group csr report 2014...2016/06/24 · ebara group csr report 2014 ebara group csr report 2014...

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11-1, Haneda Asahi-cho, Ohta-ku, Tokyo144-8510, JapanPhone: 81-3-3743-6111 (switchboard)F a x : 81-3-5736-3109U R L http://www.ebara.co.jp/en/Please direct inquiries to:CSR Promotion Departmenthttp://www.ebara.co.jp/en/contact/(Other Inquiries)

E d i t o r i a l P o l i c y

EBARA GROUP CSR Report 2014

Purpose of Issuing the CSR ReportThe EBARA Group seeks to grow as a trusted enterprise while communicating with its stakeholders. This report is issued to report to stakeholders how the EBARA Group is addressing its corporate social responsibility (CSR) and to solicit the opinions and cooperation of stakeholders.As a business signatory to the United Nations Global Compact, the EBARA Group submits this report to the United Nations Global Compact as an annual Communication on Progress (COP).

EBARA Group

Information on EBARA Group's CSR Report 2014

■ Reporting is conducted in accordance with the EBARA Group CSR Policy.

■ This report includes information on Standard Disclosures specified in the GRI Sustainability Reporting Guidelines Version 4. A list of the Standard Disclosures can be found on the EBARA website.

Issue date ： August 18, 2014Prepared by the EBARA Group CSR Report Preparation Committee.Period ： April 1, 2013 to March 31, 2014

※ The term FY used in this CSR Report stands for EBARA’s fiscal year, beginning April 1 and ending March 31 of the next year.

Information relating to times other than this period are indicated in notes.

Scope ： EBARA Group companiesContent ： EBARA Group’s CSR activitiesPrevious issue date ： August 10, 2013Next issue date ： August 2015(Yearly report)Company Name Designations ：

“EBARA” represents only the EBARA CORPORATION.“EBARA Group” represents EBARA, its subsidiaries, and its

affiliated companies.

Contact for comments and questions : [email protected]

Privacy Policy : http://www.ebara.co.jp/en/privacy/

Specific Processes for Priority IssuesBased on its founding spirit, corporate philosophy, and CSR Policy, priority issues in the medium-term management plan were identified, taking into consideration medium- to long-term forecasts of the business environment as well as the relationship between social issues and EBARA’s business and the wishes of stakeholders. In addition, the Management Meeting and the Board of Directors (page 10) identified priority issues relating to corporate governance, and the CSR Committee (page 8) and Risk Management Panel (page 11) identified priority issues relating to the environment, society, and risk management.

What We Would Like to Convey to the Reader■ This report presents information on the results of and issues

concerning specific actions taken in accordance with the EBARA Group CSR Policy of conducting business activities with a high standard of ethics and building relationships of trust with stakeholders.

■ Our key stakeholders are customers, suppliers, shareholders and investors, residents in local communities, and employees (pages 36-37). “Stakeholders” as used in the CSR Policy refers to these persons.

■ More detailed information relating to this report is presented on the EBARA website. This report should be read in conjunction with the information on the website.

http://www.ebara.co.jp/en/

EBARA Group CSR Policy1. The EBARA Group conducts business with a high

standard of ethics① The EBARA Group recognizes that it exists to support

society, industry, and infrastructure② The EBARA Group innovates to supply technologies,

products, and services that delight its customers.③ The EBARA Group operates in a spirit of free and fair

competition④ The EBARA Group strives to improve the global environment

2. The EBARA Group builds relationships of trust with stakeholders

⑤ The EBARA Group demonstrates shared passion and integrity in all its dealings

⑥ The EBARA Group respects human rights and diversity⑦ The EBARA Group strives to achieve mutual understanding

through transparent information disclosure.⑧ The EBARA Group creates secure, safe, and positive work

environment⑨ Through high-quality communication, the EBARA Group

aims to be a company everyone can take pride in.

