FOR IMMEDIATE RELEASE
Kurita Water Industries Reports Earnings for the Fiscal Year ended
March 31, 2017
Tokyo, Japan, April 28, 2017 - Kurita Water Industries Ltd. (TSE Securities Code 6370)
announced net sales of 214,187 million yen and profit attributable to owners of parentof 14,506 million yen, or 125.23 yen per share, for the year ended March 31, 2017
(April 1, 2016 – March 31, 2017).
Results of Operations
Total consolidated orders for the Kurita Group in the fiscal year ended March 31, 2017
declined 1.1% from the level of the previous fiscal year, to 218,730 million yen, and net
sales fell 0.1%, to 214,187 million yen. Operating income was down 1.9% versus theprevious fiscal year, to 19,452 million yen. Ordinary income was 20,074 million yen,down 1.8%. Profit attributable to owners of parent amounted to 14,506 million yen, up
15.3%, reflecting a reduction in tax expenses primarily due to the revision to corporate
tax rates.
During the fiscal year ended March 31, 2017, the U.S. and European economies
continued to recover, and the Chinese economy and other emerging economies in Asia
recovered chiefly due to the effects of government policy. Overall, global economic
growth was moderate.
The Japanese economy continued to recover modestly, with a steady improvement in
consumer spending and corporate earnings picking up as the appreciation of the yen
began to ease and overseas economies recovered in the second half of the fiscal year.
Looking at the market environment surrounding Kurita Group (Kurita Water
Industries Ltd. and its consolidated subsidiaries and equity method affiliates), in Japan,
there were signs of a recovery in production in the manufacturing industry on the backof a recovery in demand and progress in inventory adjustments, but the rebound incapital expenditure was tepid, reflecting concern over the economic outlook given theappreciation of the yen in the first half of the fiscal year. Overseas, demand for water
treatment continued to rise in East Asia and Southeast Asia.
In this environment, the Group focused on expanding overseas operations andimproving profitability, aiming to evolve into a strong corporate group capable ofcompeting successfully in the international market.
To expand overseas operations, the Group merged Kurita Europe APW GmbH and
Kurita Europe GmbH (the name of the company after the merger is Kurita EuropeGmbH) to bolster sales with the development of competitive new products for the
global market and the sharing of strategic products between Group companies. In thisway, the Group restructured its research and development and sales systems. In Asia,
the ultrapure water supply business, which started to supply ultrapure water to a major
semiconductor manufacturer in South Korea in the second half of the previous fiscal
year, gained credibility as a result of its contribution to stable operations at thecustomer’s plant. The Group has thus established a base for expanding its presence inSouth Korea.
To improve profitability in the water treatment facilities business, on the sales front,
the Group identified key markets and customers and focused on projects where it wasable to provide high added value. On the production front, the Group promoted thereview and standardization of business processes and, as a result, profitability in1construction projects improved. In the water treatment chemicals business andmaintenance service in the water treatment facilities business, the Group combinedcompetitive technologies and products with the analysis of water treatment data using
its own sensing technology and focused on proposing solutions to customers’ challenges,
including environment load reduction, energy saving, and an improvement inproductivity.
Segment Information
Water Treatment Chemicals
Total Group orders for the Water Treatment Chemicals segment were 82,118 million
yen, down 1.6% versus the fiscal year ended March 31, 2016, while sales declined 2.1%,
to 81,883 million yen. Operating income was up 11.8% to 7,231 million yen.
In Japan, capacity utilization recovered at customers’ plants, and the Group sought topresent solutions to customers’ challenges using new products and services. As aconsequence, the results of boiler water treatment chemicals, our mainstay products,
began to improve, and cooling water treatment chemicals and process treatment
chemicals for steel both grew. Both orders and sales rose.
Overseas, although the consolidation period for the operating results of the acquired
business in Europe, which have been consolidated from the previous consolidated fiscal
year, was a month longer than that of the previous fiscal year, both orders and sales
declined as the strength of the yen offset a solid overseas performance.
Income rose, reflecting the elimination of temporary expenses in association with arevision of the initial allocation of the cost of the acquisition of businesses in Europe in
the previous fiscal year.
Water Treatment Facilities
Total Group orders for the Water Treatment Facilities segment were 136,611 million
yen, down 0.9% versus the previous fiscal year. Sales rose 1.2%, to 132,304 million yen.
Operating income declined 8.6%, to 12,220 million yen.
In Japan, in the electronics industry, orders in maintenance services declined partly inreaction to the strong performance in the previous fiscal year, but orders in the water
treatment facilities increased significantly, reflecting orders for large-scale projects.
Sales in maintenance services remained roughly flat, while sales in the water treatment
facilities declined.
In general industries, orders in the water treatment facilities fell in reaction to orders
for large-scale projects in the previous fiscal year, but orders in maintenance servicesrose both from private plants and from public offices. Orders for water treatment
facilities for electric power rose significantly, reflecting orders for large-scale
wastewater treatment facilities for thermal power plants and for chemical cleaning
projects. Orders for soil remediation also increased thanks to demand for large-scale
projects. Sales of water treatment facilities for electric power declined, but sales of otherwater treatment facilities and sales of soil remediation and maintenance services rose.
Overseas, orders fell, reflecting orders for large-scale projects in China and Taiwan in
the previous fiscal year, but sales climbed, driven by sales from large-scale projects inthe electronics industry in China and South Korea.
Combined sales in Japan and overseas in the ultrapure water supply business declined,
attributable to the effects of the expiration of contracts and revision of contracts with2

