[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 84th 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 orotherwise. In the event of any discrepancy between this translation and the Japanese original, the latter shall prevail.

Notice of Convocation of
the 84th 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 84th Ordinary General Meeting of
Shareholders ·······································································3Reference Documents for the
General Meeting of Shareholders

Proposal No. 1: Appropriation of Surplus ·····································5
Proposal No. 2: Election of Nine (9) Directors ·······························6
Proposal No. 3: Election of Two (2) Members of the Audit & Supervisory
Board·············································································· 16
Proposal No. 4: Election of One (1) Substitute Member of the Audit &Supervisory Board ······························································ 18<Reference> Corporate Governance ········································· 21(Attached documents to the notice of convocation of the 84th ordinary general meeting of shareholders)Business Report
1. Group Overview of Operations ············································ 24
2. Stock of the Company······················································· 33
3. Directors and members of the Audit & Supervisory Board of theCompany ········································································· 34
4. Accounting Auditor ·························································· 38
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 ··································· 39
Consolidated Financial Statements

Consolidated Statement of Financial Position ······························ 46
Consolidated Statement of Profit or Loss ··································· 47
Consolidated Statement of Changes in Equity ····························· 48

Non-Consolidated Financial
Statements

Non-Consolidated Balance Sheet············································· 49
Non-Consolidated Statement of Income····································· 50
Non-Consolidated Statement of Changes in Shareholders’ Equity ······ 51

Audit Report

Accounting Auditor’s Audit Report on the Consolidated Financial
Statements········································································ 53
Accounting Auditor’s Audit Report on the Non-Consolidated Financial
Statements········································································ 55
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.
Furthermore, we would like to express our condolences to those who have passed away due to novel
coronavirus disease (COVID-19) and their families. We also pray that those who have contracted
COVID-19 recover as soon as possible. In addition, we would like to pay homage to those
responding on the front lines such as everyone in medical and healthcare.
The shareholders of Kurita Water Industries Ltd. are hereby notified of the 84th Ordinary General
Meeting of Shareholders to be held on Monday, June 29, 2020.
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, 2020. We request that you read it.
June 2020
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, 2020

Dear Shareholders
Michiya Kadota
President and Representative Director

Kurita Water Industries Ltd.
10-1, Nakano 4-chome, Nakano-ku, TokyoNOTICE OF CONVOCATION OF
THE 84th ORDINARY GENERAL MEETING OF SHAREHOLDERS
We hereby provide notice that the 84th Ordinary General Meeting of Shareholders of Kurita Water Industries Ltd.
(the “Company”) shall be held as described below.
Having carefully considered based on the situation of the spread of COVID-19 infection, the Company has
decided to hold this meeting, taking appropriate measures beforehand to avoid infection. However, you areencouraged to exercise your voting rights prior to the meeting by sending your Voting Rights Exercise
Form or via the Internet, etc., and to refrain from traveling to the venue on the date of the meeting, if at
all possible. Please review the attached Reference Documents for the General Meeting of Shareholders
described hereinafter, and exercise your voting rights, no later than 5:15 p.m. on Friday, June 26, 2020.
1.

Time and Date:

2.

Place:

3.

4.

11:00 a.m., Monday, June 29, 2020 (Reception starts at 10:00 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 84th Fiscal Year
(From April 1, 2019, to March 31, 2020)
2. Reports on Non-Consolidated Financial Statements for the 84th Fiscal Year
(From April 1, 2019, to March 31, 2020)
Agenda:Appropriation of Surplus
Proposal No. 1:
Election of Nine (9) Directors
Proposal No. 2:
Election of Two (2) Members of the Audit & Supervisory Board
Proposal No. 3:
Election of One (1) Substitute Member of the Audit & Supervisory Board
Proposal No. 4:
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.
 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
websitehttps://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 have notbeen 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:
https://ir.kurita.co.jp/en/downloads/pdf/immediate_200520_en.pdf–4–

[Translation for Reference and Convenience Purposes Only]

Reference Documents for the General Meeting of Shareholders

Proposal No. 1: Appropriation of Surplus
1. Year-end dividends
The Company’s basic policy is to pay stable dividends on an ongoing basis. The Company will endeavor to return profits
to shareholders by maintaining a dividend increase, setting a consolidated dividend payout ratio of 30% to 50% as a guideand making the decision based on consolidated dividend payout ratios for the most recent five years in order to respondflexibly to changes in the financial results each year.
The Company proposes that the year-end dividend for the current fiscal year be ¥31 per share, an increase of ¥4 per sharefrom a year earlier.
The Company’s annual dividend for the fiscal year under review would be ¥62 per share, including ¥31 per share
distributed as an interim dividend, an increase of ¥4 per share from a year earlier, and the consolidated dividend payout
ratio would be 38.1%.

(1)

Type of Property for Dividends

Cash

(2)

Allotment of Property for
Dividends and Total Amount Thereof

Dividend per share of common
stock of the Company¥31

Total amount of dividends¥3,490,878,907(3)

Effective Date of
the Distribution of Surplus

June 30, 2020

2. Other appropriation of surplus
We propose the following internal reserves to be used for investments aimed at boosting corporate value, etc.
in order to strengthen the management foundation in preparation for the development of operations in the
future.
(1)

Item of surplus to be increased
and amount of increase

General reserve¥6,000,000,000(2)Item of surplus to be decreased
and amount of decrease

Retained earnings brought forward¥6,000,000,000–5–[Translation for Reference and Convenience Purposes Only]

Proposal No. 2: Election of Nine (9) Directors
The term of office of ten (10) current Directors will expire at the conclusion of this General Meeting of Shareholders. Mr.
Koichi Iioka has resigned on March 31, 2020. Accordingly, the Company proposes the election of nine (9) Directors(including three (3) External Directors). The Company nominates these candidates in accordance with the “Policies andprocedures for nominating candidates for Directors and members of the Audit & Supervisory Board” on page 19. The
candidates for Directors are as follows:

No.

Name

1

Michiya Kadota

2

3

4

5

6

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

President andRepresentative Director―

Executive General
Executive Senior
Manager ofKiyoshi Itou
Managing Director and Corporate Planning
Representative Director and Control
Division
Executive General
Manager of Japan
Sales BusinessYoshio Yamada
Managing Director
Division and Chief
Business Officer for
Chemicals business
Executive General
Manager ofEngineering
Hirohiko Ejiri
Managing Director
Division and Chief
Business Officer for
Facilities business
Executive General
Manager of Global
Business Division
Yasuo Suzuki
Managing Director
and Chief Business
Officer for Global
business
Senior General
Manager of East
Toshimi Kobayashi
Director
Japan Group, Japan
Sales Business
Division

Reappointment100%(15/15)

6 years

Reappointment100%(15/15)

11 years

Reappointment100%(15/15)

6 years

Reappointment100%(15/15)

4 years

Reappointment100%(15/15)2 years

Reappointment100%(15/15)2 years100%(15/15)

5 years

86.6%(13/15)

3 years

91.6%(11/12)

1 yearReappointment

7

Tsuguto Moriwaki

External Director―

External
Independent
Reappointment

8

Ryoko Sugiyama

External Director―

External
Independent
Reappointment

9

Keiko Tanaka

External Director―

External
Independent

Note: During the fiscal year ended March 31, 2020, the Board of Directors held 15 Board of Directors meetings.
The record of attendances at the Board of Directors meetings for Ms. Keiko Tanaka counts only thosemeetings held after her appointment on June 27, 2019.
New
External

New candidates for Director

Reappointment

Candidates for reappointment as Director

Candidates for External Director

Independent

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

–6–

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

1

Date of birth
February 16, 1959
61 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 Executive General Manager of Administrative Division
Number of the sharesof the Company held
19,300 shares
Number of years as
Director
6 years(at the conclusion of this
General Meeting of
Shareholders)Record of attendancesat the Board of
Directors meetings
100% (15/15)

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 leadershipunrestrained by preconceived ideas in implementing reforms of the Kurita Group as a whole throughinitiatives such as the transformation of the business model, emphasizing CSR and reviewing thebusiness portfolio.

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

2

Date of birth
March 8, 1956
64 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 Executive General Manager of Administrative DivisionJun. 2013 Managing Director of the Company
Jun. 2013 Executive General Manager of Corporate Planning Division
Apr. 2016 Executive General Manager of Administrative Division

Number of the sharesof the Company held
36,200 shares

Apr. 2018 Executive Senior Managing Director and Representative Director of the Company(Current position)
Apr. 2018 Executive General Manager of Corporate Planning Division
Apr. 2019 Executive General Manager of Corporate Planning and Control Division (Current
position)

Number of years as
Director
Significant positions concurrently held
11 years(at the conclusion of this None
General Meeting of
Shareholders)
Reasons for deciding to make him a candidate for Director
Record of attendancesat the Board of
Directors meetings
100% (15/15)

Mr. Kiyoshi Itou held important posts in general affairs, such as personnel and legal affairs, and thenassumed the position of Executive General Manager of Administrative Division in June 2009. Since
then, he also served as Executive General Manager of the Corporate Planning Division and theAdministrative Division. He has overseen the entire area of general affairs and has worked to improve
corporate quality and enhance the corporate value of the Kurita Group as Executive General Manager
of Corporate Planning and Control Division since April 2019. He served as Director since June 2009,
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 ofusing his highly specialized knowledge and experience to strengthen the corporate governance of theKurita Group and has therefore nominated him as a candidate for Director.

–8–

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

3

Date of birthJune 18, 1958
62 years old

Yoshio Yamada

Reappointment

Brief personal history, positions and assignments in the Company
Apr. 1982 Joined Kurita Water Industries Ltd.
Apr. 2004 General Manager of Pulp and Paper Project, Chemicals Group I, 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 Senior General Manager of Sales Group II, Chemicals DivisionJun. 2014 Director of the Company
Apr. 2016 Senior General Manager of Sales Group I, Chemicals Division
Apr. 2017 Executive General Manager of Sales Division I
Number of the sharesof the Company held
19,300 shares

Apr. 2018 Managing Director of the Company (Current position)
Apr. 2018 Executive General Manager of Sales Division I and Chief Business Officer for Chemicals
business
Apr. 2019 Executive General Manager of Japan Sales Business Division and Chief Business
Officer for Chemicals business (Current position)

Number of years as
Director
6 years
Significant positions concurrently held
(at the conclusion of this
None
General Meeting of
Shareholders)Record of attendancesat the Board of
Directors meetings
100% (15/15)

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. Since April 2019, he
has overseen the development of total solutions for the entire domestic market, including the Water
Treatment Facilities business. 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 thefunction of the Company’s Board of Directors, leveraging his broad insights and experience related tototal solutions of the water treatment in general and has therefore nominated him as a candidate for
Director.

–9–

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

4

Date of birth
October 6, 1962
57 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 DivisionJun. 2013 General Manager of Business Management Dept., Chemicals Division
Apr. 2014 Executive Officer of the Company
Jun. 2014 Senior General Manager of Sales Group I, Chemicals Division
Apr. 2016 Executive General Manager of Corporate Planning DivisionJun. 2016 Director of the Company
Apr. 2018 Executive General Manager of Engineering Division
Apr. 2019 Managing Director of the Company (Current position)
Number of the sharesof the Company held
11,600 shares

Apr. 2020 Executive General Manager of Engineering Division and Chief Business Officer for
Facilities business (Current position)

Number of years as
Director
4 years(at the conclusion of this
General Meeting of
Shareholders)Significant positions concurrently held
None

Record of attendancesat the Board of
Directors meetings
100% (15/15)

Reasons for deciding to make him a candidate for Director
Mr. Hirohiko Ejiri led the initiative for expansion of the Kurita Group’s business fields andtransformation of revenue structure as Executive General Manager of Corporate Planning Division from
April 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 Executive General Manager of Engineering Division, leading enhancement of production
efficiency, improvement of product quality, and transformation of the production structure. He served as
Director since June 2016 and has been serving as Managing Director since April 2019. 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 various viewpoints and extensive experience, and has therefore nominated him as a
candidate for Director.

