for Water,
for the EnvironmentEnter

Annual Report 2015
For the year ended March 31, 2015

The Kurita 21st Century Vision

realize this vision.

03

Segment
Highlights

10

Corporate Philosophy

Study the properties of water, master them,and we will create an environment in which
nature and man are in harmony

Management
Indicators

Ident
ific

Special Feature: The Kurita’s Business Model
A business network spanning
Japan and the world
Domestic network

Water
Treatment
Facilities

nc

y

re

3 We will further advance our service business in the water field to help

customers meet their challenges, such as more safety, higher productivity and lower environmental impact, thereby retaining the continued
trust of our customers and realizing our own growth.

Management Guidelines

sp

ons

e

Pro

Electronics

Steel

po

s

Electrical power generationEne

rg y sShareholders
Investors

P.28
Local
communities

P.29
Naturalenvironment

av i n g

P.30-32

Water treatment facilities(hardware)

P.16-17

14

Industry-leading intellectual
property portfolioof consolidated sales

Ultrapure
waterCore technology areas

Analysis

Corrosion
prevention
anddispersion

Coagulation Sterilizationandandflocculation bacteriostasis

Research and Development
BiologicalEngineering

Membrane
Adsorption
separation
anddeionization and filtration

Surfacetreatment

16(For the fiscal year ended March 31, 2015)

Business Network
Chemical cleaning services

Boiler water treatment chemicals

Chemical cleaning services

Wastewater reclamation systems

Packaged contracts

Process treatment chemicals

Cooling water treatment chemicals

Wastewater treatment chemicals

Boiler water treatment chemicals

Pure water production systems

5 Enhanced Development of Human Resources
6 Accomplishment of Social Responsibility

33

Pure water production systems Wastewater reclamation systems
Cooling water treatment chemicals
Chemical cleaning services Chemical cleaning services
Soil remediation services

P.14-15

Wastewater treatment systems

Corporate Social Responsibility
Corporate Governance
Relationship with Customers
Relationship with Local
Communities

Financial Section

74

23
27
30

Kurita History

50%

Water treatment facilities (services)

Chemical injection and dosing equipment, etc.

19
26
29

Water treatment chemicals

32%

Maintenance services, operation
Maintenance services, operation
Maintenance services, operation

Know-How

18

18%

82%

Research and Development Capabilities(Technology-Driven Company)

3 Technology-Driven Company 4 Full Use of the Group’s Comprehensive Strength

All directors and employees of the Kurita Group are required to conduct their businessactivities based on our shared five values (fairness, transparency, integrity, safety andcompatibility) to ensure that the Group is able to realize sustainable growth
and to maintain and enhance its good reputation to deepen the trust of society.

Petroleum Pulp and paper
refining andpetrochemicals

Service operations
account forOverseas network

1 World’s Top-Class Water and Environment Business 2 Creation of New Business

Code of Ethical Conduct

Pharmaceuticals

Customers
Business
partners

P.26-27

Maintenance
Services

2 We will further progress our “water management” achieved through ourstate-of-the-art products, technologies and services, thereby achieving“advanced management” to ensure that water of appropriate quality
and quantity is available whenever and wherever it is needed.

Food

o
al

1 We will implement our Corporate Philosophy and contribute to society

by striving to add new value and functions to water and by meeting
global challenges such as the conservation of the natural environment
and effective use of resources.

P.24-25

All-Round Water
Management
rge

Water
Treatment
Chemicals

at
io

es
issu
of

A unique business mix among
companies worldwide

Employees

hancementt y en
tivi
uc
od
Pr
Customers

ental burden reduc
tio
onm
vir
n
En

ag
di

is
nos

Eme

Becoming an advanced water andenvironmental management company

12

New Medium-Term Management Plan:“Competitive Kurita 2017(CK-17)”nCorporate Vision04

Toshiyuki Nakaischerish, and our determination to

President and Representative Director

tio nKurita to be, the principals we continue to05

To All Our Stakeholders

olu

encapsulated the dream of how we want

02

Kurita’s
Business

fs

Within this 21st Century Vision, we have

Daytoday

We sketched out Kurita’s future vision.

CONTENTS

Accumulated know-how

Directors and Members of the
Audit & Supervisory Board
Relationship with Suppliers

Strong, long-term relationships
with customers froma broad array of industries,
and in-depth knowledgeof customer facilities

24
28

Relationship with Employees
Relationship with
Shareholders and Investors

Environmental Improvement
Activities

76

Corporate Data

77

Investor Information

Disclaimer
This report contains forward-looking statements from Kurita Water Industries Ltd. pertaining to plans, forecasts, strategies, and results. These forward-looking statements are basedon currently available information, and actual results may vary significantly from the forward-looking statements contained in this report due to a range of variable factors.

Kurita Water Industries Ltd. Annual Report 201501

Contents

Kurita’s Business

Segment Highlights

Management
Indicators

To All Our
Stakeholders

New Medium-Term
Management Plan

Special Feature:
The Kurita’s Business Model

Kurita’s Business
From Factory Entrance to Exit

Water Treatment Chemicals

Water Treatment Facilities

Manufacturing line
Manufacturing process

Water
treatment
facilities

Process treatment
chemicals•Process treatment

Power generation
systems

Air conditioning
systems

Refrigeration systems
Cooling tower
Wastewater
treatment
Wastewater
treatmentchemicals

Cooling water
treatment chemicals

Ultrapure waterproduction systems•Ultrapure water production

Special Feature: The Kurita’s Business Model

Business Network

Corporate Social
Responsibility

Financial Section

KURITA History

Corporate Data

Investor Information

Segment Highlights

Industrial water•Pre-treatment•Soft waterproduction•Pure waterproduction

Special Feature: The Kurita’s Business Model

Research and Development•Cooling water treatment

BoilerWastewater
treatment
systems

Wastewater reclamation

Boiler water
treatment chemicals

Wastewater
reclamation systems•Boiler, vaporizer and condenser
treatment

Water Treatment Chemicals

Water Treatment Facilities

In the fiscal year ended March 31, 2015, in Japan, orders andsales decreased mainly because of a tardy recovery in capacity
utilization at customers’ plants. Overseas, orders and sales increased
due to the acquisition of new customers, especially in China andSoutheast Asia. Income declined, reflecting lower sales of profitable
mainstay products in Japan.
In the fiscal year ending March 31, 2016, we will focus on
integration with acquired businesses in Europe and augmenting
overseas sales, chiefly in Asia. In Japan, capacity utilization at customers’ plants is expected to recover gradually, and we will work to
expand our market share by introducing competitive new products
and reinforcing our sales structure. As a result of these efforts, we
anticipate a year-on-year increase in segment orders and sales. We
expect operating income to decrease year on year, owing in partto the amortization of goodwill on acquired businesses. However,
we anticipate an increase in income, excluding the impact of suchfactors as goodwill amortization.

In the fiscal year ended March 31, 2015, in Japan, orders for water
treatment facilities declined, while orders and sales in the ultrapure
water supply business and maintenance services rose, due to arecovery in capacity utilization at the plants of major customers
and proposals for the optimization of the operation of water
treatment facilities, among other factors. Overseas, orders and sales
increased, chiefly reflecting large-scale projects in the electronics
industry. Income in the overall segment climbed significantly, due
to the rise in sales and stringent cost-control efforts.
In the fiscal year ending March 31, 2016, we will reinforce
cooperation between the sales and production divisions andoffer highly specialized proposals. We will also enhance the sales,
design and construction capabilities of our overseas subsidiaries
and affiliates, and optimize quality and costs. Consequently, we
look forward to year-on-year increases in orders and sales in thissegment. By improving the cost of sales ratio, we anticipate an
uptick in operating income.

Orders (Millions of yen)
Utilities

Industrial
waste

Waterway andsewage discharge

86,20056,71456,74856,04059,41359,353

2011

2012

2013

2014

2015

Orders (Millions of yen)
125,237

140,507

130,700

114,049

121,928

130,800

2013

2014

2015

2016

124,052

119,292

129,399

129,800

2013

2014

2015

2016

11,56011,8002015

2016

Kurita provides a host of industrial water treatment solutions, from factory entrance to exit.
Since its establishment in 1949, Kurita Water Industries Ltd.
has amassed technological expertise in water treatment.
In response to customer needs for increased efficiency andreduced environmental impact, Kurita combines a host

· Boiler water treatment chemicals· Cooling water treatment chemicals· Wastewater treatment chemicals· Process treatment chemicals· Packaged contracts· Chemical injection anddosing equipment, etc.

Water
Treatment
Chemicalsof technologies, expertise and services in three businessdomains—water treatment chemicals, water treatment facilities and maintenance services—to provide comprehensive
solutions that address all manner of water-related issues.

Water
Treatment
Facilities

Maintenance
Services· Maintenance services· Ultrapure water supply business· Operations management· Tool cleaning· Soil remediation· Chemical cleaning

Sales (Millions of yen)
56,73556,44356,091

58,844

2011

2012

2013

2014

59,999

2015

2016

2011

86,200

Sales (Millions of yen)

(Plan)

124,499

2012

137,348(Plan)· Ultrapure water production systems· Water production systems for generalindustrial use· Wastewater treatment systems· Wastewater reclamation systems

2016(Plan)

Operating Income (Millions of yen)
10,099

9,268

2011

2012

(Plan)

Operating Income (Millions of yen)
20,127

8,334

7,954

7,877

7,700

17,032
12,641
6,934

2011

2012

2013

2014

2015

2016
(Plan)

2011

2012

2013

2014

(Plan)For the years ended March 31

02 Kurita Water Industries Ltd. Annual Report 2015

Kurita Water Industries Ltd. Annual Report 201503

Contents

Kurita’s Business

Segment Highlights

Management
Indicators

To All Our
Stakeholders

New Medium-Term
Management Plan

Special Feature:
The Kurita’s Business Model

Special Feature: The Kurita’s Business Model

Special Feature: The Kurita’s Business Model

Research and Development

Business Network

Corporate Social
Responsibility

Financial Section

KURITA History

Corporate Data

Investor Information

Management Indicators
Kurita Water Industries Ltd. and Consolidated Subsidiaries
Years ended March 31

Financial
2006

2007

2008

2009

2010

2011

2012

2013

Millions ofyen

Thousands of
U.S. dollars1

2015

2015

2014

Orders¥183,910 ¥192,529 ¥208,689 ¥195,065 ¥175,162 ¥181,951 ¥197,256 ¥186,741 ¥173,463¥181,282

1,510,687

Net sales

173,683

197,146

204,875

199,706

178,520

181,234

193,792

180,143

178,137

189,398

1,578,324

Cost of sales

122,630

137,819

138,549

135,874

117,221

118,573

127,905

121,047

122,870

130,5091,087,577

Selling, general andadministrative expenses

33,74135,05035,85735,89634,941

35,52836,503

38,10640,38039,454

328,785

Operating income

17,311

24,27630,46827,93526,35827,131

29,382

20,98914,886

19,435

161,962

10.0

12.3

14.9

14.0

14.8

15.0

15.2

11.7

8.4

10.3

10,51914,207

18,297

16,29917,28817,13816,548

11,476

9,352

10,434

Operating income margin (%)
Net income

6.1

7.2

8.9

8.2

9.7

9.5

8.5

6.4

5.2

5.5

212,774

235,137

231,498

245,406

251,620

253,298

271,141

263,580

274,925

293,204

0.86

0.88

0.88

0.84

0.72

0.72

0.74

0.67

0.66

0.67

145,366

156,772

169,402177,291

192,588

198,042

208,891

207,871

217,691

222,330

68.3

66.7

73.2

72.2

76.5

78.2

77.0

78.9

79.2

75.8

Return on sales (%)
Total assets
Total assets turnover(Times) 2
Equity3

Equity ratio (%)

486,9552,443,371

1,852,758

5

5.2

6.3

7.8

6.8

7.0

6.8

6.3

4.3

3.5

3.7

Return on equity (ROE) (%) 6

7.5

9.4

11.2

9.4

9.3

8.8

8.1

5.5

4.4

4.7

Capital expenditures

16,537

19,56324,09756,322

8,083

5,965

8,105

6,688

5,709

12,864

107,205

Depreciation and amortization

4,906

6,512

9,425

11,716

15,523

16,066

16,035

15,054

14,774

14,863

123,862

R&D expenses

4,213

4,421

4,551

4,363

3,990

4,225

4,232

4,362

4,534

4,397

36,645Return on assets (ROA) (%)

Yen

Net income per share
Equity per share

7

8

¥

81.8 ¥ 110.4 ¥ 142.2 ¥ 126.7 ¥ 134.4 ¥ 134.0 ¥ 130.7 ¥
1,129.7

1,218.4

1,316.7

1,378.0

1,497.0

1,563.6

1,649.2

92.4
1,744.4¥

78.5
1,826.8¥

U.S. dollars 1

87.8$ 0.73

1,907.8

15.90
0.38

Dividends per share

22.0

28.0

32.0

34.0

36.0

38.0

40.0

42.0

44.0

46.0

Dividend payout ratio (%)

26.9

25.4

22.5

26.8

26.8

28.4

30.6

45.4

56.1

52.4

Notes: 1. The U.S. dollar amounts are given solely for convenience at the rate of ¥120 to US$1, the prevailing rate on the Tokyo Foreign Exchange Market on March 31, 2015.
2. Total assets turnover = Net sales ÷ Total assets (Average)
3. “Equity” represents “Net assets less minority interests” (hereinafter, the same).
4. Equity ratio = Equity ÷ Total assets × 100
5. Return on assets = Net income ÷ Total assets (Average) × 100
6. Return on equity = Net income ÷ Equity (Average) × 100
7. Calculation of net income per share is based on average number of shares outstanding (excluding treasury stock).
8. Calculation of equity per share is based on the number of shares at year-end (excluding treasury stock).

Non-Financial

To All Our Stakeholders

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

Total CO2 emissions (t-CO2)*

21,93722,39822,50522,541

23,56323,941

158,121

162,748

181,149

188,543

Total waste output (t)*13,69925,95426,895

27,133

26,186

24,73947,181

41,56147,85954,679Number of employees

3,668

3,992

4,249

4,404

4,445

4,490

4,555

4,640

4,635

5,222

The Kurita Group operates under the corporate philosophy of “Study the properties of water,
master them, and we will create an environment in which nature and man are in harmony.” We
strive to contribute broadly to society through business activities in the fields of water and theenvironment.
Kurita considers itself a “technology-driven company.” Based on the sophisticated technologies and expertise we have cultivated over more than 60 years in the industrial water business,
we contribute to the safe and steady operation of customers’ facilities. At the same time, we aim
to provide “advanced management” to respond flexibly and expeditiously to needs for environmental impact reduction, energy savings, productivity increases and the cyclical reuse of water. By
pursuing this sort of advanced management, we strive both to resolve the issues customers face
and to make efficient use of limited water resources, thereby contributing to the realization of asustainable society.
Our aim is to achieve a broader recognition among our various stakeholders of the Kurita
Group’s management philosophy, management strategies and contributions to society.
I ask our stakeholders for your ongoing understanding and support of the Kurita Group inthese endeavors.
July 2015

Toshiyuki Nakai
President and Representative Director* Kurita Water Industries Ltd.'s domestic offices and domestic consolidated subsidiaries

04 Kurita Water Industries Ltd. Annual Report 2015

Kurita Water Industries Ltd. Annual Report 201505

Contents

Kurita’s Business

Segment Highlights

Management
Indicators

To All Our
Stakeholders

New Medium-Term
Management Plan

Special Feature:
The Kurita’s Business Model

Q1 In the fiscal year ended March 31, 2015, youachieved increases in both consolidated sales
and income for the first time in three years.
Would you describe these results?

Corporate Social
Responsibility

Financial Section

KURITA History

Investor Information

the Japanese economy. We also expected overseas business to expand,relying on large-scale projects for electronics facilities in China andSouth Korea that were uncertain to be realized. Clearly, we fell short in
responding swiftly to market and customer fluctuations. Also, owing toeffective use of funds outside the ultrapure water supply business.

and capital expenditure in the manufacturing sector in Japan. Overseas,

Meanwhile, we set in place the foundations for new growth. In

demand for water treatment increased in East Asia and South Asia. In thisEurope, acquired water treatment-related businesses, and in South Korea

environment, the Kurita Group took steps to restore its earning power

reached a decision regarding an ultrapure water supply business. We also

and expand its global business, evolving into a corporate group capable

created new products and services.

of competing successfully in the international market. Specifically, theIn January 2015, we concluded the acquisition of the water treatment

Group sought to expand orders by proposing solutions to customers’chemicals, paper process chemicals and alumina compounds businesses

challenges and providing high-value-added and price-competitiveof BK Giulini GmbH, which is based in Germany, and its affiliates. This

products and services in regions and markets where demand for wateracquisition of a business platform in Europe is deeply meaningful fortreatment is increasing, such as East Asia and Southeast Asia. The Groupthe global development of the Kurita Group, whose overseas businessalso concentrated on improving its production system and controlling

expansion efforts to date have been centered on Asia.
Also, in the past we have made Japan the core of our ultrapure

As a result, consolidated orders for the Kurita Group rose 4.5% fromwater supply business from the perspective of minimizing business risk.

the previous fiscal year, to ¥181,282 million, and net sales increased 6.3%,

However, we expect an order we have received from a South Korean

to ¥189,398 million. Thanks to higher sales and successful efforts to curtail

semiconductor manufacturer to clear Group investment standards, andselling, general and administrative expenses, operating income was

we now look forward to developing our ultrapure water supply business¥19,435 million, up 30.6%, and net income amounted to ¥10,434 million,

through our first large-scale product for a foreign-capitalized company.

Q2 Could you provide a general overview of yourprevious medium-term management plan,“Take Action 2014 (TA-14),” and outline someof your successes?

For the past three years, we have experienced negative growth inoperating performance, with results below those for the fiscal year ended
March 31, 2012. We fell short of our targets, and profitability and capitalefficiency worsened significantly.
The main reason for this situation was that when formulating our

Regarding the creation of new products and services, by enhancing
our basic technology we succeeded in the development of a new polymer
material in the water treatment chemicals business. We have also begun
the full-scale provision of a service applying our proprietary sensing
technology for controlling the injection of water treatment chemicals inreal time in response to changes in water quality, as well as a service forproviding optimal maintenance.
I believe these moves have put us on the starting line to achieve
global growth going forward. At the same time, some issues remain to
be addressed. We need to improve profitability further, make progress on
integrating existing and acquired businesses and apply our comprehensive Group capabilities to expand our domestic business.
Related information P.15,17

Q3 Please explain Kurita’s model for value
creation.

The Kurita Group is a globally unique corporate group in that it strikes agood balance among the three businesses of water treatment chemicals,
water treatment facilities and maintenance services. We help customers
address the challenges they face by integrating our expertise in thesethree areas, which is a feat that our competitors cannot emulate. This is the
Kurita Group’s most outstanding advantage. We leverage this strength toserve customers via the sales and service network that encompasses theentirety of Japan and stretches overseas, forging strong and long-term
trust-based relationships with customers across a wide range of industries.
Furthermore, having complete knowledge of our customers’ operating

06 Kurita Water Industries Ltd. Annual Report 2015

Corporate Datafinancial targets for the TA-14 plan, we had assumed steady recovery inwhich the Kurita Group operates was characterized by weak production

Related information P.4”

Business Network

insufficient opportunities to invest in growth we were unable to makeup 11.6%. Net income per share was ¥87.8, up 11.9%.

TA-14 plan have put uson the starting line toachieve global growth
going forward.

Special Feature: The Kurita’s Business Model

During the fiscal year ended March 31, 2015, the market environment incosts thoroughly.

“Moves through ourSpecial Feature: The Kurita’s Business Model

Research and Development“The Kurita Group is a

globally unique corporategroup in that it strikes
a good balance among
the three businesses ofwater treatment chemicals,
water treatment facilities
and maintenance services.

”

Kurita Water Industries Ltd. Annual Report 201507

Contents

Kurita’s Business

Management
Indicators

Segment Highlights

To All Our
Stakeholders

New Medium-Term
Management Plan

Special Feature:
The Kurita’s Business Model

Corporate Social
Responsibility

Financial Section

KURITA History

edge, thereby creating a sustainable value-creation cycle.

the characteristics and changes identified in each market and region, we

for more than 80% of consolidated net sales. This service business, whichbillion in consolidated net sales (up 14.0% year on year), ¥19.5 billion inis relatively unaffected by customer capital expenditures, is linked to aoperating income (up 0.3%), ¥20.0 billion in ordinary income (up 5.6%)

structure for delivering stable sales and cash flow.

and ¥12.3 billion in net income (up 17.9%).

provide value to all our stakeholders, including shareholders, investors,
business partners and local communities.
Related information P.12-13

Q4 Could you provide an overview of“Competitive Kurita 2017 (CK-17),” the new
medium-term management plan that went
into effect this April?

Q6 Please describe the Group’s policy on returning
profits to shareholders and investors, as wellas any specific measures aimed at achieving
further increases in shareholder value.

Because the Kurita Group is steadily profitable and the characteristics
of our business lead to cash generation, our shareholders’ equity andcash levels have grown. Meanwhile, reduced profitability in recent years
has caused return on equity (ROE) to fall, so we view improving capitalefficiency as an important management priority.

The “Competitive Kurita,” incorporates the meanings of “having competi-

Our basic policy is to pay stable dividends to shareholders on antive strength” and “winning out over our competitors.” To be recognized as

ongoing basis. Setting our target payout ratio at 30–50%, we will worka global forerunner in water and the environment business, we need tocontinuously to increase dividends, making decisions based on the payout

clearly identify our competitive advantages vis-à-vis our competitors andratios for the most recent five years in order to allow flexibility in responsebuild a robust organizational structure that will lead to improved profit-

to annual fluctuations in operating performance.

ability and steady success. The basic themes of our plan are “competitive

For the fiscal year ended March 31, 2015, we awarded a year-end divi-

human resources, competitive systems and competitive products,” and its

dend of ¥23. This combines with an interim dividend of ¥23 for a full-yearbasic policy is to fundamentally review all work processes to provide highdividend payout of ¥46 per share, up ¥2 from the preceding fiscal year. We

added value to customers.

expect to pay total dividends of ¥48 per share for the fisical year ending

Our priority measures are to “cultivate new markets,” “create competitive products and services,” “optimize production systems and utilize
Group’s network” and “improve capital efficiency,” undertaking initiatives toInvestor Information

production methods.
For the fiscal year ending March 31, 2016, the Group forecasts ¥216.0

contribute to the realization of a sustainable society. At the same time, weCorporate Data

will provide profitable products and services through efficient sales andbusiness following the Kurita Group’s unique business model, accounts

By addressing problems related to water and the environment, we”Business Networkand regions and shift its management resources accordingly. Based on

chemicals and maintenance services, as well as the ultrapure water supply

are “competitive
human resources,
competitive systems andcompetitive products”.

Special Feature: The Kurita’s Business Modelsites and facilities enables us to accumulate further expertise and knowlAs a result, the “service business,” which includes water treatment“Basic themes of our plan

Special Feature: The Kurita’s Business Model

Research and Development“We view improving capitalefficiency as an importantmanagement priority.

”

March 31, 2016, comprising interim and year-end dividends of ¥24 each.
This would amount to the 12th consecutive year of dividend increases.
In addition, between February and April 2015, we acquired 2.96
million of our own shares, amounting to 2.49% of the total shares issued.

achieve these measures swiftly.
For the fiscal year ending March 31, 2018, the plan targets consoli-

In the interest of further enhancing shareholder value going forward,

dated net sales of ¥235.0 billion, operating income of ¥24.5 billion and an

we will seek to use our funds effectively through strategic investment in

operating income margin of 10.4%. The plan also calls for us to raise ourgrowth. After taking into account performance trends and the share price,overseas sales ratio to 34.6%, from 20.6% in the fiscal year ended March 31,

we will be flexible about considering share buybacks.

2015.
Related information P.10-11

Q5 What is your outlook for consolidated

operating performance in the fiscal year
ending March 31, 2016?

In the fiscal year ending March 31, 2016, we believe production andcapital expenditure in the Japanese manufacturing industry will recovermoderately. However, in some manufacturing sectors we expect thiscapital expenditure to go toward the replacement of aging equipment.
Overseas, demand is likely to recover at a slow pace in Europe, while
the pace of growth is likely to level off in Asia. Nevertheless, we forecast
ongoing expansion in the water treatment market.
In this environment, the Kurita Group will identify growth markets

08 Kurita Water Industries Ltd. Annual Report 2015

Kurita Water Industries Ltd. Annual Report 201509

Contents

Kurita’s Business

Segment Highlights

Management
Indicators

To All Our
Stakeholders

New Medium-Term
Management Plan

Special Feature:
The Kurita’s Business Model

Special Feature: The Kurita’s Business Model

Special Feature: The Kurita’s Business Model

Research and Development

Business Network

Corporate Social
Responsibility

Financial Section

KURITA History

Corporate Data

Investor Information

New Medium-Term Management Plan:“Competitive Kurita 2017 (CK-17)”
Highlights of Previous Medium-Term Management Plan: “Take Action 2014 (TA-14)”
Achievement Reached the starting line in preparation for global growthPending Tasks Improvement in profitability, integration of existing and newly acquired businesses, and expansion ofdomestic business by leveraging the Kurita Group’s combined strengths

2Create Competitive Products and Services

Gain a deep understanding of customer needs and facilities, and provide distinctive products and services by leveraging the Group’s
combined strengths.

