FOR IMMEDIATE RELEASE
Kurita Water Industries Reports Earnings for the Fiscal Year ended
March 31, 2019
Tokyo, Japan, May 13, 2019 - Kurita Water Industries Ltd. (TSE Securities Code 6370)
announced net sales of 259,409 million yen and profit attributable to owners of parentof 17,323 million yen, or 154.29 yen per share, for the year ended March 31, 2019
(April 1, 2018 – March 31, 2019).
Results of Operations
Total consolidated orders for the Kurita Group (Kurita Water Industries Ltd. and its
consolidated subsidiaries and equity method affiliates) in the fiscal year ended March 31,
2019 increased 2.8% from the level of the previous fiscal year, to 258,439 million yen,while net sales rose 9.5%, to 259,409 million yen. Operating income was up 8.2% fromthe previous fiscal year, to 24,326 million yen. Ordinary income was 23,919 million yen,up 8.2%. Profit attributable to owners of parent came to 17,323 million yen, a decreaseof 3.2%, due to a temporary increase in tax expenses. The Group has expanded thescope of application of the percentage-of-completion method mainly in the Water
Treatment Facilities business. As a consequence, net sales increased 7,355 million yen,and operating income and ordinary income rose 1,421 million yen, respectively. In
addition, the Group recorded a 8,676 million yen gain on sales of shareholdings of otherlisted companies (gain on sales of investment securities) in extraordinary income, while
5,063 million yen, the sum of a 2,867 million yen loss associated with the transfer of thealuminum compound business of Kurita Europe GmbH and a 1,097 million yen
impairment loss on goodwill of Kurita Water Industries (Jiangyin) Co., Ltd., wasrecorded in extraordinary losses. The recording of the impairment loss on goodwill ofKurita Water Industries (Jiangyin) Co., Ltd. was based on the Group’s decision totransfer the production function of water treatment chemicals of this company to a plantof the new Kurita Water Industries (Taixing) Co., Ltd. (due to begin operating in thesecond half of fiscal year ending March 31, 2021) to address tightened regulations by
the Chinese authorities on companies that produces hazardous chemicals in densely
populated districts in China.
During the fiscal year ended March 31, 2019, the global economy grew moderately
overall, reflecting the firm performance of the U.S. economy and continued economic
expansion in emerging countries in Asia excluding China, although the Chinese andEuropean economies decelerated in the second half of the fiscal year due to growing
uncertainties over the economic future given trade friction between the United States
and China and the Brexit issue.
The Japanese economy continued to record moderate growth, despite the absence ofstrength as typified by sluggish growth in consumer spending. The market environment
surrounding Kurita Group remained firm in Japan, although the production activities ofthe manufacturing industry dipped temporarily due to a string of natural disasters insummer. Capital expenditures increased on the back of a high level of corporate
earnings. Overseas, active capital expenditures continued mainly in the electronics
industry in East Asia.
In this environment, the Group started its five-year medium-term management plan,
Maximize Value Proposition 2022 (MVP-22). Under the basic policy “Maximize close
relationships with customers by redefining preconceived ideas and dramatically raising1the quality and speed of our work,” the Group focused on providing value to customers
with total solutions. In particular, positioning products and services with a competitive
advantage in water saving, CO2 reduction and waste reduction as Creating Shared Value(CSV) business, the Group developed the reclaimed water supply service that willcontribute to solving the water resources issues of customers, using wastewater
reclamation systems, and treatment that reclaims gases generated using dry methane
fermentation technology that contributes to realizing waste reduction and the use ofsustainable energy for power generation. The Group also continued to develop
competitive products and services that utilize IT and sensing technology and continued
to emphasize proposal sales that will contribute to solving issues of customers, such as a
reduced environmental impact, energy saving and productivity improvement.
Overseas, the Group worked to strengthen its business platform to develop totalsolutions in the United States by acquiring U.S. Water Services, Inc., which
manufactures and sells water treatment chemicals and water treatment facilities, andentering into an agreement on the acquisition of 25% of the total number of shares
outstanding of Pentagon Technologies Group, Inc. that develops the tool cleaning
business for semiconductor production equipment.
Segment Information
Water Treatment Chemicals
Total Group orders for the Water Treatment Chemicals segment were 102,939 million
yen, up 13.9% versus the fiscal year ended March 31, 2018, while sales rose 13.0%, to102,088 million yen. Operating income climbed 16.0%, to 8,327 million yen mainly due
to the increase in overseas sales.
In Japan, the Group sought to gain new customers by proposing solutions using new
products and services for their issues, although there was an effect attributable to theabsence of the spot projects of equipment and services that were posted in the previous
fiscal year. This effort resulted in an increase in cooling water treatment chemicals andprocess treatment chemicals for iron and steel. As a result, overall orders and sales
increased in Japan.
Overseas, both orders and sales rose, reflecting an increase in the consolidation
period for operating results of Hansu Co., Ltd. in South Korea, which became aconsolidated subsidiary in the fourth quarter of the previous fiscal year, by elevenmonths, in addition to an increase in demand for water treatment, particularly in Asia.
Water Treatment Facilities
Total Group orders for the Water Treatment Facilities segment were 155,500 million
yen, down 3.5% versus the previous fiscal year. Partly thanks to the expansion of thescope of application of the percentage-of-completion method, sales rose 7.4%, to157,321 million yen. Operating income climbed 4.0%, to 15,932 million yen mainly due
to the offsetting of the impact of the occurrence of unprofitable projects by cost
reduction efforts, in addition to higher sales.
In Japan, for the electronics industry, both orders and sales increased in water
treatment facilities due to orders for large-scale projects and progress in construction
work. In maintenance services, both orders and sales also increased following a rise inorders associated with expansion and remodeling projects against a backdrop of anincrease in capacity utilization at customers’ plants. For general industries, orders for2