– 10 –

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

5

Date of birthAugust 16, 1959
60 years old

Yasuo Suzuki

Reappointment

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., Chemicals Group I, Chemicals andMaintenance Services Division of the Company
Apr. 2011 President of Kurita Europe GmbH
Apr. 2014 Executive Officer of the Company
Apr. 2017 Senior General Manager of Operation Group, Global Business Division
Apr. 2018 Executive General Manager of Global Business DivisionJun. 2018 Director of the Company
Apr. 2020 Managing Director of the Company (Current position), Executive General Manager of
Global Business Division and Chief Business Officer for Global business (Current
position)
Number of the sharesof the Company held
6,200 shares
Number of years as
Director
2 years(at the conclusion of this
General Meeting of
Shareholders)Record of attendancesat the Board of
Directors meetings
100% (15/15)

Significant positions concurrently held
None
Reasons for deciding to make him a candidate for Director
Mr. Yasuo Suzuki, after holding technology and development roles in the Water Treatment Chemicals
business, held important posts such as the representative of an overseas group company. In theacquisition of the Water Treatment Chemicals business in Europe, he managed the integrated company,
putting the acquired business on track. While serving as the person responsible for the sales departmentof the overseas businesses since April 2017 and as Executive General Manager of Global Business
Division since April 2018, he has worked to establish a global platform built on the four pivotal regions
and has been promoting the acceleration of the Kurita Group’s overseas development by acquiring
several companies in North America and facilitating the integration in a short period of time. He served
as Director since June 2018 and has been serving as Managing Director since April 2020. 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.

– 11 –

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

6Toshimi Kobayashi

Date of birth
July 12, 1958
61 years old

Reappointment

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
Apr. 2011 Senior General Manager of Maintenance Group, Facilities Division
Apr. 2017 Senior General Manager of Sales Group I, Sales Division I
Apr. 2018 Senior General Manager of East Japan Sales Group, Sales Division I
Jun. 2018 Director of the Company (Current position)
Apr. 2019 Senior General Manager of Administration Group, Japan Sales Business Division
Number of the sharesof the Company held
7,800 shares
Number of years as
Director
2 years(at the conclusion of this
General Meeting of
Shareholders)Record of attendancesat the Board of
Directors meetings
100% (15/15)

Apr. 2020 Senior General Manager of East Japan Group, Japan Sales Business Division(Current position)(Note) Kurita Seibi KK was merged to Kurita Water Industries Ltd. in 1997.
Significant 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. He has promoted the development of total solutions, while firstserving since April 2017 as the person responsible for the sales department, which integrates the water
treatment chemicals and the maintenance of water treatment facilities, and since April 2019 as the
person oversees the Administration Group, which covers the entire domestic market including the Water
Treatment Facilities business, and then since April 2020 as the person responsible for East Japan sales
group of the sales department. He has been serving as Director since June 2018. The Company believes
that he is an individual capable of utilizing his broad insights and experience related to total solutions of
the water treatment in general to strengthen the function of the Company’s Board of Directors and has
therefore nominated him as a candidate for Director.

– 12 –

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

7

Date of birth
September 10, 1943
76 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, Kobe Steel, Ltd.
Jun. 1999 Managing Director, Kobe Steel, Ltd.
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
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 thisknowledge as well as his experience of having served in important positions such as representative
Number of years as
director in other companies to deliver opinions from an outside perspective and increase the rationality
Directorand transparency of the Company’s management and has therefore nominated him as a candidate for
5 years(at the conclusion of this External Director.
Number of the sharesof the Company held
4,900 shares

General Meeting of
Shareholders)Record of attendancesat the Board of
Directors meetings
100% (15/15)

Notes concerning the candidate for External Director
 Kobe Steel, Ltd., of which Mr. Moriwaki served as Representative Director in the past, is one ofcustomers of the Company. However, because the transaction value with Kobe Steel, Ltd. is less than
0.2% of consolidated net sales of the Company, it does not fall under a major customer. Similarly,
neither Kobelco Construction Machinery Co., Ltd. nor Shinsho Corporation has conducted any
transaction with the Company so far.
 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.

– 13 –

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

8

Date of birth
July 27, 1955
64 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)
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)
Dec. 2018 Head and Representative Director, Gifu Shimbun Co., Ltd. (Current position)

Number of the sharesof the Company held
2,100 shares
Number of years as
Director
3 years(at the conclusion of this
General Meeting of
Shareholders)Record of attendancesat the Board of
Directors meetings
86.6% (13/15)

Significant positions concurrently held
Head and Representative Director, 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 is currently serving as an External
Director of two listed companies as well as Director of three unlisted companies. The Company
believes that she is capable of expressing opinions from an outside perspective different from theCompany’s and increasing the rationality and transparency of the Company’s management andtherefore nominated her as a candidate for External Director.
Notes concerning the candidate for External Director
 UACJ Corporation is one of customers of the Company. However, because the transaction value with
UACJ Corporation is less than 0.1% of consolidated net sales of the Company, it does not fall under amajor customer. LECIP Holdings Corporation is not a business partner of the Company.
 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.

– 14 –

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

9Date of birth
May 24, 1960
60 years old

Keiko Tanaka

Reappointment
External
Independent

Brief personal history, positions and assignments in the Company
Apr. 1984 Joined NISSAN MOTOR CO., LTD.
Apr. 2011 Seconded to JATCO Ltd
Apr. 2013 Treated as equivalent to Vice President, JATCO Ltd
Sep. 2014 Retired from NISSAN MOTOR CO., LTD. and JATCO Ltd
Oct. 2014 Ambassador Extraordinary and Plenipotentiary of Japan to Uruguay
Apr. 2018 Vice President, Nissan Financial Services Co., Ltd. (Current position)
Jun. 2019 Director of Kurita Water Industries Ltd. (Current position)
Significant positions concurrently held
Vice President, Nissan Financial Services Co., Ltd.

Number of the sharesof the Company held
100 shares

Reasons for deciding to make her a candidate for External Director
Ms. Keiko Tanaka has been active in business fields that differ from those of the Kurita Group andpossesses a great deal of knowledge on public relations and marketing, as well as having held theposition of Ambassador Extraordinary and Plenipotentiary of Japan to Uruguay. The Company believes
that she is capable of utilizing her expansive knowledge and international experience, and expressing
opinions from an outside perspective while increasing the rationality and transparency of theCompany’s management and therefore nominated her as a candidate for External Director.

Number of years as
Director
1 year(at the conclusion of thisNotes concerning the candidate for External Director
General Meeting of Nissan Financial Services Co., Ltd. has not conducted any transaction with the Company so far.
Shareholders)

JATCO Ltd, of which Ms. Tanaka served as equivalent to Vice President in the past, has notconducted any transaction with the Company so far.
 The Company has entered into an agreement with Ms. Tanaka 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. Tanaka is reappointed as an External
Director of the Company.
 The Company has notified the Tokyo Stock Exchange, Inc. of the appointment of Ms. Tanaka 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.
Record of attendancesat the Board of
Directors meetings
91.6% (11/12)– 15 –

[Translation for Reference and Convenience Purposes Only]

Proposal No. 3: Election of Two (2) Members of the Audit & Supervisory Board
At the conclusion of this General Meeting of Shareholders, the term of Mr. Kenjiro Kobayashi, the incumbent member of the
Audit & Supervisory Board, will expire, and Mr. Shigekazu Torikai will retire. Accordingly, the Company proposes to electtwo (2) members of the Audit & Supervisory Board.
The Company has already obtained the consent of the Audit & Supervisory Board for this proposal.
The candidates for the members of the Audit & Supervisory Board are as follows:
Candidate No.

1Kenjiro Kobayashi

Date of birth
October 1, 1953
66 years old

Reappointment
External
Independent

Brief personal history and positions in the Company
Apr. 1977 Joined Japan Development Bank (current Development Bank of Japan Inc.)
Apr. 2002 General Manager of the New Business Division of Development Bank of Japan Inc.

Number of the sharesof the Company held
3,000 shares
Number of years as
member of the Audit &Supervisory Board
4 years(at the conclusion of this
General Meeting of
Shareholders)Record of attendancesat the Audit &Supervisory Board
meetings
100% (11/11)

Jul. 2004
Jun. 2006

Managing Director of CITIC Provident Management Ltd.
Executive Officer and General Manager of Corporate Strategy Planning Office of Johnson
Diversey

Apr. 2007
Apr. 2008

General Manager of Corporate Strategy Planning Division of Johnson Diversey
General Manager in charge of the Co-Creation Business Promotion Project of City of
Yokohama

Nov. 2010

Representative Director and Executive Vice President of Japan Industrial Solutions Co.,Ltd.

May 2013

Director of Japan Industrial Solutions Co., Ltd.

Jun. 2016(Full-time) Member of the Audit & Supervisory Board of Kurita Water Industries
Ltd. (Current position)

Significant positions concurrently held
None
Reasons for deciding to make him a candidate for External Member of the Audit & Supervisory
Board
Mr. Kenjiro Kobayashi is an individual who has played an active role in different areas of the Kurita
Group’s businesses and has high expertise and a wealth of international experience in the areas offinance, corporate planning, new business development and M&A, etc. As he has conducted highquality audits based on this expertise and experience from an outside perspective as an external
member of the Audit & Supervisory Board of the Company since 2016, the Company has decided tomake him a candidate for an external member of the Audit & Supervisory Board.
Notes concerning the candidate for External Member of the Audit & Supervisory Board Johnson Diversey, of which Mr. Kenjiro Kobayashi served as Executive Officer in the past, andJapan Industrial Solutions Co., Ltd., of which he served as Director in the past, are not business
partners of the Company.
 The Company has notified the Tokyo Stock Exchange, Inc. of the appointment of Mr. Kobayashi as
an independent officer as set forth under regulations thereof.

– 16 –

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

2

Date of birth
July 28, 1968
51 years old

Toshiaki Tada

New
External
Independent

Brief personal history and positions in the Company
Apr. 1996 Registered as an attorney
Dec. 1996 Joined HIBIYA SOGO LAW OFFICES

Number of the sharesof the Company held
0 sharesJul. 2002
Jan. 2005

Registered as an attorney, admitted in New York State, the U.S.A.
Partner, HIBIYA SOGO LAW OFFICES (Current position)

Jun. 2012

Audit & Supervisory Board Member, ITOCHU Techno-Solutions Corporation (Current
position)

Jun. 2019

Substitute Member of the Audit & Supervisory Board of Kurita Water Industries
Ltd. (Current position)

Significant positions concurrently held
Partner, HIBIYA SOGO LAW OFFICES
Audit & Supervisory Board Member, ITOCHU Techno-Solutions Corporation

Reasons for deciding to make him a candidate for External Member of the Audit & Supervisory
Board
Number of years as
Mr. Toshiaki Tada has expertise as an attorney and a wealth of knowledge about corporate legal affairs
member of the Audit &in Japan and overseas. He assumed the position of Substitute Member of the Audit & Supervisory
Supervisory Board
Board of the Company in June 2019. As the Company expects that Mr. Tada will conduct high quality―(at the conclusion of this audits based on his expertise and knowledge from an outside perspective, the Company has decided tomake him a candidate for an external member of the Audit & Supervisory Board.
General Meeting of
Shareholders)Record of attendancesat the Audit &Supervisory Board
meetings―

Notes concerning the candidate for External Member of the Audit & Supervisory Board The Company is one of customers of ITOCHU Techno-Solutions Corporation. However, because thetransaction value with the Company is less than 0.1% of consolidated net sales of ITOCHU TechnoSolutions Corporation, the Company does not fall under a major customer of ITOCHU TechnoSolutions Corporation.
 Mr. Tada was not involved in corporate management in ways other than acting as an external director
or an external member of the 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.
 The Company plans to notify the Tokyo Stock Exchange, Inc. of the appointment of Mr. Tada as anindependent officer as set forth under regulations thereof.