02 EBARA Group CSR Report 2014

Contents

Message from the President …………………………… 04・05

About the EBARA Group ………………………………… 06・07

EBARA Group CSR …………………………………………… 08・09

Corporate Governance/Internal Control …………………………………………………………………… 10～13

1. The EBARA Group recognizes that it exists to support society, industry, and infrastructure.

The EBARA Group that supports society, industry, and infrastructure …………………………………… 14・15Medium-Term Management Plan …………… 16・17

2. The EBARA Group innovates to supply technologies, products, and services that delight its customers.

Fluid Machinery & Systems Company ………… 18～22Precision Machinery Company ………………… 23～25Environmental Engineering Company ……… 26～28

3. The EBARA Group operates in a spirit of free and fair competition. …………………………………… 29～31

4. The EBARA Group strives to improve the global environment. ………………………………………… 32～35

5. The EBARA Group demonstrates shared passion and integrity in all its dealings. …………… 36～39

6. The EBARA Group respects human rights and diversity. ………………………………………………… 40・41

7. The EBARA Group strives to achieve mutual understanding through transparent information disclosure. ……………………………………………………… 42

8. The EBARA Group creates secure, safe, and positive work environment. ………………… 43～46

9. Through high-quality communication, the EBARA Group aims to be a company everyone can take pride in. ………………………………………………………… 47

CSR Committee Advisor CommentsMs. Shione Kinoshita, Attorney, Daiichi Fuyo Law Office …… 48

Third Party Verification …………………………………………… 49

EBARA's CSR as a Global Corporate Group ……………… 49

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How we handle your comments and inquiries■ Please submit opinions, comments, and inquiries using the

inquiry form on the EBARA website.

http://www.ebara.co.jp/en/contact/

■ Personal information may be shared with group companies so that we may respond to opinions, comments, and inquiries. Responses to some inquiries may be made by group companies.

Chart Colors and DesignsCharts are designed to be legible for those having impaired color vision.

〈Front Cover〉EBARA Group technologies, products, and services support the realization of a safe, peaceful and enriched society and development in different regions of the world.Descriptions of the products used in each scene are described in pages 14 and 15.This report presents the EBARA Group stance that supports society, industry, and infrastructure.

03EBARA Group CSR Report 2014

Looking back on E-Plan2013, our Medium-Term Management Plan

Fiscal 2013 was the final year of E-Plan2013, our Medium-Term Management Plan, which began in fiscal 2011. EBARA Group positioned the period of E-Plan2013 as the "First steps toward tackling the new challenge of solid growth and the term to establish a more solid and stable business structure," and focused on strengthening its management foundation while achieving stability in generating profit. In detail, the Company focused on achieving the establishment of an optimally located production and supply system based on its regional strategies, and also focused on such initiatives as expanding the functions of the corporate headquarters in line with the globalization of its business domains, as well as rolling out its "productivity innovation activities" both in Japan and overseas. As a result, despite the fact that business result of the final year did not meet the numerical targets that were set at the time of the formulation of the plan, we achieved steady growth over the three-year term while improving our financial standing and achieving a certain level of success in solidifying our management foundation.

Preparation of our corporate ethics framework during the E-Plan2013 period

In addition to developing our business, we have been making diligent efforts to strengthen our approaches to improve the "Global Environment" as well as developing our systems of "Compliance" and "Corporate Governance," resulting in achieving solid results. The Group, upon reaching the milestone of its "100th Anniversary" in November 2012 and looking ahead to the next 100 years, set forth a clear framework of EBARA Group’s corporate ethics. Our Founding Spirit, Corporate Philosophy, and CSR Policy manifest the Ebara Way and are positioned above our system of corporate ethics. This systematization proceeding from the Ebara Way extends to the level of management policy, policy in each business, and our Code of Conduct governing individual behavior. In content, it has a global, universal nature even encompassing the United Nations Global Compact, which EBARA supports.The Ebara Way consists of the values (Founding Spirit), mission (Corporate Philosophy), and social responsibility (CSR Policy) to be embraced by both the employees and the entire corporate group. I want to convey to all that it is the very backbone of the

EBARA Group in its efforts to make a positive contribution to society as a whole through its business activities.

The Ebara Way and the new Medium-Term Management E-Plan2016＊1

The EBARA Group has formulated E-Plan2016, our new Medium-Term Management Plan extending from fiscal 2014 to 2016. We have positioned it as a specific plan for business activities that will embody the Ebara Way in actual society. The thinking behind all of the policies and initiatives in the Medium-Term Plan is linked to the Ebara Way. Upon defining the vision of what we want to become in six years by FY 2019 and setting the Group’s goal of "ensuring its standing as a global top-tier manufacturer of industrial machinery," the Group has positioned the period of E-Plan2016 as "a turning point in which it will explicitly steer a course from the current stage of ‘reinforcement of the management foundation’ to a stage of ‘growth’," and aims to reach a point where it will be able to grasp a clear view of the path leading to the vision of what we want to become in FY 2019. To this end, the Group has set the following four basic policies:● Steadily capture the growth in global market into the Company’s

