The EBARA Group's corporate philosophy is to make "extensive contributions to society by providing superior technologies and services related to water, air, and the natural environment. Based on this corporate philosophy, the Group has positioned working toward enhancing its corporate value through sustained expansion of its business activities and continuing to return a portion of the profits it earns to shareholders as its most important management issues. To address these issues effectively, EBARA works to maintain favorable relationships with its stakeholders, including shareholders, customers, business partners, the communities it serves, and employees, while also striving to create management systems that take account of the concepts of compliance and risk management. In addition, the EBARAGroup is clearly aware of its accountability as a corporation and works to disclose accurate corporation information in a timely fashion and enhance the transparency and soundness of management.

The Company and its associated companies (known collectively as the EBARA Group or the Group) have prepared the EBARA Group Codeof Conduct as a basic set of policies governing corporate operations.The Group's business activities are based on these standards and are conducted in compliance with established laws and social practices.The Group positions internal controls as a group of activities aimedat securing "effectiveness and efficiency in operations," "reliability in financial reporting," "compliance with relevant laws and regulations,"and maintaining the soundness of assets.The basis for the Group's risk management system is set for thin the EBARA Risk Management System Operating Rules. Manage-ment of risks that have been specified as strategic risks by the Risk Management Panel, which is chaired by the president, is conducted in accordance with these operating rules. Other risks that arise in the conduct of business activities are managed under the Group's operational risk management system.In addition, EBARA is aware that the proper preparation of financial information and its timely disclosure are important for upgrading and operating internal control systems. Accordingly, the Company has newly established the Internal Control Promotion Office to strengthen internal controls. This new office is scheduled to work together with the Internal Audit Department to strengthen monitoring functions and increase the effectiveness and integrity of internal controls.

EBARA understands fully that lack of compliance may have a serious impact on its foundations as a company and has, therefore, positioned attaining full compliance with laws and regulations as one of its basic management policies. The focus of compliance activities is the CSRCommittee, which is chaired by the president and representativedirector.The CSR Committee has the mission of conducting discussions regarding environmental preservation, human rights, social contribution, compliance, and other matters, with an eye to the broad spectrum of stakeholders, and then putting the conclusions of these discussions into action in its operations. The Compliance Office has principal responsibility for activities related to maintaining and improving the observance of laws and ethical behavior on a Companywide basis.When doubts arise about certain words and actions that seem to be in violation of legal regulations and Company rules, EBARA has provided for procedures whereby employees may ask for advice from their superiors and make contact with the Compliance Consulting Window,which is operated by external legal counsel. The objective of these procedures is to prevent improper activities before they occur.To measure the level of awareness of compliance issues among employees, the Company conducts a questionnaire survey each year. According to the results of this survey, employee awareness of compliance is rising year by year.