Customer proposals that utilize IT
By developing and launching products and services that utilize
proprietary sensing technology, IT systems, and data analysis
methods, achieve differentiation from competitors.

New Medium-Term Management Plan: “Competitive Kurita 2017 (CK-17)”
Basic Themes

Basic Policy

Competitive Human Resources

Conduct a radical
review of every
operation toprovide high added
value for ourcustomers

Competitive Systems
Competitive Products

Priority Measures

1

2

Create competitive
products and services

Cultivate new markets

3

Improve capital efficiency

Operating Performance Targets(Billions of yen)

2018/3 (Plan)

2015/3 (Acutual)
Sales

Average annual growth rate

189.4

235.0

7.5%

19.4

24.5

8.0%

Operating income margin

10.3%

10.4%

Overseas sales

39.1

81.3

Overseas sales ratio

20.6%

34.6%

1

Operating income
2

1

3

4

Optimize production
systems and utilize
the Group’s network

–
27.6%

Review the functions and roles of allsites worldwide to optimize the Group’s
operational structure. By strengthening
the engineering, procurement andconstruction management functions ofoverseas operating companies, strive to
reduce cost of sales.
Utilize Kurita’s global business network—including the sites acquired inEurope—to expand the Group’s productand service lineup.

Aiming to be a world leader in water treatment chemicals

GlobalSales-driven model basedon differentiated products

High-value-added model
based on total solutions(Japan, Asia, Europe and the Americas), and strive to becomea leading global Group in the advanced water and environmental field.

Water Treatment Chemicals Business: Overseas Sales by Region
Asia

North America

3.5
1.5 17.3

Low profitability

10 Kurita Water Industries Ltd. Annual Report 2015

12.0

2015/3Company E(Actual)High profitability

SwedenGermany
France
Italy
タリア
Spain
ペイン

PolandSlovakia
Hungary
GreeceTurkeyDalian Angang
Tianjin
JiangyinSouth Korea
SuzhouShanghai
Guangzhou
TaiwanThe Americas
Exploring businessexpansion opportunities
United States

VietnamThailand
MalaysiaBrazilOther

Improve Capital Efficiency

Dividend policy
Kurita’s fundamental policy is to maintain stable dividends, and its
target payout ratio is set at 30–50%. To enable a flexible responseto annual fluctuations in operating performance, decisions are
made after taking into account the average payout ratio over thepreceding five years as the Company works to achieve ongoing
dividend increases.

43.8

16.9

22.3

2016/3(Plan)

Use of cash
The first priority is given to strategic investment for growth
purposes. The Company will consider executing share buybacks
while taking into account its business performance and its shareprice level. Overall, Kurita aims to improve its capital efficiency
and provide shareholders with adequate return.

Projected Use of Cash
4.9

Company A

Regional

Europe

4

3.7

0.3

Autonomous
growthIndonesia

Establish a global business structure covering four regions

Company B

Japan and Asia

Water treatment chemicals operations
Water treatment facilities operations

Company D

Company C

EuropeIntegration of
acquired businesses

Singapore(Billions of yen)

Low-cost model based oncommodity products

Global Business Network Spanning Four Regions–

Cultivate New Markets

Rapidly integrate the new businesses acquired by Kurita in Europe, generate synergies, expand the product and service lineup,and grow earnings.
In the North American market, to accelerate the pace of businessexpansion, evaluate options for acquisitions and alliances mainlyin the water treatment chemicals business.

To promote profitability improvement, reinforce cost competitiveness through the development of standardized water treatment
facilities by broadening the expansion of their scope of application.

Optimize Production Systems and Utilize the Group’s Network

Sales are planned to increase due to business acquisitions. 2 Operating income margin is planned to remain above 10%.

1

Reinforce cost competitiveness

25.4

53.1

21.6

Operatingcash flow

1.0

2018/3

1.2(Plan)*Kurita acquired water treatment chemicals businesses in Europe, and is working to grow its business in North America.

Cash generation

Dividends

Targeted dividend payout ratio averaging 30–50% over five years

Share buybacks
M&As andalliances

Prioritize investment in the business, and consider share buybacks
after taking into account business performance and share price

Capitalexpenditures

Investment in the ultrapure water supply business at customers’
new plants in Japan and overseas

Explore M&As and alliances opportunities in North America

Cash use
Kurita Water Industries Ltd. Annual Report 201511

Contents

Management
Indicators

Segment Highlights

To All Our
Stakeholders

New Medium-Term
Management Plan

Special Feature:
The Kurita’s Business Model

Special Feature: The Kurita’s Business Model

Special Feature: The Kurita’s Business Model

Research and Development

Business Network

Corporate Social
Responsibility

Financial Section

KURITA History

Corporate Data

Investor Information

The Kurita’s Business Model

Kurita strives to be an “advanced water and environmental
management company” providing diverse value

Kurita’s key resources are: its unique business mix for a company in the water and environmental management field; atechnology-driven company with advanced research and development capabilities; and its business network spanningall of Japan and across the globe. By providing customers from a broad range of industries with all-round water
management solutions while focusing on such issues as enhancing productivity, reducing environmental burden andenergy saving, Kurita aims to contribute to the realization of a sustainable society.
Daytoda
y

at
io

s
tio n

nc

y

olu

rge

Water
Treatment
Facilities

P.24-25

Customers

Food

Pharmaceuticals

Electronics

All-Round Water
Management
Eme

Water
Treatment
Chemicals

uc
od
r
P

Employees

hancementrePetroleum Pulp and paper
refining andpetrochemicals

Steel

sp

ons

e

P

o
ro p

sa

lo

ental burden reduc
tio
onm
vir
n
En

Domestic network

Ident
ific

es
issu
of

A business network spanning
Japan and the world

ag
di

is
nos

t y entivi

nA unique business mix among
companies worldwide

Contributing to the Realization of a Sustainable Society

fsSpecialFeatureKurita’s BusinessElectrical power generationEne

rg y sCustomers
Business
partners

P.26-27
Shareholders
Investors

P.28
Local
communities

P.29
Naturalenvironment

av i n g

P.30-32

Maintenance
Services
Water treatment facilities(hardware)

Service operations
account forOverseas network
P.16-1782%

Research and Development Capabilities(Technology-Driven Company)
Industry-leading intellectual
property portfolio

18%

of consolidated sales

Ultrapure
water(For the fiscal year ended March 31, 2015)

Water treatment chemicals

32%

50%

Core technology areas

Analysis

Corrosion
prevention
anddispersion

Water treatment facilities (services)
Coagulation Sterilizationandandflocculation bacteriostasis

Maintenance services, operation
Maintenance services, operation
Maintenance services, operation

Chemical cleaning services

Boiler water treatment chemicals

BiologicalEngineering

Membrane
Adsorption
separation
anddeionization and filtration

Chemical cleaning services

Surfacetreatment

Wastewater reclamation systems

Packaged contracts

Process treatment chemicals

Cooling water treatment chemicals

Wastewater treatment chemicals

Boiler water treatment chemicals

Know-How

Chemical injection and dosing equipment, etc.

Pure water production systems

Pure water production systems Wastewater reclamation systems

P.14-15

12

Kurita Water Industries Ltd. Annual Report 2015

Cooling water treatment chemicals
Chemical cleaning services Chemical cleaning services
Soil remediation services

Wastewater treatment systems

Accumulated know-how

Strong, long-term relationships
with customers froma broad array of industries,
and in-depth knowledgeof customer facilities

Kurita Water Industries Ltd. Annual Report 201513

Contents

Kurita’s Business

Management
Indicators

Segment Highlights

To All Our
Stakeholders

New Medium-Term
Management Plan

Special Feature:
The Kurita’s Business Model

Special Feature: The Kurita’s Business Model

Special Feature: The Kurita’s Business Model

Research and Development

Business Network

Corporate Social
Responsibility

Financial Section

KURITA History

Corporate Data

Investor Information

The Kurita’s Business Model: Research and Development
SpecialFeatureR&D and intellectual property: Innovation generated
through R&D provides new value to customers

The Kurita Group strives to be a technology-driven company. Kurita nurtures and develops core technologies that contributeto strengthening and growth of its mainstay business activities—such as feed-water and wastewater treatment, wastewater
recovery and water treatment chemicals. Kurita also takes a broad approach to R&D, from research into fundamental
technologies to the development of new business.

Focusing on the Development of Competitive Products and Services
Kurita focuses on the eight technology areas
listed below, which comprise the technological foundation for the Group’s products andsystems. Kurita is strengthening its efforts togenerate the technological seeds for the development of innovative products as well as basic
research programs. In addition, Kurita Europe
APW GmbH (KEAG), which was establishedafter Kurita acquired businesses in Europe,holds extensive know-how in such fields as
paper process chemicals and polymer synthesis. Together with these, Kurita intends tomaximize its strengths in comprehensive water
treatment technologies to generate development synergies and accelerate developmentof products targeted at overseas markets.

A case of Research and Development New Material for Boiler Water Treatment Chemicals
Issue
Scale* that adheres to boilers decreases thermal efficiency and boiler durability. Consequently, scale prevention measures are essential. Although conventional chemicals for the prevention (dispersion) of scale adherence have been available, such chemicals could neither completely disperse the scale nor remove the stubborn
scale that had built up during the normal boiler operation.

Innovation
A multifunctional polymer material like no other to date, which can perform two functions• Scale dispersion effect (scale adherence prevention)

Kurita Global Technology Center• Scale removal effect (removal of any type of scale that has adhered)

Focus Area of Core Technologies
Analysis
BiologicalEngineering

Value Provided to Customers

Corrosion
prevention anddispersion

Coagulation andflocculation

Adsorption anddeionization

Membraneseparation andfiltration

Sterilization andbacteriostasis• Two separate scale-removal chemical agents (chelating agent, etc.) are no longer necessary• Since the new polymer does not corrode steel, special water quality monitoring is unnecessary.

Surface treatment• It makes possible to reduce boiler blowdown water in areas where the water supply has a high silica content

KEAG’s two R&D centers• It achieves stable treatment effectiveness under normal operating conditions unchanged. This contributes toenergy and water savings and by customers.

Technology Integration and Development Synergies with Kurita Europe APW GmbH (KEAG)

Newly Developed Multifunctional Polymer Material

Water treatment technology

KuritaPaper processing chemical technology

KEAG

Treatment Effectiveness of Newly Developed Polymer
Comparison with conventional product: Reduction of scale adhesion volume and improvement of energy loss
Volume of scale adhesion

Polymer manufacturing technology

R&D Overview by Business Segment
Water Treatment Chemicals
Kurita is engaged in the development ofchemicals for water treatment, environmental improvement and production processes,
which contribute to customers’ energy savings,
environmental burden reduction and productivity improvement. Other development activities
include diagnostic technology for chemical
effectiveness.

Water Treatment Facilities
Kurita is taking up the challenge of realizing
further advances in the quality of ultrapure
water that will contribute to productivity improvements in such industries as electronics.
The Group is also pursuing the developmentof wastewater treatment technologies thatstay ahead of the curve vis-a-vis environmental
regulations. Another focus area is the development of technologies to meet the needsof a recycling-oriented society. These include
wastewater recovery and reuse technology, andsludge reduction technology.

14 Kurita Water Industries Ltd. Annual Report 2015

Intellectual Property

Within Japan’s water treatment industry, theKurita Group is a leader in terms of the numberof patents held. Kurita’s system for creating new
products and technologies and its long-term
cultivation of core technologies also attests to
its commitment to remain a technology-driven
company.
Intellectual Property Portfolio

4 overseas designs
5

582

671

overseas trademarks

Japanese trademarks

Total

529

overseas patents

HardnessLeak

3,597 patents(As of March 31, 2015)

1,804

Before use of newly developed polymer

After one month of use

After five months of use

Improvement of energy loss

0

10

20

Removes scale and restoresthe cleanliness on boiler’s
inner surface

1 Japanese utility model
1 Japanese design

overseas utility models

Newly developed polymer(Energy loss)

KEAG R&D facilities

Start oftreatmentwith scale
removerConventional treatment

30

40

50

60

Days elapsed

In the field of boiler water treatment, Kurita has developed amultifunctional polymer material that fulfills two functions—conventional dispersion of scale constituents to prevent scale
adherence, and removal of accumulated scale.
In recent years, as adoption of high-efficiency boilers withenhanced fuel-economy performance becomes increasingly
common, the importance of effective anti-scale measures in boiler
equipment is increasing. In the conventional boiler water treatment,
scale-dispersion chemicals is insufficient to prevent scale adherence,
and a separate scale-removal chemical agent is required. For stableboiler operation, there was a potential need for a single chemical
agent that could both disperse scale and remove it.

The new material Kurita has developed to meet theseneeds not only effectively disperses scale components in boiler
water but also rapidly removes any accumulated scale. These
functions maintain a clean boiler interior surface and support theperformance and stable operation of high-efficiency boilers. This inturn contributes to customers’ energy and water savings.
Kurita has developed a diverse lineup of water treatment
chemical products that contain the new polymer, and the promotion of these products in Japan and overseas strengthens its
business in the boiler water treatment market.

* Scale: Hardness components including solid silica that precipitate and adhere to interior surface of the boiler. Scale causes a significant reduction in heat transfer coefficient and can lead to lower fuelefficiency and boiler duarability.

Japanese patents

Kurita Water Industries Ltd. Annual Report 201515

Contents

Kurita’s Business

Management
Indicators

Segment Highlights

To All Our
Stakeholders

New Medium-Term
Management Plan

Special Feature:
The Kurita’s Business Model

Special Feature: The Kurita’s Business Model

Special Feature: The Kurita’s Business Model

Research and Development

Business Network

Corporate Social
Responsibility

Financial Section

KURITA History

Corporate Data

Investor Information

The Kurita’s Business Model: Business Network
SpecialFeatureKurita is expanding its domestic and overseas businessnetwork to support new growth

Case of Enhancing Business Network Acquisition of Water Treatment-Related Businesses in Europe
Issue

Domestic Service Network
In Japan, Kurita’s customers include a wide range of companies. These operate
in such manufacturing sectors as steel, pulp and paper, petroleum refining andpetrochemicals, where large quantities of water are used in their production
processes, electronics, pharmaceuticals, food processing and automotive. Kurita’scustomers also include large-scale healthcare facilities and commercial complexes.
To respond to the needs of this diverse customer base, Kurita has built an extensive
service network in Japan—including Group companies and sales agents—centering on water treatment chemicals and maintenance services. This network is oneof the strengths of the Kurita Group.
By leveraging this network, Kurita has won the trust of its customers based on
the provision of advanced solutions. These include rapid response to changes incustomers’ production items and processes, and realization of stable operation ofcustomer facilities through preventive measures against faults and other problems
as well as swift response to emergencies.

Group Network Providing Services
in Japan
Kurita Water Industries Ltd.
Water treatment
chemicals business21 sites
Water treatment
Water treatment
chemicals group Local area-centricchemical sales
sales companies and customer-centric
agentsoperations
11 companies
50 companies

Kurita Water
Industries Ltd.
Water treatment
facilities
maintenance
40 sites

Advancedsolutions

Kuritec Service Co. Ltd.
(Tool cleaning)
8 sites

Kuritaz Co., Ltd.
(Facility operationand maintenance)
16 sites

Kurita Engineering
Co., Ltd.
(Chemical cleaning)
7 sitesGlobal Network

Sales in Europe—one of the world’s largest markets—remained at only 1% of the Kurita Group’s overall sales.
To realize a major expansion in its global business, Kurita needed to strengthen its business platform in Europe.

Innovation
Through the acquisition of the water treatment chemicals, paper process chemicals and alumina
compound businesses of German company BK Giulini GmbH, and the establishment of Kurita Europe
APW GmbH (KEAG), the following is now possible.
• Kurita can leverage this business platform in Europe, and expand sales of the Group’s products and services.
•The Group is able to exploit a high level of complementarity between its existing and newly acquired businesses.

Value Provided to Customers• Through reciprocal sales of Kurita and KEAG products, and the integration of both companies’ technologies, theGroup will be able to provide comprehensive solutions that contribute to resolving customers’ problems.

•The expanded Kurita Group has gained a foothold toward its goal of establishing a global business structure

spanning four regions and becoming a world leader in water treatment chemicals.

The Kurita Group utilizes its comprehensive capabilities—underpinned by its
three businesses of water treatment chemicals, water treatment facilities andmaintenance services—to promote business expansion overseas. Kurita is aiming
to achieve Group growth on a global scale.

The Acquisition’s Objectives and Expected Synergies
North America
1%Europe
1%

Other
2%

SwedenEuropeFranceSpain

Slovakia

Italy

TurkeyGreeceAngangTianjin

United States

Kurita Group sales by region
in the fiscal year ended March 31, 2015

Dalian South Korea

JiangyinSuzhouGuangzhou
VietnamThailandWater treatment chemicals business
Water treatment facilities business
Acquired business site
(Water treatment chemicals business)

Malaysia
Singapore

Indonesia

16 Kurita Water Industries Ltd. Annual Report 2015

Asia
17%

Japan
79%

Hungary

ShanghaiTaiwanBrazilOther
2%North America
1%

Asia
17%

PolandGermany

Europe
10%

Japan
69%
Estimated Kurita Group sales byregion following the acquisition

Kurita sees this acquisition as a means of expanding its overseas
business and further strengthening its comprehensive capabilities,
and expects it to generate a high level of complementarity forboth parties in terms of geographical coverage, technologies andproduct portfolios.
(1) Geographical complementarity
Until now, the Kurita Group’s water
treatment chemicals business has
been predominantly located in Japanand Asia. Through the addition of theextensive business platform in Europe
operated by KEAG, Kurita can leveragethese assets to expand sales of its boiler
treatment chemicals, cooling water Ludwigshafen (Germany)treatment chemicals and other products. This is expected to accelerate the growth of Kurita’s global business.
(2) Technology and product portfolio complementarity
By complementing the products and technologies possessed byeach party, the respective products lineups will expand and reciprocal sales of each company’s specialized products will be possible.
KEAG has highly experienced sales teams whose averageexperience is over 10 years. The management teams also have astrong industry track record. KEAG’s strengths lie in its good relationships with many top European companies fostered over many
years, and its superior product development capabilities in suchareas as paper processing, which enable it to provide customers
with optimal solutions.
By integrating the strengths of KEAG with the Kurita Group’s
advanced technical capabilities and comprehensive strengths inwater treatment chemicals and water treatment facilities, the Kurita
Group will aim to generate synergies at an early stage.

Bandirma (Turkey)

Jiangyin, Jiangsu Province (China)

Kurita Water Industries Ltd. Annual Report 201517

Contents

Kurita’s Business

Segment Highlights

Management
Indicators

To All Our
Stakeholders

New Medium-Term
Management Plan

Special Feature:
The Kurita’s Business Model

Corporate Social Responsibility“Accomplishment of Social
Responsibility” as one of its six
Management Guidelines in its 21stCentury Vision
Building transparent and fairrelationships with stakeholders
P.24

Building new relationships with employees

Corporate
Philosophy

We treat employees mainly according to their duties, capabilities
and achievements, with the aim of promoting employees’ enthusiasm for work in the era of globalization.
We strive to provide a diverse range of employment styles for employees
to choose from. We aim to create an enthusiastic work environmentthat allows employees to select a working style that enables them todraw upon their abilities and suits their qualifications and stage in life.

Customers

Corporate
VisionCode of EthicalConduct

P.26

Emphasis on safety and quality
We strive to provide our customers with excellent products, technologies and services that can meet their safety and quality expectations.

Business Partners

Management
Guidelines

P.27

Sound relationship with suppliers
We strive to maintain transparent and fair business transactions
based on free competition. In our dealings with our suppliers, we
aim to strengthen relationships of mutual trust with an emphasis on
the autonomy, profits, and the assets of both companies.

Shareholders and Investors

P.28

Management that respects shareholders
We strive to provide timely disclosure of necessary and sufficient
information from the perspective of shareholders and investors.
We aim to maintain shareholder support through realization of capital-efficiency-focused management and appropriate shareholder returns.

Local Communities and Natural environment

P.29

Activities as a good corporate citizen
We develop products, technologies and services that contribute tomeeting global challenges such as the conservation of the naturalenvironment and the effective use of resources; we propose andprovide customers with solutions that improve the environment;
and we implement initiatives and disclose outcomes for reducing
the environmental impact within Kurita. We aim to achieve acknowledgement and recognition for these initiatives from involved
parties and to earn enduring social trust.
In addition to contributing to society through business, we aim tobe highly valued by society by actively using the insight and expertise built up through business to give back to society.
Kurita conducts business in a manner that respects biodiversity andsustainability.

18 Kurita Water Industries Ltd. Annual Report 2015

Special Feature: The Kurita’s Business Model

Business Network

Corporate Social
Responsibility

Financial Section

KURITA History

Corporate Data

Investor Information

Corporate Governance

Kurita has set the “Accomplishment of Social Responsibility” as one of its six Management Guidelines in its 21st Century
Vision. We will comply with laws and regulations in accordance with social ethics, and in all our business activities, wewill continue to build transparent and fair relationships with shareholders and investors, employees, customers, suppliers
and local communities.

Employees

Special Feature: The Kurita’s Business Model

Research and Development

Basic Policy
The Kurita Group aims to contribute broadly to society
through corporate activities in the fields of water andenvironment in accordance with the Kurita corporate philosophy, “Study the properties of water, master them, andwe will create an environment in which nature and man
are in harmony.” We plan to achieve sustainable growthand improve mid- to long-term corporate value while
meeting the expectations, and respecting the rights andpositions, of a range of stakeholders, including shareholders and investors, customers, local communities, suppliersand employees. To do this, the Kurita Group has adopted
a basic corporate governance policy of transparent, fair,
prompt and resolute decision-making together withhighly effective oversight of management.