business● Become a service provider that targets the entire lifecycle of the

product / plant● Continuously enhance our core competence (technological

capabilities) as an industrial machinery manufacturer● Enhance the management infrastructure that supports global

business expansionBased on the above policies, we have set various measures and quantitative plans on the corporate and company levels. These measures and quantitative plans were reflected in the action plans and quantitative plans of each organizational unit (division, department, group, etc.)＊2 and developed into the action plans of each employee for the achievement of the management goals. By executing his or her action plan, each and every employee of the EBARA Group shall assist embodiment of the Ebara Way, that is, attainment of our corporate mission and fulfillment of our social responsibility.

All EBARA employees will share the Ebara Way and develop business that contributes to society

＊1：【E-Plan2016】 The Medium-Term Management Plan announced on May, 2014 (page 16-17, http://www.ebara.co.jp/en/ir/library/pdf/business-plan/plan_201405.pdf)

＊2：【department, group】 Organizational unit in our Group correspond to division, section


Message from the President

Responding to social needs while becoming more resilient to various risks

As for the business environment of fiscal 2014, moderate economic recovery in the major countries of the world including Japan is expected to continue. However, increasing turmoil in the world economy owing to factors including the delayed economic recovery in the United States, the recurrence of the sovereign debt problem in Europe, the uncertainty surrounding the Chinese economy and the imposition of economic sanctions on Russia for its annexation of Crimea, may lead to various risks including a decline in actual demand overseas and the appreciation of the yen, in addition to the risks of a prolonged impact of the consumption tax hike in Japan. As we continuously pursue our business on a global scale, it is imperative that we enhance our capabilities and strengths as a manufacturer of industry machinery to minimize the business risks in the constantly changing market. And we intend to address such challenge through the E-Plan2016, our Medium-Term Management Plan, which commences from the current fiscal year.Populations in emerging countries are growing and the living standards there have been rising by its economic development; meanwhile, social infrastructures in industrialized countries are aging. Such situations increase the demand for the development of social and industrial infrastructure, including energy- and water-related infrastructures and environment-related facilities, and highly-efficient

equipment, machinery, and systems that are the components of such infrastructure. Considering such social needs fit exactly what the Group’s business domains cover, the Group has positioned quite responsible to achieve the mission to meet the needs by offering solutions based on its products and services. In order to remain “a manufacturer of industrial machinery which contributes extensively to society through its superior technology and outstanding services” for the next 100 years, all the companies in our Group and their employees around the world must share the Ebara Way and work together in business activities that will embody it in the global market.

Toichi MaedaPresident and Representative Director,

EBARA CORPORATION


Message from the President

Overseas offices, principal subsidiaries and affiliate companies, and composition of employees by region (as of end of March 2014; numbers are consolidated and include overseas companies)

EBARACORPORATION

Japan

Europe

2,6082,608North and South America

4,0884,088Asia-Oceania

7,8327,832

FY2013Employee PopulationFY2013Employee Population

FY2012 623FY2011 614FY2012 623FY2011 614

FY2012 2,532FY2011 2,287FY2012 2,532FY2011 2,287

FY2012 4,109FY2011 3,915FY2012 4,109FY2011 3,915

FY2012 7,906FY2011 7,879FY2012 7,906FY2011 7,879

640640

Fluid Machinery & Systems CompanyEnvironmental Engineering CompanyPrecision Machinery CompanyOverseas Offices

Corporate and Group Profile (as of the end of March 2014)

● Corporate name EBARA CORPORATION

● Common name EBARA

● Date of foundation November 1912 (Inokuchi Type Machinery Office)

● Date of establishment May 1920 (EBARA CORPORATION)

● Paid-in capital 68.6 billion yen

● Representative President and Representative Director, Toichi Maeda

● Head office 11-1, Haneda Asahi-cho, Ohta-ku, Tokyo, Japan

● CompositionEBARA, 79 subsidiaries (including 49 consolidated companies)

and 11 affiliate companies, for a total of 90 companies

Fluid Machinery & Systems CompanyConsolidated subsidiaries Domestic 8 Overseas 29Other subsidiaries and affiliates Domestic 3 Overseas 17