certain customers, despite the posting of sales from new contracts.
Profitability in water treatment facilities and maintenance service improved,reflecting an increase in sales and through cost control, but overall income declined dueto the effect of a decline in sales in the ultrapure water supply business.
Financial Condition
Current assets totaled 155,930 million yen at the end of the fiscal year (March 31, 2017),
an increase of 5,384 million yen from the end of the previous fiscal year (March 31,2016). This increase was primarily attributable to an increase of 7,413 million yen in
cash reserves, that is, cash and deposits and marketable securities, which outweighed adecrease of 3,113 million yen in accounts receivable-trade due to good progress incollecting trade accounts receivable.
Noncurrent assets totaled 143,318 million yen at the end of the fiscal year, a decreaseof 4,243 million yen versus the end of the previous fiscal year. The decrease wasprincipally attributable to a 4,352 million yen decrease in property, plant and equipment
and a 998 million yen decrease in investments and other assets, which outweighed a
1,106 million yen increase in intangible fixed assets. The decrease in property, plant andequipment was attributable chiefly to the depreciation mainly of ultrapure water supply
facilities exceeding capital expenditure. The decrease in investments and other assets
was mainly because of a decrease in unrealized gains on investment securities due tofalls in the market prices of the shares held by the Group. The increase in intangible
fixed assets chiefly reflected the posting of goodwill of 2,096 million yen andcustomer-related assets of 1,983 million yen in association with the acquisition of
Fremont Industries, LLC based in the United States in the fiscal year under review,which outweighed the amortization of intangible assets, primarily amortization of
goodwill, of 2,609 million yen.
Current liabilities totaled 44,410 million yen at the end of the fiscal year, a slight riseof 3 million yen from the end of the previous fiscal year.
Noncurrent liabilities totaled 26,080 million yen at the end of the period, an increaseof 1,345 million yen versus the end of the previous fiscal year chiefly due to a 1,213
million yen increase in “Other” in noncurrent liabilities primarily reflecting the postingof long-term loans payable at consolidated subsidiaries overseas.
Net assets totaled 228,758 million yen at the end of the period, a decrease of 206
million yen versus the end of the previous fiscal year primarily due to a decrease of
3,875 million yen in accumulated other comprehensive income, which offset an increaseof 3,602 million yen in shareholders’ equity.
The main factors for the increase in shareholders’ equity were an 8,797 million yen
increase in retained earnings mainly due to a profit attributable to owners of parent of
14,506 million yen for the fiscal year under review, which exceeded dividend paymentsof 5,693 million yen, the sum of year-end dividends for the previous fiscal year andinterim dividends for the fiscal year under review, and a 5,195 million yen rise intreasury stock (a decrease in net assets), mainly through an acquisition in the market bya resolution of the Board of Directors on February 28, 2017 and an acquisition
associated with the introduction of a performance-linked stock compensation system fordirectors. The decrease in accumulated other comprehensive income resulted mainly
from a decrease of 1,269 million yen in unrealized gains on available-for-sale securities
in association with a decline in unrealized gains on investment securities and a fall of
2,975 million yen in foreign currency translation adjustments due to the strengtheningof the yen against foreign currencies.
3Cash Flows
Consolidated net cash and cash equivalents at the end of the fiscal year (March 31,2017) totaled 65,438 million yen, an increase of 21,846 million yen from the end of theprevious fiscal year (March 31, 2016). The various cash flows and related factors are
outlined below.
Cash Flows from Operating Activities
Net cash provided by operating activities during the fiscal year ended March 31, 2017
totaled 33,941 million yen, an increase of 7,359 million yen from the previous fiscal
year. Inflows from income before income taxes (20,465 million yen), depreciation andamortization (15,857 million yen) including the amortization of goodwill, a decrease innotes and accounts receivable-trade (2,030 million yen), and an increase in notes andaccounts payable-trade (1,525 million yen) were partially offset by an increase in othercurrent liabilities (866 million yen) and income taxes paid (6,893 million yen).
Cash Flows from Investing Activities
Net cash used in investing activities totaled 1,119 million yen, a decline of 32,053
million yen from the previous fiscal year. Net cash decreased chiefly due to paymentsfor purchases of property, plant and equipment totaling 10,156 million yen, including
capital expenditures for the ultrapure water supply business, and payments associatedwith the acquisition of business (after the deduction of cash and cash equivalents
included in the acquired assets) of 4,506 million yen, which were partially offset by theincreased funds mainly due to net withdrawals of time deposits of 13,960 million yen.
Cash Flows from Financing Activities
Net cash used in financing activities totaled 10,154 million yen, an increase of 4,447
million yen from the previous fiscal year. The main cash outflows were cash dividends
paid of 5,761 million yen, the purchase of treasury stock of 5,195 million yen, and a net
decrease in short-term borrowings of 665 million yen, which were partially offset byproceeds from long-term loans payable of 2,329 million yen.
Outlook for Overall Results, Including Production, Sales, and Profits and Losses
For the full fiscal year ending March 31, 2018, the Group forecasts 223,000 million yen
in net sales (up 4.1% year on year), 18,500 million yen in operating income (down
4.9%), 19,000 million yen in ordinary income (down 5.4%), and 13,000 million yen in
net income attributable to owners of parent (down 10.4%).
In the fiscal year ending March 31, 2018, the global economy is expected to continue
to grow moderately. Domestic companies’ production activities should continue toexpand, and demand for capital expenditure associated with the maintenance andreplacement of existing facilities is likely to continue. Meanwhile, the economy may
slow depending on changes in policies in European countries and the United States.
In the new fiscal year, Fremont Industries, LLC of the United States, which theGroup acquired on January 3, 2017, is a consolidated subsidiary. However, orders andsales are expected to increase only slightly due to the remaining effects of revision ofcontracts in the domestic ultrapure water supply business in the fiscal year underreview.