Corporate Governance Structure
Directors and the Board of Directors
The Board of Directors of the Company determines the Kurita Group’s strategic directions for sustainable growth, andmakes decisions on important matters related to operational
execution in light of those directions. The Board of Directors
also has the role of oversight body for operational execution.
At present the Board of Directors comprises eleven directors,
including two external directors. The appointment period
for directors is one year. This system is intended to makethe Company more responsive to changes in the market
environment, foster a greater sense of managerial urgency
among directors, and facilitate flexible and timely revisionsof the management structure as needed. To complement
the decision-making of the Board of Directors, the Company
also has a decision approval protocol based on its internal
decision approval and review rules.
Matters Relating to Directors and the Board of Directors (June 26, 2015)
Number of directors specified underthe Articles of Incorporation

3 or more
No maximum number
specified

Term of appointment of directors underthe Articles of Incorporation

1 yearChair of the Board of Directors

President

Number of directors

11

Number of external directors (within
the total above)2

Number of independent officers
specified within external directors

2

Number of Board of Directors’ meetings
held (fiscal year ended March 31, 2015)

14

Executive Committee
The Executive Committee deliberates on importantmanagement-related matters to support the decision-makingof the Board of Directors, and conducts checks on the statusof progress toward objectives and the implementation ofpolicies and measures. The Executive Committee comprises
the president, directors of the rank of managing director orabove, the general manager of corporate planning and otherdirectors and executive officers nominated by the president.
The committee meets, in principle, twice monthly, and on an
ad hoc basis as necessary.
Executive Officer System
To strengthen its capabilities for operational execution, Kurita Water Industries Ltd. has adopted an executive officer
system. Executive officers carry out their responsibilities for
operational execution under the delegation of the Boardof Directors. At present, there are eight executive officers.
Audit & Supervisory System
Kurita Water Industries Ltd. employs an audit & supervisory system. As of June 26, 2015, the Audit & Supervisory
Board comprised three members, including two external
members. The Audit & Supervisory Board decides on audit
policies for the fiscal year, the allocation of duties to each ofits members, specific items to be performed, schedules, andother items for executing audits. Based on this framework,
each member of the Audit & Supervisory Board thenconducts audits.
The members of the Audit & Supervisory Board attend Board of Directors’ meetings, Executive Committee
meetings, and other important Company meetings andmonitor the directors’ execution of duties and the Board of
Corporate Governance Structure
General Meetingof Shareholders

Board of Directors

Audit & Supervisory
Board
Members of Audit &Supervisory Board

Executive Committee

PresidentInternal Auditing
Department

Operating Divisions

Kurita Water Industries Ltd. Annual Report 201519

Contents

Kurita’s Business

Segment Highlights

Directors’ fulfillment of its oversight responsibilities. Other
responsibilities of the members of the Audit & Supervisory
Board include conducting asset status surveys of theentire Kurita Group, including subsidiaries, and auditing
the development and operation status of internal control
systems implemented by the directors.
Matters Relating to Members of Audit & Supervisory Board andthe Audit & Supervisory Board (June 26, 2015)
Number of members of the Audit & Supervisory Board
specified under the Articles of Incorporation

3 or more
No maximum
number specified

Number of membersof the Audit & Supervisory Board

3

Number of external membersof the Audit & Supervisory Board

2

Number of independent officers specified within external
members of the Audit & Supervisory Board

2

Number of Audit & Supervisory Board meetings held (fiscal
year ended March 31, 2015)

10

Internal Audit
Kurita Water Industries Ltd. has an Internal Auditing
Department, which is independent from operational
execution functions and reports directly to the president.
The Internal Auditing Department—comprising a generalmanager and eight other staff—conducts internal auditsof the Company and its subsidiaries, identifies issues andproblems in operational execution, and provides recommendations to the president on improvement measures.
Also, in accordance with the Japanese Financial Instruments and Exchange Act, the Company established theInternal Control Reporting System in relation to financial
reporting, and the Internal Auditing Department carries
out monitoring as well as provides recommendations andsupport for improvements related to establishment andoperational status of financial reporting-related internal
controls. This system also monitors the status of risk
management and measures for improvement.
Accounting Audit
Kurita Water Industries Ltd. has appointed Grant Thornton
Taiyo LLC as its accounting auditor. Grant Thornton Taiyo
LLC provides opinions related to the Group’s financial
statements and other matters from the standpoint of an
independent accounting auditor.
Cooperation between the Internal Auditing Department,
Audit & Supervisory Board, and Accounting Auditor
From the perspective of enhancing its corporate governance, Kurita Water Industries Ltd. strives to ensure ample

20 Kurita Water Industries Ltd. Annual Report 2015

Management
Indicators

To All Our
Stakeholders

New Medium-Term
Management Plan

Special Feature:
The Kurita’s Business Model

cooperation between the Internal Auditing Department,
Audit & Supervisory Board, and accounting auditor. The
members of the Audit & Supervisory Board verify the
independence of the accounting auditor and the status ofexecution of the accounting auditor’s duties. The membersof the Audit & Supervisory Board also holds meetings withthe accounting auditor regularly and as necessary regarding
the accounting audits and exchanges opinions during thesemeetings. The members of the Audit & Supervisory Board
discuss and exchange opinions regarding planning andresults of internal audits by the Internal Auditing Department, evaluations of internal controls relating to financial
reporting, and evaluations of risk management.
External Directors and External Members of the Audit& Supervisory Board
Kurita Water Industries Ltd. appoints external members of
the Board of Directors to provide an objective perspectivefrom outside the Company on the management oversightconducted by the Board of Directors. The Company has appointed two external directors and two external membersof the Audit & Supervisory Board. Regarding the independence of these external officers, appointments are madeof members who have not worked at the Kurita Group andare not affiliated with the Company’s major shareholders or
suppliers. This policy is maintained in accordance with theindependent decision-making standards established by the
Tokyo Stock Exchange, and appointment criteria specify that
there should be no potential for conflict of interest arisingwith ordinary shareholders.
Mr. Seiji Nakamura, Kurita’s part-time external director,
has served as executive vice president and representative
director of Mitsui O.S.K. Lines, Ltd., president and representative director of MOL Ferry Co., Ltd., and as a member of
the Policy Board of the Bank of Japan. None of these haveany special interests in Kurita. Mr. Tsuguto Moriwaki, Kurita's
part-time external director, has served as Executive Vice
President & Representative Director of Kobe Steel, Ltd. andPresident & CEO of Shinsho Corporation. None of these haveany special interests in Kurita. Mr. Chiaki Kuzuu, Kurita’s fulltime external member of the Audit & Supervisory Board, isa former employee of ITOCHU Corporation. ITOCHU has no
special interests in Kurita. Mr. Tamio Uda, a part-time external
member of the Audit & Supervisory Board, is an attorney andhas no special interests in Kurita.
Mr. Seiji Nakamura, a part-time external director, sitson the Board of Directors and actively offers opinions on all
management-related matters. Mr. Chiaki Kuzuu, a part-timeexternal member of the Audit & Supervisory Board, carriesout routine audits and sits on the Board of Directors, theAudit & Supervisory Board and other important boards. He

Special Feature: The Kurita’s Business Model

Special Feature: The Kurita’s Business Model

Research and Development

Business Network

Corporate Social
Responsibility

Financial Section

offers opinions from his expert perspective, including on
topics related to finance and accounting, and exchanges
opinions as appropriate with the accounting auditor and theInternal Auditing Department. Mr. Tamio Uda, a part-timeexternal member of the Audit & Supervisory Board, sits on
the Board of Directors and the Audit & Supervisory Board.
He offers opinions as required from his expert perspective
mainly as an attorney.
Overview of Limited Liability Agreement
In 2013, Kurita Water Industries Ltd. made provision fora limited liability agreement with external directors andexternal members of the Audit & Supervisory Board in the
Articles of Incorporation. This was done to facilitate the useof outside human resources with an emphasis on greater
independence, with the aim of respecting shareholder
profits and increasing management transparency. Pursuant to the provisions of Article 427, Paragraph 1 of theCompanies Act, Kurita entered into agreements with Mr.
Seiji Nakamura (part-time external director), Mr. Tsuguto
Moriwaki (part-time external director) and Mr. Tamio Uda(part-time external member of the Audit & Supervisory
Board) to limit liability, as provided for under Article 423,
Paragraph 1 of the Companies Act. The maximum liability
provided for under these agreements is limited to theamount specified by laws and ordinances.
Meeting Attendance by the External Director and External
Members of the Audit & Supervisory Board(Fiscal year ended March 31, 2015)

Number of meetings ofthe Board of Directors
attendedNumber of meetingsof the Audit &Supervisory Board attended

Total number of
meetings held

14

10

Seiji Nakamura*1

14–

Chiaki Kuzuu*2

1410

Tamio Uda*2

14

10

KURITA History

Investor Informationreflects the full-time or part-time status of the officer. The
performance-linked amount is variable and dependent
on achievement of the business plan for the fiscal year.
To incentivize improved business performance over the
medium-to-long term, a certain proportion of the basic annual salary is paid to the Directors’ and Audit & Supervisory
Board Members’ Shareholding Scheme and allocated forpurchasing the Company’s shares. Based on this policy, theremuneration for each director is decided by the Board of
Directors and the remuneration for each member of the Audit & Supervisory Board is decided through deliberation by
all of the members of the Audit & Supervisory Board within
the total limit set by the General Meeting of Shareholders.
The breakdown for remuneration paid to directors is basic annual salary of approximately 80%, performance-linked
component of approximately 10% and contribution to
the Directors’ and Audit & Supervisory Board Members’
Shareholding Scheme of approximately 10%.
Internal Control System
In May 2006, the Board of Directors of the Kurita Groupmade a resolution on and formulated the Fundamental
Policy Regarding the Establishment of Internal Control
Systems in accordance with the requirements of Japan’sCompanies Act, and have subsequently established andbeen operating this internal control system. The Fundamental Policy Regarding the Establishment of Internal
Control Systems is revised as necessary by a Board of
Directors’ resolution. To ensure that financial reporting iscarried out appropriately, the Kurita Group has establisheddivisions at each company that have responsibility forestablishing, operating and improving the internal controls
relating to financial reporting. The Company’s Finance and
The Total Amounts of Remuneration by Officer Classification and Type as well as the
Number of Officers to whom Remuneration was Paid for the Fiscal Year under Review*1. External director *2. External members of the Audit & Supervisory Board

Classification

Remuneration Paid to Directors and Members of the
Audit & Supervisory Board
The system of Kurita Water Industries Ltd. for compensating directors and members of the Audit & Supervisory
Board is intended to create incentives to continuously
work to increase the Company’s enterprise value andbusiness results. To this end, the remuneration packages
comprise two components: a basic annual salary and aperformance-linked component that reflects the Company’sbusiness results. Specifically, for directors the basic annual
salary is set separately for each office, while for membersof the Audit & Supervisory Board the basic annual salaryCorporate Data

Total
Total remuneration paid by type
remuner(Millions of yen)
ation
paid
Stock
Retirement
Basic(Millions ofBonus
options
packageremuneration
yen)

Number ofrecipients

Directors andMembers of the
Audit& Supervisory
Board(Excluding external
director andexternal
members of the
Audit &
Supervisory Board)

395

375

–

–

19

12

External director
and external
members of
the Audit &Supervisory
Board

56

56

–

–

–

3

Kurita Water Industries Ltd. Annual Report 201521

Contents

Kurita’s Business

Segment Highlights

Management
Indicators

To All Our
Stakeholders

New Medium-Term
Management Plan

Special Feature:
The Kurita’s Business Model

Special Feature: The Kurita’s Business Model

Special Feature: The Kurita’s Business Model

Research and Development

Business Network

Corporate Social
Responsibility

Financial Section

KURITA History

Corporate Data

Investor Information

Directors and Members of the Audit & Supervisory Board
Accounting Department in the Administrative Division
oversees these divisions. Furthermore, the Company has established the Internal Control Reporting System in relation
to financial reporting in the Japanese Financial Instruments
and Exchange Act. This system is monitored by the Internal
Auditing Department, with oversight of the president, andthe department provides recommendations and support
for improvements. In addition, the Finance and Accounting
Department in the Administrative Division shares responsibility for monitoring, as well as recommendations andsupport for improvements from the perspective of effective
and efficient evaluation of the “financial reporting processcontrol of consolidated subsidiaries from a company-wide
perspective.” As of March 31, 2015, the Kurita Group’s
internal controls in relation to financial reporting havebeen determined to be effective, and after auditing by theaccounting auditor, an internal control report to that effectCompliance
The Kurita Group treats compliance activities as morethan just abiding by laws. We position these as activities toachieve the five values of fairness, transparency, integrity,
safety and compatibility described in our Code of EthicalConduct established in 2000. Also, we have establishedthe Basic Principles and Compliance Guidelines to Practice Ethical Conduct to fully enforce the observation ofcompliance with laws, regulations and social ethics in ourdaily business activities.
Framework for Promotion
Kurita Water Industries Ltd. has established the Compliance
Committee, which is chaired by the Representative Director,
and the Group Compliance Committee, which is chairedby the Representative Director and whose members are
the representatives of domestic Group companies. In thesecommittees, the Kurita Group sets out policies and important measures for compliance activities, and conveys them tohas been submitted to the Kanto Local Finance Bureau of
the Ministry of Finance Japan.
Risk Management
The Managing Director and General Manager of the Corporate Planning Division is designated as the officer topromote risk monitoring and risk management for the Kurita
Group. In this role, the officer regularly conducts risk analysis
and evaluation, conducts ongoing monitoring, and takes
steps to prevent risks. Monitoring of the execution status
and improvement status of risk management is conductedby the Internal Auditing Department.
Among serious risks, those related to compliance are theresponsibility of the representative director as Compliance
Committee head, while those related to labor, health, safetyand disasters are the responsibility of the Headquarters Healthand Safety Committee head, with this committee.

As of June 26, 2015

Directors

2011
2009
2005
1979

Compliance Behavior Survey
The Kurita Group in Japan conducts Compliance Awareness
Surveys once a year to understand the level of implementation of compliance behavior among employees. Issues
that become apparent through analysis of survey results arereflected in compliance activity policy and measures, andutilized in initiatives to improve awareness and behavior.
Initiatives to Prevent Bid-Rigging and Cartels
In 2006, the Kurita Group withdrew from all construction
projects ordered by the national government and local
public entities to ensure no recurrence of violations of
the Antimonopoly Act. We also forbid participation andmembership of trade associations in order to exclude all
dealings with associates.

2011
2009
1977

2014

2013
1983

Executive Senior
Managing Director
and Representative
Director

Managing Director

Toshiyuki Nakai

Kaoru Kajii

Kouichi Iioka

President
Representative Director (to present)
President and Representative
Director, Kurita Engineering Co., Ltd.
Director
Joined Kurita Water Industries Ltd.

all employees through subcommittees at each headquarters
division, business division, and Group company division.
2014

President andRepresentative
Director
2015
2014
2013
2009
2005
1974

2007
2005
1975

Director

Director

Youichi Kurokawa

Toshitaka Kodama

General Manager of Research andDevelopment Division (to present)
Director (to present)
Executive Officer
Joined Kurita Water Industries Ltd.

2015
2011
2009
1984

Deputy General Manager of Facilities
Division (to present)
Director (to present)
Executive Officer
Joined Kurita Water Industries Ltd.

Director

Director*

Michiya Kadota

Seiji Nakamura

Director (to present)
General Manager of Administrative
Division (to present)
Executive Officer
Joined Kurita Water Industries Ltd.

2013
2007
2003

External Director of Kurita Water
Industries Ltd. (part time) (to present)
Member of the Policy Board of the
Bank of Japan (to 2012)
President and Representative Directorof MOL Ferry Co.,Ltd.
Executive Vice President andRepresentative Director of Mitsui
O.S.K. Lines, Ltd.
Joined Mitsui O.S.K. Lines, Ltd.

2015
2014
2011
1977

Kiyoshi Itou
2013

2009
2007
1979

Managing Director (to present)
General Manager of Corporate
Planning Division (to present)
Director
Executive Officer
Joined Kurita Water Industries Ltd.

Director

General Manager of Facilities Group,
Facilities Division (to present)
Director (to present)
Executive Officer
Joined Kurita Water Industries Ltd.

Yoshio Yamada
2014
2013

2011
1982

Director (to present)
General Manager of Sales Group II,
Chemicals Division andGeneral Manager of Osaka Office (topresent)
Executive Officer
Joined Kurita Water Industries Ltd.

Director*

Tsuguto Moriwaki
2015
2010
2004
2002

1999

1967

External Director (part time) of Kurita
Water Industries Ltd. (to present)
Adviser of Shinsho Corporation
President & CEO of Shinsho
Corporation
Executive Vice President &Representative Director of Kobe Steel,Ltd.
President & CEO of Kobelco
Construction Machinery Co., Ltd.
Managing Director of Kobe Steel, Ltd.
Joined Kobe Steel, Ltd.

* External Director

Members of the Audit & Supervisory Board
Member of the Audit & Supervisory Board**

Member of the Audit & Supervisory Board

Member of the Audit & Supervisory Board**

Chiaki Kuzuu

Shiro Hayashi

Tamio Uda

2004

2012

2009

1971

22 Kurita Water Industries Ltd. Annual Report 20152011

Managing Director (to present)
General Manager of Chemicals
Division (to present)
President and Representative
Director, Kuritec Service Co. Ltd.
Director
Executive Officer
Joined Kurita Water Industries Ltd.

Takahito Namura

1965

2002

Compliance Committee

2013

Director

2000

Whistle-Blower Protection Rules
The Kurita Group in Japan has established the Public Interest
Whistle-Blower Protection Rules, to protect those providing
internal information, as we work to achieve early detectionof dishonest practices. In addition to maintaining an internal
consultation desk, we contract an outside organization toprovide consultation and reporting services.

Executive Senior Managing Director(to present)
Representative Director (to present)
General Manager of Facilities Division(to present)
Managing Director
Director
Joined Kurita Water Industries Ltd.

Managing Director

External Member of the Audit &Supervisory Board (to present)
Chief Financial Officer, Machinery
Company, ITOCHU Corporation
Joined ITOCHU Corporation

2009

1977

Member of the Audit & Supervisory
Board (to present)
General Manager of Personnel andLabor Relations Department,
Administrative Division
Joined Kurita Water Industries Ltd.

1977
1974

External Member of the Audit &Supervisory Board (part-time) (topresent)
Established Harada Uda Law Office(currently Uda Law Office)
Admitted to the Japan Bar
Association** External Member of the Audit & Supervisory Board

Kurita Water Industries Ltd. Annual Report 201523

Contents

Kurita’s Business

Segment Highlights

Management
Indicators

To All Our
Stakeholders

New Medium-Term
Management Plan

Special Feature:
The Kurita’s Business Model

Special Feature: The Kurita’s Business Model

Special Feature: The Kurita’s Business Model

Research and Development

Business Network

Corporate Social
Responsibility

Financial Section

KURITA History

Corporate Data

Investor Information

Relationship with EmployeesWith the aim of promoting employees’ motivation atwork, in its Management Guidelines the Kurita Group
strives to provide a diverse range of employment styles
for employees to choose from and allows employees toselect a working style that enables them to draw upon
their abilities and suits their qualifications and stage in life.

Promoting Personnel Diversity
At the Kurita Group, we aim to hire a diverse range of
personnel for the right positions in order to meet global
needs.
Employee Breakdown

Developing Human Resources
The Kurita Group aims firmly entrenched system thatencourages employees to challenge themselves and toenhance their own skills. We strive to enable employees
to grow so that they can create and develop Kurita’s own
products, technologies and services as they find solutions
to the issues facing customers and society.
Our Focus
The Kurita Group has traditionally promoted the development of employees who have the strength to see a
job through to completion, no matter what stage of theircareer they are in. We have focused on education andtraining, deployment and allocation, and upgrades andpromotions in our efforts to foster many more organization leaders and expert professionals. As we continue our
global expansion, the Kurita Group will promote capable
people and evaluate all employees from a uniform global
perspective to foster the Group's key employees as well.
Self-Reporting System
Kurita Water Industries Ltd. has established a system where
employees can report their preferred working style andcareer formation to the Company. Once a year, employees
discuss the suitability of their current duties, their preferredpath for the future, their family situation and more with
their superiors so that the Company can understand thethinking of each individual, which is utilized in transfer andallocation as well as training.
Creating Opportunities for Personal Development
For operational areas where Kurita Water Industries Ltd.
has needs, the Company has a paid study sabbaticalsystem that provides employees with opportunities tostudy at educational institutions and research institutionsin Japan and overseas, as well as a scholarship programfor employees which aims to develop personnel who cancontribute to the advancement of society through ourbusiness activities. We have also prepared “Global Training”
that includes language study with the aim of developing
personnel who can operate globally, as well as more than
200 distance learning and classroom-based courses for theacquisition of a wide range of knowledge and skills.

24 Kurita Water Industries Ltd. Annual Report 2015

Kurita Water Industries Ltd. (As of April 1, 2015)
Age

Full-time employees

29 and under
30–39
40–49
50 and over
Total
FemaleNon-Japanese(Management positions therein)

272
357
569
286
1,484
187
12

(0)
(58)
(316)
(220)
(594)
(5)
(2)

Notes: (1) Management position figures include employees who are ranked as
professional level or higher (including specialist abilities).
(2) Figures of female and non-Japanese employees are included in total numbersof employees.

• Average service years
16.8 years (Male 16.8 years; Female 16.6 years)• Ratio of female employees among career-track
employees 4.4%
• Average age 40.9
• Number of Employees by Region(As of March 31, 2015; Consolidated)
China 456
Thailand 146
Singapore 145

Japan
3,639

Overseas
1,583South Korea 115
Indonesia 114
Brazil 92
Europe 445
Taiwan 38

Total 5,222

U.S. 32• Ratio of local nationals among directors in overseas
Group companies as of April 1, 2015, 11 of 36
directors are local nationals (30.6%)

Employment of Personnel with Disabilities
In Japan, the Kurita Group provides a wide range of
employment opportunities for people with disabilities.
In April 2013, With Kurita Ltd. was established with thegoal of securing employment opportunities for people
with disabilities. As of May 31 of the same year, With Kurita
has been approved as a special subsidiary company underthe Act on Employment Promotion etc. of Persons with
Disabilities.
As of April 1, 2015, the disabled person employment
rate is 2.1%, which surpasses the statutory employment
rate (2.0%).
Securing Employment Opportunities for Senior Personnel
In conjunction with the enforcement of the amended Act

on Stabilization of Employment of Elderly Persons from2006, Kurita Water Industries Ltd. has established a system
to secure employment opportunities for people whohave retired having reached the mandatory retirementage. These employment opportunities are offered for up
to a maximum or five years from the time of mandatory
retirement (60 years old) in accordance with the 2013
amendment to the Act on Stabilization of Employment ofElderly Persons.
Between 2006 and April 1, 2015, a total of 287 retirement age personnel secured employment opportunities.
As of April 1, 2015, there are 82 retirement-age employees
who have secured employment opportunities at theCompany.
Second Career Support System
Kurita Water Industries Ltd. has a second career support
system that offers preferential treatment to support
employees who wish to try to work in a different fieldfrom their present one. The employees must satisfy certain
conditions to qualify for this system.
Realizing a Pleasant Workplace
Child-Raising Leave System and Shortened Working
Hours for Child-Raising System
Kurita Water Industries Ltd. has established an environment that makes it easier for employees to balance workwith raising children. In principle, each employee can takechild-raising leave until the day that their child reaches
one year and six months of age, but if the child is unable
to enter a nursery or other childcare center as of that date,
this period can be extended to the first April intake at
the centers after the child turns one year and six months.
The employee is also able to reduce their working hours
for the purpose of child-raising for a maximum periodof 36 months, until the child completes the third year ofelementary school, choosing from seven different working
patterns, each with different start and finish times, to suit
their lifestyle. As of April 2015, over the past three years
a total of 22 employees (including no males during thisperiod) have used the childcare leave system, while 29
employees have used the system that allows employees
raising children to have shortened working hours.
Nursing Care Leave System and Shortened Working
Hours for Nursing Care System
At Kurita Water Industries Ltd., employees with a family
member who needs nursing care and who wishes tocontinue to work after taking nursing care leave, may
take nursing care leave for a cumulative total of up to one

year (365 days) in principle. Also, employees may use theshortened working hours system for a cumulative total
within 12 months per family member depending on thecondition of the family member requiring care.
Volunteer Leave System
At Kurita Water Industries Ltd., all employees are eligible
to take leave for volunteer activities. Employees can takepaid leave for up to two days each fiscal year for suchactivities.
Work Health and Safety
In accordance with the Industrial Safety and Health Act,
Kurita Group companies in Japan have established healthand safety rules in order to prevent employees from being
harmed by occupational disasters, as well as to maintainand improve the health of employees and to promote
comfortable workplace environments. We have organizeda health and safety management system comprising
Health and Safety committees and Health and Safety
Managers. Under this system, the domestic Group works
alongside partnering companies to provide health andsafety education to employees and to conduct health andsafety drills. We also develop work standards and provide
instruction on them, maintain and inspect employees’safety gear and other facilities to prevent accidents. The
Group also examines ways to deal with disasters, discovers
their causes and drafts countermeasures.
Relationship with Labor Union
In addition to securing the Company’s sound growthand continuation, Kurita Water Industries Ltd. and thelabor union maintain a sound and fair relationship. Laborand management each do their utmost to improve theeconomic and social standing of union members and tomaintain and improve working conditions.
Respect for Human Rights
Kurita works to raise awareness of human rights issues
throughout the Group in Japan. This effort includes setting
up consultation counters and holding human rights
training programs aimed at preventing various types of
discrimination and harassment.
Kurita Water Industries Ltd. has established a Human
Rights Awareness Promotion Committee, develops topics
for human rights training programs and creates annual
activity plans. During the fiscal year ended March 31, 2015,
a total of 1,673 people attended training from the Head
Office and other offices, with each and every employee
deepening their understanding of respect for human rights.
Kurita Water Industries Ltd. Annual Report 201525

Contents

Kurita’s Business

Segment Highlights

Management
Indicators

To All Our
Stakeholders

New Medium-Term
Management Plan

Special Feature:
The Kurita’s Business Model

Special Feature: The Kurita’s Business Model

Special Feature: The Kurita’s Business Model

Research and Development

Business Network

Corporate Social
Responsibility

Financial Section

Relationship with Customers

Relationship with Suppliers

The Management Guidelines of the Kurita Group clarify
that it strives to provide products, technologies and services with safety and excellence that customers expect.

The Kurita Group shows in its Management Guidelinesthat it strives to maintain transparent and fair business
transactions based on free competition. In our dealings
with our suppliers, we aim to strengthen relationships of
mutual trust with an emphasis on the autonomy, profits,
and the assets of both companies.

Approach to Quality Assurance
Our Quality Policy states that the Kurita Group will speedily
provide our customers with products, technologies andservices that can meet their quality expectations, thereby winning their unshakable trust. We place particularimportance on service quality, analyzing changes in theoperating status of the equipment of our customers,
sharing issues with customers and striving to improve thequality of our solutions.
Quality Assurance Systems
With regards to product quality control, Kurita Water Industries Ltd. has established a Quality Assurance Departmentin the Chemicals Division and Facilities Division. These
departments work on quality control from production toactual use of the product. In Japan, there are quality assurance systems based on the ISO9001 international standard
for quality management systems in each of Kurita’s ElectricPower Plant department, Kurita Chemical Manufacturing
Ltd., Kurita Engineering Co., Ltd., Kuritaz Co., Ltd., andKuritec Service Co. Ltd., which they are working on.
Initiatives to Improve Technical Skills
Kurita Water Industries Ltd. opened its T&C (Technical& Career) Support Center in April 2014 for the purposeof enhancing technical capabilities related to water
treatment plants. This center coordinates and implements
technological training for the entire Group, including
domestic and overseas employees. In addition to lectures
held at the Head Office, actual systems are used forpractical skills training at the Yamaguchi Plant to enable
participants to learn knowledge and skills that are basic
but that also have application in the workplace.