Environmental Engineering CompanyConsolidated subsidiaries Domestic 1 Overseas 1Other subsidiaries and affiliates Domestic 13 Overseas 4

Precision Machinery CompanyConsolidated subsidiaries Domestic 1 Overseas 5Other subsidiaries and affiliates Domestic 1

CorporateConsolidated subsidiaries Domestic 3 Overseas 1Other subsidiaries and affiliates Domestic 3

Outline of BusinessEBARA, established in 1912, has grown to become one of the world’s principal manufacturers of industrial machinery with fluid machinery and systems such as pumps and compressors. And, EBARA has expanded into the environmental engineering business with incineration and gasification technology and water treatment technology at its core, and further into the precision machinery business handling semiconductor manufacturing equipment and other products. The EBARA Group is constantly thinking of what will be required in the future and is seeking to accurately grasp the current and future needs of its customers, while it continues to pursue the development of superior technologies and products.Going forward, the EBARA Group will continue contributing to society by providing solutions based on outstanding products, plants and high-quality services and support with the aim of achieving further development by the Group as a whole.

Key Products■ Fluid Machinery & Systems Business

(Fluid Machinery & Systems Company)Pumps, compressors, turbines and refrigeration equipment, fans

■ Environmental Engineering Business (Environmental Engineering Company)Municipal waste incineration facilities and industrial waste incineration facilities

■ Precision Machinery Business (Precision Machinery Company)Vacuum pumps, chemical mechanical polishing (CMP) systems, plating systems, and gas abatement systems

The EBARA Group consists of 90 companies in total: EBARA, 79 subsidiaries (including 49 consolidated companies) and 11 affiliate companies. The Fluid Machinery & Systems Company, the Environmental Engineering Company and the Precision Machinery Company operate their businesses globally based on an in-house company system.


About the EBARA Group

● Sales 448,657 million yen

● Operating Income 32,194 million yen

● Net Income 18,973 million yen

● Overseas Sales 236,798 million yen

● Employees 15,168

Fluid Machinery & Systems Business322,175 ／ 71.8％

Other Business1,688 ／ 0.4%

Environmental Engineering Business52,983 ／ 11.8%

Precision MachineryBusiness71,810 ／ 16.0%

Consolidated448,657

0

100,000

200,000

300,000

400,000

500,000

20132012 2014

412,076448,657

426,302

（millions of yen）

Year ended（March 31）

Japan211.8 ／47.2%

Other Business 12.2 ／ 2.6%North America 50.0 ／ 11.2%Europe 29.4 ／ 6.6%Middle East 15.0 ／ 3.4%Asia （excluding Japan）129.9 ／ 29.0%

Overseas236.7／ 52.8%

Sales448.6

23,266

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

20132012

32,194

25,084

2014



2,889

0

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10,000

15,000

20,000

25,000

20132012

18,973

2014

15,303



Composition of Sales (millions of yen) Composition of EBARA Group Employees

Sales Overseas sales by region (billions of yen)

Operating Income Net Income

For details, see our websitehttp://www.ebara.co.jp/en/ir/

Fluid Machinery ＆Systems Company10,205 ／ 67.3%

EnvironmentalEngineering Company2,605 ／ 17.2%

Precision MachineryCompany1,680 ／ 11.1%

Corporate678 ／4.5%

Consolidated15,168

Summary of Business Results (as of the end of March 2014; numbers are consolidated and include overseas companies)


About the EBARA Group

The founding spirit,

"Netsu To Makoto"(Note: "Netsu To Makoto" means enthusiasm and sincerity.)

More than simply doing what you have been assigned to do, but also tackling your assignment with the zeal of originality and ingenuity of your own and carrying it through with sincerity.Approaching any person on any issue with zeal and sincerity would never end up failing to move that person.

〈Corporate Philosophy〉Extensive contribution to society by providing superior technology and the best possible service related to water, air, and the environment.

Framework of Corporate Ethics at EBARA Group

Ebara Way

EBARA Group CSR PolicyFour Fields of

United Nations Global Compact

ISO26000 Page of this magazineThe seven principles The seven core subjects

1. The EBARA Group conducts business with a high standard of ethics①　 The EBARA Group recognizes that it exists to support society, industry, and

infrastructure

Ethical behaviorRespect for the rule of lawRespect for International

norms of behaviourGovernance

10～1329

②　 The EBARA Group innovates to supply technologies, products, and services that delight its customers.