4

Outlook by Segment
Water Treatment Chemicals
Both orders and sales will increase, primarily in the overseas business, where Fremont
Industries, LLC is added as a new consolidated subsidiary, and both sales and profits
are expected to rise. This segment will launch competitive products using IT andsensing onto the market and will focus on proposing solutions to customers’ challenges,
strengthening cooperation with maintenance service in the water treatment facilities
business.
Water Treatment Facilities
The Group expects orders and sales to remain roughly on a par with those of the fiscal
year under review by offsetting an expected significant decline in the ultrapure watersupply business with increases in other segments. The Group will separate theorganizational structure for sales and that for manufacturing and will strengthen eachfunction to deal with customers more promptly, enhance quality, and strengthen costcompetitiveness.
Dividend Policy and Dividends for the Fiscal Year ended March 31, 2017 and the
Fiscal Year ending March 31, 2018
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 precautionary funds to prepare for rapid
fluctuations in the operating environment and will use the remainder of the reserves
primarily for investment for growth. If there are excess funds, we will take steps toimprove capital efficiency and return profits to shareholders, including the acquisitionof treasury stock, taking the share price into consideration.
We intend to pay a year-end dividend of 25 yen per share for the fiscal year ended
March 31, 2017, 1 yen more than the previous year-end dividend. Combined with theinterim dividend of 25 yen per share (1 yen more than the previous interim dividend),
the annual dividend comes to 50 yen per share, 2 yen higher than the previous fiscal
year’s annual dividend. For the fiscal year ending March 31, 2018, Kurita Water
Industries plans to pay an interim dividend of 26 yen per share and a year-end dividendof 26 yen per share, for an annual dividend of 52 yen per share.