Training held at Yamaguchi Plant for overseas employees

26 Kurita Water Industries Ltd. Annual Report 2015

In addition to establishing the Technology Transmission Committee, we have opened Kurita Technology
College, which aims to develop engineers, as part of efforts
to ensure that veteran employees’ skills and know-how arereliably passed down to mid-career and young employees.
Safety Initiatives
The Kurita Group believes that safety is an essential basis ofvalue creation when providing customers with products,
technologies and services. Kurita Water Industries Ltd. hasestablished the Headquarters Health and Safety Committee under the direct control of the president and theGroup is working to improve safety management in theworkplace including across all domestic Group companies
and domestic affiliates. Over 100 education opportunities are provided per year mainly by the fulltime safety
management departments of both the water treatment
chemicals and water treatment facilities divisions, withtotal number of attendants of over 3,000. We also conductsafety patrols of our customers’ sites, bringing along senior
managers, management teams and outside experts.
Thanks to initiatives such as these, no days have been lostat customers’ workplaces, in either the water treatment
chemicals business or the water
treatment facilities
business, throughoccupational accidents during the
fiscal year ended
March 31, 2015.
Safety training for employees
Customer Satisfaction Survey
The Kurita Group conducts a customer satisfaction survey
regularly once every four years in order to verify the resultsof the work that we have done to solve our customers’
problems. The survey has been expanded internationally,rather than just being implemented within Japan, withareas highlighted for improvement including the quality ofour proposals and verifying results. We are analyzing theseissues and working to further improve our customers’levels of satisfaction.

Basic Policies for Purchasing
In connection to purchasing within the Kurita Group in
Japan, we have a basic policy of open purchases andcoexistence and prosperity. We choose suppliers based on
a comprehensive set of criteria, including product quality,
price competitiveness, certainty of on-time delivery, management stability and green purchasing (RoHS directive,
WEEE directive, REACH regulations, and substances toxic
to the environment) compliance.
Green Purchasing
In Kurita Water Industries Ltd.’s water treatment chemicals
business, while there is not a uniform set of requirements for all suppliers in connection to environmental
considerations, we do check for the presence of harmful
chemical substances, and confirm that environmental
considerations and legal compliance are in place in the
manufacturing stage before purchasing raw materials andother materials.
In Kurita Water Industries Ltd.’s water treatment
facilities business, we enact green purchasing guidelines,
and specify the requirements to our suppliers in terms ofenvironmental management initiatives and environmental
considerations regarding the procurement of resources atthe design and manufacturing stages, and the non-use ofozone-depleting substances (ODS) in the manufacturing
stage. Kurita requires that suppliers follow these guidelines
in accord with our customers’ requests.
Respect for Intellectual Property Rights
The Kurita Group respects the intellectual property rights
of others, and conducts its business activities while
avoiding infringing on them. We acquire licenses whenusing intellectual property owned by other parties, and werequest that other parties respect the intellectual property
rights of the Kurita Group. Businesses that infringe on the
Kurita Group’s intellectual property rights are required tocease the infringement, and are urged to acquire a license.
In order to promote respect for intellectual property
rights, we are implementing courses such as hierarchicalintellectual property training and e-learning within theGroup. Until March 2014, this was just a domestic activity,
but the initiative is also being expanded to overseas GroupKURITA History

Corporate Data

Investor Informationcompanies in the period up to March 31, 2015 and willcontinue in the fiscal year ending March 31, 2016.
Corruption Prevention and Dealing with Antisocial
Forces
The fundamental policy of the internal controls systemof the Kurita Group states that all officers and employees
take a resolute stance against and reject all connections toantisocial elements and organizations. In terms of specificpolicies, we have taken steps by, for example, adding aclause to our contracts about the elimination of crime
syndicates.
On the basis of the Kurita Group Code of EthicalConduct and Compliance Guidelines, we also promote
fair business activities, and prohibit while also working
to prevent the provision and acquisition, etc., of unjust
profits. Kurita surveys its suppliers with questionnaires
regarding these to confirm the current state of affairs.
Supplier Helpline
A supplier helpline has been established for suppliers tocontact the Kurita Group companies in Japan with any
trade-related worries or concerns in order to strengthen
relationships of trust with suppliers of the Company andits domestic Group companies.

Helpline manual

Kurita Water Industries Ltd. Annual Report 201527

Contents

Kurita’s Business

Segment Highlights

Management
Indicators

To All Our
Stakeholders

New Medium-Term
Management Plan

Special Feature:
The Kurita’s Business Model

Relationship with Shareholders and Investors
The Management Guidelines of the Kurita Group aim to
maintain shareholder support through timely provisionof information deemed by shareholders and investors tobe necessary and sufficient, and through realization ofcapital-efficiency-focused management and appropriate shareholder returns.
Investor Relations (IR) System
The Managing Director and General Manager of the
Corporate Planning Division has overall responsibility for
information disclosure for the Kurita Group. A full-time
IR officers and full-time IR section have been establishedwithin the Corporate Planning Division to provide support
to the General Manager. If the General Manager is unable
to have direct dialogue with shareholders, the full-time
IR officers become the point of contact instead of theGeneral Manager.
Communication with Institutional Investors
Individual meetings are routinely held with securities
analysts and institutional investors for IR activities. At thetime of second quarter and full year financial results, aresults briefing is held in a conference room, where thepresident and relevant directors explain the results andanswer questions. At the time of first and third quarter
financial results, a teleconference is held.
The president conducts roadshow IR meetings
overseas twice a year and the IR officers also conduct theirown roadshow. Also, through participation in conferencesin Japan, Kurita provides opportunities for meetings withforeign investors.

Investor Relations Website
Kurita has created an IR Website to ensure fair and timely
disclosure of Company information. A range of publications are available on the site, from financial results briefing
materials and timely information disclosure materials,
through to annual reports and fact books.
Shareholder Returns
Kurita’s basic policy is to provide shareholders with stabledividends. Setting a payout ratio of 30% to 50% as ourtarget, we will continuously work to increase dividends,
making decisions based on the payout ratios for the mostrecent five years rather than responding to fluctuations inbusiness performance each fiscal year. After taking into
account funds required for growth investment, working
capital and precautionary funds to prepare for rapid fluctuations in the business environment, we will return that
capital to shareholders to avoid excessive accumulationof funds.
Per Share Dividend Value and Dividend Payout Ratio
Dividend Payout Ratio

(Yen)

(%)

50

60

40
40

30
20

20

10
0

2008 2009 2010 2011 2012 2013 2014 20150

For the years ended March 31

Financial results briefing for institutional investors

28 Kurita Water Industries Ltd. Annual Report 2015

Special Feature: The Kurita’s Business Model

Business Network

Corporate Social
Responsibility

Financial Section

KURITA History

Corporate Data

Investor Information

Relationship with Local Communities

Communication with Shareholders and Individual
Investors
A shareholder briefing is held after the General Meetingof Shareholders, and the president and relevant directors
explain and answer questions on business conditions
for the Kurita Group. A briefing for individual investors
is held, where the General Manager of the Corporate
Planning Division speaks to the individual investors. Individual shareholders Reports are also issued to provide
easy-to-understand investor information.

Dividends per Share

Special Feature: The Kurita’s Business Model

Research and Development

The Management Guidelines of the Kurita Group statethat the Group strives to actively use the insight andexpertise built up through its business to give back tosociety as a good corporate citizen.
Kurita Water and Environment Foundation (Public Interest Incorporated Foundation)
The Kurita Water and Environment Foundation is a public
interest incorporated foundation established with basic
funds by Kurita Water Industries Ltd. in 1997. The Kurita
Group in Japan makes contributions to the Foundation
every year to provide operating funds. By providing
subsidies for surveys and research into water and theenvironment, as well as other support, the Foundation
aims to contribute to the development of a rich global
environment that promotes harmony between people
and nature.
The Foundation provides subsidies for surveys andresearch regarding water and the environment conductedby universities and other research institutes in Japanand overseas, and subsidies for holding international
symposiums and for researchers and experts to attend
international conferences regarding science related towater and the environment. It also presents awards foroutstanding achievements that come from the water- andenvironment-related surveys and research and that reflect
the Foundation’s aims. The Foundation has been actively
involved in providing subsidies overseas, including launching a research subsidy project in Thailand in the fiscal year
ended March 31, 2014. The Foundation has subsidized atotal of 1,043 projects, amounting to about 500 million
yen, since its foundation through to the end of March2015. Of those, 54 subsidies were provided overseas in theamount of about 20 million yen.

Disaster Recovery Support
Kurita Water Industries Ltd. lends seawater desalination
units to local governments in response to their requests to
help with emergency water shortage relief.
As a recent example of this, at the time of the Great East
Japan Earthquake, Kurita helped supply water from June
19 to July 19, 2011, toa hotel being used as
an evacuation shelter in
Minamisanriku, Miyagi
Prefecture, which was
one of the disasterareas. Kurita installed a
Seawater desalination unit in use
seawater desalination
after the Great East Japan Earthquake

unit there to provide water for evacuation shelter toilets andwashing. In the fiscal year ended March 31, 2015, no disasterrecovery support was required.
Regional Activities
Every year, Kurita Water Industries Ltd. holds sports
events in which the rugby team plays a central role at theCompany-owned ground in Atsugi, Kanagawa Prefecture.
A Rugby Festival was held in June 2014 that brought the
local children into contact with Kurita employees throughrugby and deepened the bonds ofcommunication.
In Nakano-ku,
Tokyo, the locationof the Kurita Water
Industries Ltd.’s Head
Office, employees
voluntarily participated in a local
festival where they Kurita employees and local children interhelped the locals acting through sportcarry portable shrines and further deepened friendships.
At the Kurita Global Technology Center, which serves
as a research and development base for Kurita Water Industries Ltd., volunteers conduct cleanup activities in the local
area twice a year
and conduct othercommunity-based
activities such as
par ticipation in
the local “ekiden”
long-distance relay
Participants cleaning up Nogi-machi, Tochigi,
road races.
the location of the Kurita Global Technology
CenterKurita Water Industries Ltd. Annual Report 201529

Contents

Kurita’s Business

Segment Highlights

Management
Indicators

To All Our
Stakeholders

New Medium-Term
Management Plan

Special Feature:
The Kurita’s Business Model

Special Feature: The Kurita’s Business Model

Special Feature: The Kurita’s Business Model

Research and Development

Business Network

Corporate Social
Responsibility

Financial Section

KURITA History

Corporate Data

Investor Information

Environmental Improvement Activities
Relationship with Business Activities and Enhancement of Corporate Values
corporate values, which is deeply connected with our
The Kurita Group’s basic policy for its environmental
ability to meet global challenges such as conservation
improvement activities is to operate in keeping with itsof the natural environment and the effective use of
corporate philosophy and to endeavor to resolve water
resources and this ability is pursued by adding new
and environmental issues so that the Kurita Group canvalues and functions to water.
broadly contribute to society. The policy is based onrecognition of the significance of the Group and our
Activity Guidelines and the Three Aspects
Our environmental improvement activities, which reflect
the connection between water and the environment andKurita Group business activities, are characterized by threeguidelines and three aspects. The activity guidelines are
as follows.
1 We will contribute to the realization of a sustainable
society by developing new products and technologies
that are conducive to environmental improvement.
2 We will work with customers to improve the environment by providing products, technologies, and services
that boost productivity, reduce environmental impact
and offer innovative energy solutions.

The Three Aspects of Our Environmental
Improvement Activities

Initiatives for Meeting Customers’ Needs
This initiative is for the second activity guideline. The Kurita
Group proposes solutions to meet its customers’ needs for
reducing their environmental impact, which, if applied,
result in environmental improvements. The Environmental
Report gathers the results in this area from Japan.
The main results for the fiscal year ended March 31,
2015 include the four items of waste reduction, waterpollutant reduction, soil and groundwater pollutant
reduction, and air pollutant reduction, which exceeded
last fiscal year’s results. We also work on the reduction of
CO2 emissions and environmentally harmful substances.

TechnologicalInnovation

Customers’
NeedsInternal
Change90,000090,33790,9942013

2014

92,3552015* Kurita Group Companies which are “specified business operators” and“designated energy management factories” of Kurita Water Industries
Ltd.
Reduced carbon dioxide emissions achieved through rationalizationof boiler management

Results of Environmental Activities in the Fiscal Year Ended March 31, 2015
the environment,” and we establish a theme for theTechnological Innovation Initiatives
development of new products and technologies. New
This initiative is for the first step of the activity guidelines.
key products and technologies for this fiscal year were
The Kurita Group grasps the needs and challenges
as follows.
of society and our customers in terms of “water andEnvironmental improvement items
CO2

System for reclaiming blow water released from cooling towers for industrial complexes○

Technology for contamination diagnostics of water-recycling facilities and technology forcleaning reverse osmosis(RO) membranes contaminated with combined suspended solids andorganic matter contamination

○

Waste

Environmentally
harmfulsubstances

Chemicals that clean the circulating water in painting booths at automobile factories by helping
paint residual coagulate and be separated

Water
pollutants○○○

Chemicals that reduce usage of bleach in the wood pulp manufacturing process
Short lead-time, space-saving and low-sludge aerobic wastewater treatment systems using fiber
reinforced plastics (FRP) tower tanks○

Anaerobic membrane systems that use methane fermentation and collect biogas from food,beverages and other organic waste○○

Energy-efficient, chemical-efficient, and space-saving systems that employ continuous flow andintermittent aeration remove nitrogen from wastewater○○

30 Kurita Water Industries Ltd. Annual Report 2015

100,000

70,000In conducting daily business activities, we will reduce
environmental impact through operational improvement and innovation.
Based on these guidelines, we are conducting TechnologicalInnovation, Customers’ Needs and Internal Change.

Chemicals that reduce contamination from used paper and reduce paper and printing defects in
the recycled papermaking process

Energy Consumption (crude oil equivalent) (Kiloliters )80,0003

New Products and Technologies

increases in the operating ratio and the wastewater burden
at some ultrapure water supply sites, we were unable tomeet Group-wide targets for waste volumes. Thoroughseparation and collection at research and development
sites, offices and other locations has enabled us to meet ourtargets for recycling.

○○

Internal Change Initiatives
This initiative is for the third activity guideline. We areworking to reduce our environmental impact, chiefly bylowering carbon dioxide emissions, reducing waste andincreasing recycling in Group operations.
To comply with Japan’s “Act on the Rational Useof Energy” (Energy Conservation Act), we establishedtargets for per-unit energy consumption and absoluteenergy consumption at our sites as “specified business
operators” and “designated energy management factories”
under the act. We also worked to reduce electric power
consumption by increasing blower efficiency in thewastewater processes of ultrapure water supply sites, toreduce city gas consumption by reviewing the heating
way used for ultrapure water, and to use such things as
inverter control for cleanroom air conditioners acrossGroup companies. This resulted in us meeting our targets
during the fiscal year ended March 31, 2015 for per-unit
energy consumption and energy consumption.
We worked to recover valuable resources at researchand development sites and reduce sludge generated
during wastewater treatment in the tool cleaning business, but because of an increase in waste accompanying

Reference: Carbon Dioxide Emissions (Tons)
200,000
188,543
181,149
180,000
162,748
160,000

140,000

0

2013

2014

2015
For the years ended March 31

Kurita Water Industries Ltd. Annual Report 201531

Contents

Kurita’s Business

Segment Highlights

Management
Indicators

Kurita Environment Month
Kurita Environment Month was first held in the fiscal
year ended March 31, 2015 for the purpose of shining
a light on environmental action and awareness in theworkplaces, homes and local communities of every employee of the Kurita Group for the purpose of energizing
environmental improvement activities by cultivating
broad environmental awareness. During the month ofAugust, we solicited experiences, photographs, paintingsand catchphrases related to environmental improvementfrom officers, employees and temporary workers, and theirfamilies, of domestic and overseas Group companies. Witha high level of participation from domestic and overseas

To All Our
Stakeholders

New Medium-Term
Management Plan

Special Feature:
The Kurita’s Business Model

Special Feature: The Kurita’s Business Model

Special Feature: The Kurita’s Business Model

Research and Development

Business Network

Corporate Social
Responsibility

Financial Section

KURITA History

Corporate Data

Investor Information

Group employees and their families, the event succeeded
in becoming a new means of communication, so the
Kurita Group will continue the event going forward while
expanding its scope.
Environmental Improvement Activities for the Fiscal
Year Ending March 31, 2016
As part of the next rollout of environmental improvement
activities with our overseas businesses, there are ten overseas companies able to conduct environmental activities
from the fiscal year ending March 31, 2016. However,they have just started so we will begin by working onunderstanding among our overseas employees.

Financial Section
Topics34 Management’s Discussion and Analysis

New Series of Water Treatment Chemicals for Painting Booths to Help Reducethe Environmental Impact at Automobile Factories

When excess paint is not used in automobile factory
painting booths, it is collected in water below thebooths. Paint is separated from this mixture by water
treatment chemicals, and then the water is reusedas circulating water. This newly developed series ofcirculating water treatment chemicals for painting
booths offers greatly increased ability to render oilbased paints tack-free and catch water-based paints

44 Consolidated Balance Sheetscompared to our previous products, and more stablewater treatment can be achieved. It is possible tomaintain the quality of circulating water even without
discharging it by combining chemicals of this newseries. This meets the environmental impact reduction
demands by customers who have restriction in water
discharge amount.

46 Consolidated Statements of Income and Consolidated
Statements of Comprehensive Income
47 Consolidated Statements of Changes in Net Assets
48 Consolidated Statements of Cash Flows
49 Notes to Consolidated Financial Statements
73 Report of Independent Certified Public Accountants

Water treatment in painting booths
Paint mist

Air drawn in todrop excess paint
Paint mist
Water film

Optimal chemical addition

Chemicaldosing equipment
Control equipment

Water after
paint
removedExcesspaint
recoveryequipment

Sampling
Recovery of separated paintWaste treatment

Kurita water treatment chemicals added toseparate paint from water

32 Kurita Water Industries Ltd. Annual Report 2015

Kurita Water Industries Ltd. Annual Report 201533

Contents

Kurita’s Business

Segment Highlights

Management
Indicators

To All Our
Stakeholders

New Medium-Term
Management Plan

Special Feature:
The Kurita’s Business Model

Special Feature: The Kurita’s Business Model

Special Feature: The Kurita’s Business Model

Research and Development

Business Network

Corporate Social
Responsibility

Financial Section

KURITA History

Corporate Data

Investor Information

MANAGEMENT’S DISCUSSION AND ANALYSIS
Business Overviewc) Cost of Sales and Gross Profit

Sales by Segment

During the fiscal year ended March 31, 2015, the global economy overall

Cost of sales increased 6.2%, to ¥130,509 million, compared with ¥122,870

Years ended March 31(Millions of yen)recovered moderately. The U.S. economy experienced a steady recovery, chiefly

million in the previous fiscal year. However, as a percentage of sales, costreflecting an improvement in employment and the expansion of personalof sales decreased from 69.0% to 68.9%. This was mainly attributable to an

spending. In Europe, there were signs of recovery despite the debt crisis. China

improved cost of sales ratio in the Water Treatment Facilities segment, as weand emerging countries in Asia saw a slowdown in growth.

introduced increasingly stringent cost management to prevent additional

The Japanese economy was affected by weakening demand in reaction to

Water Treatment Chemicals
Water Treatment Facilities

181,234

193,792

180,143 178,137

189,398

costs from arising. Gross profit consequently increased 6.6%, from ¥55,267

a spike ahead of the consumption tax hike. In the second half of the fiscal year,

million to ¥58,889 million.

however, corporate earnings improved on the back of the weaker yen and a124,499

137,348 124,052 119,292 129,399

56,73556,44356,091

58,84459,999

2011

2012

2013

2014

2015

d) Selling, General and Administrative (SG&A) Expenses

fall in crude oil prices, and the economy recovered moderately.
Looking at the market environment surrounding the Kurita Group,

SG&A expenses were ¥39,454 million, compared with ¥40,380 million in the

production and capital expenditure in the manufacturing industry were weakprevious fiscal year. This decrease, of ¥926 million, or 2.3%, was the result ofin Japan. Overseas, demand for water treatment increased in East Asia andefforts to cut overheads.

Southeast Asia.
e) Operating Income

In this environment, the Kurita Group took steps to restore its earnings
power and expand its global business by combining its expertise in the Water

Owing to the factors mentioned above, operating income was ¥19,435 million,

Treatment Chemicals segment, water treatment facilities and maintenanceup 30.6%, compared with ¥14,886 million in the previous fiscal year. The

services, aiming to evolve into a corporate group capable of competing

operating margin rose to 10.3% from 8.4% in the previous fiscal year.

successfully in the international market. Specifically, the Group sought toexpand orders by proposing solutions to customers’ challenges, includingf ) Results by Business Segment

environmental impact reduction, energy saving, and an improvement in

Water Treatment Chemicals

productivity, and providing high-value-added and price-competitive products

Orders and Sales

and services in regions and markets where demand for water treatment is

In Japan, orders and sales were down slightly overall. Amid sluggish production

increasing, such as East Asia and Southeast Asia. The Group also worked toactivity in the manufacturing sector, orders and sales increased for process

improve its production system and control costs thoroughly.

chemicals for pulp and paper, as well as steel. However, there were decreases

Gross Profit
Years ended March 31(Millions of yen)

62,66065,88659,09655,26758,889for mainstay boiler chemicals and cooling water chemicals, owing to the
Operating Results

delayed recovery in capacity utilization rates at customer factories. Overseas,a) Orders
In the Water Treatment Chemicals segment, orders in Japan decreased, mainly
because of a tardy recovery in capacity utilization at customers’ plants. However, overseas orders increased due to the addition of new customers, especiallyin China and Southeast Asia. In the Water Treatment Facilities segment, orders
rose in Japan due to maintenance services. Overseas, orders rose for water

centering on China and Southeast Asia, sales and orders both rose substantialOrders by Segment

ly, thanks to successful efforts to cultivate new customers.

Years ended March 31(Millions of yen)

As a result, total Group orders for the Water Treatment Chemicals segment

Water Treatment Chemicals

were ¥59,353 million, down 0.1% compared with the previous fiscal year, andWater Treatment Facilities

197,256
181,951

2011

2012

2013

treatment facilities for the electronics industry. As a result, total consolidated

173,463

181,282

2015

40,38039,454

2014

2015

SG&A Expenses
Years ended March 31(Millions of yen)sales were ¥59,999 million, up 2.0%.
186,741

2014

35,52836,503

2011

2012

38,106orders for the Kurita Group in the fiscal year ended March 31, 2015, were
¥181,282 million, up 4.5% compared with the previous fiscal year.

125,237 140,507 130,700 114,049 121,928b) Net Sales
Consolidated net sales for the fiscal year ended March 31, 2015, increased¥11,261 million, or 6.3%, to ¥189,398 million, mainly due to progress on theconstruction of water treatment facilities.

34 Kurita Water Industries Ltd. Annual Report 2015

56,71456,74856,04059,41359,353

2011

2012

2013

2014

2015
2013

Kurita Water Industries Ltd. Annual Report 201535

Contents

Kurita’s Business

Segment Highlights

Management
Indicators

To All Our
Stakeholders

New Medium-Term
Management Plan

Special Feature:
The Kurita’s Business Model

Special Feature: The Kurita’s Business Model

Special Feature: The Kurita’s Business Model

Research and Development

Business Network

Corporate Social
Responsibility

Financial Section

KURITA History

Corporate Data

Operating Income

Operating Income by Segmentg) Overseas Sales

Overseas Sales by Region

Segment operating income declined 1.0%, to ¥7,877 million, due to a higher

Years ended March 31(Millions of yen)

Sales by Region

Fiscal year ended March 31, 2015

cost of sales ratio stemming from lower revenues from highly profitable
mainstay products in Japan.

Overseas sales rose 16.4%, to ¥39,107 million. The overseas sales ratio within

Water Treatment Chemicals
Water Treatment Facilities

27,131

Regional Breakdown

Water Treatment Facilities
20,989Orders and Sales
In Japan, in the electronics industry, plant construction and expansion projects

17,032

20,127

were limited, and orders for and sales of water treatment facilities declined.

12,641

19,435

11,560rose, reflecting advances in construction in progress. Orders for and sales ofmaintenance services, water treatment facilities for electric power and soil
remediation services rose.
Overseas, orders and sales increased, chiefly reflecting large-scale projects
in the electronics industry in China and Taiwan.
As a result, total Group orders for the Water Treatment Facilities segment

10,099

9,268

8,334

7,954

7,877

2011

2012

2013

2014

2015

mainly due to higher sales and stringent cost-management efforts, which¥

39,10782.1%

million

Other regions: Up 4.2% to ¥3,471 million; 8.9% of total overseas sales

Years ended March 31
(%)

13.7

income of ¥488 million in the previous fiscal year. The main reason was theposting of ¥1,626 million in expenses related to the acquisition of a Europeani) Income before Income Taxes and Minority Interests

17.8
15.0

Other income and expenses–net was expenses of ¥968 million, compared withchemicals business.