Notes: 1. No special interest exists between the Company and the above candidates for members of the Audit & Supervisory
Board.
2. Ages of the candidates indicated are as of the date of the General Meeting of Shareholders.

– 17 –

[Translation for Reference and Convenience Purposes Only]

Proposal No. 4: 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 therelevant laws and regulations, the Company proposes that Mr. Tetsuya Nagasawa be elected as a Substitute Member of the
Audit & Supervisory Board.
The Company has already obtained the consent of the Audit & Supervisory Board for this proposal.
The candidate for Substitute Member of the Audit & Supervisory Board is as follows:

Date of birth
April 17, 1970
50 years old

Tetsuya Nagasawa

External
Independent

Brief personal history
Registered as an attorney
Apr. 1996
Joined Oh-Ebashi LPC & Partners
Jan. 2002 Registered as an attorney, admitted in New York State, the U.S.A.
Aug. 2002 Partner, Oh-Ebashi LPC & Partners (Current position)
Jul. 2006 Corporate Auditor, LifeFoods Co., Ltd. (Current position)
Oct. 2016 Visiting Professor, Kobe University Graduate School of Law (Current position)
Temporary Member, The Small and Medium Enterprise Agency, The Small and Medium Enterprise Policy-Making
Jul. 2018
Council (Current position)
Significant positions concurrently held
Partner, Oh-Ebashi LPC & Partners
Corporate Auditor, LifeFoods Co., Ltd.
Visiting Professor, Kobe University Graduate School of Law
Reasons for deciding to make him a candidate for Substitute External Member of the Audit & Supervisory Board
Mr. Tetsuya Nagasawa has expertise as an attorney and a wealth of knowledge about corporate legal affairs in Japan andoverseas. The Company decided to make him a candidate for Substitute External Member of the Audit & Supervisory Board sothat 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 Oh-Ebashi LPC & Partners, LifeFoods Co., Ltd., and Kobe University are not business partners of the Company.
 Mr. Nagasawa was not involved in corporate management in ways other than acting as an external director or an external
member of the 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.
 The Company plans to notify the Tokyo Stock Exchange, Inc. of the appointment of Mr. Nagasawa as an independent officer
as set forth under regulations thereof, if he assumes the office of external member of the Audit & Supervisory Board.
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.

– 18 –

[Translation for Reference and Convenience Purposes Only]<Reference> Policies and procedures for nominating candidates for Directors and membersof 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, experience and diversity for overall decision-making and consists of personnel
with a high degree of expertise in various business fields, management planning, finance and accounting, legal affairs,
and technologies, etc., and be composed of members with considerations made for gender, international experience andother matters. It is also our policy that there should be three or more members of the Audit & Supervisory Board, one ormore of whom should be a member who specializes in finance, accounting and legal affairs.
2) Procedures for nominating candidates for Directors and members of the Audit & Supervisory Board
When making a proposal of candidates for the Directors, the President and Director, Representative Directors, andDirectors with positions of responsibility as well as members of the Audit & Supervisory Board, the Chairperson of theBoard of Directors will consult 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 forrecommending the candidates for the Directors and the members of the Audit & Supervisory Board by stating the reason
for recommendation. After deliberating the proposal, the Board of Directors will nominate the candidates and make adecision on the President and Director, Directors with positions of responsibility, and Representative Directors. Whensubmitting a proposal for recommending the candidates for the members of the Audit & Supervisory Board to the Boardof Directors, it shall be carried out after obtaining the consent of the Audit & Supervisory Board in advance.
Distribution of knowledge and experience in the Board of Directors
FinanceandSales
accounting,Corporate
Name
legal
planning
affairs,
Japan
Overseas
personnel
affairs

Development,
production,technologies

Knowledge and experience expected toExternal Directors
Corporate
management

Environment

International

Michiya
Kadota

●

●

―

―

―

Kiyoshi Itou

●

●

―

―

―

●

―

―

―

●

―

―

―

●

―

―

―

●

―

―

―

YoshioYamada●Hirohiko Ejiri●●

Yasuo Suzuki●●

ToshimiKobayashi●

TsugutoMoriwaki(External)
Ryoko
Sugiyama(External)
Keiko Tanaka(External)

●

―

―

―

―

―

●

―

―

―

―

―

●

―

―

―

―

―

●

– 19 –●●

[Translation for Reference and Convenience Purposes Only]<Reference> Our criteria for judging independence
The criteria for judging the independence of the Independent External Directors in selecting candidates shall be that thecandidates for Independent External Directors and their close relatives (*1) must not fall under any of the following
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 theCompany 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> Corporate Governance1. Corporate Governance Policies(1) Basic concept
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 contribute broadly
to society through corporate activities in the fields of water and environment in accordance with the Kurita corporate
philosophy, “Study the properties of water, master them, and we will create an environment in which nature and man are
in harmony.” The Kurita Group will make efforts to promote sustainable growth and enhance its corporate value in themedium 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 this end, the Kurita Groupwill establish corporate governance, with the aim of realizing transparent, fair, prompt, and decisive 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 to exerciseof their rights in a timely and accurate manner in order to secure the substantive equality of the rights of shareholders,
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 this aim, theKurita Group will properly respond to issues related to sustainability, and make actions based on compliance with 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 informationin accordance with the laws and regulations 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 establishedby the Tokyo Stock Exchange. The Kurita Group will actively and fairly disclose information that is deemed to beeffective for facilitating understanding of the Kurita Group among shareholders and investors. This information willcomprise financial information including financial conditions and results of operations, management strategies
including risks, corporate governance and matters related to social and environmental issues, and policies for capitalefficiency.
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 theorientation 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 risktaking, 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
Continuing to emphasize management that values shareholders, the Kurita Group will make efforts to engage inconstructive dialogues 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.
(https://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 of overall management. The Nomination and Remuneration Advisory Council, mainly consisting of External
Directors and an external member of the Audit & Supervisory Board, is in place to enhance the transparency of the decisionmaking process related to the remuneration of Directors and the nomination of candidates for Directors/members of the Audit& Supervisory Board. In addition, the Successor Planning Committee was established in order to select and develop
candidates for successors to the President and Directors, etc.
The Executive Committee conducts a review of matters resolved at the Board of Directors meetings when necessary to enable
speedy and smooth decision-making by the Board of Directors. Furthermore, the E&S (Environmental & Social) Committee,
Investment Committee and various other committees are in place 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 Boardin accordance with the audit policy and audit plan determined thereby, also attend important meetings including meetings ofthe Board of Directors, Executive Committee and E&S Committee to audit execution of duties by Directors.
(As of March 31, 2020)

General Meetings of Shareholders
Election & Dismissal

Election & Dismissal

Consultation

Nomination &Remuneration
Advisory Council
Successor
Planning
Committee[Business
Operations]

Advisory

ReportReportBoard ofDirectors

Discussion& Report

Audit &
Supervisory Board

Audit

Resolution
Election &Supervision

Members of the
Audit &
Supervisory Board
Audit
Audit Report

Internal Auditing
Department

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

Cooperation

Cooperation

President

Discussion& Report

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 resolved the evaluation results at a meeting of the Board of Directors. This evaluation was conducted via awritten 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 established the issue and initiatives in
the future, which were resolved at the Board of Directors meeting. The evaluation items consisted of six areas, i.e., (i) roles
and responsibilities of the Board of Directors, (ii) collaboration with members of Audit & Supervisory Board and External
Directors, (iii) composition of the Board of Directors, (iv) operation of the Board of Directors, (v) contributions of individual
Directors and members of the Audit & Supervisory Board, and (vi) dialogue with shareholders, covering the period of one
year from January to December 2019. In addition, part of the survey was revised to include more specific contents based on
the results of the previous fiscal year.
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 area of“contributions of individual Directors and members of the Audit & Supervisory Board” was highly evaluated with lessvariance of evaluation among Inside Directors, External Directors and members of the Audit & Supervisory Board. On theother hand, among “roles and responsibilities of the Board of Directors,” certain items related to deepening discussion andproviding specific goals on business strategies and involvement in the environment and society were evaluated relatively
lower than other items. The issue and measures to be addressed in fiscal 2020 were resolved to improve such evaluation.
(Issue)Identification of specific themes and deepening of discussion are necessary for creating long-term corporate value.
(Measures)
We will provide occasions for considering value creation stories based on integrated thinking and the utilization of managerial
resources for realizing those stories with executive officers, Senior General Managers and other positions who will takeresponsibility for the Company’s future management, and discuss the results at the Board of Directors.

4. Results of corporate governance initiatives(1) Improvement of successor training process
We established a structure to develop and evaluate each candidate for successor, including the “Successor Planning
Committee” mainly consisting of External Directors and external members of the Audit & Supervisory Board establishedin the fiscal year ended March 31, 2019, in order to further improve objectivity in the selection of the President, Directors,
and executive officers of the Company, and ensure transparency in the selection process.
In the fiscal year ended March 31, 2020, we improved the process for selecting candidates for successors to President
and Directors. Specifically, in order to develop managerial human resources in the medium and long term, the range ofranks eligible for new candidates has been expanded. According to this, if any eligible persons unknown to the External
Directors and full-time external members of the Audit & Supervisory Board are listed for selection, the External Directors
and full-time external members of the Audit & Supervisory Board shall interview them, and the candidates for successors
shall subsequently be selected by the Successor Planning Committee.
(2) Reduction of strategic shareholdings in other listed companies
Based on the policy that “The propriety of holding each individual stock owned for policy purposes is reviewed on aregular or timely basis at the Board of Directors by closely examining the expected return against the cost of capital andthe status of business transactions with the company whose shares the Company holds. Based on the results of theexamination, the Company aims to reduce the holding of shares owned for policy purposes.” stated in the Corporate
Governance Policies, the Company proceeded with the sale of strategic shareholdings in the fiscal year ended March 31,
2020.

– 23 –

[Translation for Reference and Convenience Purposes Only](Attached documents to the notice of convocation of the 84th ordinary general meeting of shareholders)Business Report(From April 1, 2019 to March 31, 2020)
1. Group Overview of Operations(1) Operations and results
During the fiscal year ended March 31, 2020, economic growth slowed in China and Europe due to the protracted
trade dispute between the United States and China and the Brexit issue. Toward the end of the fiscal year underreview, the global economy declined sharply, reflecting the spread of COVID-19. The Japanese economy became
increasingly stagnant due to the consumption tax hike and stay-at-home requests to tackle the spread of COVID-19.
Looking at the market environment surrounding the Kurita Group, in Japan, production in the manufacturing sector
remained weak as exports continued to struggle, and capital expenditure restraint was seen. Overseas, the sense ofslowdown strengthened as production activity slowed, as seen by the trend of postponements in capital expendituremainly in the electronics industry in East Asia.
In this environment, the Kurita Group used the fiscal year under review, which is the second year of its mediumterm management plan Maximize Value Proposition 2022 (MVP-22), to accelerate the development of totalsolutions that solve the issues that customers and society face, by making excellent use of its products, technologies
and services for water treatment chemicals, water treatment facilities and maintenance services. We proceeded withthe creation of solution models encompassing the products, technologies, services and contractual methods thatenable horizontal expansion, bringing together marketing, sales, technologies and development. Through these
efforts, we completed six models such as a model for papermaking process which contributes to improving in-plantwater quality and increasing productivity by combining the equipment with IT and sensing technology to maximize
the effect of the water treatment chemicals. The Kurita Group also integrated the sales functions of water treatment
chemicals, water treatment facilities and maintenance services in Japan into a single sales division to strengthen thesales structure into one that differentiates by market and by geographical region as part of our grand design topromote total solutions. We also established Kurita Kitakantou Co., Ltd., a new company that provides both water
treatment chemicals and maintenance services. Overseas, U.S. Water Services, Inc., which was acquired by theCompany and became a U.S. subsidiary in the previous fiscal year, was merged with Kurita America Inc. andFremont Industries, LLC, pre-existing U.S. subsidiaries, to generate synergies promptly in production and sales.
The Kurita Group thereby has built a business foundation for providing total solutions across the United States.
Also, the Company acquired U.S.-based Avista Technologies, Inc. and U.K.-based Avista Technologies (UK) Ltd.
(collectively “Avista Technologies”), which provide reverse osmosis (RO) membrane treatment chemicals and RO
membrane management services in the fiscal year under review. As such, the Kurita Group has acquired RO
membrane treatment chemicals technology and a business model, providing a competitive edge in the global market,
and is rolling them out. Furthermore, toward developing the tool cleaning business overseas and strengthening
competitiveness in the electronics industry, the Kurita Group entered into an agreement for making U.S.-based
Pentagon Technologies Group, Inc. a subsidiary through acquisition of its additional shares.
In response to the spread of COVID-19, in view of the status of infection in each country and the city lockdowns
and restrictions on movement, etc. we strove to provide products and services to our customers while taking
precautions to ensure the safety of our employees.
As a result, total consolidated orders for the Kurita Group in the fiscal year ended March 31, 2020 amounted to259,545 million yen (up 0.4% year on year), and net sales amounted to 264,807 million yen (up 2.9% year on year).
Operating profit was 27,479 million yen (up 38.4% year on year), profit before tax rose 31.7% over the previous
year to 26,691 million yen and profit attributable to owners of parent was 18,287 million yen (up 51.8% year onyear), marking a significant increase in profits. The main contributing factors behind this increase were the recordingof a gain on sale of fixed assets of 4,777 million yen mainly from the partial sale of facilities for the ultrapure watersupply business despite recording a loss on sale of fixed assets of 2,305 million yen accompanying the decision to
relocate our R&D center, and also temporary losses that were recorded in the previous fiscal year comprising a
2,867 million yen loss associated with the transfer of the aluminum compound business of Kurita Europe GmbHand a 1,171 million yen impairment loss on goodwill of Kurita Water Industries (Jiangyin) Co., Ltd.
From the fiscal year under review, the Kurita Group prepares consolidated financial statements based on theInternational Financial Reporting Standards (IFRS), instead of the conventional Japanese Generally Accepted
Accounting Principles (GAAP). Figures for the previous fiscal year are reclassified based on IFRS for comparison
and analysis.
– 24 –