5

Business and Other Risks
The following are summaries of major foreseeable risks present in the businessenvironments in which the Group operates. Forward-looking statements herein are
based on judgments made by management as of March 31, 2017.
1) Economic and market conditions
The Group’s Water Treatment Chemicals and Water Treatment Facilities businesses
are affected by economic conditions in Japan and in other countries and regions where
the Group operates. Demand in the Water Treatment Chemicals business fluctuates in
response to factory capacity utilization rates in such industries as steel, petroleum
refining and petrochemicals, and pulp and paper, which are the business’ main sourcesof demand. Such demand fluctuations may affect the Group’s operating results.
Demand in the Water Treatment Facilities business fluctuates in response to trends incapital expenditure in the electronics industry and other industries that are the business’
main sources of demand. Such demand fluctuations may affect the Group’s operating
results.
Intensification of competition with rivals in the Group’s business domains could
lead to declines in prices of products and services, which could lower the Group’s
profitability.
2) Materials and parts procurement
The Group procures raw materials and parts from outside the Group for the
manufacture of products and the fabrication of facilities. The prices of raw materials
and parts fluctuate based on changes in market conditions, and such fluctuations may
affect the Group’s operating results.
3) Overseas business development
The Group is striving to expand its business outside Japan. In contrast to theJapanese market, doing business in overseas markets involves a number of inherent,
unforeseen risks, including the risk of changes to local laws and regulations, the risk ofpolitical and economic instability, and the risk of foreign exchange rate fluctuations. If
such risks materialized, the Group’s operating results could be affected.
4) New product development
The Group continuously endeavors to develop new technology and competitive new
products. The success of new technology and product development efforts cannot be
guaranteed. The Group may not be able to offer new technologies and products thatmeet the needs of its customers or launch new products in a timely fashion. The Group
may also fail to keep pace with rapid changes in technological innovation and changing
customer needs. If the Group were to fail to develop competitive new products, this
could hamper its future growth and profitability or otherwise affect its operating
results.
5) Intellectual property
The Group recognizes the importance of intellectual property and continually seeks
to register its own intellectual property while avoiding infringement of the intellectual
property rights of third parties, both in Japan and overseas. Given the wide scope of theGroup’s business, however, there is potential for the Group’s intellectual property
rights to be infringed and potential for the Group to infringe upon the rights held by
third parties. Such occurrences may affect the Group’s operating results.
6) Information systems
The Group’s use of information systems is increasing, as is the importance of
information systems to the Group’s business. If a computer virus or some other factor
6were to obstruct the functions of the Group’s information systems, the Group’sbusiness activities, operating results, and financial condition could be negatively
affected.
7) Large-scale natural disasters
If an earthquake, typhoon, or other kind of natural disaster were to directly or
indirectly upset the Group’s business execution, the Group’s business activities,
operating results, and financial condition could be negatively affected.
Basic concept for the selection of accounting standards
The Kurita Group is considering improvements to the accounting standards of theGroup and accounting processing procedures and the timing for applying them inpreparation for the application of the International Financial Reporting Standards(IFRS).

7

Financial Statements — Consolidated
Balance Sheet — Consolidated(Million yen)

AssetsCurrent assets
Cash and deposits
Notes receivable – trade
Accounts receivable – tradeMarketable securities
Finished products
Work in process
Raw materials and supplies
Deferred tax assets
Other
Allowance for doubtful accounts
Total current assets
Noncurrent 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 noncurrent assets
Total assets

As ofMarch 31, 2016
AmountAs ofMarch 31, 2017
Amount58,374
7,463
63,552
7,566
3,130
3,690
2,433
1,652
2,866
(185)
150,546

72,7507,843
60,439
603
3,114
4,181
2,229
1,568
3,447
(246)
155,930

61,278(45,347)
15,931
109,735(77,295)
32,43913,941
8,315(3,216)
5,099
8,586
13,105(10,715)2,389
78,38862,093(48,087)
14,005
121,311(85,258)
36,053
13,881
8,352(3,679)4,673
2,852
13,755(11,184)
2,570
74,03615,114
1,722
7,365
24,202