Tasks Involving Consumers

③　 The EBARA Group operates in a spirit of free and fair competition Anti-corruption Practice of Fair Business 30・31④　 The EBARA Group strives to improve the global environment. Environment Environment 32～35

2. The EBARA Group builds relationships of trust with stakeholders⑤　 The EBARA Group demonstrates shared passion and integrity in all

its dealings.

Respect for stakeholders' interests 36～39

⑥　 The EBARA Group respects human rights and diversity. Human rights Respect for human rights Human rights 40・41

⑦　 The EBARA Group strives to achieve mutual understanding through transparent information disclosure

AccountabilityTransparency 42

⑧　 The EBARA Group creates secure, safe, and positive work environment. Labour Labour Practice 43～46⑨　 Through high-quality communication, the EBARA Group aims to be a

company everyone can take pride in.Community involvement

and development 37～39

The EBARA Corporate PhilosophyThe EBARA founding spirit, corporate philosophy, and CSR Policy are prioritized as Ebara Way within a framework of corporate ethics, and we strive to permeate this way both inside and outside the Group as the defining feature of the EBARA Group.Management policies and the Medium-Term Management Plan are positioned as action plans for putting into practice Ebara Way in our dealings with society and are defined by the Board of Directors based on the needs and issues of the economy, the environment, society, and customers.To carry out our management policies, a variety of operational-level policies are formulated and officers and employees work to set their own business direction. When conducting business, we comply with laws, regulations, and internal rules and act in accordance with the EBARA Group Code of Conduct. Each individual’s body of actions leads to the fulfillment of management policies, and this in turn leads to the realization of Ebara Way.

EBARA Group CSR PolicyThe CSR Policy is a statement of the EBARA Group’s responsibility that it owes to itself to conduct business with a high standard of ethics and the responsibility it owes to build relationships of trust with stakeholders. The policy incorporates the United Nations Global Compact and ISO 26000 (guidelines on social responsibility).

CSR Promotion OrganizationCSR CommitteeThe CSR Committee, the highest decision-making body on CSR management, meets four times annually. The EBARA president chairs the committee, and the other members are all directors including outside directors and full-time Audit and Supervisory Board members. An attorney also attends meetings to serve as a consultant on compliance matters and provide objective counsel on ensuring full compliance and the implementation of CSR management. In addition, representatives of three to four Group companies attend each meeting in rotation to report on the status of CSR activities within their respective companies. Priority issues


EBARA Group CSR

addressed within the committee are shared with managers to support the implementation of the Medium-Term Management Plan from the perspectives of risk management and compliance.In FY2013, the committee adopted resolutions on further reinforcement of compliance and spreading Ebara Way throughout the Group globally as well as formulation of the next medium-term management plan with a greater awareness of the EBARA Group’s social mission.Summaries of the committee’s minutes are made available on the Group intranet with the aim of raising awareness of CSR among employees.

Enterprise Risk Management DivisionThe Enterprise Risk Management Division, which operates under the direct supervision of the president, oversees implementation of CSR activities and risk management for the entire EBARA Group. The CSR Promotion Department includes an administrative office for the CSR Committee and carries out group-wide matters decided by the CSR Committee.

Enterprise Risk Management Division (April 2014)

Corporate Ethics Educational MeasuresTraining-Based Educational MeasuresAdopted the FY2013 Board of Directors CSR Action Plan, providing that directors and officers should take the initiative, set a good example for others, and proactively participate in the implementation of CSR management and the spread of good corporate ethics. Based on this plan, programs are conducted to deepen understanding of corporate ethics within the various opportunities for CSR and other training for newly-appointed directors, employees on overseas assignments, new employees, and all personnel in Japan (see table below).

Day for Reconfirming Basic Principles for ActionMarch 23 of each year is designated the “Day of Reaffirmation of Guiding Action Principles,” on which the President releases a message addressed to all employees to encourage them to review the social corporate responsibility of the EBARA Group. In FY2013, we encouraged awareness of the EBARA Group identity (Ebara Way). We are expected by society to conduct our business not only during normal times, but also during disasters and other irregular circumstances to support the continuation of business by customers in various industries and restore as quickly as possible the function of non-operable products that we delivered so that customers can resume and continue business operations, thereby supporting the recovery of society as a whole. We reconfirmed that doing this is our responsibility to society and is the value of the EBARA Group’s existence within society. We called on personnel to actively participate in training to ensure the creation and implementation of a business continuity management system (BCMC) as a system for carrying out this crucial role and fulfilling our social responsibility. (page 12)

〈Five Basic Principles for Actions of the EBARA Group〉1. Realize that any action, no matter how trivial, can lead to

serious consequences.2. Confirm the objective and meaning of actions before carrying

them out.3. Follow fixed procedures and rules when carrying out actions.4. Review actions, confirm them, and take responsibility for their results.5. Adopt a wide perspective and consider areas outside one’s

own responsibility when carrying out actions.