Operating Margin by Segment

Income before income taxes and minority interests increased 20.1%, to ¥18,467

16.4
15.2

Asia .....................................................................¥32,092 million
North America................................................¥2,028 million
Europe.................................................................¥1,514 million
Other regions..................................................¥3,471 million
Net Income per ShareYears ended March 31(Yen)

134.02

million, compared with ¥15,375 million in the previous fiscal year.

14.9

130.65The pretax profit margin rose to 9.8% from 8.6% in the previous fiscal year.

14.7

11.7
10.2

Operating Income
Segment operating income increased 66.7%, to ¥11,560 million. This was

Overseas Sales

North America: Up 14.9% to ¥2,028 million; 5.2% of total overseas salesh) Other Income and Expenses

were ¥121,928 million, up 6.9% compared with the previous fiscal year, andsales were ¥129,399 million, up 8.5%.

5.2%

Asia: Up 18.2% to ¥32,092 million; 82.1% of total overseas sales

6,934

maintenance services rose, mainly due to a recovery in capacity utilization at
facilities declined due to a sluggish recovery in capital expenditure, but sales

3.9%

Europe: Up 13.8% to ¥1,514 million; 3.9% of total overseas sales

14,886

Meanwhile, orders and sales in the ultrapure water supply business andthe plants of major customers. In general industries, orders for water treatment

8.9%

consolidated net sales increased to 20.6% from 18.9% in the previous fiscal year.

29,382

Investor Information

13.5
8.4

Water Treatment Chemicals
Total
Water Treatment Facilities

92.43

13.1
10.3

j) Net Income

8.9

After deducting income taxes and minority interests in income, Kurita recorded

78.48

87.81

net income of ¥10,434 million for the fiscal year ended March 31, 2015, an
5.8

11.6% increase, compared with ¥9,352 million in the previous fiscal year.

prevented additional costs from arising.

Net income per share increased to ¥87.81 from ¥78.48 in the previous fiscal
year, and the net margin rose to 5.5% from 5.2%.
2011

2012

2013

2014

2015

Return on equity (ROE) increased to 4.7% from 4.4% in the preceding fiscal
year.
k) Policies on Shareholder Returns
Kurita’s basic policy is to pay stable dividends on an ongoing basis. Kurita
strives to increase its dividends, taking into consideration earnings perfor-

2011

2012

2013

2014

2015

Return on Equity
Years ended March 31
(%)

8.8

8.1

mance and investment in its businesses.
Taking into account the future business outlook and as recognition ofshareholder support, for the fiscal year ended March 31, 2015, the Company

4.7

5.5

paid an annual dividend of ¥46 per share (of which ¥23 per share was an

4.4interim dividend), an increase of ¥2 per share compared with the ¥44 pershare paid in the previous fiscal year (of which ¥22 per share was an interim
dividend).

2011

2012

2013

2014

2015

Note: Return on equity = Net income ÷ Equity (Average) × 100
Equity is defined as net assets less minority interests

36 Kurita Water Industries Ltd. Annual Report 2015

Kurita Water Industries Ltd. Annual Report 201537

Contents

Kurita’s Business

Segment Highlights

Management
Indicators

To All Our
Stakeholders

New Medium-Term
Management Plan

Special Feature:
The Kurita’s Business Model

Special Feature: The Kurita’s Business Model

Special Feature: The Kurita’s Business Model

Research and Development

Business Network

Corporate Social
Responsibility

Financial Section

KURITA History

Corporate Data

Capital Expenditure

Dividends per Shareaddress this situation, the Company has developed chemicals that enable the

R&D Expenses

The Kurita Group is committed to making investments necessary forYears ended March 31(Yen)membrane to be washed without damaging the membrane itself.

Years ended March 31(Millions of yen)technological innovation and production capacity expansion, and to enhance

The R&D expenses for the Water Treatment Chemical segment for the fiscal

competitiveness in response to intensified sales competition. In the year ended
March 31, 2015, capital expenditures totaled ¥12,864 million, an increase

Investor Information

42.00

40.00

38.00

46.00

44.00

year ended March 31, 2015, totaled ¥1,485 million, a 4.6% decrease comparedto the previous fiscal year.

4,225

4,232

4,362

2011

2012

2013

4,534

4,397

2014

2015

of ¥7,155 million compared with the previous fiscal year (including leased
assets and lease obligations for finance lease transactions that do not transfer

For the Water Treatment Facilities segment, Kurita has striven to further

ownership).

improve ultrapure water quality to contribute to higher productivity in the

The Water Treatment Chemicals segment undertook capital expenditure

electronics industry, and also developed wastewater treatment technologies

totaling ¥5,378 million, mainly for upgrading water treatment chemicals

compatible with future environmental regulations. Kurita also has developed

production facilities. This represented a increase of ¥3,586 million comparedtechnologies for wastewater reclamation and reuse, and sludge volume

with the previous fiscal year.

reduction, which are conducive to a sustainable society. The segment had the

The Water Treatment Facilities segment carried out capital expenditure
totaling ¥7,486 million, mainly for the installation and expansion of facilities forthe ultrapure water supply business. This represented a ¥3,569 million increase
compared with the preceding fiscal year.
Depreciation and amortization increased 0.6%, to ¥14,863 million.

2011

2012

2013

2015

2014

• We have developed a space-saving aerobic biotreatment unit that can be

Capital Expenditures andDepreciation and Amortization

easily transported and attached to cooling towers made of fiber-reinforced

Years ended March 31(Millions of yen)plastic, which is a cost-competitive solution to small and medium-scale
wastewater treatment needs.

Capital Expenditures

Research and Development
Kurita’s R&D activities are performed mainly by the Research and Development
Division.

Depreciation and Amortization

16,066

16,035• Kurita has developed a highly cost-competitive ultrapure water production
system that features increased performance on each of the constituent units,

15,054

14,774

14,863

12,864In the fiscal year ended March 31, 2015, Kurita’s R&D expenses totaled ¥4,397
million, equivalent to 2.3% of sales. It decreased by 3.0% compared to theprevious fiscal year.
The Kurita Group as a whole employs approximately 170 R&D personnel,

following R&D achievements:

which are smaller than on previous models, providing water of the quality
required for leading-edge semiconductor production processes.
• The Company has developed a large-scale chromatography unit that offers

8,105
5,965

6,688

excellent separation performance and operability. This unit can be used to
5,709

separate and refine active ingredients in the production process for biophar-equivalent to 3.3% of its total workforce (5,222 on a consolidated basis).

maceuticals, which is a growing market.
The R&D expenses for the Water Treatment Facilities segment for the fiscal

The R&D activities of the Water Treatment Chemical segment predominantly
consisted of developing chemicals and technologies for diagnosing chemical

2011

2012

2013

2014

2015

year ended March 31, 2015, totaled ¥2,911 million, a 2.2% decrease comparedto the previous fiscal year.

processing effectiveness, which help customers improve their energy efficiency, reduce environmental impacts and increase productivity. The segment
had the following R&D achievements:• Kurita developed various sensing technologies to diagnose and control
customers’ water treatment conditions and a new water processing management system. This system determines whether water processing is favorable
and provides the results of benefit analysis over the Internet so they can beviewed on a website.
• Aimed at regions with severe water shortages, we have developed a “coolingwater flow recovery system” comprising a membrane separation device andcooling water chemicals that recovers the water emitted from cooling towers
and enables it to be reused as cooling water.
• Dirt adhering to the membrane surface of reverse-osmosis membrane units
employed in seawater desalination units can inhibit their performance. To

38 Kurita Water Industries Ltd. Annual Report 2015

Kurita Water Industries Ltd. Annual Report 201539

Contents

Kurita’s Business

Segment Highlights

Management
Indicators

To All Our
Stakeholders

New Medium-Term
Management Plan

Special Feature:
The Kurita’s Business Model

Special Feature: The Kurita’s Business Model

Special Feature: The Kurita’s Business Model

Research and Development

Business Network

Corporate Social
Responsibility

Financial Section

KURITA History

Corporate Data

Financial Position

Total Assets and Return on Assets

trade, ¥4,317 million in accounts payable–other, ¥2,060 million in income taxes

Equitya) Assets

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

payable, and ¥2,835 million in “other” in current liabilities.

Years ended March 31(Millions of yen)

As of March 31, 2015, Kurita had total assets of ¥293,204 million, an increase of

Total Assets¥18,279 million. compared with ¥274,925 million as of March 31, 2014.

Return on Assets

Breakdown of Assets

253,298

271,141

263,580

274,925

293,204

6.3

6.8

3.7

3.5

This decrease was primarily attributable to a decrease of ¥27,839 million

year under review, compared with the outcome of a year ago. The increase
in inventories was attributable to the acquisition of businesses in Europe. The
decrease in cash reserves was principally the result of the use of cash reserves
for the acquisition of businesses in Europe, which was completed at the end of

2011

2012

2013

2014

2015

Note: Return on assets = Net income ÷ Total assets (Average) × 100

106,608¥4,325 million from ¥219,153 million the end of the previous fiscal year, due primarily to a ¥3,615 million decrease in shareholders’ equity and an ¥8,254 million

association with additional acquisitions of equity in consolidated subsidiaries, a¥4,534 million increase in retained earnings mainly due to net income of ¥10,434
million for the fiscal year under review, which exceeded dividend payments of

98,36874,0462012

2013

Cash Flows from Operating Activities
Years ended March 31(Millions of yen)

29,79628,282

27,276

29,666

treasury stock through acquisitions in the market. Accumulated other comprehensive income rose, chiefly reflecting a ¥6,906 million increase in unrealized

As of March 31, 2015, property, plant and equipment, net, totaled ¥74,046 million,

gains on available-for-sale securities associated with the abovementioned

a decrease of ¥3,809 million compared with ¥77,855 million as of March 31, 2014.

increase in unrealized gains from investment securities and a ¥1,126 million rise

Investments and long-term receivables were ¥43,534 million as of March 31,

23,314interim dividends for the fiscal year under review, and a ¥7,703 million rise inLong-term Receivables

in foreign currency translation adjustments due to the weaker yen.

2015, an increase of ¥10,543 million compared with ¥32,991 million a year earlier.

intangible assets, primarily technology-related assets, and the posting of goodwill

2011¥5,362 million, the sum of year-end dividends for the previous fiscal year and

86,820Property, Plant and Equipment, Intangible Assets, and Investments and

The increase in intangible assets reflected the acquisition of other in

2015

Net assets totaled ¥223,478 million at the end of the fiscal year, an increase of

decline in shareholders’ equity were a ¥446 million decrease in capital surplus inYears ended March 31(Millions of yen)

77,855Intangible assets as of March 31, 2015, were ¥27,331 million, a increase of2014

businesses in Europe.

increase in accumulated other comprehensive income. The main factors for theProperty, Plant and Equipment, Net

January, and the purchase of treasury stock.

¥25,753 million compared with ¥1,578 million a year earlier.

222,330c) Net Assets

in cash reserves—cash and deposits and marketable securities—which out-

in sales in the Water Treatment Facilities business in the latter half of the fiscal

217,691

in the Accounting Standard for Retirement Benefits and the acquisition of

4.3¥14,210 million, compared with ¥162,500 million as of March 31, 2014.

The increase in accounts receivable–trade was mainly the result of a rise

198,042

208,891 207,871

rise of ¥2,422 million in net defined benefit liability associated with a change

Current assets as of March 31, 2015, totaled ¥148,290 million, a decrease of

million in inventories.

Noncurrent liabilities came to ¥21,964 million at the end of the fiscal year, up¥3,092 million from the end of the fiscal year. The increase was chiefly due to a

Current Assets

weighed increases of ¥9,307 million in accounts receivable–trade and ¥3,042

Long-term Liabilities

Investor Information

As a result, total assets were ¥293,204 million as of March 31, 2015, an
2011

2012

2013

2014

2015

increase of ¥18,279 million, compared with ¥274,925 million at the previous

2011

2012

2013

2014

2015

fiscal year-end. As of March 31, 2015, Kurita had an equity ratio of 75.8%, down
3.4 percentage points from 79.2% a year earlier. Net assets per share at March
31, 2015, were ¥1,907.80, an increase of ¥80.96 compared with ¥1,826.84 a yearof ¥19,391 million in association with the acquisition of businesses in Europe. The

earlier.

increase in investments and long-term receivables primarily reflected a rise in* Equity is defined as total net assets less minority interests.

investment securities due to higher stock prices.
Cash Flowsb) Liabilities

Cash Flows from Operating Activities

As of March 31, 2015, liabilities totaled ¥69,726 million, an increase of ¥13,954

Net cash provided by operating activities during the fiscal year ended Marchmillion, compared with ¥55,772 million as of March 31, 2014.

31, 2015, totaled ¥23,314 million, a decrease of ¥6,352 million from the previous fiscal year. Inflows from income before income taxes and minority interests

Current Liabilitiesof ¥18,467 million, depreciation and amortization of ¥14,863 million and an

Current liabilities were ¥47,761 million at the end of the fiscal year, a rise ofincrease in notes and accounts payable–trade of ¥1,868 million were partially¥10,862 million from ¥36,899 million at the end of the previous fiscal year. The

offset by an increase in notes and accounts receivable–trade of ¥7,674 million

increase was mainly due to increases of ¥2,142 million in accounts payable–

and income taxes paid of ¥5,934 million.

40 Kurita Water Industries Ltd. Annual Report 2015

Kurita Water Industries Ltd. Annual Report 201541

Contents

Kurita’s Business

Segment Highlights

Management
Indicators

To All Our
Stakeholders

New Medium-Term
Management Plan

Special Feature:
The Kurita’s Business Model

Special Feature: The Kurita’s Business Model

Special Feature: The Kurita’s Business Model

Research and Development

Business Network

Corporate Social
Responsibility

Financial Section

KURITA History

Cash Flows from Investing Activities

and parts fluctuate based on changes in market conditions, and this may affect

Net cash provided by investing activities totaled ¥4,746 million, up ¥21,422

the Group’s financial results.

Corporate Data

Investor Information

million from the previous fiscal year. Net cash increased chiefly due to proceedsfrom sale and redemption of marketable securities, net of payments for pur-3. Overseas Business Development

chases of marketable securities, totaling ¥43,039 million. The main cash outflows

The Group is striving to expand its business outside Japan. In contrast to thewere payments into time deposits, net of withdrawals from time deposits,

Japanese market, doing business in overseas markets involves a number ofof ¥1,331 million, payments for purchases of property, plant and equipment

inherent risks, including the risk of changes to local laws and regulations, thetotaling ¥8,148 million, including capital expenditures for ultrapure water supply

risk of political and economic instability, and the risk of foreign exchange ratebusiness, payments for purchases of intangible fixed assets of ¥4,375 million, andfluctuations. If such risks materialized, the Group’s financial results could be

payments for the acquisition of businesses in Europe of ¥24,383 million.

affected.

Cash Flows from Financing Activities

4. New Product Development

Net cash used in financing activities totaled ¥13,929 million, an increase of ¥7,972

The Group continuously endeavors to develop new technology and appealing

million from the previous fiscal year. The main cash outflows were the purchasenew products.

of treasury stock of ¥7,703 million and cash dividends paid of ¥5,480 million.

The success of new technology and product development efforts cannot
be guaranteed. The Group may not be able to offer new technologies andCash and Cash Equivalents at End of Yearproducts that meet the needs of its customers or launch new products in a

At March 31, 2015, Kurita had cash and cash equivalents totaling ¥55,675

timely fashion. The Group may also fail to keep pace with rapid technologicalmillion, an increase of ¥14,647 million compared with March 31, 2014.

innovation and changing customer needs. If the Group were to fail to develop
outstanding new products, this could hamper its future growth and profitabili-

Business Risks

ty or otherwise affect its financial results.

The following are summaries of major foreseeable risks present in the businessenvironments in which the Kurita Group operates. Forward-looking statements

5. Intellectual Property

herein are based on judgments made by management as of March 31, 2015.

The Group recognizes the importance of intellectual property and continuallyseeks to register its own intellectual property while avoiding infringing the

1. Economic and Market Conditions

intellectual property rights held by third parties, both in Japan and overseas.

The Group’s Water Treatment Chemicals and Water Treatment Facilities

Given the wide scope of the Group’s business, however, there is potential forbusinesses are affected by economic conditions in Japan and countries andthe Group’s intellectual property rights to be infringed and potential for theregions outside Japan where the Group operates. Demand in the Water Treat-

Group to infringe the rights held by third parties. Such occurrences may affectment Chemicals business fluctuates in response to factory capacity utilization

the Group’s financial results.

rates in industries such as steel, petroleum refining and petrochemicals, andpulp and paper—the main areas of demand for the business. Such demand

6. Dependence on Information Systems

fluctuations may affect the Group’s financial results. Demand in the Water

The Group’s use of information systems is increasing, as is the importance ofTreatment Facilities business fluctuates in response to trends in capital expen-

information systems to the Group’s business. If a computer virus or some otherditure in electronics—the main area of demand for the business—and otherfactor were to obstruct the functions of the Group’s information systems, theindustries. Such demand fluctuations may affect the Group’s financial results.

Group’s business activities, financial results, and financial condition could beMore intense competition with rivals in the Group’s business domains

negatively affected.

could lead to declines in prices of products and services, which could lower
the Group’s profitability.

7. Large-scale Natural Disasters
If an earthquake, typhoon, or other kind of natural disaster were to directly or

2. Materials and Parts Procurement

indirectly upset the Group’s business execution, the Group’s business activities,

The Group procures raw materials and parts from outside the Group for thefinancial results, and financial condition could be negatively affected.

manufacture of products and fabrication of facilities. The prices of raw materials

42 Kurita Water Industries Ltd. Annual Report 2015

Kurita Water Industries Ltd. Annual Report 201543

Contents

Kurita’s Business

Segment Highlights

Management
Indicators

To All Our
Stakeholders

New Medium-Term
Management Plan

Special Feature:
The Kurita’s Business Model

Special Feature: The Kurita’s Business Model

Special Feature: The Kurita’s Business Model

Research and Development

Business Network

Corporate Social
Responsibility

Financial Section

KURITA History

Corporate Data

Investor Information

CONSOLIDATED BALANCE SHEETS
Kurita Water Industries Ltd. and Consolidated Subsidiaries
As of March 31, 2015 and 2014

Thousands of
U.S. dollars

Millions of yen

Assets2015

2015

Current assets:
Cash and time deposits (Notes 3, 4 and 6)¥52,497¥47,336$437,482

Notes and accounts receivable, trade (Note 4)

67,324

57,791

561,034

(261)

(184)

(2,181)Marketable securities (Notes 4 and 5)

14,99947,999124,998

Inventories (Note 7)

8,854

5,811

73,784

Deferred tax assets (Note 9)

1,728

2,193

14,408Other current assets

3,147

1,551

26,230148,290

162,500

1,235,756

Allowance for doubtful accounts

		

Total current assets

Investments and long-term receivables:
Investment securities (Notes 4 and 5)

32,42423,004

270,204

Investments in unconsolidated subsidiaries and affiliates (Note 4)

3,646

1,713

30,386

Deferred tax assets (Note 9)

4,423

6,586

36,865

Other investments

3,342

2,097

27,853

Allowance for doubtful accounts

(302)

(409)

(2,518)43,53432,991

362,791

Land (Note 12)

13,972

13,953

116,437

Buildings and structures

61,862

61,177515,519

Machinery and equipment

102,598

93,982854,988

Construction in progress

4,156

1,742

34,633

Other facilities

13,245

11,867110,380

Leased assets

8,199

7,990

68,330204,034

190,7141,700,291(129,988)(112,859)(1,083,237)

74,04677,855617,054

		Goodwill

19,391—

161,597

		

7,940

1,578

66,172¥293,204¥274,925$2,443,371

		Total investments and long-term receivables

Property, plant and equipment, at cost (Note 15):

		TotalAccumulated depreciation		Property, plant and equipment, net

Intangible assets:
Other intangible assets

		Total assets

Millions of yen(Note 1)

2014

Thousands of
U.S. dollars(Note 1)

Liabilities and Net Assets

2015

2014

2015

Current liabilities:
Short-term borrowings and current portion of long-term debt (Note 8)
Notes and accounts payable, trade (Note 4)
Accounts payable, other
Income taxes payable
Advances received
Accrued employees’ bonuses
Provision for product warranties
Provision for loss on construction contracts
Other current liabilities
		 Total current liabilities¥1,794
20,820
9,858
4,595
3,021
2,255
784
1,037
3,594
47,761¥1,063
18,887
5,541
2,535
1,995
2,246
801
1,311
2,516
36,899$14,950
173,501
82,15738,29525,18018,791
6,537
8,642
29,956
398,015

Long-term liabilities:
Long-term debt (Note 8)
Net defined benefit liability (Note 10)
Accrued retirement benefits for directors and corporate auditors
Deferred tax liabilities on revaluation of land (Note 12)
Other long-term liabilities (Note 8)
		 Total long-term liabilities
		Total liabilities

5,159
13,785
75
1,181
1,763
21,96469,726

5,389
11,36398
1,303
718
18,872
55,772

42,995
114,875
628
9,846
14,691
183,036
581,052

13,45010,980189,693

13,45011,426
185,159

112,089
91,506
1,580,781(7,705)
206,419(2)
210,034(64,213)1,720,164

14,768
66
(442)
1,510
8
15,911
1,147
223,478¥293,204

7,862
—
(564)
384
(25)
7,657
1,461
219,153¥274,925

123,069
550(3,689)12,59071
132,592
9,561
1,862,319$2,443,371

Net assets:
Shareholders’ equity (Note 11):
Common stock, 2015 and 2014
		 Authorized: 531,000,000 shares
		 Issued: 119,164,594 shares
Capital surplus
Retained earnings
Treasury stock, at cost		2015—2,626,561 shares		2014—1,125 shares
		 Total shareholders’ equity
Accumulated other comprehensive income:Unrealized gains on available-for-sale securities
Deferred gains or losses on hedges
Revaluation reserve for land (Note 12)
Foreign currency translation adjustments
Remeasurements of defined benefit plans (Note 10)
		 Total accumulated other comprehensive income
Minority interests
		 Total net assets
		 Total liabilities and net assets

The accompanying notes are an integral part of these statements.

44 Kurita Water Industries Ltd. Annual Report 2015

Kurita Water Industries Ltd. Annual Report 201545

Contents

Kurita’s Business

Segment Highlights

Management
Indicators

To All Our
Stakeholders

New Medium-Term
Management Plan

Special Feature:
The Kurita’s Business Model

Special Feature: The Kurita’s Business Model

Special Feature: The Kurita’s Business Model

Research and Development

Business Network

Corporate Social
Responsibility

Financial Section

KURITA History

Corporate Data

Investor Information

CONSOLIDATED STATEMENTS OF INCOME ANDCONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETSCONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Kurita Water Industries Ltd. and Consolidated Subsidiaries
For the years ended March 31, 2015 and 2014

Kurita Water Industries Ltd. and Consolidated Subsidiaries
For the years ended March 31, 2015 and 2014

CONSOLIDATED STATEMENTS OF INCOME
Millions of yen

Net sales (Note 18)
Cost of sales (Note 13)
Gross profit
Selling, general and administrative expenses (Note 14)
Operating income (Note 18)
Other income (expenses):
Interest and dividend income
Foreign exchange gains (losses)
Interest expense
Settlement
Equity in earnings of unconsolidated subsidiaries and affiliates
Loss on disposal of properties (Note 15)
Rent expenses on properties
Acquisition-related costs
Impairment loss
Provision for building demolition expenses
Contribution
Other, net
		 Other income (expense), net
Income before income taxes and minority interests
Income taxes (Note 9):
Current
Deferred		 Total income taxes
Income before minority interests
Minority interests in income
Net income(Note 1)

2015
¥189,398
130,50958,88939,454
19,4352014¥178,137
122,870
55,26740,38014,8862015$1,578,324
1,087,577
490,747
328,785
161,962

636
(86)
(84)
—
286
(241)
(37)
(1,626)
(226)
—
—
411
(968)
18,467

501
174
(60)
(56)
302
(23)
(24)
—
—
(197)
(500)
372
488
15,375

5,306
(723)
(704)
—
2,386
(2,011)(311)(13,558)(1,883)——
3,429(8,069)
153,892

7,718
242
7,961
10,50671¥10,434

6,614
(737)
5,877
9,498
145
¥9,35264,3192,022
66,34287,550595$86,955

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Thousands of
U.S. dollars

Millions of yen

Income before minority interests
Other comprehensive income (Note 16):
Unrealized gains on available-for-sale securities
Deferred gains or losses on hedges
Revaluation reserve for land
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Share of other comprehensive income of entities accounted for using equity method
		 Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to minority interests(Note 1)

2015
¥10,506

2014¥9,498

2015$87,550

6,916
66
121
1,049
33
115
8,303
¥18,809

3,782
—
—
1,792
—
204
5,780
¥15,278

57,636
550
1,015
8,748
282
965
69,199$156,749¥18,688121¥14,989
288$155,737
1,011
U.S. dollars

Yen

Per share of common stock (Note 20):
Net income
Cash dividends applicable to the year
The accompanying notes are an integral part of these statements.