15,0491,908
8,350
25,30837,063
4,232
3,879
(204)
44,970147,561
298,107

34,844
4,275
5,042
(189)
43,972
143,318
299,2498

(Million yen)

As ofMarch 31, 2016
AmountAs ofMarch 31, 2017
Amount1,719
21,060
6,897
3,705
2,365
284
768
7,606
44,407

1,710
21,715
8,019
2,875
2,361
81
801
6,844
44,410

4,763
1,119
57
15,467
3,327
24,735
69,142

4,339
1,119
25
16,054
4,540
26,08070,49013,45010,993
196,788(8,695)
212,536

13,45010,993
205,586(13,891)
216,138

16,061

14,792

398
(380)
(618)
(101)
15,3601,067
228,964
298,107670(380)(3,593)(3)
11,484
1,135
228,758
299,249

Liabilities
Current liabilities
Notes payable – trade
Accounts payable – trade
Accounts payable – other
Income taxes payable
Provision for bonuses
Provision for loss on construction contracts
Provision for product warranties
Other
Total current liabilities
Noncurrent liabilities
Lease obligations
Deferred tax liabilities related to revaluation
Provision for directors’ retirement benefit
Net defined benefit liability
Other
Total noncurrent liabilities
Total 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

9Statements of Income and Comprehensive Income — Consolidated
Statement of Income(Million yen)

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
Equity in earnings of unconsolidated subsidiaries
and affiliates
Other
Total non-operating income
Non-operating expenses
Interest expense
Foreign exchange losses
Acquisition-related costs
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of non-current assets
Gain on sales of investment securities
Total extraordinary income
Extraordinary losses
Loss on liquidation of businessTotal 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

Year ended
March 31, 2016
Amount214,372
143,964
70,407

Year ended
March 31, 2017
Amount214,187
145,455
68,732

19,021

19,160

1,318
2,001
3,023
5,269
19,93950,574
19,833

1,334
1,440
2,767
5,038
19,53749,28019,452

232
478

183
488

145

175

581
1,438

582
1,429

276
102
221
232
832
20,439

187
39
259
321
807
20,074

148
148

391
391

176
176
20,411

20,465

7,027
626
7,654
12,757180
12,577

5,996
(193)
5,803
14,661
155
14,506

10

Statement of Comprehensive Income(Million yen)

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

Year ended
March 31, 2016
Amount12,757

Year ended
March 31, 2017
Amount14,661

1,293(1,263)332
62(2,113)(109)

271(2,897)
97

(86)

(83)

(621)
12,136(3,876)
10,784

11,997

10,649

138

134

11

Statement of Changes in Shareholders’ Equity — Consolidated
Year ended March 31, 2016 (April 1, 2015 - March 31, 2016)(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
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

13,45010,980189,693(7,705)

Total shareholders’equity206,419(5,469)(5,469)12,577

12,577
(990)

(990)

12

12
(13)

(13)
-

-

12

7,094

(990)

6,117

13,45010,993

196,788(8,695)

212,536

Accumulated other comprehensive income
Unrealized
gains (losses) Deferred gains Revaluation
on available(losses) on
reserve forfor-salehedgeslandsecurities

Balance as of the
beginning of the fiscal
year

14,768

66

(442)

Total
NonForeign
Remeasureaccumulated controllingcurrency
ments ofotherinterests
translation defined benefit
comprehensive
adjustments
plansincome1,510

8

15,911

1,147

Total net
assets

223,478

Change during theperiodDividend from surplus(5,469)Profit attributable toowners of parent

12,577Purchase of treasury
stock

(990)

Changes of equity
interest in consolidated
subsidiaries

12

Other

(13)

Net change in items
other than shareholders’equity during theperiod

1,293

332

62

(2,129)

(109)

(551)

(79)

(630)

Total change during theperiod

1,293

332

62

(2,129)

(109)

(551)

(79)

5,486

Balance as of the end of
the fiscal year

16,061

398

(380)

(618)

(101)

15,3601,067

228,96412

Year ended March 31, 2017 (April 1, 2016 - March 31, 2017)(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
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

196,788(8,695)

Total shareholders’equity212,536(5,693)(5,693)

14,506

14,506(5,195)(5,195)
-

(15)

(15)
-

-

-

8,797

(5,195)