water treatment facilities increased on orders for large-scale projects for power plants
using gases generated by using dry methane fermentation technology, although sales
declined. Both orders and sales increased in maintenance services, reflecting an increasein expansion projects for the purpose of renewing facilities and increasing production
capacity at customers’ plants. Orders for water treatment facilities for electric powerand soil remediation facilities increased due to orders for large-scale projects, and sales
also increased thanks to progress in the construction work of large-scale projects forwhich orders were received in the previous fiscal year.
Overseas, while orders for water treatment facilities declined in reaction to orders forlarge-scale projects in the previous fiscal year, sales increased due to progress inconstruction work for large-scale projects for the electronics industry in China andSouth Korea.
Total sales in the ultrapure water supply business in Japan and overseas increased
thanks to the expansion projects.
Financial Condition
1) Total assets: 349,885 million yen (increased 26,839 million yen from the end of theprevious fiscal year)
Current assets totaled 149,550 million yen, a decreased of 10,859 million yen from theend of the previous fiscal year (March 31, 2018). This was mainly attributable todecreases in work in process by 2,386 million yen due to the absence of posting of
relevant projects associated with the expansion of the scope of application of thepercentage-of-completion method and in funds in hand, or cash and deposits andmarketable securities, by 24,503 million yen mainly due to acquisitions in North
America (Water Treatment Chemicals business and Water Treatment Facilities
business) and capital expenditures in the ultrapure water supply business (Water
Treatment Facilities business), although trade receivables increased 12,383 million yen
mainly due to higher sales.
Non-current assets totaled 200,335 million yen, an increase of 37,698 million yen
from the end of the previous fiscal year. This increase mainly reflected a 23,641 million
yen increase in property, plant and equipment and a 22,955 million yen increase inintangible fixed assets due to the aforementioned acquisitions and capital expendituresin the ultrapure water supply business, while investment securities decreased 13,480
million yen chiefly due to sales of shareholdings of other listed companies.
2) Liabilities: 110,412 million yen (increased 28,219 million yen from the end of theprevious fiscal year)
Current liabilities totaled 68,072 million yen, an increase of 11,923 million yen from theend of the previous fiscal year. This increase mainly reflected a rise of 8,742 million
yen in accounts payable due to the acquisition of facilities in the ultrapure water supply
business and an increase of 4,048 million yen in Other due to a rise in advances
received.
Non-current liabilities totaled 42,339 million yen, an increase of 16,295 million yen
from the end of the previous fiscal year. This increase mainly reflected a rise of 14,877
million yen in Other due to the receipt of long-term advances received.
3) Net assets: 239,473 million yen (decreased 1,380 million yen from the end of theprevious fiscal year)
Net assets totaled 239,473 million yen, a decrease of 1,380 million yen from the end of
the previous fiscal year. This decrease was mainly due to a fall of 12,000 million yen in3

accumulated other comprehensive income, while shareholders’ equity rose 10,801
million yen.
The factor for the increase in shareholders’ equity was a rise of 11,084 million yen inretained earnings due to the posting of profit attributable to owners of parent, which
outweighed the posting of year-end dividends and interim dividends. Meanwhile, themajor factors for the decrease in accumulated other comprehensive income were a 7,907
million yen decline in unrealized gains on available-for-sale securities, the result of adecrease in unrealized gains on investment securities held associated with sales ofshareholdings of other listed companies, and a 4,584 million yen fall in foreign currencytranslation adjustments associated with the appreciation of the yen against foreign
currencies.
Cash Flows
Consolidated net cash and cash equivalents at the end of the fiscal year (March 31,2019) totaled 35,548 million yen, a decrease of 23,369 million yen from the end of theprevious fiscal year (March 31, 2018).
The various cash flows and related factors are outlined below.
1) Cash Flows from Operating Activities
Net cash provided by operating activities during the fiscal year ended March 31, 2019
totaled 38,478 million yen, an increase of 17,070 million yen from the previous fiscal
year. Inflows from income before income taxes (27,532 million yen), depreciation andamortization (17,761 million yen) including the amortization of goodwill, and anincrease in advances received (15,920 million yen) were partly offset by an increase innotes and accounts receivable-trade (10,907 million yen) and income taxes paid (8,915
million yen).
2) Cash Flows from Investing Activities
Net cash used in investing activities totaled 51,559 million yen, an increase of 35,631
million yen from the previous fiscal year. Inflows included proceeds from sales ofinvestment securities of 13,335 million yen, but cash was used for payments associatedwith the acquisition of business of 33,374 million yen and payments for purchases ofproperty, plant and equipment of 28,600 million yen.
3) Cash Flows from Financing Activities
Net cash used in financing activities totaled 11,280 million yen, a decrease of 1,139
million yen from the previous fiscal year. The main cash outflows were cash dividends
paid of 6,009 million yen and net increase (decrease) in short-term borrowings of 2,417
million yen.

4

(Reference) Cash flow indicators
Year ended
Year ended
Year ended
Year ended
Year ended
March 31, 2015 March 31, 2016 March 31, 2017 March 31, 2018 March 31, 2019
Equity ratio (%)

75.5

76.4

76.1

73.9

67.9

Equity ratio (market value
basis) (%)

115.0

100.1

102.8

117.3

90.7

Cash flow / interest
bearing liabilities ratio
(%)

32.8

33.0

28.2

42.6

24.1

Interest coverage ratio
277.6
96.3
104.4
41.6
85.9
(times)(Notes) Equity ratio: Shareholders’ equity / Total assets
Equity ratio (market value basis): Market capitalization / Total assets
Cash flow / interest bearing liabilities ratio: Interest-bearing debt / Cash flow
Interest coverage ratio: Cash flow / Interest payments
1. Each indicator is calculated based on consolidated financial figures.
2. Market capitalization is calculated based on the number of shares outstanding excluding
treasury stock.
3. Cash flow uses net cash provided by operating activities.
4. Interest-bearing debt includes all liabilities requiring the payment of interest under theliabilities section of the consolidated balance sheet.

Outlook for Overall Business, Including Production, Sales, and Profits and Losses
For the full fiscal year ending March 31, 2020, the Group forecasts 278,000 million yen
in net sales, 29,000 million yen in operating income, 29,200 million yen in income
before taxes and 20,600 million yen in profit attributable to owners of parent. For the
first half of the fiscal year ending March 31, 2020, the Group forecasts net sales of
133,800 million yen, operating income of 15,500 million yen, income before taxes of
15,600 million yen and profit attributable to owners of parent of 11,000 million yen.
Because the Group has decided to voluntarily apply the International Financial
Reporting Standards (IFRS) from the fiscal year ending March 31, 2020, its forecasts
for the full fiscal year and the first half of the fiscal year ending March 31, 2020 arereported based on IFRS. Therefore, a year-on-year comparison with actual values in thefiscal year ended March 31, 2019 when JGAAP was adopted is not stated.
In the fiscal year ending March 31, 2020, the global economy is expected to continue
to grow moderately overall. In addition, the production activities of domestic companies
are likely to remain solid, and demand for capital expenditures associated with therenewal and maintenance of aging facilities and existing facilities are also expected toremain firm. However, downside risks for the global economy, such as intensified trade
friction between the United States and China, a slowdown of the Chinese economy anddecelerating growth in Europe, as well as downside risks for the Japanese economy
linked to stagnant exports and a prolonged fall in corporate earnings are also expected.
In these circumstances, the Group will continue to shift to the highly profitable service
business in light of the characteristics of each region and market by injecting
management resources after identifying growth regions and markets. The Group willdevelop total solutions making full use of the technologies, products and services ofwater treatment chemicals, water treatment facilities and maintenance services that willcontribute to the creation of common value with society by focusing on thestrengthening and enhancement of business platforms in Japan and overseas and closer
relationships with customers. In the fiscal year ending March 31, 2020, orders and sales
5are expected to increase, given that U.S. Water Services, Inc. in the United States,
which was acquired on March 26, 2019, will be consolidated.
Outlook by Segment
Water Treatment Chemicals
Both orders and sales are likely to increase, particularly in overseas operations,
including U.S. Water Services, Inc. in the United States, which will be consolidated. In
Japan, this segment will seek to improve profitability by focusing on the service
business that will provide customers with value with the best solutions while utilizing
IT and sensing technology under a system with stronger integration with maintenanceservices in the water treatment facilities business.
Water Treatment Facilities
The Group expects orders to decline and sales to increase slightly due to the effects ofposting strong orders and steady progress in construction work in the fiscal year underreview, and changes in contracts with a customer in the ultrapure water supply businessin Japan, partially offsetting the positive impacts of consolidating U.S. Water Services,
Inc. in the United States. The segment will aim to increase profitability withcomprehensive measures to prevent the occurrence of unprofitable projects throughenhanced production systems and stronger production processes, while focusing on theprovision of solutions that will contribute to solving the water resources problem andrealizing the use of sustainable energy.
Dividend Policy and Dividends for the Fiscal Year ended March 31, 2019 and the
Fiscal Year ending March 31, 2020
Kurita Water Industries’ basic policy is to provide shareholders with stable dividends.
Setting a payout ratio of 30 to 50% as our target, we will continuously work to increase
dividends, making decisions based on the payout ratios for the most recent five years to
respond flexibly to fluctuations in business performance each year. We will appropriate
internal reserves for operating funds and will use the remainder of the reserves to invest
in growth on a preferential basis. If we have decided that there are excess funds, we willtake steps to improve capital efficiency and return profits to shareholders, including theacquisition of treasury stock, taking the share price into consideration.
We intend to pay a year-end dividend of 27 yen per share for the fiscal year ended
March 31, 2019, 1 yen more than the previous year-end dividend. Combined with theinterim dividend of 27 yen per share (1 yen more than the previous interim dividend),
the annual dividend comes to 54 yen per share, 2 yen higher than the previous fiscal
year’s annual dividend. For the fiscal year ending March 31, 2020, Kurita Water
Industries plans to pay an interim dividend of 31 yen per share and a year-end dividendof 31 yen per share, for an annual dividend of 62 yen per share.
Basic Concept for the Selection of Accounting Standards
The Kurita Group has decided to voluntarily apply IFRS from the first quarter of the
fiscal year ending March 31, 2020 for its consolidated financial statements for the
purpose of increasing the international comparability of financial information andunifying accounting within the Group.