Main CSR-Related Training and Promotion Tools for FY2013Training category Details

Training

CSR training for EBARA Group managers Training for group managers. No. of participants: 45

New director training Training for newly-appointed EBARA Group company directors to raise understanding of the corporate ethics by directors and promote its practice.

CSR Lectures A training program including raising understanding of corporate ethics and self-awareness for all personnel in Japan.No. of participants: 8,628 (participation rate: 94%; employees on long-term leave and others did not participate)

Training for employees on overseas assignments Training for employees who are posted overseas prior to reporting to their assignments. No. of participants: 36

Corporate ethics trainingTraining to deepen understanding of corporate ethics and the Code of Conduct for section head and general manager level and higher employees in Japan.No. of participants: 1,001 (47 sessions)

CSR Promotion

Tools

Distribution of corporate ethics pamphlet

A pamphlet describing EBARA Group corporate ethics and the Code of Conduct was distributed to all personnel in Japan.

Intranet A CSR Management site was created in FY2013 and information on CSR initiatives on the management level have been posted.

Overseas Intranet A site for overseas group employees was created to provide information on Ebara Way, corporate ethics, and CSR activities by individual EBARA Group companies.

In-house newsletter Special features by the company president and other managers discussing the relationship between their areas of responsibility and the CSR Policy were included in the in-house newsletter.

Website Information on EBARA Group CSR programs is posted on the Group website in nine languages to enhance understanding of EBARA Group corporate ethics by external stakeholders.

Implements CSR management in accordance with the CSR Policy.

Main Duties:

Carries out CSR activities for the entire EBARA Group. Conducts education on human rights and compliance and investigates and addresses consultation inquiries. Functions as the administrative office of the CSR Committee.Creates internal control systems in compliance with the Companies Act. Establishes and operates risk management systems for the EBARA Group including BCMS and crisis management.

Carries out security trade control, safety, fire prevention, and quality assurance measures.

Oversees compliance with business-related laws concerning construction and procurement.

Continuously improves environmental management systems for the entire EBARA Group.

CSR Promotion Department

Risk Management Department

Security Trade Control Department

Construction & Procurement Business Management Department

President

Enterprise Risk Management Division

Corporate Environmental Management Department

For details, see our websitehttp://www.ebara.co.jp/en/csr/


EBARA Group CSR

Corporate GovernanceAt EBARA, we think it is of the utmost importance to enhance corporate governance and to continue to improve it, so that we can be thought of as a reliable company by our stakeholders and continue contributing to society.

Corporate Governance StructureBased on Japan’s Companies Act, EBARA has established a governance structure comprising of the Board of Directors, the Audit & Supervisory Board, and an Independent Auditor.

Board of DirectorsThe Board of Directors, the highest business decision-making body and the supervisory functions, is composed of 12 members (all Japanese men), and 4 of these are independent Outside Directors who have no special interest in EBARA. The outside directors provide advice and supervise operations from an independent standpoint to enhance the validity of the decision-making process. The position of Chairman of the Board of Directors is held by a board member who does not have the right to represent the company, so as to maintain distance from the President and Representative Director. From the standpoint of diversity, the company is considering the appointment of women and persons of foreign nationality as directors in several years.

Audit & Supervisory BoardThe Audit & Supervisory Board is composed of five members, three of whom are Outside Audit & Supervisory Board members with no stake in EBARA. Based on auditing plans and auditing principles drawn up by the Audit & Supervisory Board, it audits the execution of management duties by the Directors. At the same time, it exchanges information and opinions with the Representative Director and with the Independent Auditor to ensure the effectiveness of auditing activities.

Discretionary Governance StructureEBARA has established a number of discretionary governance structures to separate the company’s business execution and management/supervision, speed up the business decision-making process and enhance the supervisory functions of the Board of Directors.