[Translation for Reference and Convenience Purposes Only](2) Status of segment of the Kurita Group
Water Treatment Chemicals business
The MVP-22 plan for the Water Treatment Chemicals business is to transform the business model and strengthen
the business foundations overseas in order to enhance profitability.
In Japan, we have focused on receiving orders in the service contract-type business, in which we help customers torealize productivity improvements and reduced environmental burden by providing total solutions based on athorough understanding of the customer and grasp of their issues, and share this value with the customer on acontinuous basis. Overseas, U.S. Water Services, Inc. joined us as a subsidiary, and our sales network was expandedin the U.S. We acquired Avista Technologies, Inc. to expand our RO membrane treatment chemicals and related
services and strengthen our structure for global development. Furthermore, we made efforts to improve efficiency
and profitability in each region, such as reviewing our products and services and integrating our U.S. subsidiaries.
As for products and services, we focused on completing and proposing solution models, such as a model thatcombines equipment and IT and sensing technology in the papermaking process to maximize the effect of water
treatment chemicals, helping to improve water quality in the plant and productivity. We also expanded our service
contract-type business through the IT and sensing technology S.sensing® CS, a model that was completed in theprevious fiscal year, which enables optimization and automatic control of the dosage of water treatment chemicals
in wastewater treatment. In addition, we focused on creating customer value by promoting the use of technology
such as Dropwise Technology (dropwise condensation technology), which increases the heat transfer efficiency ofheat exchangers.
With respect to orders and sales in Japan, orders fell, reflecting one-time orders from the oil refinery andpetrochemical industries recorded in the previous fiscal year, but net sales, primarily sales of process treatment
chemicals for iron and steel production, increased due to the Kurita Group’s efforts to gain new customers byproposing total solutions that contribute to energy saving and increasing productivity at customers’ plants. Overseas,
both orders and sales rose primarily due to the new consolidation of operating results (for 12 months) in the water
treatment chemicals business at U.S. Water Services, Inc. and operating results (for ten months) at U.S.-based Avista
Technologies, Inc., despite a decrease in sales resulting from the transfer of the aluminum compound business in
Europe in the previous fiscal year and the effect of a stronger yen. Operating profit increased significantly year on
year, due to the absence of temporary losses posted in the previous fiscal year, namely a loss on transfer of business
related to the aluminum compound business in Europe and an impairment loss on goodwill based on the Kurita
Group’s decision to transfer a water treatment chemical production function in China. As a result, total Group orders
for the Water Treatment Chemicals business amounted to 113,777 million yen (up 10.5% year on year), while sales
amounted to 113,632 million yen (up 11.3% year on year). Operating profit amounted to 10,127 million yen (up137.8% year on year).
Water Treatment Facilities business
The MVP-22 plan for the Water Treatment Facilities business is to apply knowledge and technology cultivated in
the ultrapure water supply business to comprehensive contract proposals for maintenance and operational
management starting from large-scale Engineering, Procurement and Construction (EPC) projects in order toincrease profitability
In Japan, in addition to developing total solutions, we promoted cost efficiency improvements for maintenanceprojects and increased efficiency of operational management through the use of AI, IoT, and sensing technologies.
In addition, we actively made capital expenditure in the ultrapure water supply business and the tool cleaning
business, which will lead to future earnings. Overseas, we made efforts to develop reclaimed water supply services
mainly in China and entered into an agreement for acquiring additional Pentagon Technologies Group, Inc.’s sharesto make it our consolidated subsidiary as a means of strengthening the competitiveness of the tool cleaning business.
As for products and services, we expanded the service contract-type business by promoting development ofreclaimed water supply services utilizing the CORR® System (The Customized Optimal Ready-made Recycle
System) that serves as a standardized wastewater reclamation system as a solution model and widening the market
for application of the pure water supply service KWSS® (Kurita Water Supply Service) by expanding the lineup.
Also, on the production side, we took measures to improve the quality of designs and construction by improving
operational processes in plant production, introducing a risk management system and strengthening its
implementation.
With respect to orders and sales in Japan, in the electronics industry, both orders and sales of water treatment
facilities declined from the previous fiscal year, during which orders were received and sales were recorded for– 25 –

[Translation for Reference and Convenience Purposes Only]

large-scale projects; while maintenance services rose due to progress in the construction work for expansion andrenovation projects for the purpose of increasing production capacity at customers’ plants. For general industries,
orders for water treatment facilities fell, but sales rose due to progress in construction work for orders for largescale projects received in the previous fiscal year. In maintenance service, orders decreased slightly and sales
increased only slightly in reaction to strong orders and sales in the previous fiscal year. In facilities for electric
power plants, orders declined in reaction to orders for large-scale projects in the previous fiscal year, but sales
increased due to progress in construction work for received orders. In soil remediation, both orders and sales
decreased, reflecting a completion of large-scale projects. Overseas, orders increased, chiefly attributable to the newconsolidation of operating results (for 12 months) in the water treatment facilities business of U.S. Water Services,
Inc. However, net sales decreased in reaction to sales from large-scale projects in the electronics industry in China
and South Korea posted in the previous fiscal year and due to the effect of a stronger yen. Total sales in the ultrapure
water supply business in Japan and overseas increased chiefly due to the commencement of a new contract, despite
a fall due to the effect of changes in contracts with certain customers. Total operating profit for the Water Treatment
Facilities business increased, chiefly reflecting an improvement in the cost of sales ratio mainly due to the steps
taken to prevent additional costs in the production of water treatment facilities, and a gain on sale of fixed assets
resulting primarily from the sale of a certain facility in the ultrapure water supply business. As a result, total Grouporders for the Water Treatment Facilities business amounted to 145,768 million yen (down 6.3% year on year),while sales amounted to 151,174 million yen (down 2.6% year on year). Operating profit amounted to 17,390
million yen (up 12.1% year on year).
(3) Status of capital expenditure
The Kurita Group carried out capital expenditure amounting to a total of 31,729 million yen (down 8,274 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 6,423 million yen (up 2,647 million yen year on year), and in the Water Treatment
Facilities business largely used for newly constructing and expanding facilities for the ultrapure water supply
business and tool cleaning services of 25,306 million yen (down 10,921 million yen year on year).
(4) Status of financing
Short-term working capital is basically supplied by the Company’s own funds. Capital expenditure and otherinvestments in growth fields depend chiefly on the Company’s own funds, but the Company considers financing
through bank loans as needed. The Company has concluded commitment line contracts with four financial
institutions (realized borrowings: 35,000 million yen; unrealized borrowings: 35,600 million yen as of the end of
the fiscal year under review).

– 26 –

[Translation for Reference and Convenience Purposes Only](5) Changes in assets and profit and loss
[The Kurita Group]
81st
Fiscal Year
2016

82nd
Fiscal Year
2017

Japanese
GAAP

Japanese
GAAP

Japanese
GAAP

IFRS

IFRS

Orders(Million yen)

218,730

251,447

258,439

258,439

259,545

Net sales(Million yen)

214,187

236,815

259,409257,331

264,807

Operating profit(Million yen)

19,452

22,47524,326

19,86027,479Profit and Profit before tax
Loss(Million yen)

20,46525,53527,532

20,267

26,691

Profit attributable toowners of parent(Million yen)

14,506

17,897

17,323

12,05018,287

Basic earnings per
share
(Yen)

125.23

159.37154.29107.33162.86

Total assets(Million yen)

299,249

323,046

349,885359,500

387,749

Total equity(Million yen)

228,758

240,853

239,473

239,184

244,108

Equity attributable toowners of parent per
share
(Yen)

1,991.91

2,126.96

2,116.19

2,113.32

2,158.96

49

52

60

60

62

5

4

4

4

9

Classification

AssetsConsolidated
Number of subsidiaries
Companies Equity method
affiliates(Notes)

1.

2.
3.
4.

