurita Water Industries Ltd.
Grant Thornton Taiyo LLC
Satoshi Kirikawa
Designated and Engagement Partner
Certified Public Accountant
Tatsuya Arai
Designated and Engagement Partner
Certified Public Accountant
Kenta Nishimura
Designated and Engagement Partner
Certified Public Accountant(Seal)(Seal)(Seal)

Pursuant to Paragraph 4, Article 444 of the Companies Act, we have audited the accompanying consolidated
financial statements, which comprise the consolidated balance sheet, the consolidated statement of income, theconsolidated statement of changes in shareholders’ equity and the notes to consolidated financial statements ofKurita Water Industries Ltd. (the “Company”) applicable to the fiscal year from April 1, 2017 through March 31,
2018.
Management’s Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated financial statements inaccordance with accounting principles generally accepted in Japan, and for designing and operating such internal
control as management determines is necessary to enable the preparation and fair presentation of theconsolidated financial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We
conducted our audit in accordance with auditing standards generally accepted in Japan. Those standards requirethat we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial
statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
consolidated financial statements. The procedures selected depend on the auditor’s judgment, including theassessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or
error. The purpose of an audit of the consolidated financial statements is not to express an opinion on theeffectiveness of the entity’s internal control, but in making these risk assessments the auditor considers internal
controls relevant to the entity’s preparation and fair presentation of the consolidated financial statements in orderto design audit procedures that are appropriate in the circumstances. An audit also includes evaluating theappropriateness of accounting policies used and the reasonableness of accounting estimates made bymanagement, as well as evaluating the overall presentation of the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinion.
OpinionIn our opinion, the consolidated financial statements referred to above present fairly, in all material respects, thefinancial position and results of operations of the Kurita Group, which consisted of the Company andconsolidated subsidiaries, applicable to the fiscal year ended March 31, 2018 in conformity with accounting
principles generally accepted in Japan.
Conflicts of Interest
We have no interest in the Company which should be disclosed in compliance with the Certified Public
Accountants Act.
– 55 –

[Translation for Reference and Convenience Purposes Only]

Accounting Auditor’s Audit Report on the Non-Consolidated Financial Statements
Report of Independent Auditor
May 21, 2018
The Board of Directors
Kurita Water Industries Ltd.
Grant Thornton Taiyo LLC
Satoshi Kirikawa
Designated and Engagement Partner
Certified Public Accountant
Tatsuya Arai
Designated and Engagement Partner
Certified Public Accountant
Kenta Nishimura
Designated and Engagement Partner
Certified Public Accountant(Seal)(Seal)(Seal)

Pursuant to Item 1, Paragraph 2, Article 436 of the Companies Act, we have audited the accompanying nonconsolidated financial statements, which comprise the non-consolidated balance sheet, the non-consolidated
statement of income, the non-consolidated statement of changes in shareholders’ equity, the notes to nonconsolidated financial statements and the related supplementary schedules of Kurita Water Industries Ltd. (the“Company”) applicable to the 82nd fiscal year from April 1, 2017 through March 31, 2018.
Management’s Responsibility for the Financial Statements and the Related Supplementary Schedules
Management is responsible for the preparation and fair presentation of these financial statements and the related
supplementary schedules in accordance with accounting principles generally accepted in Japan, and fordesigning and operating such internal control as management determines is necessary to enable the preparationand fair presentation of the financial statements and the related supplementary schedules that are free frommaterial misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these financial statements and the related supplementary schedules
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 thefinancial statements and the related supplementary schedules are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in thefinancial statements and the related supplementary schedules. The procedures selected depend on the auditor’s
judgment, including the assessment of the risks of material misstatement of the financial statements and therelated supplementary schedules, whether due to fraud or error. The purpose of an audit of the financial
statements and the related supplementary schedules is not to express an opinion on the effectiveness of theentity’s internal control, but in making these risk assessments the auditor considers internal controls relevant to
the entity’s preparation and fair presentation of the financial statements and the related supplementary schedules
in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating
the appropriateness of accounting policies used and the reasonableness of accounting estimates made bymanagement, as well as evaluating the overall presentation of the financial statements and the related
supplementary schedules.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinion.
OpinionIn our opinion, the financial statements and the related supplementary schedules referred to above present fairly,
in all material respects, the financial position and results of operations of the Company applicable to the fiscal
year ended March 31, 2018 in conformity with accounting principles generally accepted in Japan.
Conflicts of Interest
We have no interest in the Company which should be disclosed in compliance with the Certified Public
Accountants Act.
– 56 –

[Translation for Reference and Convenience Purposes Only]

The Audit & Supervisory Board’s Audit Report

Audit Report
With respect to the Directors’ performance of their duties during the 82nd fiscal year (from April 1, 2017 toMarch 31, 2018), the Audit & Supervisory Board has prepared this audit report, as the agreed opinion of all
members of the Audit & Supervisory Board formed as a result of their deliberations, based on the audit reports
prepared by each member of the Audit & Supervisory Board, and hereby reports as follows:1.