3,602

13,45010,993

205,586(13,891)

216,138

Accumulated other comprehensive income
Unrealized
gains (losses) Deferred gains Revaluation
on available(losses) on
reserve forfor-salehedgeslandsecurities

Balance as of the
beginning of the fiscal
year

16,061

398(380)

NonTotal
Foreign
Remeasure- accumulated
controllingcurrency
ments ofothertranslation defined benefit comprehensive interests
adjustments
plansincome

(618)

(101)

15,3601,067

Total net
assets228,964

Change during theperiodDividend from surplus(5,693)

Profit attributable toowners of parent

14,506

Purchase of treasury
stock(5,195)

Changes of equity
interest in consolidated
subsidiaries

-

Other

(15)

Net change in items
other than shareholders’equity during theperiod(1,269)271-(2,975)97(3,875)67(3,807)

Total change during theperiod(1,269)271-(2,975)97(3,875)67(205)

Balance as of the end of
the fiscal year

14,792670(380)(3,593)(3)

11,484

1,135

228,758

13

Statement of Cash Flows — Consolidated(Million yen)

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
Other extraordinary (income) losses(Gains) losses on sale/disposal of property, plant andequipment(Gains) losses on sale of investment securities(Gains) losses on valuation 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 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
Cash flows from investing activities
Deposits into time deposit accounts
Withdrawals from time deposits
Payments for purchases of marketable securities
Proceeds from sale and redemption 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 sale of intangible assets
Payments for purchases of investment securities
Proceeds from sale and redemption of investment securities
Payments associated with acquisition of business
Other payments
Other proceeds
Net cash provided by (used in) investing activities

Year ended
March 31, 2016
AmountYear ended
March 31, 2017
Amount20,411
14,682
1,066

20,465
14,877
980

(145)

(175)

1,587
(842)
(710)
276
(214)
176

646
(143)
(671)
187
(51)
-

(74)

26

(23)
20
(4,473)
(249)
282
2,293
(274)
398
34,189
710
581
(276)
(358)
(8,264)
26,582

(391)
2,030
(144)
(866)
1,525
1,890
112
40,297
835
570
(325)
(542)
(6,893)33,941(45,262)
35,124(9,576)9,000(17,693)
156
(772)
7
(8)
27
(3,857)(388)
72(33,172)(20,802)34,762516(10,156)
30
(791)
(240)
863
(4,506)(924)
129(1,119)14

(Million yen)

Cash flows from financing activities
Net increase (decrease) in short-term borrowings
Proceeds from long-term loans payable
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
Cash and cash equivalents of newly consolidated
subsidiaries
Cash and cash equivalents at the end of the period

Year ended
March 31, 2016
AmountYear ended
March 31, 2017
Amount

339
1,256
(15)
(626)
(990)
(5,474)
(77)

(665)
2,329
(223)
(637)
(5,195)(5,694)
(67)

(119)

-

(5,707)(10,154)

154

(821)

(12,143)
55,675

21,846
43,59159-

43,59165,43815

Business Combination
Business combination through acquisition
1. Overview of business combination(1) Name and business of the acquired company
Name: Fremont Industries, LLC
Business: Manufacturing and sales of water treatment chemicals(2) Reason of business combination
Fremont Industries, LLC is a water treatment chemicals manufacturing and sales company
headquartered in Minnesota, U.S.A. Fremont provides a variety of types of water treatment chemicals
in a broad range of areas, including hospitals and office building air-conditioning, mainly in markets
with growth potential such as biofuels and the food industry. Fremont has built local area-centric
operating bases and systems in the Midwest of U.S.A., and Kurita expects to increase the sales of
products and technologies of the Kurita Group and to develop new markets by taking advantage of thecustomer base and sales network of Fremont.
(3) Date of business combination
January 3, 2017(4) Legal form of business combination
Acquisition of business for a cash consideration(5) Name after business combination
Fremont Industries, LLC(6) Percentage of voting rights acquired
100%(7) Main reason for determining the acquiring company
Acquisition of business for a cash consideration
2. Period of consolidation of the results of acquired business
Only the opening balance sheet as of January 4, 2017 is consolidated in the fiscal year under review.
3. Acquisition cost of the acquired business and breakdown by type of consideration
Consideration
Cash4,760 million yen
Acquisition cost
4,760 million yen
4. Major expenses related to the acquisition
Compensation, fees, etc. paid to the advisor: 123 million yen
5. Amount of goodwill, reason of the occurrence of goodwill, amortization method, and amortization
period(1) Amount of goodwill
2,096 million yen(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. Assets accepted and liabilities assumed on the date of the business combination
Current assets
880 million yen
Noncurrent assets
2,133 million yen
Total assets
3,013 million yen
Current liabilities
350 million yen
Noncurrent liabilities- million yen
Total liabilities
350 million yen
7. Estimated effect of the acquisition of business if it had been completed on the first day of the fiscal
year under review and calculation method
The Company states no estimated effect because estimating the effect is difficult.