84th
Fiscal Year
2019

83rd
Fiscal Year 2018

From the 84th fiscal year, we adopted IFRS for preparing the consolidated financial statements. For
reference purpose, the table includes figures of the 83rd fiscal year complying with IFRS. “Income
before income taxes,” “Profit attributable to owners of parent,” “Net income per share,” “Total assets,”“Net assets” and “Net assets per share” under Japanese GAAP are respectively stated as “Profit
before tax,” “Profit attributable to owners of parent,” “Basic earnings per share,” “Total assets,”“Total equity” and “Equity attributable to owners of parent per share” under IFRS, in each column.
Basic earnings per share is calculated by deducting the number of treasury stock from the average
total number of issued shares during the fiscal year.
Equity attributable to owners of parent 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 about 312 thousand 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
The Company has implemented the MVP-22 plan since the fiscal year ended March 31, 2019, aiming at realizing
the corporate vision of “‘A creator of unique value to the solution of water and environment’ contributing to therealization of a sustainable society.” In the MVP-22 plan, we are making efforts to create shared value with society,positioning CSR (corporate social responsibility) as the core of management. Also, we are aiming at realizing highprofitability and sustainable growth, in addition to offering new value to customers, by clarifying that the source of
the Company’s competitive power is “customer intimacy” and performing business processes with dramatically
improved work quality and speed.
In the fiscal year under review, the second year of the MVP-22 plan, we focused on promoting total solutions. We
proceeded with the creation of solution models encompassing the products, technologies, services and contractual
methods that enable horizontal expansion and built a structure which can develop total solutions efficiently in the
future by reorganizing operational systems in Japan and integrating U.S. subsidiaries. Furthermore, through M&A,
we strengthened our products, technologies and services leading to the expansion of total solutions such as RO
membrane treatment chemicals, RO membrane management services and the tool cleaning business. In doing so,
we have continued to strengthen the foundation for promoting total solutions. However, to achieve the goals of the
MVP-22 plan, we need to accelerate the creation of solution models and measures to improve profitability by theentire Group.
In addition, due to the COVID-19 infection spread, measures such as lockdown of cities and restrictions on
movement have been taken in many countries. The outlook is uncertain as the impact of the restrictions on economic
activity and corporate activities on the global economy is extremely significant. Regarding the business environmentof the Company, operations are being maintained in the electronics and food markets, but the building and air
conditioning market, etc. is sluggish due to commercial facilities voluntarily refraining from operating or closing.
The Company and the Kurita Group in Japan have instructed employees in areas where self-restraint has beenrequested to work at home in principle and limit jobs requiring outings only to those necessary for securing business
continuity of our customers and the Kurita Group and responding to social demands, while taking anti-infection
measures. The Kurita Group companies overseas are also taking measures in accordance with the situation in eachcountry. The Company is working to minimize the impact on procurement through initiatives such as efficiently
procuring raw materials across the entire Group and switching to alternative suppliers
We have found that the issues to be addressed by the Kurita Group involve continuing to provide high social value
and customer value by making every effort to continue to provide products, technologies and services indispensable
for solving social issues and for the business activities of our customers.
Based on the above, positioning the fiscal year ending March 31, 2021, the interim year of the MVP-22 plan, we
will accelerate the promotion of “CSV (Creating Shared Value) businesses,” that promote the creation of sharedvalue with society and excel in “water saving,” “CO2 reduction” and “waste reduction” for customers, creating
additional solution models, and the transformation of our business processes and business models by utilizing IoT
and AI, and we will prioritize the following three key measures.
1) Accelerating the promotion of total solutions
We will accelerate the promotion of total solutions by strengthening a structure where marketing, sales,
technologies and development functions cooperate with each other for each customer market. Based on thoroughunderstanding of social issues and customers’ issues, we will focus on proposal activities for customers to whomhigh value can be offered, and promote CSV businesses and solution models in Japan and overseas as service
contract-type businesses, as well as set and manage specific profitability improvement indicators.
2) Transformation of business model and process
We will accelerate the transformation of the Kurita Group’s businesses by newly establishing the Digital Strategy
Division and unifying the Kurita Group’s IT-related departments, in order to move away from existing businessmodel and to promote digital transformation which utilizes digital technologies to create new value. We will
also utilize technologies and knowledge that our U.S. subsidiary Fracta possesses, thereby leading to creation of
new customer value. Furthermore, we will improve the efficiency of facility production systems through theutilization of AI for automation of designs and the introduction of simulation technologies.

– 28 –

[Translation for Reference and Convenience Purposes Only]

3) Increasing profitability overseas
In the overseas business, we will improve profitability both globally and locally by utilizing business bases andtechnologies acquired through M&A. Specifically, as part of our global efforts, Avista Technologies will leadthe initiative for developing RO membrane treatment chemicals and related services, and strengthening global
market deployment. And in each region, we aim to demonstrate synergy through the integration of subsidiaries
in the U.S., in addition to expanding the service contract-type business, which includes operational management
and maintenance, starting from EPC transactions in East Asia.
(7) Principal businesses (As of March 31, 2020)
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 pulp andpaper, process treatment chemicals for steel, marine vessel-related water
Water Treatment Chemicals treatment chemicals, wastewater treatment chemicals, sludge dehydratingchemicals, civil engineering and construction related chemicals, dioxin
treatment chemicals, heavy metal stabilizers, RO membrane treatment
chemicals, chemical dosing systems, ion exchange resin, maintenanceservices, water analysis and software services

Water Treatment Facilities

Ultra-pure water production systems, pharmaceutical-use water production
systems, deionizer, condensate demineralizers, filtration systems, standardtype products (deionizers, wastewater treatment systems, various water
treatment systems), water and wastewater treatment systems for various
industries (electronics, steel, oil refining, petrochemicals, electric power,
paper, pulp, pharmaceuticals, food products, etc.), wastewater reclamation
systems, marketable substance recovery systems, biogas production
systems, seawater desalination system, swimming pool-related equipment,
ion exchange resin, RO membranes, ultrafiltration membranes, functional
water production equipment for the semiconductor manufacturing process,water purifiers, ultrapure water supply, reclaimed water supply, maintenanceservices, tool cleaning services, chemical cleaning services, operation andmaintenance of water treatment facilities, soil and groundwater remediation,
household drinking water and software services– 29 –

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

Principal offices (As of March 31, 2020)
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(Notes)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)
Engineering Center (Mitaka-shi, Tokyo)
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)
U.S. Water Services, Inc. (United States)

1. The Company has 25 sales branch offices in addition to those listed above.
2. U.S. Water Services, Inc. changed its name to Kurita America Inc. on April 1, 2020.

– 30 –

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

Important subsidiaries (As of March 31, 2020)
Capitalization(In millions)Company name

Ownership(%)

Principal business

Kurita Europe GmbHEUR 50100

Manufacture and sale of water
treatment chemicals

Kurita Water Industries (Suzhou)
Ltd.

JPY 530

100

Manufacture and sale of water
treatment facilities

Kurita Water Industries (Jiangyin)Co., Ltd.

USD 16

100

Manufacture and sale of water
treatment chemicals
Manufacture and sale of water
treatment facilities
Operation and maintenance of water
treatment facilities

Hansu Technical Service Ltd.

KRW 26,400

100

Hansu Co., Ltd.

KRW 2,500

100

USD 0.00001

100

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

U.S. Water Services, Inc.

(Note)

Manufacture and sale of water
treatment chemicals
Manufacture and sale of water
treatment chemicals and water
treatment facilities
Operation and maintenance of water
treatment facilities
Chemical cleaning services
Tool cleaning services
Manufacture of water treatment
chemicals

U.S. Water Services, Inc. changed its name to Kurita America Inc. on April 1, 2020.

(10) Employees (As of March 31, 2020)[The Kurita Group]
Number of employees

Year-on-year change

6,737

+124

[The Company]
Number of employees

Year-on-year change

Average age

Average length of service

1,541

-8

42.6

17 years and 2 months– 31 –

[Translation for Reference and Convenience Purposes Only](11) Main lenders and outstanding borrowings (As of March 31, 2020)(Note)

LenderOutstanding borrowings (Million yen)

Syndicated loan

35,000The syndicated loan is under a commitment line contract (maximum loan amount: 70,000 million yen)concluded by MUFG Bank, Ltd., Resona Bank, Limited and Sumitomo Mitsui Trust Bank, Limited.

(12) Important matters concerning the Kurita Group
1) Acquisition of Avista Technologies, Inc. and Avista Technologies (UK) Ltd.
On May 15, 2019 PST, the Company completed acquisition of all shares of U.S.-based Avista Technologies,
Inc. and U.K.-based Avista Technologies (UK) Ltd. which provide RO membrane treatment chemicals andRO membrane management services and made them subsidiaries.
Avista Technologies, Inc. specializes in RO membrane treatment chemicals, manufactures and sells various
types of RO membrane treatment chemicals, in addition to providing services including RO membranecleaning. Avista Technologies (UK) Ltd. also operates similar business in EMEA (Europe, Middle East andAfrica) under license from Avista Technologies, Inc.
We will promote global sales expansion of RO membrane treatment chemicals in the future and strengthen
services related to RO membranes by sharing technologies and knowledge between the two companies.
2) Turning Pentagon Technologies Group, Inc. into a subsidiary.
On December 26, 2019, the Company entered into a share transfer agreement for acquiring additional sharesof Pentagon Technologies Group, Inc., a company operating a precision tool cleaning business in the U.S.
Ensuring speedier cooperation by holding a majority of the shares and thereby making it into a subsidiary, we
will further promote efforts to create new value including integration of technologies and services in thebusiness side toward generating synergies.
On April 1, 2020 PST, the Company completed the procedure involved in the acquisition of the shares inquestion.
3) Merger of U.S. subsidiaries
On March 31, 2020, our subsidiaries (U.S. Water Services, Inc., which manufactures and sells water treatment
chemicals and facilities in the U.S.; Kurita America Inc., which sells water treatment facilities andmanufactures, sells, imports and exports water treatment chemicals; Fremont Industries, LLC, which
manufactures and sells water treatment chemicals; and Global Water Services Holding Company, Inc., whichis the holding company of U.S. Water Services, Inc.) were merged with U.S. Water Services, Inc. as thesurviving company. Through this merger of four U.S.-based subsidiaries of the Company, we aim to offer totalsolutions to customers by integrating business models, products, technologies, as well as sales, production,and management control system, and enhancing business operating efficiency.
On April 1, 2020 CST, U.S. Water Services, Inc. changed its company name to Kurita America Inc.

– 32 –

[Translation for Reference and Convenience Purposes Only]

2.

Stock of the Company (As of March 31, 2020)(1)

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

Total number of issued shares
116,200,694 shares (including 3,591,697 shares of treasury stock)(3)

Number of shareholders
24,346 persons(4)

Major shareholders (Top 10 shareholders)Name of shareholder

Number of shares
thousand shares

Ratio of shareholding%

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

7,581

6.73

Japan Trustee Services Bank, Ltd. (Trust Account)

7,545

6.70

Nippon Life Insurance Company

5,979

5.31

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

2,202

1.95

Tokio Marine & Nichido Fire Insurance Co., Ltd.

2,155

1.91

MUFG Bank, Ltd.

2,056

1.82

State Street Bank and Trust Company 505025

2,056

1.82

JP Morgan Chase Bank 385151

1,935

1.71

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

1,913

1.69

BNP PARIBAS SECURITIES SERVICES PARIS /JASDECFRENCH RES /UCITS ASSETS

1,790

1.58

(Notes)

1.
2.
3.

(5)

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 about 312 thousand shares of treasury stock for performance-linked
stock compensation to Directors, held by Japan Trustee Services Bank, Ltd. (Trust Account).

Other important matters regarding stock

Holdings of the Company stock by means of a trust pertaining to the performance-linked stock compensation plan
As of March 31, 2020, 312,900 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 performance-linked stockcompensation plan which was adopted upon resolution made at the 80th Ordinary General Meeting of
Shareholders held on June 29, 2016 and held by Japan Trustee Services Bank, Ltd. (Trust Account).

– 33 –

[Translation for Reference and Convenience Purposes Only]

3. Directors and members of the Audit & Supervisory Board of the Company (As of March 31, 2020)(1)

Directors and members of the Audit & Supervisory Board
Name

Responsibility andimportant concurrent positions

Position

Koichi Iioka

Chairman and Director

Chief Business Officer for Global businessMichiya Kadota

President andRepresentative Director

Kiyoshi Itou

Executive Senior Managing
Director and Representative
Director

Executive General Manager of Corporate
Planning and Control Division

Toshitaka Kodama

Managing Director

Executive General Manager of Solution Business
Division and Chief Business Officer for Facilities
business

Yoshio Yamada

Managing Director

Executive General Manager of Japan Sales
Business Division and Chief Business Officer for
Chemicals business

Hirohiko Ejiri

Managing Director

Executive General Manager of Engineering
Division

Toshimi Kobayashi

Director

Senior General Manager of Administration Group,Japan Sales Business Division

Yasuo Suzuki

Director

Executive General Manager of Global Business
Division

Tsuguto Moriwaki

Director(External Director)

Ryoko Sugiyama

Director(External Director)

Head and Representative Director 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, apublic interest incorporated foundation

Keiko Tanaka

Director(External Director)

Vice President, Nissan Financial Services Co.,Ltd.

Kenjiro Kobayashi

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

Yukihiko Mutou

Full-time member of the Audit& Supervisory Board

Shigekazu Torikai(Notes)

1.
2.
3.
4.

Member of the Audit &Supervisory Board(External member of the Audit& Supervisory Board)

Representative Lawyer, Torikai Law Office
External Director, United Super Markets HoldingsInc.
Outside Director, RISO KAGAKUCORPORATION
Representative Director, Torikai Consulting GroupMr. Takahito Namura and Mr. Yukihiko Mutou retired from the office of Director at the conclusionof the 83rd Ordinary General Meeting of Shareholders held on June 27, 2019.
Mr. Shiro Hayashi resigned from the office of Member of the Audit & Supervisory Board at theconclusion of the 83rd Ordinary General Meeting of Shareholders held on June 27, 2019.
Mr. Koichi Iioka resigned from the office of Director on March 31, 2020.
Directors Tsuguto Moriwaki, Ryoko Sugiyama and Keiko Tanaka are External Directors of theCompany under Item 15, Article 2 of the Companies Act.
– 34 –

[Translation for Reference and Convenience Purposes Only]

5.