Discretionary Governance

StructureRole in Corporate Governance

Executive Officer System

The company has separated the decision-making and management/supervision functions of the Board of Directors and the functions of the Executive Officers, who are in charge of the conduct of operations of business division.

Nominations Committee

This committee ensures transparency and objectivity in the selection of Directors and Executive Officers. More than half the members of the committee are Outside Directors and the resolutions are made by majority vote.

Compensation Committee

This committee ensures transparency and objectivity in the determination of their compensation. More than half the members of the committee are Outside Directors and the resolutions are made by majority vote.

CSR Committee

The company established the CSR Committee to receive reports periodically from the responsible division about overall CSR initiatives, including compliance and internal control, and to provide directions for improvements as required. Directors (including Outside Directors), Full-Time Audit & Supervisory Board Members, and members of the internal audit division attend the meetings of the committee.

Outside DirectorName Reason for appointment

Akio MikuniTo use his extensive knowledge and expertise as a specialist in corporate credit rating and financial markets to benefit the business management of the Company.

Sakon UdaTo use his extensive knowledge and expertise as a specialist in business management strategy to benefit the business management of the Company.

Masao NamikiTo use his extensive experience and expertise as a senior executive of a listed company to benefit the business management of the Company.

Shiro KuniyaTo use his specialist knowledge and insight as an attorney to benefit the business management of the Company.

Outside Audit and Supervisory Board MemberName Reason for appointment

Yoshihiro Machida

To use his insight as a university professor specializing in corporate auditing and internal control to benefit the auditing issues of management and the performance of Director's duties.

Fumio Takahashi

To use his specialist knowledge and insight as a certified public accountant to benefit the auditing issues of management and the performance of Director's duties.

Tadashi UrabeTo use his specialist knowledge and insight as an attorney to benefit the auditing issues of management and the performance of Director's duties.

Corporate Governance Reporthttp://www.ebara.co.jp/en/ir/policy/corporategovernance.html

Outline of EBARA’s Corporate Governance Framework As of April 2014

Cooperation

Exchange of Information and Opinions

General Meeting of Shareholders

Board of DirectorsPresided over by the Chairman

President and Representative Director

Executive Officer Meeting

Subsidiaries and Affiliated Companies

Reporting

Selection/Dismissal Selection/DismissalAuditing

Exchange of Opinions

Auditing

Supplementary Assistance

Selection/Dismissal/Surveillance

Guidance/ Transmission of Information

Company/Corporate

Guidance

Support for Management and Operational Execution

Management Meeting

Risk Management Panel

CSR Committee

Management Planning Committee

Disclosure Committee

Nominations Committee

Compensation CommitteeAudit & Supervisory Board

Independent Auditor

Advice, directions for im

provement

Internal Audits

Corporate Audit DepartmentDepartment

of Audit & Supervisory Board

Members' staff

Selection/Dism

issal

ReportingReporting

Reporting Reporting

Reporting

Reporting


The EBARA Group conducts business with a high standard of ethics.

ISO 26000

INDEX

Consum

er issuesO

rganizational governanceC

omm

unity involvement

and development

Fair operating practicesThe enviro

nment

Labo

ur practices

Hum

an rights

Corporate Governance/Internal Control

Organizational governance

Executive CompensationPolicies regarding the compensation of Directors of the Board are deliberated by the Compensation Committee and put to a vote in the Board of Directors meeting. The compensation of Audit & Supervisory Board members is discussed and decided in meetings of the Audit & Supervisory Board.The Company’s remuneration system for Directors is closely linked with the business performance of the Company and designed to encourage the execution and supervision of operations in line with the Company’s management philosophy and to strongly motivate them to achieve the medium-to long-term management strategies. Outside directors who are in a position independent from the execution of operations are paid fixed compensation.In setting compensation for Audit & Supervisory Board members, consideration is given to the workload assigned to full-time versus part-time Audit & Supervisory Board members, and compensation for individual Auditors is determined in discussions between Audit & Supervisory Board Members.

Amount of Compensation Paid to Directors of the Board and Audit & Supervisory Board Members (FY2013)

PositionTotal

Compensation (millions of yen)

Compensation by Type (millions of yen)

Basic compensation Bonus Stock

options

Directors of the Board (13 members) 512 278 123 110

Outside Directors (4 members)

48 48 No set system

No set system

Audit & Supervisory Board members (5 members)

81 81 No set system

No set system

Outside Audit & Supervisory Board members (3 members)

32 32 No set system

No set system

Internal ControlEBARA established systems and adopted internal rules and puts them into practice to ensure the appropriateness of its operations in accordance with the Internal Control Basic Policy adopted by the Board of Directors in 2007 with the aim of ensuring compliance with the Companies Act and Financial Instruments and Exchange Act.

