The Kurita Group is committed to establishing a management system that will help us to increase the corporate value of the Group on an ongoing basis. To this end, we are implementing measures to achieve even higher transparency, soundness, compliance, efficiency and speed with regard to our management.

The Kurita Group has adopted a system of directors and corporate auditors. The Board of Directors and the Board of Corporate Auditors hold meetings on a regular basis. We have also appointed an external auditing firm as our accounting auditor.

(as of June 26, 2009)

The Board of Directors consists of 13 members, including one outside director. The Board holds a meeting at least once a month, during which it makes important managerial decisions. Through such meetings, the Board also monitors and audits the operational execution of the representative directors. The meetings of the Board of Directors are also attended by corporate auditors, who monitor and audit the management performance of the directors.

The Board of Corporate Auditors consists of three corporate auditors, including two from outside the Group. In addition to conducting audits based on the policies and plans determined by the Board of Corporate Auditors, the corporate auditors monitor and audit the operational execution of the Group’s representative directors and the management performance of its directors.

Based on the Companies Act and the Financial Instruments and Exchange Act, we have chosen Grant Thornton Taiyo ASG to conduct our accounting audits.

In order to comply with the Companies Act, the Kurita Group formulated its Fundamental Policy Regarding the Establishment of Internal Control Systems and has since been enhancing its risk management and internal control systems based on this policy. In addition, we have been monitoring the risk management measures taken by Group companies, and began operating our internal control reporting system for financial reporting in April 2008. Through these measures, we are confirming the effectiveness of our risk management and internal control systems and are making improvements to them on a continual basis.

Fundamental Policy Regarding the Establishment of Internal Control Systems

The Executive Committee, which consists of six directors, namely the chairman, the president, executive senior managing director and managing directors, deliberates important managerial issues and supports the Board of Directors in making managerial decisions.

In order to enhance our business execution capabilities, we introduced a system of executive officers in 2005. At present, we have six executive officers.

The Internal Auditing Department is under the direct control of the president. This department conducts internal audits, including within each Group company, pinpoints issues and problems related to the execution of business and submits corrective proposals to the president. Also, it monitors the operation of the risk management system and the internal control system with regard to financial reporting.

The Kurita Group has established two compliance committees—the companywide Compliance Committee, chaired by the executive senior managing director, and the Group Compliance Committee—to foster and improve compliance activities across the Group. In April 2000, we formulated our Code of Ethical Conduct as the criteria to be met when making assessments or decisions and taking actions, in which are described five values (fairness, transparency, integrity, safety and compatibility) to be maintained by employees. Each department of Kurita Industries and both domestic and overseas Kurita Group companies have established their own compliance guidelines based on the Code of Ethical Conduct to ensure that all employees conduct business operations in compliance with laws and social and ethical standards. Also, we have established our whistleblower protection rules and maintain an internal consultation desk while at the same time contracting an outside party to provide consultation and reporting services.

In order to deepen the trust of society and build transparent and fair relations with our stakeholders, the Kurita Group is committed to the timely and appropriate disclosure of information that complies with the Financial Instruments and Exchange Act as well as other related laws and regulations and the timely disclosure rules set out by the relevant stock exchanges. In addition, although some information is not subject to timely disclosure rules, we are striving to also disclose such information in a prompt manner through such means as press conferences, briefing sessions and our website, based on the spirit of timely disclosure and in line with our corporate rules.