6.

7.

8.

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 with respect
to finance and accounting, having handled operations that include the investment and loan businessof 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.
Member of the Audit & Supervisory Board Yukihiko Mutou has considerable insight with respect
to finance and accounting, as he was engaged in finance and accounting in the Finance andAccounting Dept. for 16 years at Kurita Water Industries Ltd.
On April 1, 2020, the following changes were made in the position and responsibility of Directors.
Name

Position

Toshitaka Kodama Managing Director
Hirohiko Ejiri

Managing Director

Yasuo Suzuki

Managing Director

Toshimi Kobayashi Director
9.

Responsibility and important concurrent positions
Executive General Manager of Digital Strategy
Division
Executive General Manager of Engineering
Division and Chief Business Officer for Facilities
business
Executive General Manager of Global Business
Division and Chief Business Officer for Global
business
Senior General Manager of East Japan Group,Japan Sales Business Division

The Company has registered the following individuals as independent officers with the Tokyo Stock
Exchange, Inc.
Director
Tsuguto Moriwaki
Director
Ryoko Sugiyama
Director
Keiko Tanaka
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, Ryoko Sugiyama andKeiko Tanaka, and an external member of the Audit & Supervisory Board Shigekazu Torikai that limits liability fordamages 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 amountstipulated in Paragraph 1, Article 425 of the Act has been set as the maximum liability for damages based on thisagreement.
(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 themembers of the Audit & Supervisory Board’s Shareholding Scheme for the purchase of the Company’s shares sothat the Directors and the members of the Audit & Supervisory Board share the risks of share price fluctuations withthe shareholders. 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. The incentive
remuneration consists of short-term incentive remuneration, which increases or decreases depending on factors suchas the level of attainment of the annual business plan or the evaluation of each individual’s performance of his or– 35 –

[Translation for Reference and Convenience Purposes Only]

her duties and long-term incentive remuneration, whereby shares are issued to retiring directors according to theirperformance while in office and their title.
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), the Chairpersonof the Board of Directors will consult the Nomination & Remuneration Advisory Council in advance. Based on thereport given by the Nomination & Remuneration Advisory Council, the Board of Directors will decide theremuneration of the Directors within the total amount determined by a General Meeting of Shareholders. The
Nomination & Remuneration Advisory Council consists of the five members of three External Directors, one fulltime 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 be decided throughdiscussions among members of the Audit & Supervisory Board.
(4)

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

Number of payees

Amount of remuneration

Director

13(including three External
Directors)

453 million yen

Member of the Audit &Supervisory Board

4(including two external membersof Audit & Supervisory Board)

81 million yen

External officers

5

85 million yen(Notes)

1.

2.
3.

4.

5.

6.

The above table includes two Directors and one member of the Audit & Supervisory Board who
retired from office at the conclusion of the 83rd Ordinary General Meeting of Shareholders held on
June 27, 2019.
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 maximumof 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 was madeto pay performance-linked stock compensation (long-term incentive remuneration) to Directors(excluding External Directors) from a separate fund from that shown in 3. above.
The Company will record the estimates of money to be paid for short-term incentive remunerationand long-term incentive remuneration as provisions, etc. as of March 31, 2020. The amounts ofremuneration paid to Directors stated above include 40 million yen of provision for short-term
incentive remuneration for the fiscal year under review and 91 million yen of provision, etc. for longterm incentive remuneration for the fiscal year under review.
In addition to the above-stated remuneration paid to Directors, 114 million yen of short-term
incentive remuneration for the previous fiscal year has been paid to Directors and 39 million yen ofprovision for long-term incentive remuneration (including the amount of deliverable sharescalculated as cash) has been paid to two Directors who retired as of the conclusion of the 83rd
Ordinary General Meeting of Shareholders held on June 27, 2019.

(5) 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 members of the Audit& Supervisory Board.”– 36 –

[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 15 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.

External Director

Ms. Sugiyama attended 13 of 15 Board of Directors
meetings (attendance rate: 86.6%) held during the fiscal
year under review.
She poses questions and expresses her opinions over thecourse of deliberations on proposals and confirmationsof matters reported from an outsider’s perspective in
general, drawing on her career background acting as anexternal director, etc. at listed companies in otherindustries in addition to her significant knowledge of theenvironment and waste.

Keiko Tanaka

External Director

Ms. Tanaka attended 11 of 12 Board of Directors
meetings (attendance rate: 91.6%) held after she
assumed the office of Director at the 83rd Ordinary
General Meeting of Shareholders held on June 27, 2019.
She poses questions and expresses her opinions over thecourse of deliberations on proposals and confirmationsof matters reported from an outsider’s perspective in
general, based on her extensive knowledge about PR,
marketing, etc. and global experience in businesssegments different from those of the Kurita Group.

Kenjiro Kobayashi

Mr. Kobayashi attended all 15 Board of Directors
meetings and all 11 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 15 Board of Directors meetings
and all 11 Audit & Supervisory Board meetings (eachattendance rate: 100%) held during the fiscal year under
External member of the
Audit & Supervisory Board review.
He expressed his opinions from his professional
standpoint as an attorney at law.

Tsuguto Moriwaki

Ryoko Sugiyama– 37 –

[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

73 million yen

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

87 million yen(Notes)(3)

1.

The amount of remuneration listed above in the row “Amount of Remuneration paid by the Company
for the fiscal year under review” has been determined on the basis of the audit agreement enteredinto between the Company and the Accounting Auditor. The above paid amount is the total of
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 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, and rationale
used for calculating quotations for remuneration.

3.

Among the Company’s significant subsidiaries, Kurita Europe GmbH, Kurita Water Industries(Suzhou) Ltd., 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 equivalent qualifications 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.

– 38 –

[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 (April 1, 2019 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”) comply with laws and regulationsin 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 which business activities are
conducted, and have specified actions based on compliance with laws, regulations, and social ethics as aprerequisite for corporate activities. We have established Core Values (fairness, transparency, integrity, safety
and compatibility) that officers and employees should emphasize, and the Kurita Group Code of Conduct
with which 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 inour 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 and thedepartment committees of the Group Companies. The Company will also work continuously to raise thecompliance 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 andimplement remedial actions and preventive measures. The President and Representative 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-Blower Protection Regulations as a mechanism for theemployees 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 the ComplianceCounselling Counter. The Company also works to ensure the fairness and transparency of the managementof the Company and the Group Companies by regularly reporting the status of the operation of 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 Finance and Accounting Department in the Corporate Planning and Control
Division shares responsibility for monitoring, recommendations for improvement, and support for
improvement related to the “operations process control inside the Company” and the “account settlement
and financial reporting process control of consolidated 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
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.
– 39 –

[Translation for Reference and Convenience Purposes Only]

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 formulated
and is operating the “CSR Policy” including what we should be like and the frame of mind that we should
maintain firmly in 2030.

(b)

To enhance the effectiveness of the Kurita Group Code of Conduct, the Company revised the policies sharedby the Group Companies on environment, finance, and taxation, thereby promoting the establishment of theKurita Group Business Policy in the fiscal year ended March 31, 2020.

(c)

The Company is operating the Regulation for Responding to Anti-social Forces that prescribes mattersrelating 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 established the Kurita Group Code of Conduct, the Corporate Governance Policies, the Basic
Policies for Constructing an Internal Control System, the CSR Policy, the Kurita Group BCM Policy(Business Continuity Management) and the Kurita Group Business Policy as its basic policies. In the fiscal
year ended March 31, 2020, the Company conducted the Management Monitoring by the Internal Auditing
Department with the purpose of confirming the implementation status of the basic policies in the Group
Companies, and confirmed that there was no material deficiency.

(f)

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 findings in activity policies for the subsequent fiscal year.

(g)

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.

(h)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 Financeand Accounting Department in the Corporate Planning and Control Division has also been taking on some
responsibility in that regard. The Company has also been monitoring the effectiveness of respective controls.

(i)

The Company revises our policies on corporate governance regularly (at least once a year) or as necessary.
In the fiscal year ended March 31, 2020, following a transition of accounting standards of the Kurita Groupto IFRS, the Company partially revised its Corporate Governance Policies on February 1, 2020 to revise
operating standards relating to important transactions among related parties.

(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 Executive General Manager of the Corporate Planning and Control Division acting as the officer incharge. The Executive General Manager of the Corporate Planning and Control Division regularly analyzes
and assesses the risks of the Company and the Group Companies, and makes efforts to prevent the occurrenceof risks through continuous monitoring. If a risk that may have a material impact on management arises, the– 40 –

[Translation for Reference and Convenience Purposes Only]

Executive General Manager of the Corporate Planning and Control Division will appoint a responsible
official, draw up a system to address the risk, and immediately issue a command after gaining the approvalof the President and Representative Director. The responsible official will immediately implement
countermeasures and report the impact of the risk, the status of correcting the risk, and the measures forpreventing the risk to the President and Representative Director and the Executive General Manager of the
Corporate Planning and Control 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 executive general managers of the divisions, who acts as the
responsible official. Other day-to-day risks related to quality, the environment, information security, andexport regulations, etc. are addressed by their respective departments.

3)

The Executive General Manager of the Corporate Planning and Control Division, the Chairmen of theCommittees, and the executive general managers of the divisions regularly report the status of activities topromote risk 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 the event of anearthquake or other disaster, or as “business risk” which derives directly from daily business affairs. The
Company and the Group Companies have also been conducting review on an annual basis of risk 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, the Company and the Group
Companies have been striving to prevent risk from materializing by implementing prevention measures, andotherwise have been preparing themselves to address unforeseen circumstances by establishing action plans
for risk events. In addition, the Kurita Group implements the “Kurita Group BCM Policy (BusinessContinuity Management)” which sets out the Kurita Group’s principles on response measures for officers,
executive officers, and employees in handling emergencies that pose a risk to the continuity of the Kurita
Group’s businesses such as major earthquakes, storm and flood damage, or pandemics.

(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 implementationof 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 havebeen receiving reports whenever appropriate with respect to the occurrence and materializing of significant
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 Senior General
Manager, Head of Osaka Office or Head of an Office).

2)

The Board of Directors formulates a long-term vision, a medium-term management plan, and a business plan
for a single fiscal year, and sets out the targets, policies, and focused measures for each organization. The– 41 –

[Translation for Reference and Convenience Purposes Only]

Board of Directors also implements monthly and quarterly business controls in relation to the consolidated
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 made at the Boardof Directors meetings.

4)

The Executive Committee makes decisions and conducts a review of matters resolved at the Board of
Directors meetings to facilitate the decision-making progress when necessary. The Executive Committee
consists of the President and Representative Director, Directors with a rank of Managing Director or above,
the Executive General Manager of the Corporate Planning and Control Division, and the Directors andexecutive officers appointed by the President and Representative Director. The committee meets twice amonth 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 andquarterly 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 reviewed and is operating the Final
Decision and Examination Regulations when necessary.