6Financial Statements — Consolidated
Balance Sheet — Consolidated

AssetsCurrent assets
Cash and deposits
Notes receivable – trade
Accounts receivable – tradeMarketable securities
Finished products
Work in process
Raw materials and supplies
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures
Accumulated depreciation
Buildings and structures (net)
Machinery, equipment and vehicles
Accumulated depreciation
Machinery, equipment and vehicles (net)Land
Leased assets
Accumulated depreciation
Leased assets (net)
Construction in progress
Other
Accumulated depreciation
Other (net)Total property, plant and equipment
Intangible fixed assets
Goodwill
Software
Other
Total intangible fixed assets
Investments and other assets
Investment securities
Deferred tax assets
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets(Million yen)

As ofMarch 31, 2018
AmountAs ofMarch 31, 2019
Amount61,086
7,870
78,994
3
3,968
3,621
2,800
2,528
(464)
160,40935,351
7,576
91,671
1,235
5,106
1,235
3,133
4,900
(659)
149,550

63,191(51,193)
11,997137,176(94,085)
43,09015,596
8,256(3,831)
4,424
7,880
15,292(12,255)
3,037
86,02865,743(51,382)
14,360145,560(103,009)
42,551
14,51011,878(5,486)
6,391
28,08816,859(13,092)
3,767
109,669

20,362
2,111
8,529
31,00336,301
2,808
14,847
53,95835,683
4,860
5,238
(176)
45,605
162,637
323,046

22,203
7,929
6,724
(149)
36,708200,335
349,8857

(Million yen)

As ofMarch 31, 2018
AmountAs ofMarch 31, 2019
AmountCurrent liabilities
Notes payable – trade
Accounts payable – trade
Accounts payable – other
Income taxes payable
Provision for bonuses
Provision for directors' bonuses
Provision for loss on construction contracts
Provision for product warranties
Other
Total current liabilities

2,073
26,801
10,995
4,806
2,420
145
94
455
8,355
56,1491,961
24,401
19,737
5,890
2,520
133
238
785
12,40368,072

Non-current liabilities
Lease obligations
Deferred tax liabilities related to revaluation
Provision for directors’ retirement benefit
Net defined benefit liability
Provision for directors’ stock benefits
Other
Total non-current liabilities
Total liabilities

4,038
1,119
7
16,610183
4,084
26,04482,193

5,250
1,119
6
16,648352
18,96142,339110,412

13,45010,959209,149(10,943)
222,615

13,450
10,665220,234(10,932)
233,417

16,558

8,651

(1)
(380)
6
3
16,1872,049
240,853
323,046314(200)(4,578)
0
4,187
1,868
239,473
349,885

Liabilities

Net assets
Shareholders’ equity
Common stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders’ equity
Accumulated other comprehensive income
Unrealized gains (losses) on available-for-salesecurities
Deferred gains (losses) on hedges
Revaluation reserve for land
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets

8Statements of Income and Comprehensive Income — Consolidated
Statement of Income

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Directors' and corporate auditors' compensations,salaries and allowances
Provision for bonuses
Retirement benefit expenses
Traveling and transportation expenses
Research and development expenses
Other
Total selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Rent income
Equity in earnings of unconsolidated subsidiaries
and affiliates
Other
Total non-operating income
Non-operating expenses
Interest expense
Foreign exchange losses
Commitment fee
Acquisition-related costs
Loss on valuation of investments in capital
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of investment securities
Gain on step acquisitions
Total extraordinary income
Extraordinary losses
Loss on sales of non-current assets
Impairment loss
Loss on liquidation of business
Loss on transfer of business
Provision of allowance for building demolition
expenses
Total extraordinary losses
Income before income taxes
Income taxes
Current
Deferred
Total income taxes
Net income
Profit attributable to non-controlling interests
Profit attributable to owners of parent(Million yen)

Year ended
March 31, 2018
Amount236,815
160,476
76,338Year ended
March 31, 2019
Amount259,409
176,663
82,746

20,61022,245

1,411
1,343
2,906
5,258
22,33353,86322,475

1,587
1,231
2,845
5,490
25,01958,42024,326

187
550
107

159
573
269

73

136

656
1,576

866
2,006

352
192
250
732
418
1,946
22,104

317
320
1,284
262
228
2,413
23,919

1,720
2,443
4,163

8,676
8,676

413
-

*1
*2
*3
*4

579
1,097
519
2,867

320

-

733
25,535

5,063
27,532

7,906
(408)
7,498
18,037139
17,897

9,715
491
10,207
17,325
1
17,3239

Statement of Comprehensive Income

Net income
Other comprehensive income
Unrealized gains (losses) on available-for-salesecurities
Deferred gains (losses) on hedges
Revaluation reserve for land
Foreign currency translation adjustments
Remeasurements of defined benefit plans, net of tax
Share of other comprehensive income of associates
accounted for using equity method
Total other comprehensive income
Comprehensive income
Components:
Comprehensive income attributable to owners ofparentComprehensive income attributable tonon-controlling interests(Million yen)