Method and Contents of Audit by Members of the Audit & Supervisory Board and the Audit & Supervisory
Board
The Audit & Supervisory Board stipulated auditing policies and the audit plan for the fiscal year underreview, designated the status of the establishment and operation of internal control systems (includinginternal controls for financial reporting) and risk management systems as priority audit items, received
reports from each member of the Audit & Supervisory Board about the implementation status and results of
the audit, received reports from the Directors and Accounting Auditors about the status of performing suchduties, and requested explanations as necessary.

In accordance with the auditing standards for members of the Audit & Supervisory Board determinedby the Audit & Supervisory Board, and in compliance with auditing policies and the audit plan, eachmember of the Audit & Supervisory Board made efforts to collect information and establish auditing
circumstances through communication with Directors and other employees, and conducted the audit by
the following methods.
(1) Each member of the Audit & Supervisory Board has attended the Board of Directors meetings and otherimportant meetings, received reports from the Directors and employees about the status of performanceof their duties, and requested them to provide explanation when needed. Each member of the Audit &Supervisory Board has reviewed important authorized documents and examined the status of business
operations and financial position of the Company and its principal offices. As for subsidiaries, eachmember of the Audit & Supervisory Board also facilitated communication and information exchangewith Directors and employees, visited subsidiaries when needed, and examined the status of business
operations and financial position of the subsidiaries and their principle officers.
(2) Each member of the Audit & Supervisory Board verified the resolutions adopted by the Board of
Directors regarding the establishment of a system for ensuring that the Directors’ duties, as stated in
the Business Report, are executed in conformity of laws and regulations, and the Articles ofIncorporation of the Company, and the establishment of a system necessary to ensure proper
business operations of a stock company set forth in Paragraphs 1 and 3 of Article 100 of theOrdinance for Enforcement of the Companies Act. Each member of the Audit & Supervisory Board
also received reports from Directors and employees on the status of the establishment and operationof the system (internal control system) established in accordance with such resolutions adopted by
the Board of Directors, and requested explanations as necessary and expressed his/her opinions. As
for internal controls for financial reporting, we received reports from the Directors and Accounting
Auditor about the status of evaluation and audit of the internal controls, and requested explanations
as necessary.
(3) Each member of the Audit & Supervisory Board audited whether the Accounting Auditor maintained its
independence and properly conducted its audit, received a report from the Accounting Auditor on thestatus of its performance of duties, and requested explanations as necessary. In addition, each member ofthe Audit & Supervisory Board was notified by the Accounting Auditor that it had established a “System
to ensure that the performance of the duties of the Accounting Auditors was properly conducted” (thematters set forth in the items of Article 131 of the Ordinance on Accounting of Companies) inaccordance with the “Quality Control Standards for Audits” (Business Accounting Council, October 28,2005), and requested explanations as necessary.
– 57 –

[Translation for Reference and Convenience Purposes Only]

Based on the above method, the Audit & Supervisory Board has examined the Business Report and the
supplementary schedules, the non-consolidated financial statements (the non-consolidated balance sheet, thenon-consolidated statement of income, the non-consolidated statement of changes in shareholders’ equity
and the notes to the non-consolidated financial statements) and the supplementary schedules, as well as theconsolidated financial statements (the consolidated balance sheet, the consolidated statement of income, theconsolidated statement of changes in shareholders’ equity and the notes to the consolidated financial
statements) for the fiscal year under review.
2.

Results of Audit(1) Results of Audit of Business Report, etc.
(a)

We acknowledge that the Business Report and the related supplementary schedules fairly present
the status of the Company in conformity with the applicable laws and regulations and the Articles
of Incorporation of the Company.

(b)

We acknowledge that there is no misconduct or material fact in violation of the applicable laws or
regulations and the Articles of Incorporation of the Company with regard to the performance of
duties by Directors.

(c)

We acknowledge that the Board of Directors’ resolutions with respect to the internal control
systems are appropriate. We also acknowledge that there are no matters warranting special
mention, neither regarding content provided in the Business Report on the internal control
systems, nor regarding the performance of duties by Directors. As for internal controls forfinancial reporting, we received reports from Grant Thornton Taiyo LCC stating that the internal
controls were functioning effectively Company-wide as of the date on which this report was
prepared, and furthermore that there were no deficiencies warranting disclosure with respect to theinternal controls in business processes.

(2) Results of Audit of Financial Statements and Related Supplementary Schedules
We acknowledge that the methods and results of audit performed by the Accounting Auditor Grant
Thornton Taiyo LLC, are appropriate.
(3) Results of Audit of Consolidated Financial Statements
We acknowledge that the methods and results of audit performed by the Accounting Auditor Grant
Thornton Taiyo LLC, are appropriate.
May 28, 2018
Kurita Water Industries Ltd.

Audit & Supervisory Board

Full-time member of the Audit & Supervisory Board

Shiro Hayashi

Full-time member of the Audit & Supervisory Board
Kenjiro Kobayashi(External member of the Audit & Supervisory Board)
External member of the Audit & Supervisory Board– 58 –

Shigekazu Torikai