46 Kurita Water Industries Ltd. Annual Report 2015

(Note 1)

2015

2014

¥87.81
46.00¥78.48
44.00

2015
$0.73
0.38

Millions of yen
Accumulated other comprehensive income
Unrealized Deferred
Foreign Remeasure- Total accumugains on
gains or Revaluation currency ments of lated other
Total
Common Capital Retained Treasury shareholders’ available-for- losses on reserve for translation defined comprehensive
sale securities hedges land (Note 12) adjustments benefit plans income
equitystock
surplus earnings stock

Minority
interests¥13,450¥11,426 ¥202,807 ¥(21,859) ¥205,826¥13,450¥11,426 ¥202,807 ¥(21,859) ¥205,826

Shareholders’ equity (Note 11)

Thousands of
U.S. dollars

Balance as of March 31, 2013
Cumulative effects of changes
in accounting policies
Restated balance as of March 31, 2013
Changes during the year
Cash dividends paid
Net income for the year
Acquisition of treasury stock
Retirement of treasury stockReversal of revaluation
reserve for land
Changes in equity interest inconsolidated subsidiaries
Other
Net changes of net assets otherthan shareholders’ equity
Total changes during the year
Balance as of March 31, 2014
Cumulative effects of changes
in accounting policies
Restated balance as of March 31, 2014
Changes during the year
Cash dividends paid
Net income for the year
Acquisition of treasury stock
Retirement of treasury stockReversal of revaluation
reserve for land
Changes in equity interest inconsolidated subsidiaries
Other
Net changes of net assets otherthan shareholders’ equity
Total changes during the year
Balance as of March 31, 2015

¥4,079¥—¥(564)¥(1,469)¥—¥2,045¥1,246 ¥209,118¥4,079¥—¥(564)¥(1,469)¥—¥2,045¥1,246 ¥209,118—(5,124)
9,352(21,859)(2)
21,859Total net
assets—(5,124)
9,352
(2)
—

(5,124)
9,352
(2)
—

—

—

—

—

(17)

(17)

(17)

—
¥13,450— (17,648)¥11,426 ¥185,159

21,8564,208¥(2) ¥210,034

(501)

(501)

¥13,450¥11,426 ¥184,657¥(2) ¥209,532(5,362)
10,434(5,362)
10,434(7,703)—(5,362)
10,434(7,703)
—

—

—

(445)

(445)

(36)

(36)

(7,703)

(445)
(36)
—
¥13,450(445)(5,035)(7,703)(3,113)¥10,980 ¥189,693 ¥(7,705) ¥206,419

3,783

—

—

1,853

(25)

5,611

3,783
¥7,862—¥——¥(564)

1,853
¥384

(25)
¥(25)

5,611
¥7,657215

215
10,035¥1,461 ¥219,153

5,827¥7,862¥—¥(564)

¥384

¥(25)

¥7,657¥1,461 ¥218,652

(501)

6,905

66

121

1,126

33

8,253

6,905
¥14,768

66
¥66

121
¥(442)

1,126¥1,510

33
¥8

8,253
¥15,911

Thousands of U.S. dollars (Note 1)
Accumulated other comprehensive income
Unrealized Deferred
Foreign Remeasure- Total accumugains on
gains or Revaluation currency ments of lated other
Total
Common Capital Retained Treasury shareholders’ available-for- losses on reserve for translation defined comprehensive
sale securities hedges land (Note 12) adjustments benefit plans income
equitystock
surplus earnings stock

(314)

7,939

(314)
4,826
¥1,147 ¥223,478

Shareholders’ equity (Note 11)

Balance as of March 31, 2014
$112,089
Cumulative effects of changes
in accounting policies
Restated balance$112,089
Changes during the year
Cash dividends paid
Net income for the year
Acquisition of treasury stock
Retirement of treasury stockReversal of revaluation
reserve for land
Changes in equity interest inconsolidated subsidiaries
Other
Net changes of net assets otherthan shareholders’ equity
Total changes during the year—
Balance as of March 31, 2015
$112,089

Minority
interests

Total net
assets$95,223 $1,542,996$(19) $1,750,289(4,181)(4,181)$95,223 $1,538,815$(19) $1,746,108(44,686)
86,955(44,686)
86,955(64,193)—(44,686)
86,955(64,193)———(3,716)(3,716)(64,193)(3,716)(302)(3,716)
41,966$91,506 $1,580,781$65,521$—$(4,705)$3,205$(211)$63,810$12,182 $1,826,282$65,521$—$(4,705)$3,205$(211)$63,810$12,182 $1,822,100(4,181)(302)(64,193)(25,943)$(64,213) $1,720,164(302)
57,547

550

1,015

9,385

282

68,78257,547$123,069

550
$550

1,015
$(3,689)

9,385$12,590282$71

68,782$132,592(2,620)66,162(2,620)40,218$9,561 $1,862,319

The accompanying notes are an integral part of these statements.
Kurita Water Industries Ltd. Annual Report 201547

Contents

Kurita’s Business

Segment Highlights

Management
Indicators

To All Our
Stakeholders

New Medium-Term
Management Plan

Special Feature:
The Kurita’s Business Model

Special Feature: The Kurita’s Business Model

Special Feature: The Kurita’s Business Model

Research and Development

Business Network

Corporate Social
Responsibility

Financial Section

KURITA History

Corporate DataCONSOLIDATED STATEMENTS OF CASH FLOWSNOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Kurita Water Industries Ltd. and Consolidated Subsidiaries
For the years ended March 31, 2015 and 2014

Kurita Water Industries Ltd. and Consolidated Subsidiaries

Thousands of
U.S. dollars

Millions of yen(Note 1)

2015

2014

2015

¥18,467
14,863
781
(547)
(286)
(636)
84
231
226
(39)
17

¥15,375
14,774
454
1,559
(302)
(501)
60
14
—
(0)
—

$153,892
123,862
6,515(4,560)(2,386)(5,306)
704
1,925
1,883
(326)
141

Interest and dividends received
Interest paid
Income taxes paid
Others, net
		 Net cash provided by operating activities(7,674)
(504)
177
1,868
1,515
1,290
29,835783(84)(5,934)(1,285)23,314

4,997
(673)
204
(26)
(222)
121
35,835751(62)(6,652)(204)
29,666(63,950)(4,204)
1,479
15,57012,631
10,753248,6256,530(704)(49,453)(10,710)
194,287

II. Cash flows from investing activities
Decrease in time deposits, net
Payments for purchase of property, plant and equipment
Proceeds from sale of property, plant and equipment
Payments for purchase of intangible assets
Payments for purchase of marketable securities and investment securities
Proceeds from sale and redemption of marketable securities and investment securities
Payments for acquisition of business (Note 3)
Others, net
		 Net cash provided by (used in) investing activities(1,330)(8,148)38(4,375)(45,008)
88,072(24,383)
(117)
4,746

(1,516)(5,670)105(441)(100,145)
91,004—(12)(16,676)(11,088)(67,907)322(36,462)(375,073)
733,938(203,194)(978)39,556605(5,362)(118)(588)(7,703)54(164)(5,122)
(71)
(595)
(2)
—

5,044
(44,688)(988)(4,904)(64,193)450

I. Cash flows from operating activities
Income before income taxes and minority interests
Depreciation and amortization
Increase in net defined benefit liability
Increase (decrease) in other allowances
Equity in earnings of unconsolidated subsidiaries and affiliates
Interest and dividend income
Interest expense
Gain on sales and disposal of properties
Impairment loss
Gain on sales of investment securities
Loss on valuation of investment securities
Changes in assets and liabilities:
		 Decrease (increase) in trade receivables
		 Increase in inventories
		 Decrease in other assets
		 Increase (decrease) in trade payables
		 Increase (decrease) in other liabilities
Others, net

III. Cash flows from financing activities
Increase (decrease) in short-term borrowings, net
Cash dividends paid
Cash dividends paid to minority shareholders of consolidated subsidiaries
Payments for lease obligations
Payments for purchase of treasury stock, net
Proceeds from share issuance to minority shareholders
Payments from changes in ownership interests in subsidiaries
		 that do not result in change in scope of consolidation
		 Net cash used in financing activities

(815)

—

(6,796)(13,929)(5,957)(116,076)

IV. Effect of exchange rate changes on cash and cash equivalents
V. Net increase in cash and cash equivalents
VI. Cash and cash equivalents at beginning of year
VII.Cash and cash equivalents at end of year (Note 3)515
14,64741,028¥55,675

683
7,715
33,313¥41,028

4,292
122,059
341,906$463,965

Investor Information

1. Basis of presentation of consolidated financial statements ������������������������������������������������������������������������������������������
Kurita Water Industries Ltd. (the “Company”) and its domestic subsidiaries maintain their books ofaccount and prepare their financial statements in accordance with accounting principles and practices
generally accepted in Japan, while its foreign subsidiaries maintain their books of account and prepare
their financial statements in conformity with those of the countries of their domicile. Certain accounting
principles and practices generally accepted in Japan are different from International Financial ReportingStandards and standards in other countries in certain respects as to application and disclosure
requirements. Accordingly, the accompanying consolidated financial statements are intended for use by
those who are informed about Japanese accounting principles and practices.
The Company’s consolidated financial statements, prepared in accordance with accounting
principles and practices generally accepted in Japan, were filed with the Japanese Ministry of Financeand the Tokyo Stock Exchange as required by the Financial Instruments and Exchange Law of Japan.
Certain reclassifications of accounts and modifications have been made in the accompanying
consolidated financial statements to facilitate understanding by readers outside Japan. In addition,certain reclassifications have been made in the 2014 financial statements to conform to the classification
used in 2015.
All figures in the consolidated financial statements and notes are stated in millions of Japanese yen
by discarding fractional amounts of less than ¥1 million. As a result, the totals shown in the consolidated
financial statements and notes in yen do not necessarily agree with the sum of the individual amounts.
The translation of yen amounts as of or for the year ended March 31, 2015 into U.S. dollars is
included solely for the convenience of readers and has been made, as a matter of arithmeticalcomputation only, at the rate of ¥120 to US$1, the prevailing rate on the Tokyo Foreign Exchange Market
on March 31, 2015. The translation should not be construed as a representation that yen amounts havebeen, could have been or could in the future be converted into U.S. dollars at the above or any otherrate.

2. Significant accounting policies �������������������������������������������������������������������������������������������������������������������������������������������������
(1) Consolidation
Scope of consolidation
The consolidated financial statements included the accounts of the Company and its significant
subsidiaries (together, the “Group”). For the years ended March 31, 2015 and 2014, 43 and 36 subsidiaries
were consolidated, respectively.
Under the control concept, those companies in which the Company, directly or indirectly, is able toexercise control over operations are fully consolidated.
All significant inter-company transactions and balances have been eliminated in consolidation.
Names of principal consolidated subsidiaries:
		 Kurita Europe APW GmbH		 Kurita Water Industries (Jiangyin) Co., Ltd.
		 Kuritaz Co., Ltd.
		 Kurita Engineering Co., Ltd.
		 Kuritec Service Co. Ltd.
		 Kurita Chemical Manufacturing Ltd.
Fiscal years of consolidated subsidiaries
The fiscal years of all of the foreign consolidated subsidiaries (Kurita (Singapore) Pte. Ltd. and others)
end on December 31. For these consolidated subsidiaries, the financial statements as of December 31
were used for consolidation purposes. However, material transactions that have occurred during the

The accompanying notes are an integral part of these statements.

48 Kurita Water Industries Ltd. Annual Report 2015

Kurita Water Industries Ltd. Annual Report 201549

Contents

Kurita’s Business

Segment Highlights

Management
Indicators

To All Our
Stakeholders

New Medium-Term
Management Plan

three-month period from January 1 to March 31 of the following year have been adjusted as necessary
for consolidation. For the consolidated subsidiaries (Kurita Europe APW GmbH and others) that were
included in the scope of consolidation as a result of transfer of business, the financial statements basedon the provisional statements of accounts as of January 31, 2015 were used.
Amortization of goodwill
Goodwill is amortized using the straight-line method over a reasonable number of years, not exceeding
20 years, on a case-by-case basis, except for minor amounts that are charged to income in the period ofacquisition.
(Additional Information)
In previous years, basically, goodwill was amortized using the straight-line method over three years.
Due to acquisition of the water treatment chemicals business, paper process chemicals business andalumina chemical compounds business from BK Giulini GmbH and its affiliates in the year ended March
31, 2015, collection periods from the investment are estimated individually for goodwill arose from theinvestments in the companies or businesses and each goodwill is amortized using the straight-line
method over a reasonable number of years, not exceeding 20 years.
(2) Equity method
Scope of equity method application
Under the influence concept, significant investments in unconsolidated subsidiaries and affiliates overwhich the Company has the ability to exercise significant influence with regard to the operating andfinancial policies of the investees are accounted for by the equity method. For the years ended March 31,
2015 and 2014, 6 and 5 companies were accounted for by the equity method, respectively.
Name of principal company applying the equity method:
		 Kurita Sogo Service Co., Ltd.
Investments in the remaining unconsolidated subsidiaries and affiliates were stated at cost. If theequity method of accounting had been applied to the investments in these companies, the effect on
the accompanying consolidated financial statements would not be material.
Fiscal years of companies accounted for by the equity method
The companies accounted for by the equity method that have different closing dates are included in the
consolidated financial statements based on their respective fiscal year-end.
(3) Cash and cash equivalents
Cash and cash equivalents in the consolidated statements of cash flows are composed of cash on hand,readily available bank deposits, and short-term investments with an original maturity of three months orless and subject to a minor risk of fluctuations in value.
(4) Available-for-sale securities
Available-for-sale securities that have available fair values are stated at fair value at the balance sheet
date, with resulting unrealized holding gains and losses reported as a separate component of net assets.
Available-for-sale securities with no available fair values are stated at cost computed by the movingaverage method. The cost of sold securities is computed by the moving-average method.
(5) Inventories
Inventories held for sale in the ordinary course of business are stated at the lower of cost determinedby the moving-average method, except for work in process determined by the specific-identification
method, or net selling value.

50 Kurita Water Industries Ltd. Annual Report 2015

Special Feature:
The Kurita’s Business Model

Special Feature: The Kurita’s Business Model

Special Feature: The Kurita’s Business Model

Research and Development

Business Network

Corporate Social
Responsibility

Financial Section

KURITA History

Corporate Data

Investor Information(6) Derivative transactions
Derivative transactions are measured at fair value in principle.
(7) Depreciation of property, plant and equipment
Property, plant and equipment is depreciated by the declining-balance method for the Company andits domestic consolidated subsidiaries, except for buildings (other than building equipment) acquired
on and after April 1, 1998, and ultrapure water supply equipment located at clients’ sites, for which thestraight-line method is applied. The straight-line method is applied by foreign consolidated subsidiaries.
The estimated useful lives of these assets are as follows:		 Buildings and structures:		
2–65 years
		 Machinery and equipment:		
4–10 years(8) Intangible assets
Intangible assets are amortized by the straight-line method.
(9) Impairment of long-lived assets
The Company reviews its long-lived assets for impairment in accordance with the accounting standards
for impairment of fixed assets whenever events or changes in circumstances indicate the carrying
amount of an asset or asset group may not be recoverable. An impairment loss would be recognized if
the carrying amount of an asset or asset group exceeds the sum of the undiscounted future cash flows
expected to result from the continued use and eventual disposition of the asset or asset group. The
impairment loss would be measured as the amount by which the carrying amount of the asset exceeds
its recoverable amount, which is the higher of the discounted cash flows from the continued use andeventual disposition of the asset or the net selling price at disposition.
(10) Accrued employees’ bonuses
The Company and its domestic consolidated subsidiaries accrue the amount of employees’ bonuses
based on the anticipated bonus payments to employees.
(11) Provision for loss on construction contracts
Provision for loss on construction contracts is provided in an amount sufficient to cover probable losses
on construction contracts on hand when substantial losses in the future are anticipated and can bereasonably estimated.
(12) Hedges
Gain or loss on derivatives designated as hedging instruments is deferred until the gain or loss on theunderlying hedged items is recognized.
The Company uses forward foreign exchange contracts only in order to manage certain risks arisingfrom fluctuations in foreign exchange rates and do not use derivative transactions for speculative
purposes.
The Company evaluates the effectiveness of its hedging activities by comparing cumulative changes
in cash flows on the hedging instruments with those of the related hedged items.
Hedging instruments
Hedged items

Forward foreign exchange contracts
Forecasted transactions denominated in foreign currencies

Kurita Water Industries Ltd. Annual Report 2015

51

Contents

Kurita’s Business

Segment Highlights

Management
Indicators

To All Our
Stakeholders

New Medium-Term
Management Plan

(13) Accounting method for employees’ retirement benefits
The straight-line method is used as a method of attributing expected benefits to be paid to the current
period in calculating retirement benefit obligations.
Actuarial differences are subject to amortization over a period of 1–2 years from the year when they
are incurred.
(Change in accounting policies)
Effective from the year ended March 31, 2015, the Group adopted the article 35 of “Accounting Standard
for Retirement Benefits” (Accounting Standards Board of Japan (“ASBJ”) Statement No. 26, May 17, 2012)
and the article 67 of “Guidance on Accounting Standard for Retirement Benefits” (ASBJ Guidance No.
25, March 26, 2015). Under the standard and guidance, the calculation method of retirement benefit
obligations and service cost has been revised, and the method for determining the discount rate has
been changed from the method using a discount rate determined based on years proximate to theaverage remaining service period of the employees to the method using multiple weighted-average
discount rates determined by reflecting the estimated periods of retirement benefit payments. With
regards to the application of the standard and the guidance, the effect of this change in calculation
methods of retirement benefit obligations and service cost was recognized in retained earnings at April
1, 2014 in accordance with the transitional treatment stipulated in article 37 of the standard.
As a result of this change, net defined benefit liability increased by ¥779 million ($6,492 thousand)and retained earnings decreased by ¥501 million ($4,181 thousand) at April 1, 2014. Also, net assets per
share decreased by ¥4.31 ($0.04) at March 31, 2015. The effects of this change on operating income,income before income taxes and minority interests and net income per share for the year ended March
31, 2015 were immaterial.
(14) Leases
Finance leases which do not transfer ownership are capitalized to recognize leased assets and leaseobligations in the consolidated balance sheets. Leased assets are depreciated using the straight-line
method over the respective lease periods without residual value.
(15) Consumption taxes
Consumption taxes are accounted for separately from transaction prices and are not reflected in the
consolidated statements of income.
(16) Construction contracts
The percentage-of-completion method has been applied to the contracts if the outcome of theconstruction activity is deemed certain for the percentage of performance of the contractor’s obligation
at the end of the balance sheet date, otherwise the completed-contract method is applied. The
percentage of completion is determined using the cost incurred to the estimated total cost.
(17) Foreign currency translation
Monetary receivables and payables denominated in foreign currency are translated using the spot
exchange rate prevailing at the balance sheet date, and the differences are charged to income as foreignexchange gains or losses.
Foreign subsidiaries’ assets and liabilities are translated using the spot exchange rate at their balance
sheet dates, and their income and expenses are translated using the average exchange rate during theyear. The translation differences are recorded in “Foreign currency translation adjustments” and “Minority
interests” in net assets.

52 Kurita Water Industries Ltd. Annual Report 2015

Special Feature:
The Kurita’s Business Model

Special Feature: The Kurita’s Business Model

Special Feature: The Kurita’s Business Model

Research and Development

Business Network

Corporate Social
Responsibility

Financial Section

KURITA History

Corporate Data

Investor Information(18) Appropriation of retained earnings
The accompanying consolidated statements of changes in net assets reflect the appropriations ofretained earnings of the Company in the fiscal year in which the appropriations are approved at thegeneral shareholders’ meeting.
(19) Earnings per share
Earnings per share are computed using the weighted-average number of common shares outstanding.
(20) Change in accounting policies
Accounting Standard for Business Combinations“Accounting Standard for Business Combinations” (ASBJ Statement No. 21, September 13, 2013),“Accounting Standard for Consolidated Financial Statements” (ASBJ Statement No. 22, September 13,
2013 and “Accounting Standard for Business Divestitures” (ASBJ Statement No. 7, September 13, 2013),
etc. shall be effective from April 1, 2014. Accordingly, effective from the year ended March 31, 2015,
the Group adopted these standards, except the article 39 of ASBJ Statement No. 22, and any changes
in interest of a parent’s ownership interest in a subsidiary while the parent retains its control interest
over the subsidiary is recorded as capital surplus and acquisition-related costs are expensed in the year
when such costs are incurred. With regards to business combinations occurred on or after April 1, 2014,changes in acquisition costs allocation due to settlement of transitional treatment are reflected in the
consolidated financial statement for the year when the date of the business combination belongs to.
In accordance with the transitional treatment stipulated in article 58-2 (4) of ASBJ Statement No. 21,
article 44-5 (4) of ASBJ Statement No. 22 and article 57-4 (4) of ASBJ Statement No. 7, these standards
have been applied from April 1, 2014 to the future periods.
As a result of this change, income before income taxes and minority interests decreased by ¥778
million ($6,489 thousand) for the year ended March 31, 2015. Also, net income per share decreased by¥4.68 ($0.04) for the year ended March 31, 2015. The effect of this change on capital surplus and net
assets per share at March 31, 2015 was immaterial.
(21) Reclassifications
Certain reclassifications have been made in the 2014 consolidated financial statements to conformto the 2015 presentation. These reclassifications had no impact on previously reported results ofoperations.