Year ended
March 31, 2018
Amount18,037

Year ended
March 31, 2019
Amount17,325

1,739(7,904)

(671)
0
3,219
7

315
(2,208)
(3)

93

(46)

4,389
22,426(9,848)7,476

22,255

7,535

170

(58)

10

Statement of Changes in Shareholders’ Equity — Consolidated
Year ended March 31, 2018 (April 1, 2017 - March 31, 2018)(Million yen)

Shareholders’ equity

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

Common stock

Capital surplus

Retained earnings

Treasury stock

13,45010,993

205,586(13,891)

Total shareholders’equity216,138(5,793)(5,793)

17,897

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

14

14

8,525

-

(0)

(0)
-

(33)

(33)
(15)

(15)

-

(33)

3,563

2,947

6,476

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

222,61511

Accumulated other comprehensive income
Unrealized
gains (losses) Deferred gains Revaluation
on availablereserve for(losses) on
for-salelandhedgessecurities

Balance as of the
beginning of the fiscal
year

14,792

670(380)

NonTotal
Foreign
Remeasure- accumulated
controllingcurrency
ments ofotherinterests
translation defined benefit
comprehensive
adjustments
plansincome(3,593)(3)

11,484

1,135

Total net
assets228,758

Change during theperiodDividend from surplus(5,793)

Profit attributable toowners of parent

17,897Purchase of treasury
stock(5,592)

Disposal of treasury
stock

14

Retirement of treasury
stock

-

Reversal of revaluation
reserve for land(0)

Changes associatedwith the change offiscal year-end of
consolidated
subsidiaries-

Changes of equity
interest in consolidated
subsidiaries

(33)

Other

(15)

Net change in items
other than shareholders’equity during theperiod

1,766

(671)

0

3,600

7

4,703

914

5,617

Total change during theperiod

1,766

(671)

0

3,600

7

4,703

914

12,094

Balance as of the end of
the fiscal year

16,558

(1)

(380)

6

3

16,1872,049

240,853

12

Year ended March 31, 2019 (April 1, 2018 - March 31, 2019)(Million yen)

Shareholders’ equity

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

Common stock

Capital surplus

Retained earnings

Treasury stock

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

Total shareholders’equity222,615(5,968)(5,968)17,323

17,323
(2)

(2)

14

14
-

(180)

(180)

(123)

(123)

(294)

(294)
32

32

-

(294)

11,084

11

10,801

13,450

10,665220,234(10,932)

233,41713

Accumulated other comprehensive income
Unrealized
gains (losses) Deferred gains Revaluation
on availablereserve for(losses) on
for-salelandhedgessecurities

Balance as of the
beginning of the fiscal
year

16,558(1)(380)

NonTotal
Foreign
Remeasure- accumulated
controllingcurrency
ments ofotherinterests
translation defined benefit
comprehensive
adjustments
plansincome6

316,1872,049

Total net
assets240,853

Change during theperiodDividend from surplus(5,968)

Profit attributable toowners of parent

17,323Purchase of treasury
stock

(2)

Disposal of treasury
stock

14

Retirement of treasury
stock

-

Reversal of revaluation
reserve for land

(180)

Changes associatedwith the change offiscal year-end of
consolidated
subsidiaries(123)

Changes of equity
interest in consolidated
subsidiaries

(294)
32

Other
Net change in items
other than shareholders’equity during theperiod(7,907)315

180(4,584)(3)(12,000)(181)(12,181)

Total change during theperiod(7,907)315

180(4,584)(3)(12,000)(181)(1,379)Balance as of the end of
the fiscal year

8,651

314

(200)

(4,578)

0

4,187

1,868

239,47314

Statement of Cash Flows — Consolidated

Cash flows from operating activities
Income before income taxes
Depreciation and amortization
Amortization of goodwill
Equity in (earnings) losses of unconsolidated subsidiaries andaffiliates
Increase (decrease) in net defined benefit liability
Increase (decrease) in other allowancesInterest and dividend income
Interest expense
Other non-operating (income) losses(Gain) loss on step acquisitions
Provision of allowance for building demolition expenses(Gains) losses on sale/disposal of property, plant andequipment
Loss on liquidation of business
Loss on transfer of businessImpairment loss
(Gains) losses on sale of investment securities(Increase) decrease in notes and accounts receivable – trade(Increase) decrease in inventories(Increase) decrease in other current assets
Increase (decrease) in notes and accounts payable – trade
Increase (decrease) in advances received
Increase (decrease) in other current liabilities
Other
Sub-totalInterest and dividend received
Other proceeds
Interest paid
Other payments
Income taxes paid
Net cash provided by (used in) operating activities(Million yen)

Year ended
March 31, 2018
AmountYear ended
March 31, 2019
Amount25,535
15,677
1,184

27,532
16,118
1,643

(73)

(136)

387
6
(737)
352
626
(2,443)
320

206
666
(733)
317
1,082
-

54

666

413
(1,720)(16,332)
(29)
1,073
3,699
74
223
(195)
28,095
897
743
(514)
(1,643)(6,170)21,408

519
2,867
1,097
(8,676)(10,907)
1,463
(692)
(1,088)15,920971(882)
47,956
950
1,056
(448)
(2,120)(8,915)38,47815

Cash flows from investing activities
Deposits into time deposit accounts
Withdrawals from time deposits
Payments for purchases of marketable securities
Payments for purchases of property, plant and equipment
Proceeds from sale of property, plant and equipment
Payments for purchase of intangible assets
Proceeds from sales of intangible assets
Payments for purchases of investment securities
Proceeds from sale and redemption of investment securities
Payments associated with acquisition of business
Payments for purchase of shares in and purchase ofinvestments in capital of subsidiaries and associates
Other payments
Other proceeds
Net cash provided by (used in) investing activities
Cash flows from financing activities
Net increase (decrease) in short-term borrowings
Repayments of long-term loans payable
Repayment of finance lease obligations
Purchase of treasury stock
Cash dividends paid
Dividends paid to non-controlling interests
Purchase of shares of subsidiaries without change in scope of
consolidation
Net cash provided by (used in) financing activities
Effect of exchange rate changes on cash and cash
equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the period
Increase in cash and cash equivalents due to the change ofthe fiscal year-end of consolidated subsidiaries
Cash and cash equivalents at the end of the period(Million yen)

Year ended
March 31, 2018
AmountYear ended
March 31, 2019
Amount(11,600)
17,387(1)(17,924)
15
(972)
(5)
2,115
(136)

(19,145)
20,079(28,600)
479(1,235)18(2,144)
13,335(33,374)(4,012)-(1,198)404(15,928)(1,480)509(51,559)

177
(400)
(610)
(5,592)(5,753)(66)(2,417)(594)(1,165)(2)(5,966)
(43)

(173)

(1,094)(12,419)(11,280)

417

(104)

(6,521)65,438(24,465)
58,917-

1,097

58,91735,54816

Notes to Consolidated Financial Statements
Changes in Accounting Policies(Changes to accounting policies that are difficult differentiating from changes to accounting estimates)(Changes to the depreciation method of property, plant and equipment)
In the past, the Company adopted the declining-balance method for the deprecation of buildings(excluding facilities attached to buildings) acquired on or after April 1, 1998, facilities attached tobuildings and structures acquired on or after April 1, 2016 and property, plant and equipment(excluding leased assets) except for facilities of ultrapure water supply business which the Company
had installed at customer sites. However, the Company has changed the depreciation method for themto the straight-line method from the first quarter of fiscal year ended March 31, 2019.
The Company has made this change because the pattern of consumption of the economic benefits ofproperty, plant and equipment has changed as the expansion of the global business and a transition tothe optimum production system have become clear. Given that actual production on a consolidated
basis generally stays at a certain level and that the operation of facilities is also stable, the Company
has determined that the straight-line method is more suitable for the consumption pattern of theeconomic benefits of property, plant and equipment. The impact of this change on profits and losses in
the fiscal year under review is minor.