16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.
3. Sales, income and loss, assets and liabilities, and other amounts by reportable segment
Year ended March 31, 2016 (April 1, 2015 - March 31, 2016)(Million yen)

Reportable segment
Water
Water
Treatment Treatment
Chemicals Facilities
Total

Amounts
reported on the
Adjustments statements of(see note)
incomeSales
Sales to outside customers
Inter-segment sales and transfers
Total

83,680235
83,916130,692
158
130,850214,372
394
214,767

(394)
(394)

214,372
214,372

Segment income

6,467

13,366

19,834(0)

19,833

Segment assets

79,365

142,564

221,930

76,176298,107

Segment liabilities

24,14245,06069,202(59)

69,142Other amounts
Depreciation

2,613

12,068

14,682-

14,682

-

-

-

-

-

2,434

17,188

19,623-

19,623

Impairment loss
Change in property, plant andequipment and intangible fixed
assets17

Year ended March 31, 2017 (April 1, 2016 - March 31, 2017)(Million yen)

Reportable segment
Water
Water
Treatment Treatment
Chemicals Facilities
Total
Sales
Sales to outside customers
Inter-segment sales and transfers
Total81,883242
82,126132,304
191
132,495

Amounts
reported on the
Adjustments statements of(see note)
income214,187434
214,621

Segment income

7,231

12,22019,451

(434)
(434)
0

214,187
214,187

Segment assets

80,120134,623

214,744

84,504299,249

Segment liabilities

24,75945,78670,545(54)

70,49019,452Other amounts
Depreciation
2,926
11,95014,877
14,877
Impairment loss
Change in property, plant andequipment and intangible fixed
2,175
7,911
10,087
10,087
assetsNote: “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 76,237 million
yen at March 31, 2016 and 84,550 million yen at March 31, 2017.
4. Segment liabilities: Amount resulting from eliminations of inter-segment claims and liabilities.
Related information
Year ended March 31, 2016 (April 1, 2015 - March 31, 2016)
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
37,7782,431
20,6982,970
214,372
150,495
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.
(Change in presentation)
Because of the acquisition of businesses that operate mainly in Europe, the Middle East, and Africa,
the importance of EMEA has increased. For this reason, part of the sales that were included inEurope, Asia and Other are included in EMEA in the fiscal year under review. To reflect this change
in presentation, the data in 2. Information by geographic region, (1) Sales for the previous fiscal year
are replaced.
Sales of 1,514 million yen in Europe, sales of 31 million yen in Asia, and sales of 10 million yen in
Other for the previous fiscal year are replaced by sales of 1,557 million yen in EMEA.
(2) Property, plant and equipment(Million yen)

North
Japan
Asia
America
EMEA
6,790
21
2,038
68,993
Note: EMEA here stands for Europe, the Middle East and Africa.

Other
544

Total
78,38818

3. Information by major customer(Million yen)

Name of customer
Sharp Corporation

Sales
23,097

Name of transacting segment
Water Treatment Facilities

Year ended March 31, 2017 (April 1, 2016 - March 31, 2017)
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
39,8991,885
19,774
2,641
214,187
149,988
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(Million yen)

North
Japan
Asia
America
EMEA
8,881
147
1,939
62,387
Note: EMEA here stands for Europe, the Middle East and Africa.