(b)

The Executive Committee has been making judgments and decisions on matters that have been delegated to
it by the Board of Directors, and has been conducting review with respect to agenda items for meetings ofthe Board of Directors. Executive Committee members include the President and Representative Director,
Directors with a rank of Managing Director or above, the Executive General Manager of the Corporate
Planning and Control Division, and the Directors and executive officers appointed by the President andRepresentative Director. The committee has been meeting twice a month in principle, and on a temporary
basis when necessary. 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 and Control
Division. In addition, an officer and a department of the Company in charge of each Group Company areappointed to regularly 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, andto 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 dispatcha (non-standing) Director and (non-standing) member of the Audit & Supervisory Board to monitor the
management, business performance, settlement of accounts, and risks. If a decision needs to be made as the
Kurita Group, the Executive Committee of the Company deliberates the matter and makes the decision inaccordance with “7. Matters related to subsidiaries and associates in Japan and overseas,” an appendix of the– 42 –

[Translation for Reference and Convenience Purposes Only]

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 andimplements specific measures. In addition, the system for ensuring the accuracy of the financial reporting by
the Kurita 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 fora 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 with respective
Group Companies annually, 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 and Control 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)

In order to strengthen governance at the Group Companies, the Company improves the systems andstructures provided by the Company, and the Board of Directors accurately evaluates operational status andaims to improve effectiveness. In the fiscal year ended March 31, 2020, as part of these efforts, the Company
evaluated the effectiveness of the Board of Directors for the Group Companies in Japan to identify current
issues and determine support to be provided by the Company and measures to be taken by each Group
Company.

(d)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 the assignmentof 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 the employee

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 in accordancewith 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 the employee.

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, and members of
the Audit & Supervisory Board give instructions to specific employees in the Internal Auditing Department to assist
audit work as necessary.

– 43 –

[Translation for Reference and Convenience Purposes Only](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, executive officers 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, the Confidential
Information Management Regulations, and other regulations.

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 executive officers and employees of the Company and the Directors, the members of the Audit &Supervisory Board, and the employees of the Group Companies report matters stipulated in laws andregulations as well as cases of compliance violations, cases in dispute, the occurrence of material risks, andmatters 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 executive officers andemployees of the Company and the Directors, the members of the Audit & Supervisory Board and employeesof Group Companies to the members of the Audit & Supervisory Board or the Audit & Supervisory Board
when necessary. In addition, the departments in charge also make necessary reports at the request of amember 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, executive officers and employees of the Company and the Directors and employees of theGroup 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 executive officers and employees of the Company, and the Directors, members of the Audit &Supervisory Board and the employees of the Group Companies report on the matters stipulated in laws andregulations as well as cases of compliance violations, cases in dispute, the occurrence of material risks, andmatters related to accounting and the settlement of accounts, etc. to the departments in charge within the
Company. The departments in charge report on the details of the reports from the executive officers andemployees of the Company, and the Directors, members of the Audit & Supervisory Board and employeesof Group Companies to the members 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 amember 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 Boardor the Audit & Supervisory Board to exchange opinions is held regularly.

– 44 –

[Translation for Reference and Convenience Purposes Only]

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 the Group
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 their concerns.

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.

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 also been taking steps to promote
cooperation with the Accounting Auditor by mutually checking each other’s audit plans and regularly
exchanging opinions through forums such as briefing sessions for reporting on settlement of accounts andaudit 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.
(https://ir.kurita.co.jp/en/corporate_governance/internal_control_system/index.html)– 45 –

[Translation for Reference and Convenience Purposes Only]

Consolidated Financial Statements
Consolidated Statement of Financial Position (As of March 31, 2020)
Account item
AssetsCurrent assets
Cash and cash equivalents
Trade receivables and contract assets
Securities, deposits with a maturity ofover three months
Finished products
Work in process
Raw materials and supplies
Other

AmountAccount item

162,847
50,21593,067

Borrowings

35,371

5,038

Accounts payable - other and accrued
expenses

16,455

Income taxes payable
Provisions

1,998
1,557

1,291
2,917
8,254
224,902

Property, plant and equipment
Buildings and structures
Machinery, equipment and vehicles
Land
Construction in progress

106,358
19,847
62,231
12,624
7,376
4,277

Right-of-use assets

17,784

Intangible assets

60,415

Goodwill
Software
Customer and technology related
assetsOther
Investments and other assets

94,40824,016
5,912

2,062

Non-current assets

Other

Liabilities
Current liabilities
Trade payables
Contract liabilities(Million yen)Amount

Other

9,096

Non-current liabilities
Borrowings
Lease liabilities
Retirement benefit liability
Other49,232
1,305
13,701
16,913
17,311

Total liabilities

143,640
Equity47,0333,307

Equity attributable to owners ofparentShare capital
Capital surplus

9,565

Retained earnings

231,456

Treasury shares(10,893)508
40,343

Other components of equity
Financial assets measured at fair value
through other comprehensive income

242,225
13,4508,212216

Investment securities

21,002

Investments accounted for using
equity method

7,469

Cash flow hedge

Deferred tax assets

4,295

Exchange differences on translation offoreign operations(9,033)

Other

7,576

Non-controlling interests

1,666

Total equity
Total assets
387,749
Total liabilities and equity(Note)
Figures are rounded down to the nearest millions of yen.

– 46 –

8,747
503

244,108
387,749

[Translation for Reference and Convenience Purposes Only]

Consolidated Statement of Profit or Loss
(From April 1, 2019 to March 31, 2020)(Million yen)AmountAccount item
Net sales

264,807

Cost of sales

172,092

Gross profit

92,715

Selling, general and administrative expenses

66,060

Other income

5,832

Other expenses

5,006

Operating profit

27,479Finance income

569

Finance costs

1,417

Share of profit of investments accounted for using equity method

60

Profit before tax

26,691

Income tax expense

8,378

Profit for the period

18,312

Profit attributable to non-controlling interests

25

Profit attributable to owners of parent(Note)
Figures are rounded down to the nearest millions of yen.

– 47 –

18,287

[Translation for Reference and Convenience Purposes Only]

Consolidated Statement of Changes in Equity(From April 1, 2019 to March 31, 2020)(Million yen)
Equity attributable to owners of parent

Balance as of April 1,
2019
Profit for the period
Other comprehensive
incomeTotal comprehensive
income for the period
Purchase of treasury
sharesDividends
Share-based paymenttransactions
Changes in ownershipinterests in subsidiaries
Transfer from othercomponents of equity toretained earnings
Put options granted to
non-controllingshareholders
Other
Total transactions withownersBalance as of March 31,
2020

Balance as of April 1, 2019
Profit for the period
Other comprehensive
incomeTotal comprehensive income
for the period
Purchase of treasury shares
Dividends
Share-based paymenttransactions
Changes in ownershipinterests in subsidiaries
Transfer from othercomponents of equity toretained earnings
Put options granted to noncontrolling shareholders
Other
Total transactions withownersBalance as of March 31,
2020

Share capital

Capital surplus

Treasury shares

13,45010,265(10,932)––

Other components of equity
Exchangedifferences on
Cash flow hedges
translation offoreign operations–(4,671)310(4,362)

192(4,362)

192

(3)

103

42

(1,385)

0

(771)
(0)

13,450(2,053)

38

0

–

8,212

(10,893)(9,033)503

Equity attributable to owners of parent
Other components of equity
FinancialassetsRemeasuremeasured atments of
Retainedfair value
Total
definedearnings
through othercomprehen- benefit plans
sive income
9,199
–
4,838
219,660
18,287

Total equity

Total

Noncontrollinginterests

237,282
18,2871,902
25

239,184
18,312(4,569)(49)(4,619)18,287

13,717(24)

13,693(6,521)(3)(6,521)(24)(3)(6,546)

145

8

154

(1,385)(196)(1,581)

(462)
(462)

63

(4,569)63(4,569)

0
10

(63)

(52)

52

–

–

(771)

(771)

(21)

(21)

(21)

10

(63)

(52)

(6,490)(8,557)(211)(8,769)

8,747

–

216

231,456

242,442

1,666

244,108(Note) Figures are rounded down to the nearest millions of yen.

– 48 –

[Translation for Reference and Convenience Purposes Only]

Non-Consolidated Financial Statements
Non-Consolidated Balance Sheet (As of March 31, 2020)
Account item
AssetsCurrent assets
Cash and deposits
Notes receivable – trade
Accounts receivable – tradeFinished products
Work in process
Raw materials
Short-term loans receivable
Other

AmountAccount item

85,69923,044
4,553
47,556
618
306
786
3,098
5,735

Liabilities
Current liabilities
Accounts payable – trade
Short-term borrowings
Accounts payable – other and accrued
expenses
Deposits received
Provision for bonuses
Other
Non-current liabilities
Lease obligations(Million yen)Amount72,031
13,45235,000
7,587
9,165
1,080
5,744
26,232
392

Deferred tax liabilities related torevaluation

1,119

Net defined benefit liability

10,829Other

13,891

Total liabilities

98,263

Non-current assets

235,336

Property, plant and equipment
Buildings and structures
Machinery, equipment and vehicles

85,212
14,14453,097

Land

9,429

Leased assets
Construction in progress
Other

450
6,527
1,562

Net assets
Shareholders’ equity
Common stock

212,554
13,450Intangible fixed assets
SoftwareTechnology-related assets
Other

9,421
2,855
6,435
129

Capital surplus
Legal capital surplus
Retained earnings
Legal retained earnings

11,426
11,426
198,571
2,919

Investments and other assets

140,702

195,651

Investment securities

20,195

Shares of subsidiaries and associates

77,531

Investments in capital of subsidiaries
and associates

28,453

Other retained earnings
Reserve for advanced depreciationof non-current assets
General reserve
Retained earnings brought forward
Treasury stock(10,893)Long-term loans receivable
Deferred tax assets
Other
Allowance for doubtful accounts

5,929
2,719
5,952
(79)

Valuation and translation adjustments

10,217

Unrealized gains (losses) on availablefor-sale securities

8,506

Total assets

321,035

773
181,480
13,397

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

(0)
1,711
222,772

Total liabilities and net assets

321,035(Note) Figures are rounded down to the nearest millions of yen.

– 49 –

[Translation for Reference and Convenience Purposes Only]

Non-Consolidated Statement of Income(From April 1, 2019 to March 31, 2020)(Million yen)AmountAccount item
Net sales

121,467

Cost of sales

81,913Gross profit

39,554

Selling, general and administrative expenses

26,733Operating profit

12,821Non-operating income

6,268Interest and dividend income

2,311

Other

3,957
1,298

Non-operating expenses

173

Interest expense

1,125

Other

17,791

Ordinary profit

4,752

Extraordinary income

4,752

Gain on sale of fixed assets

3,005

Extraordinary losses

2,293

Loss on sale of non-current assets
Loss on valuation of investment securities

344

Provision for environmental measures

368
19,538

Income before income taxes
Income taxes
Current

625

Deferred

4,006

Net income

14,907(Note) Figures are rounded down to the nearest millions of yen.

– 50 –

[Translation for Reference and Convenience Purposes Only]

Non-Consolidated Statement of Changes in Shareholders’ Equity(From April 1, 2019 to March 31, 2020)(Million yen)
Shareholders’ equity
CapitalsurplusRetained earnings
Other retained earnings

Commonstock

Balance as of the
beginning of the fiscal
year
Change during the period
Provision of generalreserve
Dividend from surplus
Net income
Purchase 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

773

Generalreserve

Retainedearnings
brought
forward

Total retained
earnings

163,980

24,433

192,106

17,500(17,500)–(6,531)
14,907(6,531)
14,907(1,911)(1,911)

(0)

–

(0)

–

–

17,500(11,035)

6,464

13,45011,426

2,919

773

181,480

13,397

198,571– 51 –

[Translation for Reference and Convenience Purposes Only]
Shareholders’ equity

Balance as of the
beginning of the fiscal
year

Valuation and translation adjustments

Treasury stock

Total
shareholders’equity(10,932)

206,051

Change during theperiodProvision of generalreserve
Dividend fromsurplus
Net income
Purchase of treasury
stock
Disposal of treasury
stock
Reversal ofrevaluation reserve
for landNet change in items
other thanshareholders’ equity
during the period
Total change during
the period

38

Balance as of the endof the fiscal year

(10,893)

Unrealized
gains (losses)
on availablefor-salesecurities

Deferred gains(losses) onhedges8,552

0Revaluation
reserve for
land

(200)

Total
valuation andtranslation
adjustments
8,352

Total net
assets214,404––(6,531)(6,531)

14,907

14,907

(3)

(3)

(3)

42

42

42

(1,911)(1,911)

(46)

(0)

1,911

1,864

1,864

6,503

(46)

(0)

1,911

1,864

8,367

212,554

8,506

(0)

1,711

10,217

222,772(Note) Figures are rounded down to the nearest millions of yen.