Change in Presentation Method(Change associated with the adoption of the “Partial Amendments to Accounting Standard for Tax
Effect Accounting”)
The Company has adopted the “Partial Amendments to Accounting Standard for Tax EffectAccounting” (ASBJ Statement No. 28 on February 16, 2018), among others, from the beginning of the
fiscal year under review. As a result, deferred tax assets are presented in investments and other assets,
and deferred tax liabilities are presented in non-current liabilities.
As a result, “Deferred tax assets” of 1,595 million yen in “Current assets” is presented by including it in“Deferred tax assets” of 4,860 million yen in “Investments and other assets” in the consolidated balance
sheet for the previous fiscal year.

Additional Information(Expansion of the scope of application of the percentage-of-completion method)
In the past, the Company applied the percentage-of-completion method to construction work forprogress of which the certainty of outcome can be recognized and applied the completed-contract
method to other construction work. However, the Company has applied the percentage-of-completion
method to other construction work from the fiscal year under review because a reliable estimate has
become possible for most of them due to the development and strengthening of the cost management
system.
As a result, net sales have increased 7,355 million yen, and operating income, ordinary income andincome before income taxes have increased 1,421 million yen, respectively.

Statement of Income*1. Loss on sales of non-current assets
The breakdown of loss on sales of non-current assets is as follows.
Land
456 million yen
Other (buildings and structures, etc.)
123 million yen
Total
579 million yen*2. Impairment loss
(1) Overview of assets or asset groups for which an impairment loss was recognized
In the fiscal year under review, an impairment loss was posted for the following assets group.
Use-

Classification
Goodwill

Location
Jiangyin, China

Amount
1,097 million yen(2) Background of recognizing an impairment loss
In the fiscal year under review, to reduce constraints on production associated with tighter regulations
on companies that produces hazardous chemicals in densely populated districts in China, the Grouphas decided to transfer the production function of water treatment chemicals of Kurita Water
Industries (Jiangyin) Co., Ltd. to the plant (due to begin operating in the second half of fiscal year
ending March 31, 2020) of the newly established Kurita Water Industries (Taixing) Co., Ltd. andrecognized an impairment loss because recoverability is no longer recognized.

17

(3) Amount of impairment loss
The book value of the asset group for which we have recognized an impairment loss was reduced to
the recoverable amount, and the amount of reduction was posted in extraordinary losses as impairment
loss of 1,097 million yen.
(4) Method of asset grouping
The Group performs the asset grouping of business assets based on the type of business and leased
assets and idle assets by individual property.
(5) Calculation of the recoverable amountFor the goodwill for which an impairment loss has come to be recognized, the Group recorded the fullamount of the unamortized balance as an extraordinary loss in the fiscal year under review because theGroup has decided to transfer the production function of water treatment chemicals of Kurita Water
Industries (Jiangyin) Co., Ltd. to the plant of the newly established Kurita Water Industries (Taixing)
Co., Ltd. and recoverability is no longer recognized.
*3. Loss on liquidation of business
Loss on liquidation of business of 519 million yen consists mainly of special retirement benefits 等that were generated associated with the restructuring of manufacturing, sales and research anddevelopment bases of Kurita Europe GmbH.
*4. Loss on transfer of business
A loss on transfer of business of 2,867 million yen comprises mainly of a loss on transfer pertaining to
the sale of the aluminum compound business of Kurita Europe GmbH, its non-core business, andcompensation money for the business continuation.

Business Combination

Acquisition of equity interests by consolidated subsidiaries
1. Overview of business combination(1) Name and business of the acquired company
Name: Global Water Services Holding Company, Inc., and two other companies
Business: Company holding equity interests in U.S. Water Services, Inc.
The Company also acquired U.S. Water Services, Inc., a wholly owned subsidiary of Global Water
Services Holding Company, Inc., through an investment in Global Water Services Holding Company,
Inc.
Name: U.S. Water Services, Inc.
Business: Manufacture and sale of water treatment chemicals and water treatment facilities(2) Reason of business combination
The Group aims to significantly expand its overseas businesses by establishing platforms in four
regions around the world – Japan, Asia, Europe and the Americas. This investment is made as a part ofits strategy of strengthening business in the United States, a strategic market. The Group will also
accelerate business development in the United States by establishing even closer relationships withcustomers through the development of the service contract business model making full use of IT andsensing by combining the Group’s products, with their competitive advantage and highly uniqueservices such as pure water supply and wastewater reclamation, into the solid customer base and sales
channels of U.S. Water Services, Inc.
(3) Date of business combination
March 25, 2019(4) Legal form of business combination
Acquisition of shares with cash as consideration(5) Name after business combination
The name will not change.
(6) Percentage of voting rights acquired
100%(7) Main reason for determining the acquiring company
Because Kurita America Holdings Inc., a subsidiary of the Company, acquired shares using cash as
consideration.
2. Period of consolidation of the results of acquired businessIn the fiscal year under review, only the beginning balance sheet on March 26, 2019 is consolidated.
3. Breakdown of the acquisition cost of acquired business and consideration by type
Consideration for acquisition
Cash and deposits
30,369 million yen
Acquisition cost
30,369 million yen