Other
682

Total
74,036

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.
Information on impairment of reportable segments’ noncurrent assets
Year ended March 31, 2016 (April 1, 2015 - March 31, 2016)
Not applicableYear ended March 31, 2017 (April 1, 2016 - March 31, 2017)
Not applicable
Goodwill amortization and unamortized balance of goodwill by segment
Year ended March 31, 2016 (April 1, 2015 - March 31, 2016)(Million yen)

Reportable segment
Water
Water
Treatment
Treatment
Chemicals
Facilities
Goodwill
amortization
Unamortizedbalance of
goodwill

Total

Eliminationor corporate

Total

1,066

-

1,066

-

1,066

15,114-

15,114-

15,11419

Year ended March 31, 2017 (April 1, 2016 - March 31, 2017)(Million yen)

Reportable segment
Water
Water
Treatment
Treatment
Chemicals
Facilities
Goodwill
amortization
Unamortizedbalance of
goodwill

Eliminationor corporate

Total

Total

980

-

980

-

980

15,049-15,049-15,049

Information on negative goodwill
Year ended March 31, 2016 (April 1, 2015 - March 31, 2016)
Not applicableYear ended March 31, 2017 (April 1, 2016 - March 31, 2017)
Not applicable

Per Share Information
Net assets per share
Net income per share

Year ended March 31, 2016
1961.30 yen
108.24 yen

Year ended March 31, 2017
1,991.91 yen
125.23 yen

Notes: 1. Fully diluted net income per share was not reported here because there were no dilutive securities
outstanding.
2. For the fiscal year under review, 339,000 shares in the Company owned by Japan Trustee Services Bank,
Ltd. (trust account) (shares placed in trust for performance-based stock compensation for directors) are
included in the number of treasury shares that is deducted in the calculation of the average number of shares
outstanding used for the calculation of per share information.
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, 2016
228,964
1,067(1,067)
227,896

As ofMarch 31, 2017
228,758
1,135(1,135)
227,623

116,196,920

114,274,081

The calculation bases for net income per share are as follows.
(Million yen unless otherwise stated)

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, 2016
12,577-

Year ended
March 31, 2017
14,506-

12,577

14,506116,197,479

115,837,837

20

Significant Subsequent Events
Retirement of treasury stock
By a resolution of the Board of Directors on January 30, 2015, the Company acquired 2,963,900 commonshares in the Company. The resolution stipulates that the Company shall keep the acquired treasury stockin preparation for the use of it as cash considerations for possible M&A and shall make a decision about
the disposition of the treasury stock by March 31, 2017. Towards the deadline, at a meeting of the Boardof Directors held on March 30, 2017, the Company resolved to cancel the acquired treasury stock,considering cash flows, the future development of operations, shareholder return, capital efficiency, andcapital policy, to alleviate shareholders’ concern over the dilution of stock value.
1. Class of shares cancelled
Common stock
2. Book value
8,525 million yen
3. Number of shares cancelled
2,963,900 shares
4. Timing of retirement
April 6, 201721

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

Year ended March 31,
2016
Business segment
Water Treatment Chemicals
Water Treatment Facilities
Total

Amount83,680130,692
214,372

2017
%
39.0
61.0
100.0

Amount81,883132,304
214,187

%
38.2
61.8
100.0

(2) Order Intake and Backlog(Million yen)

Year ended March 31,
2016
Business segment

Order Intake

Order Backlog

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

2017
%

Amount%83,44037.7

82,11837.5

137,832

62.3

136,61162.5

221,273

100.0

218,730

100.0

3,559

6.4

3,793

6.3

52,475

93.6

56,783

93.7

56,034100.0

60,577100.0(3) Production Results(Million yen)

Year ended March 31,
2016
Business segment
AmountWater Treatment Chemicals
84,131
Water Treatment Facilities
131,698
Total
215,829
Note: The amounts were based on sales amounts.

2017
%
39.0
61.0
100.0

Amount81,363
132,828
214,192

%
38.0
62.0
100.0

(4) Capital Expenditures (Property, Plant and Equipment)(Million yen)

Year ended March 31,
2016
Business segment
Water Treatment Chemicals
Water Treatment Facilities
Total

Amount1,951
16,867
18,818

2017
%
10.4
89.6
100.0

Amount
1,822
7,466
9,289

%
19.6
80.4
100.0

(5) Depreciation (Property, Plant and Equipment)(Million yen)

Year ended March 31,
2016
Business segment
Water Treatment Chemicals
Water Treatment Facilities
Total

Amount1,634
11,775
13,409

2017
%
12.2
87.8
100.0

Amount1,624
11,623
13,248

%
12.3
87.7
100.0

22