– 52 –

[Translation for Reference and Convenience Purposes Only]

Audit Report
Accounting Auditor’s Audit Report on the Consolidated Financial Statements
Report of Independent Auditor
May 26, 2020
The Board of Directors
Kurita Water Industries Ltd.
Grant Thornton Taiyo LLC
Tokyo OfficeTetsuo Shibaya
Designated and Engagement Partner
Certified Public Accountant
Makio Wada
Designated and Engagement Partner
Certified Public Accountant
Kenta Nishimura
Designated and Engagement Partner
Certified Public Accountant(Seal)(Seal)(Seal)

OpinionPursuant to Paragraph 4, Article 444 of the Companies Act, we have audited the accompanying consolidated
financial statements, which comprise the consolidated statement of financial position, the consolidated statementof profit or loss, the consolidated statement of changes in equity and the notes to consolidated financial statementsof Kurita Water Industries Ltd. (the “Company”) applicable to the fiscal year from April 1, 2019 through March
31, 2020.
In our opinion, the consolidated financial statements, which were prepared under the designated IFRS withomission of a part of disclosure items pursuant to the provisions of the latter part of Paragraph 1, Article 120 of
the Regulation on Corporate Accounting, present fairly, in all material respects, the consolidated financial positionof Kurita Water Industries Ltd. and its subsidiaries as of March 31, 2020, and their financial performance for theyear then ended.
Basis for Audit Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our responsibilities
under those standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated
Financial Statements section of our report. We are independent of the Company and its consolidated subsidiaries
in accordance with the ethical requirements that are relevant to our audit of the consolidated financial statements
in Japan, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Emphasis of Matter
As stated in significant subsequent events, Kurita America Holdings Inc., a consolidated subsidiary, acquired
additional shares of Pentagon Technologies Group, Inc. on April 1, 2020, thereby making the company aconsolidated subsidiary.
Our opinion is not qualified in respect of this matter.
Responsibilities of Management, Audit & Supervisory Board Members and the Audit & Supervisory Board for theConsolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements inconformity with the provisions of the latter part of Paragraph 1, Article 120 of the Regulation on Corporate
Accounting that allows companies to prepare consolidated financial statements with the omission of a part of thedisclosure items required under the designated International Financial Reporting Standards (“IFRS”), and fordesigning and operating such internal control as management determines is necessary to enable the preparationand fair presentation of the consolidated financial statements that are free from material misstatement, whether
due to fraud or error.

– 53 –

[Translation for Reference and Convenience Purposes Only]

In preparing the consolidated financial statements, management is responsible for assessing whether it isappropriate to prepare the consolidated financial statements with the assumption of a going concern, and fordisclosing, as necessary, matters related to going concern, in accordance with the provisions of the latter part ofParagraph 1, Article 120 of the Regulation on Corporate Accounting, which allows the omission of a part of items
required to be disclosed by the designated IFRS in preparing the consolidated financial statements.
Audit & Supervisory Board Members and the Audit & Supervisory Board are responsible for overseeing the
Directors’ performance of duties within the maintenance and operation of the financial reporting process.
Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
Our responsibilities are to obtain reasonable assurance about whether the consolidated financial statements as awhole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
expresses our opinion on the consolidated financial statements based on our audit from an independent point ofview. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the decisions of users of these consolidated financial statements.
In accordance with auditing standards generally accepted in Japan, we exercise professional judgment andmaintain professional skepticism throughout the audit process to perform the following:・Identify and assess the risks of material misstatement, whether due to fraud or error, and design and perform
audit procedures responsive to those risks. Selecting audit procedures to be applied is at the discretion of theauditor. Obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.
・When auditing the consolidated financial statements, obtain an understanding of internal control relevant to theaudit in order to design audit procedures that are appropriate in the circumstances in making risk assessments, but
not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control.
・Evaluate the appropriateness of accounting policies used by management and their method of application, as
well as the reasonableness of accounting estimates made by management and the appropriateness of related notes
thereto.
・Conclude on the appropriateness of preparing the consolidated financial statements with the assumption of agoing concern by management, and based on the audit evidence obtained, whether a material uncertainty exists
related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern.
If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to thenotes to the consolidated financial statements or, if the notes to the consolidated financial statements on material
uncertainty are inadequate, to express a qualified opinion with exceptions on the consolidated financial statements.
Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future
events or conditions may cause the Group to cease to continue as a going concern.
・ Evaluate whether the presentation of the consolidated financial statements and notes to the consolidated
financial statements are in accordance with the provisions of the latter part of Paragraph 1, Article 120 of theRegulation on Corporate Accounting, which allows the preparation of the consolidated financial statements withsome omissions of disclosure items required by the designated IFRS, as well as evaluate the presentation, structure,and content of the consolidated financial statements, including the related notes thereto, and whether the
consolidated financial statements fairly present the underlying transactions and accounting events.
・Obtain sufficient and appropriate audit evidence regarding the financial information of the Company and its
consolidated subsidiaries to express an opinion on the consolidated financial statements. We are responsible forthe direction, supervision and performance of the audit of the consolidated financial statements. We remain solely
responsible for our audit opinion.
We report to the Audit & Supervisory Board Members and the Audit & Supervisory Board regarding, among othermatters, the planned scope and timing of the audit and significant audit findings, including any significant
deficiencies in internal control that we identify during our audit process, and other matters required by auditing
standards.
We also provide the Audit & Supervisory Board Members and the Audit & Supervisory Board with a statementthat we have complied with relevant ethical requirements in Japan regarding independence, and communicate withthem all relationships and other matters that may reasonably be deemed to bear on our independence, and whereapplicable, related safeguards in order to eliminate or reduce obstruction factors.
Conflicts of Interest
We or engagement partners have no interest in the Company and its consolidated subsidiaries which should be
disclosed in compliance with the Certified Public Accountants Act.
– 54 –

[Translation for Reference and Convenience Purposes Only]

Accounting Auditor’s Audit Report on the Non-Consolidated Financial Statements
Report of Independent Auditor
May 26, 2020
The Board of Directors
Kurita Water Industries Ltd.
Grant Thornton Taiyo LLC
Tokyo OfficeTetsuo Shibaya
Designated and Engagement Partner
Certified Public Accountant
Makio Wada
Designated and Engagement Partner
Certified Public Accountant
Kenta Nishimura
Designated and Engagement Partner
Certified Public Accountant(Seal)(Seal)(Seal)

OpinionPursuant 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”) (hereinafter, the “financial statements, etc.”) applicable to the 84th fiscal year from April 1, 2019
through March 31, 2020.
In our opinion, the financial statements, etc. referred to above present fairly, in all material respects, the financial
position and results of operations pertaining to these financial statements, etc., applicable to the fiscal year ended
March 31, 2020 in accordance with accounting principles generally accepted in Japan.
Basis for Audit Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our responsibilities
under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial
Statements, Etc. section of our report. We are independent of the Company in accordance with the ethicalrequirements that are relevant to our audit of the financial statements in Japan, and we have fulfilled our otherethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained
is sufficient and appropriate to provide a basis for our opinion.
Responsibilities of Management, Audit & Supervisory Board Members and the Audit & Supervisory Board for the
Financial Statements, Etc. and the Related Supplementary Schedules
Management is responsible for the preparation and fair presentation of the financial statements, etc. in accordancewith 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 the financial statements,
etc. that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, etc., management is responsible for assessing whether it is appropriate toprepare the financial statements, etc., with the assumption of a going concern, and in accordance with accounting
principles generally accepted in Japan, for disclosing, as necessary, matters related to going concern.
Audit & Supervisory Board Members and the Audit & Supervisory Board are responsible for overseeing the
Directors’ performance of duties within the maintenance and operation of the financial reporting process.
Auditor’s Responsibility for the Audit of the Financial Statements, Etc.
Our responsibilities are to obtain reasonable assurance about whether the financial statements, etc. as a whole arefree from material misstatement, whether due to fraud or error, and to issue an auditor’s report that expresses ouropinion on the financial statements, etc. based on our audit from an independent point of view. Misstatements canarise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the decisions of users of these financial statements, etc.
In accordance with auditing standards generally accepted in Japan, we exercise professional judgment andmaintain professional skepticism throughout the audit process to perform the following:– 55 –

[Translation for Reference and Convenience Purposes Only]・Identify and assess the risks of material misstatement, whether due to fraud or error, and design and perform
audit procedures responsive to those risks. Selecting audit procedures to be applied is at the discretion of theauditor. Obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.
・When auditing the financial statements, etc., obtain an understanding of internal control relevant to the audit inorder to design audit procedures that are appropriate in the circumstances in making risk assessments, but not forthe purpose of expressing an opinion on the effectiveness of the entity’s internal control.
・Evaluate the appropriateness of accounting policies used by management and their method of application, as
well as the reasonableness of accounting estimates made by management and the appropriateness of related notes
thereto.
・Conclude on the appropriateness of preparing the financial statements, etc. with the assumption of a going
concern by management, and based on the audit evidence obtained, whether a material uncertainty exists related
to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If weconclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the notes tothe financial statements, etc. or, if the notes to the financial statements, etc. on material uncertainty are inadequate,
to express a qualified opinion with exceptions on the financial statements, etc. Our conclusions are based on theaudit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause theGroup to cease to continue as a going concern.
・Evaluate whether the presentation of the financial statements, etc. and notes to the financial statements, etc. arein accordance with accounting standards generally accepted in Japan, as well as evaluate the presentation,
structure, and content of the financial statements, etc., including the related notes thereto, and whether the financial
statements, etc. fairly present the underlying transactions and accounting events.
We report to the Audit & Supervisory Board Members and the Audit & Supervisory Board regarding, among othermatters, the planned scope and timing of the audit and significant audit findings, including any significant
deficiencies in internal control that we identify during our audit process, and other matters required by auditing
standards.
We also provide the Audit & Supervisory Board Members and the Audit & Supervisory Board with a statementthat we have complied with relevant ethical requirements in Japan regarding independence, and communicate withthem all relationships and other matters that may reasonably be deemed to bear on our independence, and whereapplicable, related safeguards in order to eliminate or reduce obstruction factors.
Conflicts of Interest
We or engagement partners have no interest in the Company which should be disclosed in compliance with theCertified 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 84th fiscal year (from April 1, 2019 to March
31, 2020), 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 byeach 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 under review,
designated the status of the establishment and operation of internal control systems (including internal controls
for financial reporting) and risk management systems as priority audit items, received reports from eachmember 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 such duties, and requested
explanations as necessary.

In accordance with the auditing standards for members of the Audit & Supervisory Board determined by
the Audit & Supervisory Board, and in compliance with auditing policies and the audit plan, each memberof the Audit & Supervisory Board made efforts to collect information and establish auditing
circumstances through communication with Directors, the Internal Auditing Department 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 performance of
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 exchange with
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 the Regulation 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 operation of 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 the statusof its performance of duties, and requested explanations as necessary. In addition, each member of the
Audit & Supervisory Board was notified by the Accounting Auditor that it had established a “System toensure that the performance of the duties of the Accounting Auditors was properly conducted” (the mattersset forth in the items of Article 131 of the Regulation on Corporate Accounting) in accordance 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 andthe notes to the non-consolidated financial statements) and the supplementary schedules, as well as theconsolidated financial statements (the consolidated statement of financial position, the consolidated statementof income, the consolidated statement of changes in 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 theperformance of duties by Directors. As for internal controls for financial 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 the internal controls in businessprocesses.

(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, 2020
Kurita Water Industries Ltd.

Audit & Supervisory Board

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

Kenjiro Kobayashi

Full-time member of the Audit & Supervisory
Board

Yukihiko Mutou

External member of the Audit & Supervisory
Board

Shigekazu Torikai– 58 –