18

4. Major expenses related to the acquisition
Compensation, fees, etc. paid to the advisor

717 million yen

5. Amount of goodwill, reason of the occurrence of goodwill, amortization method, and amortization
period(1) Amount of goodwill
1,148 million yen
The amount of goodwill is an amount provisionally reported because the allocation of the acquisition
cost has yet to be completed.
(2) Reason of the occurrence of goodwill
Expected excess earning power(3) Amortization method and amortization period
Goodwill will be amortized over the effective period by the straight-line method. The amortization
period will be fixed based on the result of the allocation of the acquisition cost.
6. Assets accepted and liabilities assumed on the date of the business combination
Current assets
4,899 million yen
Non-current assets
26,337 million yen
Total assets
31,237 million yen
Current liabilities
1,737 million yen
Non-current liabilities
279 million yen
Total liabilities
2,016 million yen
7. Allocation of the acquisition cost
As of the end of the fiscal year under review, the allocation of the acquisition cost has yet to becompleted because the identification of recognizable assets and liabilities on the date of businesscombination and the calculation of market values are incomplete.
8. Estimated impact of the takeover of business on the consolidated statement of income for the fiscal
year under review based on the assumption that the takeover of business is completed on the beginning
date of the fiscal year under review and its calculation method
This is not stated because calculating an estimated amount is difficult.
Business combination through acquisition
1. Overview of business combination(1) Name and business of the acquired company
Name: Fracta, Inc.
Business: Company holding equity interests in Fracta
The Company also acquired Fracta, a wholly owned subsidiary of Fracta,Inc., through an investment
in Fracta,Inc.
Name: Fracta
Business: Software services to predict the deterioration of water pipes utilizing artificial intelligence(AI) and machine learning (ML)(2) Reason of business combination
Fracta, Inc. develops software services to predict the deterioration of water pipes utilizing AI and ML
at Fracta, a wholly owned subsidiary. The Group will create and expand new digital businesses
utilizing IoT and AI in the fields of water and the environment by acquiring the advanced technologies
and know-how in AI and ML of Fracta, Inc. and applying them to the water treatment technologies
and services of the Company.
(3) Date of business combination
May 31, 2018(4) Legal form of business combination
Acquisition of shares with cash as consideration(5) Name after business combination
The name will not change.
(6) Percentage of voting rights acquired
60.63% (fully diluted basis: 50.1%)(7) Main reason for determining the acquiring company
Because the Company acquired shares with cash as consideration.
2. Period of consolidation of the results of acquired business
From June 1, 2018 to March 31, 201919

3. Breakdown of the acquisition cost of acquired business and consideration by type
Consideration for acquisition
Cash and deposits
3,968 million yen
Acquisition cost
3,968 million yen
4. Major expenses related to the acquisition
Compensation, fees, etc. paid to the advisor

177 million yen

5. Amount of goodwill, reason of the occurrence of goodwill, amortization method, and amortization
period(1) Amount of goodwill
2,941 million yen
The amount above is provisionally reported because the allocation of the acquisition cost has yet to becompleted, given that the identification of recognizable assets and liabilities and the estimation of themarket values are incomplete as of the business combination because the period from the businesscombination to the fiscal year-end is short.
(2) Reason of the occurrence of goodwill
Expected excess earning power(3) Amortization method and amortization period
Amortized for 15 years by the straight-line method
6. Put options granted to non-controlling shareholders and call options held by the Company
The Company plans to make Fracta, Inc. a wholly owned subsidiary within four years from 2020. To
convert Fracta, Inc. into a wholly owned subsidiary in the future, the Company has granted written put
options over the shares of Fracta, Inc. to its non-controlling shareholders and holds purchased call
options over the shares of Fracta, Inc.
7. Assets accepted and liabilities assumed on the date of the business combination
Current assets
1,793 million yen
Non-current assets
43 million yen
Total assets
1,836 million yen
Current liabilities
142 million yen
Total liabilities
142 million yen
8. Estimated impact of the takeover of business on the consolidated statement of income for the fiscal
year under review based on the assumption that the takeover of business is completed on the beginning
date of the fiscal year under review and its calculation method
This is not stated because calculating an estimated amount is difficult.

Segment Information

1. Overview of reportable segments
The Company’s reportable segments are components of the Group about which separate financial
information is available. These segments are subject to periodic examinations to enable the Company’sboard of directors to decide how to allocate resources and assess performance.
The Company’s business divisions are based on product and service categories. Each of the divisions
conduct business based on comprehensive strategies formulated for the products and services that theyhandle in Japan and overseas. The Company’s consolidated subsidiaries conduct business under thesupervision of the relevant business divisions.
The Group’s operations are therefore classified into two reportable segments, the Water Treatment
Chemicals segment and the Water Treatment Facilities segment, based on the products and services
handled by each of the divisions.
The Water Treatment Chemicals segment manufactures and sells water treatment chemicals andequipment and provides maintenance services. The Water Treatment Facilities segment manufacturers
and sells water treatment equipment and facilities, provides ultrapure water, chemical cleaning, toolcleaning, soil and groundwater remediation services, and provides maintenance services that encompass
operation, maintenance, and management of water treatment facilities.
2. Method for calculating sales, income and loss, assets and liabilities, and other amounts by reportablesegment
Accounting methods applied in reportable segments are consistent with the methods applied in
preparation of consolidated financial statements. Segment income represents operating income.
Inter-segment sales and transfers between consolidated-group companies reflect values based on market
prices. Inter-segment sales and transfers between the Company’s divisions are based primarily on bookvalues.

20

3. Sales, income and loss, assets and liabilities, and other amounts by reportable segment
Year ended March 31, 2018 (April 1, 2017 - March 31, 2018)

Sales
Sales to outside customers
Inter-segment sales and transfers
Total

Reportable segment
Water
Water
Treatment Treatment
Chemicals Facilities
Total
90,361431
90,792

146,453298
146,751

236,815729
237,544(Million yen)Amounts
reported on the
Adjustments statements of(see note)
income(729)(729)

236,815
236,815

Segment income

7,180

15,312

22,493(18)

22,475

Segment assets

95,589158,631254,220

68,826

323,046

Segment liabilities

29,19853,16782,366(172)

82,1933,593
85

12,083-

15,67785

327

15,677413

3,162

19,80522,967-22,967

Other amounts
Depreciation
Impairment loss
Change in property, plant andequipment and intangible fixed
assetsYear ended March 31, 2019 (April 1, 2018 - March 31, 2019)

Sales
Sales to outside customers
Inter-segment sales and transfers
Total

Reportable segment
Water
Water
Treatment Treatment
Chemicals Facilities
Total(Million yen)Amounts
reported on the
Adjustments statements of(see note)
income102,088779
102,867

157,321
1,532
158,854259,409
2,311
261,721(2,311)(2,311)

259,409259,409

Segment income

8,327

15,932

24,26065

24,326

Segment assets

111,580

196,152

307,733

42,152349,885

Segment liabilities

34,10576,660110,765(353)

110,412

Other amounts
Depreciation
4,117
12,001
16,118
16,118
Impairment loss
1,097
1,097
1,097
Change in property, plant andequipment and intangible fixed
3,502
34,66838,17038,170assetsNote: “Adjustments” represents the following:
1. Sales: Elimination of inter-segment transactions.
2. Segment income: Amount resulting from eliminations of inter-segment transactions.
3. Segment assets: Consisting mainly of corporate assets (cash deposits, securities in trust, andlong-term investments) unallocated to reportable segments. Corporate assets totaled 68,890 million
yen at March 31, 2018 and 42,205 million yen at March 31, 2019.
4. Segment liabilities: Amount resulting from eliminations of inter-segment claims and liabilities.
5. Details of impairment losses in the fiscal year under review are stated in “Statement of Income” inNotes to Consolidated Financial Statements.