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

Millions of yen
Cash and time deposits

Time deposits with original maturity of more than
three months
Certificates of deposits included in marketable securities,
excluding deposits maturing over three months
Commercial papers included in marketable securities,
excluding papers maturing over three months
Cash and cash equivalents(Note 1)

2015

2014

2015

¥52,497¥47,336$437,482(11,821)(11,307)(98,515)

14,0005,000

116,666

999

—

8,331

¥55,675¥41,028$463,965

Kurita Water Industries Ltd. Annual Report 201553

Contents

Kurita’s Business

Segment Highlights

Management
Indicators

To All Our
Stakeholders

New Medium-Term
Management Plan(2)	The details of assets and liabilities in relation to acquisition of business for cash and cash equivalents
consideration
For the year ended March 31, 2015
	The details of assets in relation to acquisition of the water treatment chemicals business, paper
process chemicals business and alumina chemical compounds business from BK Giulini GmbH and
its affiliates for cash and cash equivalents consideration and reconciliation between acquisition costsof the businesses and net payment for the acquisition are as follows:
Millions of yen

Thousands of
U.S. dollars(Note 1)

Current assets¥5,124$42,704

Non-current assets

7,045

58,709Goodwill

18,825

156,877

Current liabilities(1,191)(9,933)

Non-current liabilities(1,196)(9,971)

Total acquisition costs

28,606238,387

Accounts payable–other in relation to the acquisition of businesses(3,387)(28,231)

Cash and cash equivalents(835)(6,961)¥24,383$(203,194)

Net payment for the acquisition of businesses

4. Financial instruments and related disclosures �������������������������������������������������������������������������������������������������������������������
(1) Policy for financial instruments
The Group invests its funds in low–risk financial assets (deposits, etc.) in principle. The Group finances its
working fund and capital investment fund internally and does not need external funds, but may raisenecessary funds from external resources in cases of special demand for significant capital investment,
if any. In such cases, financing from external resources would be possible without any problem thanks
to our sound financial position. With respect to derivatives, only forward foreign currency contracts areused if necessary to avoid foreign exchange risk, and not for speculative purposes.
(2) Nature of financial instruments and their related risks
Trade receivables such as notes and accounts are exposed to customer credit risk. Certain tradereceivables denominated in foreign currencies arising from overseas operations are exposed to themarket risk of fluctuation in foreign currency exchange rates.
Marketable securities and investment securities are exposed to the risk of market price fluctuations
and business risk of the investees.
Payment terms of trade payables such as notes and accounts are mostly less than one year. Leaseobligations under finance lease transactions are mainly related to the ultrapure water supply businessand its payment term is 14 years (15 in 2014) later at maximum.
(3) Risk management system for financial instruments
Credit risk management (customers’ default risk):
The Company manages its credit risk involved in trade receivables based on the Credit Control Policy
and Manual. The Control Division of each business unit and the Legal Department collect credit
information on a regular basis and control the payment terms and outstanding balances by customer,
and the Company is making efforts to prevent them from damages and to improve the soundness ofthe transactions by monitoring the default risk of customers due to the deterioration of their financial

54 Kurita Water Industries Ltd. Annual Report 2015

Special Feature:
The Kurita’s Business Model

Special Feature: The Kurita’s Business Model

Special Feature: The Kurita’s Business Model

Research and Development

Business Network

Corporate Social
Responsibility

Financial Section

KURITA History

Corporate Data

Investor Information

position at an early stage. The consolidated subsidiaries are also making efforts to reduce credit risk bycontrolling payment terms and outstanding balances of customers. Counterparties of forward foreign
currency contracts to be used to avoid foreign exchange risk when necessary are limited to high-creditrating financial institutions and accordingly, we believe there is very little credit risk.
Market risk management (foreign exchange risk and interest rate risk):
The Company and certain consolidated subsidiaries utilize forward foreign currency contracts to hedge
the market risk of fluctuations in foreign exchange rates involved in trade receivables and payables
by currency and by month. Forward foreign currency contracts are executed and controlled by the
Finance & Accounting Department after the individual contract is approved in accordance with thepredetermined rule.
The fair value of marketable securities and investment securities and the financial position of theissuers are regularly reviewed. The Finance & Accounting Department of the Company executes andmonitors each of forward foreign currency contracts individually, followed by appropriate authorization
procedures prescribed in the internal rules.
Liquidity risk management (risk that the Company may not be able to settle on the payment duedate):The Finance & Accounting Department of the Company and its consolidated subsidiaries prepare andupdate the fund management plan every month based on reports from each business unit and hold asufficient amount of liquidity in hand and manage the liquidity risk.
Carrying amounts, fair values and unrealized gain (loss) of financial instruments at March 31, 2015
and 2014 were as follows (financial instruments whose fair values cannot be reliably determined are notincluded in the following table):
Millions of yen
At March 31, 2015

Carrying
amountFair value

Difference

Cash and time deposits¥52,497¥52,497¥—

Notes and accounts receivable, tradeMarketable securities and investment securities
Available-for-sale securities
Total assets

67,324

67,324—47,33447,334—¥167,156¥167,156¥—

Notes and accounts payable, trade¥20,820¥20,820¥—

Total liabilities¥20,820¥20,820

¥—

¥(11)

¥(11)

¥—

Derivatives

At March 31, 2015

Thousands of U.S. dollars (Note 1)
Carrying
amountFair value
Difference

Cash and time deposits$437,482$437,482$—

Notes and accounts receivable, tradeMarketable securities and investment securities
Available-for-sale securities
Total assets

561,034

561,034—

394,450

394,450—$1,392,967$1,392,967$—

Notes and accounts payable, trade$173,501$173,501$—

Total liabilities$173,501$173,501$—

Kurita Water Industries Ltd. Annual Report 201555

Contents

Kurita’s Business

Management
Indicators

Segment Highlights

Derivatives

To All Our
Stakeholders

$(96)

$(96)

New Medium-Term
Management Plan$—

Special Feature:
The Kurita’s Business Model

Special Feature: The Kurita’s Business Model

Special Feature: The Kurita’s Business Model

Research and Development

Business Network

Corporate Social
Responsibility

Financial Section

KURITA History¥134,774

Total

Millions of yen

Corporate Data¥—

Investor Information¥—¥—

Thousands of U.S. dollars (Note 1)
Due after one
Due after five
year throughyears throughfive years
ten years

Due after ten
years

At March 31, 2014

Carrying
amountCash and time deposits¥47,336¥47,336¥—

At March 31, 2015

Notes and accounts receivable, tradeMarketable securities and investment securities
Available-for-sale securities
Total assets

57,791

57,791—

Deposits$437,086

$—

$—

$—

70,91370,913—561,034———¥176,040¥176,040¥—

116,666———

Notes and accounts payable, trade¥18,887¥18,887¥—

Total liabilities¥18,887¥18,887

¥—

¥—

¥—

¥—

Notes and accounts receivable, tradeMarketable securities and investment securities
Available-for-sale securities with maturities(Certificates of deposits)
Marketable securities and investment securities
Available-for-sale securities with maturities(Commercial paper)
Total

$—

$—

$—

Derivatives

Fair value

Difference

Notes:
a. Computation method of fair values
Cash and time deposits and notes and accounts receivable, trade:
Fair values approximate carrying amounts because of their short maturities.
Marketable securities and investment securities:
	Fair values approximate carrying amounts because of their short maturities since marketable securities consist ofcertificates of deposits and commercial paper. Fair values of investment securities are determined based on thequoted market price of the stock exchange.
Notes and accounts payable, trade:
Fair values approximate carrying amounts because of short maturities.
Derivatives:
Details and information are discussed in Note 6.
b. Financial instruments whose fair values cannot be reliably determined are as follows:
Thousands of
U.S. dollars
Millions of yen(Note 1)

2015

2015

2014

Unlisted equity securities (Unlisted shares)

¥90

¥91

$752

Investments in capital

241

—

2,010

3,646

1,713

30,386

Shares of unconsolidated subsidiaries and affiliates

These securities are not included in the above “Marketable securities and investment securities” since their fair values
cannot be reliably determined.
c. Maturities of monetary receivables and securities after the balance sheet date:Millions of yen
Due after one
Due after fiveDue in one year year throughyears throughDue after
At March 31, 2015or less
five years
ten yearsten years

Deposits¥52,450

¥—

¥—

¥—

Notes and accounts receivable, tradeMarketable securities and investment securities
Available-for-sale securities with maturities(Certificates of deposits)
Marketable securities and investment securities
Available-for-sale securities with maturities(Commercial paper)

67,324———14,000

—

—

—

8,331
$1,123,119

5. Marketable securities and investment securities ��������������������������������������������������������������������������������������������������������������
(1) Available-for-sale securities with fair value at March 31, 2015 and 2014 are summarized as follows:
Millions of yen
Carrying
amountAcquisition cost

Difference

Stocks¥32,284¥11,990¥20,293

Bonds

—

—

—

Other

—

—

—

32,284

11,99020,293

Stocks

49

63

(13)

Bonds

—

—

—

Other

—

—

—

49

63

(13)

¥32,334¥12,054¥20,280

At March 31, 2015

Carrying amount exceeding acquisition cost:			

Subtotal

Carrying amount not exceeding acquisition cost:			

Subtotal

Total

At March 31, 2015

Thousands of U.S. dollars (Note 1)
Carrying
amountAcquisition cost
Difference

Carrying amount exceeding acquisition cost:
Stocks$269,040$99,923$169,116

Bonds

—

—

—

Other

—

—

—

269,040

99,923

169,116

Stocks

411

526

(114)

Bonds

—

—

—

Other

—

—

—

411

526

(114)

$269,452$100,450$169,001

			999

Due in one year
or less

Subtotal

Carrying amount not exceeding acquisition cost:			

Subtotal

Total

Note: T he above table does not include negotiable deposits that have not been assigned a market value (value on consolidatedbalance sheets: ¥14,000 million), commercial paper (value on consolidated balance sheets: ¥999 million), unlisted shares (value
on consolidated balance sheets: ¥90 million) and investments in capital (value on consolidated balance sheets: ¥241 million).

56 Kurita Water Industries Ltd. Annual Report 2015

Kurita Water Industries Ltd. Annual Report 201557

Contents

Kurita’s Business

Segment Highlights

Management
Indicators

To All Our
Stakeholders

New Medium-Term
Management Plan

Special Feature:
The Kurita’s Business Model

Special Feature: The Kurita’s Business Model

Special Feature: The Kurita’s Business Model

Research and Development

Business Network

Corporate Social
Responsibility

Financial Section

KURITA History

Corporate Data

Investor Information

There were no derivatives for which hedge accounting was not applied at March 31, 2014.
Millions of yen
Carrying
amount

At March 31, 2014

Acquisition cost

Difference¥11,998¥10,842

Carrying amount exceeding acquisition cost:

Derivatives for which hedge accounting was applied at March 31, 2015 are as follows:
Currency related

Stocks¥22,841

Bonds

—

—

—

Other

—

—

—

22,841

11,998

10,842Currency swap contracts:

Stocks

71

96

(24)

Receive Yen, Pay Euro

Bonds

—

—

—

Other

—

—

—

71

96

(24)

¥22,913¥12,095¥10,818

			

Subtotal

At March 31, 2015

Hedging instrument

Carrying amount not exceeding acquisition cost:			

Subtotal

Total

At March 31, 2015

Notes:
The above table does not include negotiable deposits that have not been assigned a market value (value on
consolidated balance sheets: ¥47,000 million), commercial paper (value on consolidated balance sheets: ¥999 million)
and unlisted shares (value on consolidated balance sheets: ¥91 million).

(2) Available-for-sale securities sold during the years ended March 31, 2015 and 2014 are summarized asfollows:
Thousands of
U.S. dollars

Millions of yen

2015(Note 1)

2015

2014

Sales amount

¥72

¥4

$605

Total gains on sales

39

0

326

Total losses on sales

—

—

—

Hedging instrument

Currency related
At March 31, 2015

Hedging instrument

Currency swaps:
Receive Yen, Pay Korean Won

At March 31, 2015

Hedging instrument

Currency swaps:
Receive Yen, Pay Korean Won

Contract
amount¥3,081

Contract
amount$25,682

Millions of yen
Due after one
year
Fair value

Receive Yen, Pay Euro

¥3,081¥(109)¥(109)

Thousands of U.S. dollars (Note 1)
Due after one
year
Fair value

Unrealized gains(losses)$25,682$(910)

Hedged item

Fair value¥12,388¥97¥13,764

Thousands of U.S. dollars (Note 1)
Contract
Due after one
amountyear
Fair value

Forecasted
transactions
denominated inforeign currencies$114,706$103,235$813

Note: Fair value is based on the prices provided by the counterparty financial institutions.

Derivatives for which hedge accounting was applied at March 31, 2014 are not disclosed because
they are not material.

7. Inventories ����������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������
Inventories at March 31, 2015 and 2014 consist of the following:Thousands of
U.S. dollars

Millions of yen(Note 1)

2015

2014

2015

Finished products¥3,206¥1,788$26,718

Raw materials

2,569

1,455

21,410Work in process
Unrealized gains(losses)

Forecasted
transactions
denominated inforeign currencies

Millions of yen
Due after one
year

Currency swap contracts:

6. Derivatives ����������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������
Derivatives for which hedge accounting not applied at March 31, 2015 are as follows:

Hedged item

Contract
amount

Total

3,078

2,568

25,655¥8,854¥5,811$73,784

Inventories and provision for loss on construction contracts related to construction contracts that arelikely to incur losses are presented as is and are not offset. The amount of inventories (work in process)corresponding to the provision for loss on construction contracts is immaterial.

$(910)

Note: Fair value is based on the prices provided by the counterparty financial institutions.

58 Kurita Water Industries Ltd. Annual Report 2015

Kurita Water Industries Ltd. Annual Report 201559

Contents

Kurita’s Business

Segment Highlights

Management
Indicators

To All Our
Stakeholders

New Medium-Term
Management Plan

Special Feature:
The Kurita’s Business Model

Special Feature: The Kurita’s Business Model

Special Feature: The Kurita’s Business Model

Research and Development

Business Network

Corporate Social
Responsibility

Financial Section

KURITA History

Corporate Data

Investor Information

8. Short-term borrowings and long-term debt �����������������������������������������������������������������������������������������������������������������������

9. Income taxes ������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������

(1) Short-term borrowings and current portion of long-term debt
The short-term borrowings and current portion of long-term debt at March 31, 2015 and 2014 consist of
the following:

Significant components of the deferred tax assets and liabilities as of March 31, 2015 and 2014 are as
follows:

Thousands of
U.S. dollars

Millions of yen

2015
Short-term borrowings

2015

¥ 498

$9,855Current position of long-term borrowings

16

—

133

Current portion of lease obligations

595

565

4,962

¥1,794¥1,063$14,950

Total

The weighted-average annual interest rate of short-term borrowings for the years ended March 31, 2015
and 2014 were 5.04% and 4.56%, respectively.
(2) Long-term debt
Long-term debt at March 31, 2015 and 2014 is summarized as follows:
Thousands of
U.S. dollars

Millions of yen

2015(Note 1)

2015

2014

Long-term borrowings

¥54

¥—

$457

Less current portion of long-term borrowings

16

—

133

Long-term borrowings (Excluding current portion)

¥38

¥—

$324

¥5,754¥5,954$47,957

(595)

(565)

(4,962)¥5,159¥5,389$42,995

Lease obligations
Less current portion of lease obligations
Lease obligations (Excluding current portion)

The weighted-average annual interest rate of long-term borrowings for the year ended March 31, 2015
was 2.98%.
Annual maturities of long-term debt at March 31, 2015 are as follows:
Years ending March 31

2016

Millions of yen¥611

Thousands of
U.S. dollars(Note 1)

$5,095

2017

592

4,939

2018

512

4,268

461

3,848

2020 and thereafter

3,631

30,262

Total¥5,809$48,4152019(3) Other long-term liabilities
Other than the short-term borrowings, long-term borrowings and lease obligations described above,¥663 million (US$5528 thousand) and ¥684 million of interest-bearing long-term deposits received were
included in other long-term liabilities as of March 31, 2015 and 2014, respectively. The weighted-averageannual interest rates for such deposits received for the years ended March 31, 2015 and 2014 were0.36%.

60 Kurita Water Industries Ltd. Annual Report 2015

Millions of yen(Note 1)2014

¥1,182Thousands of
U.S. dollars

Deferred tax assets:
Excess depreciation of property, plant and equipment
Net defined benefit liability
Loss on revaluation of investment securities
Excess provision for accrued bonuses to employees
Accrued enterprise taxes not deductible
Impairment loss
Unrealized gain on sale of property, plant and equipment
Excess provision of allowance for product warranty
Provision for loss on construction contracts
Other
		Subtotal		Valuation allowance
		 Total deferred tax assets
Deferred tax liabilities:
Unrealized losses on available-for-sale securities
Estimated income taxes pertaining to retained
earnings of overseas consolidated subsidiaries
Capital gains on properties deferred for tax purposes
Other
		 Total deferred tax liabilities
		 Deferred tax assets, net(Note 1)

2015

2014

2015

¥6,205
4,000
1,063
737
355
325
264
234
106
1,238
14,530(1,452)
13,077¥6,212
3,913
1,159
785
190
322
187
285
467
1,097
14,621(1,591)
13,030$51,708
33,336
8,862
6,143
2,964
2,710
2,205
1,950
886
10,319121,086(12,104)
108,982(5,502)(2,944)(45,850)

(741)

(670)

(6,176)

(576)
(105)
(6,924)¥ 6,152(636)—(4,251)¥ 8,779(4,802)(879)(57,708)$51,274

A reconciliation between the normal effective statutory tax rate and the effective income tax rate as apercentage of income before income taxes and minority interests for the year ended March 31, 2015
was as follows:
2015
Normal effective statutory tax rate
Expenses not deductible for income tax purposes
Withholding tax withheld from foreign subsidiaries’ dividends
Reversal of deferred tax liabilities on retained earnings of foreign consolidated subsidiaries
Dividend income not taxable for income tax purposes
R&D expense tax credit
Difference in statutory tax rates of foreign subsidiaries
Reduction of deferred tax assets due to tax rate change
Per capita inhabitant taxes
Other
Actual effective tax rate

35.6%
0.4
0.5
(0.4)
(0.3)
(1.4)
(0.1)
6.8
0.5
1.5
43.1%

The reconciliation for the year ended March 31, 2014 was not presented since the difference was lessthan 5% of the normal effective statutory tax rate.

Kurita Water Industries Ltd. Annual Report 2015

61

Contents

Kurita’s Business

Segment Highlights

Management
Indicators

To All Our
Stakeholders

New Medium-Term
Management PlanOn March 31, 2015, “Act on Partial Revision of the Income Tax Act” (Act No. 9 of 2015) was enacted intolaw. As a result, the normal effective statutory tax rate will be changed from 35.6% to 33.1% for the year
beginning on April 1, 2015, and to 32.3% for the year beginning on April 1, 2016.
As a result of this change, compared with when using the previous normal effective statutory tax
rate, deferred tax assets, net of deferred tax liabilities as of March 31, 2015 decreased by ¥684 million($5,708 thousand) and income taxes–deferred increased by ¥1,250 million ($10,424 thousand), increase
in income tax expenses, for the year ended March 31, 2015.

10. Retirement benefits and pension plans ������������������������������������������������������������������������������������������������������������������������������
Defined benefit plans
The Company and certain consolidated subsidiaries provide lump-sum retirement benefit plansfor defined benefit plans. Also, the Company and certain consolidated subsidiaries provide defined
contribution pension plans. Certain consolidated subsidiaries use the simplified method for computing
retirement benefit obligations.

Balance at beginning of year
Cumulative effects of changes in accounting policies
Restated balance at beginning of year

Thousands of
U.S. dollars(Note 1)

2015

2014

2015

¥9,975¥9,562$83,128

779

—

6,492

¥10,754¥9,562$89,620

Service cost

629

568

5,241

Interest cost

106

183

884

92

34

769

Benefits paid

(370)

(414)

(3,085)

Increase due to acquisition of business

1,128

—

9,405

58

40

485

¥12,399¥9,975$103,326

Actuarial differences incurred

Other
Balance at end of year

(2) Movement in net defined benefit liability for plans applied simplified method
Thousands of
U.S. dollars

Millions of yen(Note 1)

2015

2014

2015

¥1,387¥1,290$11,563

Net periodic benefit costs

95

201

799

Benefits paid

(97)

(104)

(814)

¥1,385¥1,387$11,548

Balance at beginning of year

Balance at end of year

Special Feature: The Kurita’s Business Model

Special Feature: The Kurita’s Business Model

Research and Development

Business Network

Corporate Social
Responsibility

Financial Section

KURITA History

Corporate Data

Investor Information(3) Reconciliation between retirement benefit obligations and net defined benefit liability
Thousands of
U.S. dollars

Millions of yen(Note 1)

2015

2014

2015

Retirement benefit obligations¥13,785¥11,363$114,875

Net liability on the consolidated balance sheet¥13,785¥11,363$114,875

Net defined benefit liability¥13,785¥11,363$114,875

Net liability on the consolidated balance sheet¥13,785¥11,363$114,875(4) Net periodic benefit costs
Thousands of
U.S. dollars

Millions of yen

2015(1) Movement in retirement benefit obligations, except plans applied simplified method
Millions of yen

Special Feature:
The Kurita’s Business Model(Note 1)

2015

2014

Service cost

¥629

¥568

$5,241

Interest cost

106

183

884

Amortization of actuarial differences

144

12

1,200

Net periodic benefit costs computed by simplified method

95

201

799

27

11

229

¥1,002¥977$8,355Other
Net periodic benefit costs(5) Remeasurements of defined benefit plans, before income tax effect in other comprehensive
incomeThousands of
U.S. dollars

Millions of yen

2015(Note 1)

2015

2014

Actuarial differences

¥12

—

$105

Total

¥12

—

$105

(6) 
Remeasurements of defined benefit plans, before income tax effect in accumulated othercomprehensive income
Thousands of
U.S. dollars

Millions of yen

2015(Note 1)

2014

2015

Unrecognized actuarial differences

¥12

¥(39)

$105

Total

¥12

¥(39)

$105

(7) Assumptions for actuarial calculation
The Company uses multiple weighted-average discount rates determined by reflecting the estimatedperiods of retirement benefit payments.

62 Kurita Water Industries Ltd. Annual Report 2015

Kurita Water Industries Ltd. Annual Report 2015

63

Contents

Kurita’s Business

Segment Highlights

Management
Indicators

To All Our
Stakeholders

New Medium-Term
Management Plan

Defined contribution pension plans
The amount to be contributed to the defined contribution pension plans by the Company and its
consolidated subsidiaries was ¥880 million (US$7,341 thousand) and ¥804 million for the years ended
March 31, 2015 and 2014, respectively.

Special Feature:
The Kurita’s Business Model

Special Feature: The Kurita’s Business Model

Special Feature: The Kurita’s Business Model

Research and Development

Business Network

Corporate Social
Responsibility

Financial Section

KURITA History

Corporate Data

Investor Information

13. Cost of sales �����������������������������������������������������������������������������������������������������������������������������������������������������������������������������������
Provision for loss on construction contracts included in cost of sales were ¥(273) million ($(2,282)
thousand) and ¥1,311 million for the years ended March 31, 2015 and 2014, respectively.

14. Selling, general and administrative expenses ������������������������������������������������������������������������������������������������������������������
11. Shareholders’ equity �������������������������������������������������������������������������������������������������������������������������������������������������������������������
Japanese companies are subject to the Companies Act. A summary of the sections of the Companies
Act that affect financial statements and accounting matters is as follows:

Selling, general and administrative expenses for the years ended March 31, 2015 and 2014 consisted of
the following:Thousands of
U.S. dollars

Millions of yen(1) Distribution of dividends to shareholders
Under the Companies Act, if companies meet certain criteria, dividends can be paid at any time during
the fiscal year in addition to the year-end dividend upon resolution at the shareholders’ meeting.
Semiannual interim dividends may also be paid once a year upon resolution by the Board of Directors’
meeting if the articles of incorporation of the company so stipulate.
The Companies Act provides certain limitations on the amounts available for dividends and/or
the purchase of treasury stock. The limitation is defined as the amount available for distribution to theshareholders, and it is calculated mainly based on capital surplus other than paid-in capital, retained
earnings, and treasury stock, but the amount of net assets after dividends must be maintained at no lessthan ¥3 million.
(2) Increases/decreases; transfer of common stock, reserve, and surplus
The Companies Act requires that an amount equal to 10% of dividends must be appropriated as a legal
reserve (a component of retained earnings) or as additional paid-in capital (a component of capitalsurplus) depending on the equity account charged upon the payment of such dividends. However, suchappropriation may not be made if the aggregate amount of legal reserve and additional paid-in capital
exceeds 25% of the common stock. Under the Companies Act, this legal reserve and additional paid-in
capital may be reversed without limitation.
The Companies Act also provides that common stock, legal reserve, additional paid-in capital, othercapital surplus, and retained earnings can be transferred among the accounts under certain conditions
upon resolution of the shareholders.

(Note 1)

2015

2014

2015

¥16,064¥15,780$133,872

Provision for employees’ bonuses

1,216

1,223

10,140Retirement benefit expenses

1,117

1,018

9,313

Salaries and allowances

Travel expenses

2,767

2,808

23,063

Research and development expenses

4,397

4,534

36,645

Other

13,88915,013

115,749

Total¥39,454¥40,380$328,785

15. Other income (expenses) ����������������������������������������������������������������������������������������������������������������������������������������������������������
Loss on disposal of properties for the year ended March 31, 2015 consisted of the following:Thousands of
U.S. dollars

Millions of yen

2015(Note 1)

2015

2014

Buildings and structures

¥57

—

$475

Other (Leasehold, etc)

184

—

1,533

Total

¥241

¥23

$2,011(3) Treasury stock
The Companies Act provides that companies may purchase, hold or dispose of such treasury stock byresolution of the Board of Directors’ meetings. The amount of treasury stock purchased cannot exceed
the amount available for distribution to the shareholders which is determined by a specific formula.

12. Revaluation reserve for land ���������������������������������������������������������������������������������������������������������������������������������������������������
The Company implemented a revaluation of land for business use in accordance with the Land
Revaluation Law (enacted on March 31, 1998). The revaluation difference, net of taxes is stated as“Revaluation reserve for land” in the accumulated other comprehensive income in net assets. The tax
equivalent is stated as deferred tax assets or liabilities in long-term liabilities.
When any revaluated land is sold, the related unrealized gain or loss on revaluation of land istransferred to retained earnings.
Revaluation method: The revaluation of land was computed in accordance with Article Two, Item
One of the Land Revaluation Law Enforcement Order.
Revaluation date: March 31, 2002

64 Kurita Water Industries Ltd. Annual Report 2015

Kurita Water Industries Ltd. Annual Report 2015

65

Contents

Kurita’s Business

Segment Highlights

Management
Indicators

To All Our
Stakeholders

New Medium-Term
Management Plan

Special Feature:
The Kurita’s Business Model

Special Feature: The Kurita’s Business Model

Special Feature: The Kurita’s Business Model

Research and Development

Business Network

Corporate Social
Responsibility

Financial Section

KURITA History

Corporate Data

Investor Information

16. Comprehensive income ������������������������������������������������������������������������������������������������������������������������������������������������������������

17. Business combination ����������������������������������������������������������������������������������������������������������������������������������������������������������������

The components of other comprehensive income for the years ended March 31, 2015 and 2014 are as
follows:

Business combination through acquisition
1. Overview of business combination(1) Name and description of the business of the acquired companiesName:
BK Giulini GmbH and its affiliates
Description of the business:	Business related to the manufacturing, sales and research anddevelopment of water treatment chemicals, paper process
chemicals, and alumina chemical compounds(2) Main reasons for the business combination
	
The addition of broad-ranging customer bases in Europe of the water treatment chemicalbusiness, the paper process chemical business, and the alumina chemical compounds business(the “target businesses”) to the business foundation in Japan and Asia where the Group has astrong presence will significantly advance the expansion of the Company’s overseas business. In
addition as the Company and the target businesses have high complementarity in technologies
and product lineup, we expect that their amalgamation will enable us to develop new products
and services.
(3) Date of the business combination
January 31, 2015(4) Legal form of the business combination
Acquisition of business with cash as consideration(5) Company names after the business combination
Kurita Europe APW GmbH, Kurita Water Industries (Jiangyin) Co., Ltd. and other seven companies(6) Ratio of voting rights acquired
100%(7) Main grounds to determine the acquirer
The Group acquired business with cash as consideration

Thousands of
U.S. dollars

Millions of yen(Note 1)

2015

2014

2015

¥9,520(15)
9,505(2,588)6,916¥5,488(0)
5,487(1,705)
3,782$79,339(131)
79,208(21,572)
57,636

Amount arising during the year

97

—

813

Reclassification adjustments to profit or loss

—

—

—

Amount before income tax effect

97

—

813

Income tax effect

(31)

—

(262)

Subtotal

66

—

550

121

—

1,015

1,049

1,792

8,748

Unrealized gains on available-for-sale securities:
Amount arising during the year
Reclassification adjustments to profit or loss
Amount before income tax effect
Income tax effectSubtotal
Deferred gains on hedges:

Revaluation reserve for land:
Income tax effectForeign currency translation adjustments:
Amount arising during the year
Remeasurments of defined benefit plans:
Amount arising during the year

12

—

105

Reclassification adjustments to profit or loss

39

—

327

Amount before income tax effect

52

—

433

Income tax effect

(18)

—

(150)

Subtotal

33

—

282

Share of other comprehensive income of associates
accounted for using equity method:Amount arising during the year
Reclassification adjustments to profit or loss
Subtotal
		Total2. The period of business results of the acquired companies included in the consolidated financial
statements
Only their balance sheets as of January 31, 2015 are considered for the year ended March 31, 2015.
3. Acquisition cost of the business acquired
Millions of yen

Consideration for acquisition
Acquisition cost
125
(9)
115
¥8,303204—
204¥5,780

1,045
(80)
965
$69,199(Note 1)

¥32,317$269,313¥32,317$269,313

4. Major acquisition-related cost
Millions of yen

Advisory fees, etc.

66 Kurita Water Industries Ltd. Annual Report 2015

Cash

Thousands of
U.S. dollars¥1,536

Thousands of
U.S. dollars(Note 1)

$12,804

Kurita Water Industries Ltd. Annual Report 201567

Contents

Kurita’s Business

Segment Highlights

Management
Indicators

To All Our
Stakeholders

New Medium-Term
Management Plan

5. Amount, cause, amortization method and amortization period of goodwill recognized(1) Amount¥18,825 ($156,877 thousand)	The amount of goodwill is provisionally calculated as the allocation of the acquisition cost has yet
to be completed.
(2) Cause
Due to an excess earnings capability expected in the future(3) Amortization method and amortization period
Straight-line method over 15 years

Special Feature:
The Kurita’s Business Model

Special Feature: The Kurita’s Business Model

Special Feature: The Kurita’s Business Model

Research and Development

Business Network

Corporate Social
Responsibility

Financial Section

KURITA History

Corporate Data

Investor Information(2) Methods for calculating sales, income and loss, assets and liabilities, and other amounts byreportable segment
Accounting methods applied in the reportable segments are consistent with the methods appliedin preparation of the accompanied consolidated financial statements. Segment income represents
operating income. Intersegment sales and transfers between the Group reflect values based on market
price. Intersegment 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
Millions of yen

6. Major components of assets acquired and liabilities assumed on the business combination dateMillions of yen

Current assets¥5,124

Thousands of
U.S. dollars

Year ended March 31, 2015

(Note 1)

Sales

$42,7041) Sales to outside customers
2) Intersegment sales

Non-current assets

10,756

89,635

Total assets¥15,880$132,339

Current liabilities¥1,191$9,932

Non-current liabilities

1,196

9,970

Total liabilities¥2,388$19,903

Water
Treatment
Chemicals

Water
Treatment
Facilities

Total¥59,999¥129,399¥189,398

Adjustments Consolidated¥—¥189,398

377

231

608

(608)

—

¥60,376¥129,631¥190,007¥(608)¥189,398¥7,877¥11,560¥19,437¥(2)¥19,435

Segment assets

78,109136,931

214,50178,703

293,204

Segment liabilities

25,36544,581

69,947(220)

69,726

Depreciation and amortization

1,406

13,457

14,863—

14,863

Impairment loss
Increase in property, plant andequipment andintangible assets

—

226

226

—

226

5,378

7,486

12,864—

12,864

Total
Segment income

Other items
7. Allocation of the acquisition cost	The allocation of acquisition cost is not yet finished because the fair value of identifiable assets andliabilities as of the business combination date had not been fully identified and calculated as of March
31, 2015.
8. Estimated amount and method of calculation of the impact of the acquisition of business on the
consolidated statement of income for the year ended March 31, 2015 on the assumption that theacquisition of business had been completed on April 1, 2014
Not stated as it is difficult to calculate the estimated amount.

18. 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’s
Board 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
conducts business based on comprehensive strategies formulated for the products and services thatthey handle in Japan and overseas. The Company’s consolidated subsidiaries conduct business under
the supervision 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 manufacturesand sells water treatment equipment and facilities, provides ultrapure water, chemical cleaning,
tool cleaning, soil and groundwater remediation services, and provides maintenance services thatencompass operation, maintenance, and management of water treatment facilities.

68 Kurita Water Industries Ltd. Annual Report 2015

Year ended March 31, 2015

Water
Treatment
Chemicals

Thousands of U.S. dollars (Note 1)
Water
Treatment
Facilities
Total
Adjustments Consolidated

Sales1) Sales to outside customers
2) Intersegment sales
Total$499,995 $1,078,328 $1,578,324
3,144

1,930

5,074

$503,140 $1,080,258 $1,583,399$— $1,578,324(5,074)—$(5,074) $1,578,324

Segment income$65,642$96,336$161,979$(17)$161,962

Segment assets

650,914

1,136,598

1,787,512

655,8592,443,371

Segment liabilities

211,377

371,514582,892(1,839)581,052

Depreciation and amortization

11,719112,142

123,862—

123,862

Impairment loss
Increase in property, plant andequipment andintangible assets

—

1,883

1,883

—

1,883

44,821

62,383

107,204—

107,204

Other items

Kurita Water Industries Ltd. Annual Report 2015

69

Contents

Kurita’s Business

Segment Highlights

Management
Indicators

To All Our
Stakeholders

New Medium-Term
Management Plan

Millions of yen
Water
Treatment
Chemicals

Water
Treatment
Facilities

Total¥58,844¥119,292¥178,137¥—¥178,137

278

252

530

(530)

—

¥59,122¥119,545¥178,668¥(530)¥178,137

Segment income¥7,954¥6,934¥14,888¥(2)¥14,886

Segment assets

37,310133,620

170,931103,994

274,925

Segment liabilities

15,82440,08755,911(139)

55,772

Depreciation and amortization

1,386

13,387

14,774—

14,774

Impairment loss
Increase in property, plant andequipment andintangible assets

—

—

—

—

—

1,792

3,917

5,709

—

5,709

Year ended March 31, 2014

Adjustments Consolidated

Sales1) Sales to outside customers
2) Intersegment sales
Total

Other items

Note:“Adjustments” represents the following:
1. Sales: Elimination of intersegment transactions.
2. Segment income: Amount resulting from eliminations of intersegment transactions.
3.	Segment assets: Mainly corporate assets of ¥78,926million ($657,721 thousand) and ¥104,135 million as of March
31, 2015 and 2014, respectively, unallocated to reportable segment assets (cash deposits, securities in trust, andlong-term investments).
4. Segment liabilities: Amount resulting from eliminations of intersegment claims and liabilities.

Related Information(Information by geographic region)(1) Net sales
Year ended March 31, 2015

Sales

Year ended March 31, 2015

Sales

Year ended March 31, 2014

Sales

Special Feature: The Kurita’s Business Model

Special Feature: The Kurita’s Business Model

Research and Development

Business Network

Corporate Social
Responsibility

Financial Section

Asia¥150,291¥32,092

Asia$1,252,431 $267,440

Japan

Asia

¥144,546¥27,162

Millions of yen
North
America
Europe

Other

Total

¥2,028¥3,471¥189,398

Other

Total

$28,925$1,578,324¥1,514

Thousands of U.S. dollars (Note 1)
North
America
Europe$16,905$12,621

Corporate Data

Investor Information(Information by major customer)
Year ended March 31, 2015

Millions of yen

Thousands of
U.S. dollars(Note 1)

Reportable segment$219,152

Water Treatment
Facilities

Sales to:¥26,298

Sharp Corporation
Year ended March 31, 2014

Millions of yen

Reportable segment¥26,850

Water Treatment
Facilities

Sales to:Sharp Corporation(Information about amortization and unamortized balance of goodwill)
Millions of yen
Year ended March 31, 2015

Water
Treatment
Chemicals

Amortization
Unamortized balance

Unamortized balance

Water
Treatment
Facilities

Corporate/
Elimination

Total

Total

¥—

¥—

¥—

¥—

¥—

19,391—

19,391—

19,391

Water
Treatment
Chemicals

Amortization

Thousands of U.S. dollars (Note 1)
Water
Treatment
Corporate/
Facilities
Total
Elimination

Total

$—

$—

$—

$—

$—

161,597—

161,597—

161,597

There were no applicable matters for the year ended March 31, 2014.

19. Subsequent events ���������������������������������������������������������������������������������������������������������������������������������������������������������������������

Millions of yen
North
America
Europe

Other

Total

¥1,765¥3,331¥178,137¥1,330KURITA History(2) Property, plant and equipment
The Company has omitted disclosure here because property, plant and equipment holdings inJapan account for more than 90% of the amount of property, plant and equipment reported on the
consolidated balance sheets.

Year ended March 31, 2015

Japan

Japan

Special Feature:
The Kurita’s Business Model

Appropriation of retained earnings
The following appropriation of retained earnings for the year ended March 31, 2015 was approved at theordinary general meeting of shareholders of the Company held on June 26, 2015.
Millions of yen

Cash dividends (year-end dividends)¥2,680Thousands of
U.S. dollars(Note 1)

$22,336

Note:
Sales are allocated to regions based on the location of the customer to which the products or services are deliveredor provided.

70 Kurita Water Industries Ltd. Annual Report 2015

Kurita Water Industries Ltd. Annual Report 201571

Contents

Kurita’s Business

Segment Highlights

Management
Indicators

To All Our
Stakeholders

New Medium-Term
Management Plan

Special Feature:
The Kurita’s Business Model

Special Feature: The Kurita’s Business Model

Special Feature: The Kurita’s Business Model

Research and Development

Business Network

Corporate Social
Responsibility

Financial Section

KURITA History

Corporate Data

Investor Information

Report of Independent Certified Public Accountants

20. Per share information ����������������������������������������������������������������������������������������������������������������������������������������������������������������
U.S. dollars

Yen

Net assets per share(Note 1)

2015

2014

2015

¥1,907.80¥1,826.84$15.90

87.81

78.48

0.73

Net income per share (EPS)The basis of calculation for net assets per share is as follows:

Thousands of
U.S. dollars

Millions of yen

Net assets(Note 1)

2015

2014

2015

¥223,478¥219,153$1,862,319

Amounts excluded from net assets

1,147

1,461

9,561

(Minority interests on the above)(1,147)(1,461)(9,561)

222,330

217,691

1,852,757

116,538,033

119,163,469

Net assets attributable to common stock
Number of common stock at the year-end used forthe calculation of net assets per share
The basis of calculation for EPS is as follows:

Thousands of
U.S. dollars

Millions of yen

Net income
Net income attributable to common stock
Average number of shares outstanding(Note 1)

2015

2014

2015

¥10,434¥9,352$86,955

10,434

9,352

86,955

118,825,349

119,164,231(The Company has no dilutive shares.)

72 Kurita Water Industries Ltd. Annual Report 2015

Kurita Water Industries Ltd. Annual Report 201573

Contents

Kurita’s Business

Segment Highlights

Management
Indicators

To All Our
Stakeholders

New Medium-Term
Management Plan

Special Feature:
The Kurita’s Business Model

Special Feature: The Kurita’s Business Model

Special Feature: The Kurita’s Business Model

Research and Development

Business Network

Corporate Social
Responsibility

Financial Section

KURITA History

Kurita History
250

1949

150

Establishment of an
overseas company forwater treatment
chemicals business(Brazil)

Maintenance services

1958

Process treatment
chemicals

1951

1965

Tool cleaning
services(Billions of yen)

250

2002

Soil remediation
services

Water treatment facilities
business

100

2015

Ultrapure watersupply business(Billions of yen)

Water treatment chemicals
business (boiler water
treatment chemicals)

Investor Information

Acquisition of water treatment-related
businesses in Europe

Consolidated Sales and Historical Highlights of Business

200

Corporate Data

1991

200

1986

150

1975

Entry into theelectronics industry

100

1973

50

50

0

1949

Establishment

1961

Listed stock on the Second Section of the Tokyo Stock Exchange
and the Osaka Securities Exchange

Economic and industrial history

1947–1955

Postwar years of recovery
Major growing industries

1974

2012

Completion of Tokyo
Head Office building

1955–1973

High-speed growth period
Heavy and chemical industry(Petroleum and steel)0

Head Officerelocation to Nakano

1973–1991

1991–2015

Stable-growth period
Industries of manufacturing and assembly(Home appliances and autos)
Semiconductor industry (Computers)

Extensive stage of information society
Multimedia industry(Personal computers and digital appliances)

History & Achievements
1949–1950s

Development of chemicals that increase productivity in thepulp and paper, petrochemical and steel industries, where large
volumes of water are used, as the Company broadens the scopeof its business from water treatment chemicals to production
process treatment chemicals.

1949 Founded upon water treatment chemicals business (boiler
1951

1951
1953
1958
1959

water treatment chemicals)
The founder of the Company starts selling boiler water treatment
chemicals based on boiler technology for large ships.
Entry into the water treatment facilities business
Capitalizing on sales of deionizers for the pretreatment of boiler
water supplies, the Company moves into the water treatment
facilities business. Start of comprehensive service of water
treatment chemicals and water treatment facilities.
Boiler Water Supply Laboratory established.
Start-up of chemical cleaning services
New expansion into the chemical cleaning services, where boilerinteriors are cleaned using chemical technology.
Expansion of maintenance services
An organization specializing in maintenance services isestablished with a view to expanding after-sales services andmaintenance operations for water treatment facilities.
KK Suzuki Shokai established as a chemical cleaning company(now Kurita Engineering Co., Ltd.).

1970s

1973 Entry into the electronics industry

1974
1975
1975
1978

1960s

1961 Listed stock on the Second Section of the Tokyo Stock
Exchange and the Osaka Securities Exchange

1961 Kansai Kurita Seibi KK. established as a maintenance company for
1962
1965

74

water treatment facilities (predecessor of Kurita Technical Service
Co., Ltd.).
Listed stock on the First Section of the Tokyo Stock Exchange andthe Osaka Securities Exchange.
Expansion into process treatment chemicals

Kurita Water Industries Ltd. Annual Report 2015

Ultrapure water production technology is developed to meetthe demand for water of a higher degree of purity that comeswith increasing miniaturization in semiconductor manufacturing
processes.
Completion of Tokyo Head Office building in Shinjuku, Tokyo.
Establishment of an overseas company for water treatment
chemicals business
Kurita do Brasil LTDA. established to manufacture and sell water
treatment chemicals in Brazil.
Kurita Operation and Maintenance Services, Ltd. established as awater treatment facilities operation and maintenance company(now Kuritaz Co., Ltd.).
Kurita (Singapore) Pte. Ltd. established as Kurita’s water treatment
chemicals and water treatment facilities business base inSoutheast Asia.

sales of water treatment chemicals in Indonesia.

1987 Kurita (Taiwan) Co., Ltd. established to conduct water treatment
chemical manufacturing and sales in Taiwan.

1989 Kurita Europe GmbH established in Germany as Kurita’s base in
1989

1986

Sales channels established for the electronics business andchemical cleaning technology developed to date are used for theCompany’s entry into the cleaning services for tools and jigs usedin semiconductor production equipment.
P.T. Kurita Indonesia established to carry out the production and

2001
2002

1990s

1991 Launch of soil remediation services

1995
1996
1997
1998

1980s

1986 Deployment of tool cleaning services

Europe for water treatment chemical production and sales.
Goshu Chemical Co., Ltd. established to conduct water treatment
chemical manufacturing and sales in Thailand (now Kurita-GK
Chemical Co., Ltd.).

Soil pollution was increasingly becoming a major social problem,
and, as a result, the Company commenced soil remediation
business operations based on water treatment technology
developed to date.
Kurita Water Industries (Dalian) Co., Ltd. established as Kurita’sbase in China for water treatment chemical production and sales.
Kurita America, Inc. established in the United States to conduct
water treatment facilities sales and maintenance services.
Kurita Water Industries Ltd. merges with maintenance company
Kurita Technical Service Co., Ltd.
Acquires an equity stake in Hansu Technical Service Ltd., whichis involved in the production, sales and maintenance of water
treatment facilities in South Korea.

2000s

2001 Land Solution Inc. established as a consulting company dealing
in soil remediation.

2001 Start of consulting services for hedging soil pollution risks

Start of business involving the hedging of pollution risks and

2003
2003
2004
2005
2009

schemes to facilitate the smooth liquidation of land that has
been restored to a safe condition based on soil remediation
successes to date.
Kuritec (Shanghai) Co., Ltd. established as Kurita’s base in China
for import, sales and maintenance services of water treatment
facilities sales and maintenance services.
Launch of ultrapure water supply business
Launch of outsourcing business in which Kurita owns, operates
and manages facilities for customers, and supplies them withultrapure water.
A business model is developed that represents a fusion of
products, technologies and services developed to date across thechemicals, facilities and maintenance arms of the business.
Integration of tool cleaning business units from Group
companies and establishment of Kuritec Service Co. Ltd.
Analysis division split off to establish Kurita Analysis Service Co.
Ltd.
Kurita Water Industries (Suzhou) Ltd. established as a water
treatment facilities production and sales base in China.
Kurita Global Technology Center established through the
integration of research and development facilities.
Kurita Chemical Manufacturing Ltd. established as a new
subsidiary to manufacture water treatment chemicals.

2010s2012 Head office relocation to Nakano, Tokyo
2015 Acquisition of water treatment-related businesses in Europe

Acquires water treatment chemicals, paper process chemicals
and alumina compound businesses of BK Giulini GmbH from
Israel Chemicals Ltd. (ICL); Kurita Europe APW GmbH established.
Kurita Water Industries Ltd. Annual Report 201575

Contents

Kurita’s Business

Segment Highlights

Management
Indicators

To All Our
Stakeholders

New Medium-Term
Management Plan

Special Feature:
The Kurita’s Business Model

Corporate Data
Osaka Office:2-22, Kitahama 2-chome, Chuo-ku,
Osaka-shi, Osaka 541-0041, Japan
Tel.: 81 (6) 6228-4800
Other Offices:
Shizuoka, Tohoku, Nagoya,
Hiroshima and Kyushu

Kurita Water Industries Ltd.
10-1, Nakano 4-chome,
Nakano-ku, Tokyo 164-0001, Japan
Paid-in Capital¥13,450,751,434
Date of Establishment July 13, 1949
Number of Employees 5,222 (on a consolidated basis);
1,527 (parent company)(As of March 31, 2015)

Overseas Office

Major Domestic Offices Head Office:10-1, Nakano 4-chome,
Nakano-ku, Tokyo 164-0001, Japan
Tel.: 81 (3) 6743-5000
Kurita Global Technology Center:
1-1, Kawada, Nogi-machi,
Shimotsuga-gun, Tochigi
329-0105, Japan
Tel.: 81 (280) 54-1511

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

Major Consolidated Subsidiaries and Affiliated Companies
Paid-in capital
Equity(Millions)ownership (%)

Main businessb North America & South America

Kurita do Brasil Ltda.

US$3.0
R$6.986

100.0
100.0

Manufacture & sale of water treatment chemicals and operation andmaintenance of water treatment facilities
Manufacture & sale of water treatment chemicals

b Europe

Kurita Europe GmbH
Kurita Europe APW GmbH
Kurita France S.A.S.
Kurita Iberica SL
Kurita Turkey Kimya A.S.
Kurita Sverige AB
b AsiaKurita Water Industries (Dalian) Co., Ltd.
Kurita Water Industries (Jiangyin) Co., Ltd.
Angang BK Giulini Water Treatment Co., Ltd.
Kuritec (Shanghai) Co., Ltd.
Kurita Water Industries (Suzhou) Ltd.
Hansu Co., Ltd.
Hansu Technical Service Ltd.
Kurita (Taiwan) Co., Ltd.
Kurita (Singapore) Pte. Ltd.
Kurita Water (Malaysia) Sdn. Bhd.
Kurita-GK Chemical Co., Ltd.
P.T. Kurita Indonesiab JapanKurita Creation Co., Ltd.
Kuritec Service Co. Ltd.
Kuritaz Co., Ltd.
Kurita Engineering Co., Ltd.
Land Solution Inc.
Kurita Chemical Manufacturing Ltd.

EUR2.301
EUR20
EUR0.01
EUR0.00301
TRY5.78445
SEK0.1

95.0
100.0
100.0
100.0
100.0
100.0

Manufacture & sale of water treatment chemicals
Manufacture & sale of water treatment chemicals, paper process chemicals and alumina compounds
Sale of water treatment chemicals
Sale of water treatment chemicals
Manufacture & sale of water treatment chemicals
Sale of water treatment chemicals¥550
US$16.043
RMB55
¥30
¥530
W2,500W8,400
NT$20
S$4
RM$0.6
BAHT204
US$2.00

90.1
100.0
50.0
100.0
100.0
33.2
100.0
100.0
100.0
100.0
85.0
92.5

Manufacture & sale of water treatment chemicals
Manufacture & sale of water treatment chemicals and paper process chemicals
Manufacture & sale of water treatment chemicals
Sale & maintenance of water treatment facilities
Manufacture & sale of water treatment facilities
Manufacture & sale of water treatment chemicals
Manufacture & sale of water treatment facilities
Manufacture & sale of water treatment chemicals
Manufacture & sale of water treatment chemicals and water treatment facilities
Sale of water treatment chemicals and water treatment facilities
Manufacture & sale of water treatment chemicals
Manufacture & sale of water treatment chemicals and water treatment facilities

¥160
¥50
¥220
¥160
¥450
¥50

100.0
100.0
100.0
100.0
66.0
100.0

Manufacture & sale of water treatment equipment and products for general households
Tool cleaning
Operation & maintenance of water treatment facilities
Chemical cleaning
Soil remediation
Manufacture of water treatment chemicals(As of March 31, 2015)

76 Kurita Water Industries Ltd. Annual Report 2015

Special Feature: The Kurita’s Business Model

Business Network

Corporate Social
Responsibility

Financial Section

KURITA History

Corporate Data

Investor Information

Investor Information

Company Name
Address

Kurita America, Inc.

Special Feature: The Kurita’s Business Model

Research and Development

Stock Exchange Listing
Common Stock

Number of Shareholders
Independent Auditor
Transfer AgentFirst Section of the Tokyo Stock Exchange
Authorized: 531,000,000 shares
Issued: 119,164,594 shares(Stock trading unit: 100 shares) (As of March 31, 2015)27,247 (As of March 31, 2015)
Grant Thornton Taiyo LLC
Akasaka Oji Bldg. 5F, 8-1-22, Akasaka, Minato-ku, Tokyo 107-0052, Japan
Sumitomo Mitsui Trust Bank, Ltd.
1-4-1, Marunouchi, Chiyoda-ku, Tokyo 100-8233, Japan

Major Shareholders

Distribution of Shares
Shareholdings(Number of shares)

Percentage
of totalshares issued(%)

Nippon Life Insurance Company

5,979,883

5.01

Japan Trustee Services Bank, Ltd. (Trust Account)

5,147,300

4.31

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

2,985,700

2.50

RBC IST 15 PCT LENDING ACCOUNT-CLIENT
ACCOUNT

2,718,581

2.28

Kurita Water Industries Ltd.

2,626,561

2.20

Tokio Marine & Nichido Fire Insurance Co., Ltd.

2,155,826

1.80

NORTHERN TRUST CO. (AVFC)
RE U.S. TAX EXEMPTED PENSION FUNDS

2,135,700

1.79

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

2,056,131

1.72

NORTHERN TRUST CO. (AVFC) RE SILCHESTERINTERNATIONAL INVESTORS INTERNATIONALVALUE EQUITY TRUST

1,939,600

1.62Japan Trustee Services Bank, Ltd.
(Trust Account 9)

1,731,200

1.45

Treasury Stock
Individuals

Financial Institutions

Securities
Firms
Foreigners

Other Domestic Firms
Shareholdings(Number of shares)(%)

b

33,086,980

27.8

b

1,401,937

1.2

b

10,182,685

8.5

b58,451,123

49.1

b

13,415,308

11.3

b

2,626,561

2.2

Total

119,164,594

100.0(As of March 31, 2015)(As of March 31, 2015)

Stock Price Range and Trading Volume (Tokyo Stock Exchange)
Stock price (Yen)

Trading volume (Thousands of shares)

4,000

40,0003,000

30,0002,000

20,0001,000

10,0000Jan. ’13

Stock priceJan. ’14

Jan. ’15

0

Trading volume
Kurita Water Industries Ltd. Annual Report 201577

10-1, Nakano 4-chome, Nakano-ku, Tokyo 164-0001, Japan
Tel: 81 (3) 6743-5000

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

This report was printed on FSC-approved paper using vegetable oil ink.
Printed in Japan