21

Related information
Year ended March 31, 2018 (April 1, 2017 - March 31, 2018)
1. Information by product and service
The Company has omitted disclosure here because equivalent information appears in the segment
information.
2. Information by geographic region(1) Sales(Million yen)

North
Japan
Asia
America
EMEA
Other
Total
158,232
48,911
5,178
21,3503,142
236,815
Note: Sales are allocated to regions based on the location of the customer to which the products orservices are provided. EMEA here stands for Europe, the Middle East and Africa.
(2) Property, plant and equipment
North
Japan
Asia
America
EMEA
68,671
14,275182
2,212
Note: EMEA here stands for Europe, the Middle East and Africa.

(Million yen)

Other
686

Total
86,028

3. Information by major customer
The Company states no information here because, among the sales to outside customers, no single
external customer accounts for 10% or more of net sales posted in the consolidated statement ofincome.
Year ended March 31, 2019 (April 1, 2018 - March 31, 2019)
1. Information by product and service
The Company has omitted disclosure here because equivalent information appears in the segment
information.
2. Information by geographic region(1) Sales(Million yen)

North
Japan
Asia
America
EMEA
Other
Total
163,297
66,513
5,589
21,297
2,711
259,409
Note: Sales are allocated to regions based on the location of the customer to which the products orservices are provided. EMEA here stands for Europe, the Middle East and Africa.
(2) Property, plant and equipment
North
Japan
Asia
America
EMEA
91,321
12,7862,328
2,671
Note: EMEA here stands for Europe, the Middle East and Africa.

(Million yen)

Other
561

Total
109,669

3. Information by major customer
The Company states no information here because, among the sales to outside customers, no single
external customer accounts for 10% or more of net sales posted in the consolidated statement ofincome.

22

Information on impairment of reportable segments’ noncurrent assets
Year ended March 31, 2018 (April 1, 2017 - March 31, 2018)
The Company has omitted disclosure here because equivalent information appears in the segment
information.
Year ended March 31, 2019 (April 1, 2018 - March 31, 2019)
The Company has omitted disclosure here because equivalent information appears in the segment
information.
Goodwill amortization and unamortized balance of goodwill by segment
Year ended March 31, 2018 (April 1, 2017 - March 31, 2018)

Goodwill
amortization
Unamortizedbalance of
goodwill

Reportable segment
Water
Water
Treatment
Treatment
Chemicals
Facilities

Total(Million yen)

Eliminationor corporate

1,184

-

1,184

-

1,184

20,362-

20,362-

20,362

Year ended March 31, 2019 (April 1, 2018 - March 31, 2019)

Goodwill
amortization
Unamortizedbalance of
goodwill

Total

Reportable segment
Water
Water
Treatment
Treatment
Chemicals
Facilities

Total(Million yen)

Eliminationor corporate

Total

1,643

-

1,643

-

1,643

28,886

7,415

36,301-36,301

Information on negative goodwill
Year ended March 31, 2018 (April 1, 2017 - March 31, 2018)
Not applicableYear ended March 31, 2019 (April 1, 2018 - March 31, 2019)
Not applicable

23Per Share Information
Net assets per share
Net income per share

Year ended March 31, 2018
2,126.96 yen
159.37 yen

Year ended March 31, 2019
2,116.19 yen
154.29 yen

Notes: 1. Fully diluted net income per share was not reported here because there were no dilutive securities
outstanding.
2. The Company’s own shares remaining in trust that are posted as treasury stock in shareholders’ equity areincluded in treasury stock that are deducted in the calculation of the average number of shares outstandingused for the calculation of per share information. The average number of shares outstanding of the deductedtreasury stock was 335,000 in the previous fiscal year and 329,000 in the fiscal year under review.
3. The calculation bases for net assets per share are as follows.
(Million yen unless otherwise stated)

Total net assets
Amount deducted from total net assets(Those with non-controlling interests)
Net assets attributed to common stock
Number of common stock used in calculation of
net assets per share (shares)

As ofMarch 31, 2018
240,853
2,049(2,049)238,803

As ofMarch 31, 2019
239,473
1,868(1,868)
237,604

112,274,296

112,279,619

Note: The calculation bases for net income per share are as follows.

Net income attributable to owners of parent
Amount not attributed to common stockholders
Net income attributed to owners of parent
associated with common stock
Average number of shares outstanding (shares)

Year ended
March 31, 2018
17,897-(Million yen unless otherwise stated)Year ended
March 31, 2019
17,323-

17,897

17,323112,303,666

112,278,133

24

Significant Subsequent Events

Conversion to an equity method affiliate through the acquisition of shares
Pentagon Technologies Group, Inc.
On October 5, 2018, the Company entered into an agreement to acquire 25.0% of shares of Pentagon
Technologies Group, Inc. (hereinafter “Pentagon Technologies”), a tool cleaning company in the UnitedStates, through Kurita America Holdings, Inc., a wholly owned subsidiary of the Company. Based on
the agreement, the acquisition of shares was completed on April 1, 2019, and the Company madePentagon Technologies an equity method affiliate.
(1) Name, address, the name of representative, the amount of capital and business of the company
whose shares were acquired(i) Name:
Pentagon Technologies Group, Inc.
(ii) Address:
21031 Alexander Ct. Hayward, California, U.S.A.
(iii) Name of representative:
Chairman, Irwin H. Pfister(iv) Amount of capital:
2,000 US dollars(v) Business:
Tool cleaning business, the development of surface particle detectorsof semiconductor manufacturing equipment and the provision ofclean room-related services(2) Purpose of acquiring shares
The Group aims to significantly expand its overseas businesses by establishing platforms in four
regions around the world – Japan, Asia, Europe and the Americas. This investment is made as a part ofits strategy of strengthening business in the United States, a strategic market. The Group also aims tofurther strengthen its market competitiveness in the electronics industry, which the Group positions as
one of its priority business domains, by acquiring a base for the service business overseas and further
accelerating business growth and the provision of new value by acquiring the advanced technologies
and know-how of Pentagon Technologies and creating synergies with the tool cleaning services inJapan developed by the Group.
(3) Date of acquiring shares
April 1, 2019(4) Number of shares acquired, the acquisition price and the ownership ratio after acquisition(i) Number of shares acquired:
728,724 shares(ii) Acquisition price:
50,000,000 US dollars(iii) Ownership ratio after acquisition: 25.0%(5) Financing method of funds for payment and the payment method
Own funds were appropriated.
APANA, Inc.
On March 29, 2019, the Company entered into an agreement to underwrite a capital increase throughprivate placement with APANA, Inc. (hereinafter “APANA”), a venture company in the United Statesthat develops the IoT water saving solution business. Based on the agreement, the payment wascompleted on April 5, 2019. On the same day, the Company also exercised the share acquisition rights itheld with respect to APANA, and the payment of the exercise price was completed. As a result, theCompany made APANA an equity method affiliate.
(1) Name, address, the name of representative, the amount of capital and business of the company
whose shares were acquired(i) Name:
APANA, Inc.
(ii) Address:
4290 Pacific Highway, Suite A, Bellingham, Washington 98229,
U.S.A(iii) Name of representative:
CEO, Matt Rose(iv) Amount of capital:
4,424,805 US dollars(v) Business:
Development of technologies related to the real-time monitoring ofwater consumption and big data analysis, utilizing IoT and wirelesscommunication technology, and service business that contributes towater saving in commercial and industrial facilities(2) Purpose of capital increase through private placement and the exercise of share acquisition rights
The Company will accelerate its efforts to introduce and utilize advanced technologies and services of
APANA by further strengthening the collaborative structure with APANA through this investment.
The Company aims to create new value in the fields of water and the environment by creating
innovations through the provision of the highly unique digital service business of APANA to morecustomers.
(3) Date of payment and exercise of share acquisition rights
April 5, 2019(4) Acquisition price and the percentage of voting rights acquired
Acquisition price: 10,005,301 US dollars (1,116 million yen)25

Percentage of voting rights held immediately before the underwriting of capital increase throughprivate placement and the exercise of share acquisition rights: 19.88%
Percentage of voting rights acquired by underwriting capital increase through private placement andexercising share acquisition rights: 22.85%
Percentage of voting rights after the underwriting of capital increase through private placement andthe exercise of share acquisition rights: 42.73% (fully diluted basis：36.64%)(5) Financing method of funds for payment and the payment method
Own funds were appropriated.
Acquisition of equity interests by consolidated subsidiaries
On May 13, 2019, the Company entered into an agreement to acquire all shares outstanding of Avista
Technologies, Inc. (hereinafter “Avista Technologies”), a manufacturing and sales company of water
treatment chemicals in the United States, through Kurita America Holdings Inc., a wholly owned
subsidiary of the Company. On the same day, the Company also entered into an agreement to acquire all
shares outstanding of Avista Technologies (UK) Ltd. (hereinafter “Avista Technologies (UK)”), a
manufacturing and sales company of water treatment chemicals in the United Kingdom, through Kurita
Europe GmbH, a wholly owned subsidiary of the Company. Both companies will become consolidated
subsidiaries of the Company.
(1) Name, address, the name of representative, the amount of capital and business of Avista Technologies,
Inc.
(i) Name:
Avista Technologies, Inc.
(ii) Address:
140 Bosstick Blvd. San Marcos, California 92069, U.S.A.
(iii) Name of representative:
CEO, Dave Walker(iv) Amount of capital:
3,719 US dollars(v) Business:
Manufacture and sale of reverse osmosis (RO) chemicals and theprovision of RO membrane-related services(2) Name, address, the name of representative, the amount of capital and business of Avista Technologies(UK) Ltd.
(i) Name:
Avista Technologies (UK) Ltd.
(ii) Address:
13 Nasmyth Square, Houstoun Industrial Estate Livingston, EH54
5GG, U.K.
(iii) Name of representative:
Managing Director, Michael Jefferies(iv) Amount of capital:
65 British pounds(v) Business:
Manufacture and sale of reverse osmosis (RO) chemicals and theprovision of RO membrane-related services(3) Purpose of acquiring equity interests
Avista Technologies specializes in RO chemicals that are applied to RO membrane, one of thecomponents of water treatment facilities, among water treatment chemicals. It manufactures and sells awide variety of RO chemicals. Avista Technologies also develops services including RO membranecleaning and has many customers in a broad range of industrial fields including mining, chemical, oil,marine oilfields, food, beverages and local governments, mainly in the United States. Avista
Technologies (UK) develops similar businesses in EMEA (Europe, the Middle East and Africa) throughlicensing from Avista Technologies. The Group will bolster the product lineup of RO chemicals by
combining RO chemicals of Avista Technologies and distinctive RO chemicals of the Company andwill seek to expand sales of RO chemicals by proposing a wider range of products to all customers. The
Group will also strengthen its RO membrane-related services by sharing the technologies andknow-how of the both companies.
(4) Time of acquiring equity interests
May 15, 2019 (planned)(5) Number of shares to acquire, the acquisition price and the ownership ratio after acquisition(i) Number of shares to acquire
Avista Technologies, Inc.:
800,000 shares
Avista Technologies (UK) Ltd.:
65 shares(ii) Acquisition price of Avista Technologies, Inc. and Avista Technologies (UK) Ltd.
81,800,000 US dollars(Note) The final acquisition price will reflect any excess and deficiency in working capital for Avista
Technologies, Inc. and Avista Technologies (UK) Ltd. on the date of acquisition of equity interests and theadjustment of net interest-bearing debt on the above amount.

(iii) Ownership ratio after acquisition
Avista Technologies, Inc.:
100.0%
Avista Technologies (UK) Ltd.:
100.0%(6) Financing method of funds for payment and the payment method
Loans will be appropriated.

26

Supplementary Information — Consolidated(1) Net Sales(Million yen)

Year ended March 31,
2018
Business segment
Water Treatment Chemicals
Water Treatment Facilities
Total

Amount90,361
146,453
236,815

2019
%
38.2
61.8
100.0

Amount102,088
157,321259,409(2) Order Intake and Backlog
2018

Order Intake

Order Backlog

AmountWater Treatment
Chemicals
Water Treatment
Facilities
Total
Water Treatment
Chemicals
Water Treatment
Facilities
Total

2019
%

Amount%90,35835.9

102,93939.8

161,08864.1

155,500

60.2

251,447

100.0

258,439

100.0

3,791

5.0

4,536

6.3

71,41795.0

67,80393.7

75,209100.0

72,339100.0(3) Production Results(Million yen)

Year ended March 31,
2018
Business segment
AmountWater Treatment Chemicals
90,088Water Treatment Facilities
145,811
Total
235,899
Note: The amounts were based on sales prices.

2019
%
38.2
61.8
100.0

Amount101,692
154,138
255,830(4) Capital Expenditures (Property, Plant and Equipment)

Amount2,809
19,261
22,070

%
12.7
87.3
100.0

Amount3,096
33,82336,920

2018

%
8.4
91.6
100.0
(Million yen)

Year ended March 31,
Amount1,804
11,702
13,507

39.7
60.3
100.0

2019

(5) Depreciation (Property, Plant and Equipment)

Business segment
Water Treatment Chemicals
Water Treatment Facilities
Total

%

(Million yen)

Year ended March 31,
2018
Business segment
Water Treatment Chemicals
Water Treatment Facilities
Total

39.4
60.6
100.0
(Million yen)

Year ended March 31,
Business segment

%

2019
%
13.4
86.6
100.0

Amount2,380
11,502
13,883

%
17.1
82.9
100.0

27

Disclaimer- This document is an English translation of the Earnings Report for the Year Ended
March 31, 2019 as reference information primarily for overseas investors. If there areany discrepancies between the Japanese version and the English version, theJapanese version shall take precedence in all cases.
- This document is not subject to audit.
- The forward-looking statements such as performance forecasts contained in thisdocument are based on information currently available to the Company and certain
assumptions deemed to be reasonable, and are not intended to be a commitment by
the Company.
Actual performance, etc. may differ due to a variety of factors.
See “Outlook” on page 5 of this document for the conditions assumed in theperformance forecasts and the precautions concerning the use of performance
forecasts.

28