Internal Control Basic PolicyUnder the Internal Control Basic Policy, operational-level directors conduct internal control self-audits and evaluations at the end of each fiscal year. In such self-audits and evaluation, directors conduct assessments concerning the establishment and operational status of internal control systems within the EBARA Group, and if any issues are identified, the Internal Control Department formulates a responsive policy and reflects it in the internal action plan for the following fiscal year.In FY2013, internal control assessments were conducted on the companywide level in accordance with the Internal Control Basic Policy as a measure for ensuring the legitimacy of

operations by Group companies including non-consolidated companies in Japan and overseas. The companywide internal control assessments evaluate the status of internal controls at each group company from the perspective of six fundamental elements of internal control ((i) control environment, (ii) risk assessment and response, (iii) control activities, (iv) information and communication, (v) monitoring, and (vi) IT responses). In conjunction with the companywide internal control assessments, interviews of managers are conducted and the status of management in each company is confirmed from the perspective of internal control. With regard to overseas group companies, under the Internal Control Basic Policy and the provisions of applicable internal rules relating to internal control, we developed the internal control summary tables, based on the companywide internal control assessments, interviews with local managers, internal control self-audits and evaluations performed by directors, and data from audits conducted by the Corporate Audit Department. In addition, internal control related issues and risk management topics were identified from such internal control summary tables.

Risk ManagementThe Risk Management Panel (RMP), which comprises the president as its chairman and full-time directors as members, was established to oversee risk management throughout the EBARA Group. Risk Management Committees (RMC), subordinate organizations of the RMP, undertake responses to risks in each Group company. The RMC of each company reviews projects determined to pose significant risks such as contracts for large amounts and projects involving application of advanced technologies. In the case of such projects that are determined to require deliberation from a companywide perspective, the RMP reviews countermeasures. In addition, inter-organizational headquarters, committees, and the like are established to address specific issues such as security trade control, environmental management, and responding to antisocial forces as well as implementing measures to avoid compliance breaches including violations of the Construction Business Act and the Subcontracting Act.

EBARA Group risk management system

Specific Risk/Cross-sectional Committee

Board of Directors

Risk Management Panel

Each subsidiary Each division

Company/Corporate Risk Management Committee


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Basic Approach to Risk ManagementOur fundamental stance on risk management is to minimize risks that arise in relation to the Group’s internal controls and risks relating to business caused by external environmental factors in the course of the EBARA Group’s global business activities. This stance is based on the CSR Policy, which is one aspect of Ebara Way, a key concept in the Group’s ethics systems.To minimize risks that impede the sound and continued development of EBARA and Group companies, we adopted and put into practice the Risk Management Standards as a statement of frameworks and procedures for controlling the occurrence of risks and minimizing the harm caused by risks that do occur.

Risk Management Measures Pursuant to the Risk Management Standards

(1) Systematically identify and assess risks that impede the sound and continued development of the EBARA Group, implement countermeasures to minimize those risks, and make continuous improvements❶ Compliance risks❷ Financial reporting risks❸ Sales project risks❹ Loan and investment loss risks❺ Environmental risks❻ Other business risks

(2) Establish, maintain, and improve business continuity strategies to prepare for the occurrence of the following crises.❶ Countermeasures against data breaches❷ Countermeasures against large-scale disasters❸ Countermeasures against epidemics

One risk management measure undertaken in FY2013 was having top management of all domestic and overseas Group companies make anti-corruption declarations based on an awareness of the importance of preventing corruption (particularly preventing bribery of foreign government officials) in all EBARA Group companies. Each Group company adopted an anti-corruption policy and detailed anti-corruption rules and took efforts to spread anti-corruption programs and raise awareness of risks through compliance training.

Business Continuity Management SystemEBARA Group products, technologies, and services serve as the cornerstones of many aspects of society, industry, and consumers’ lives through water and sewer facilities, wastewater pump facilities for preventing flooding, waste incineration facilities, electric power plants, plants for making steel, chemicals, semiconductors, and other products, hospitals, commercial buildings, apartment buildings, and more. The mission of the EBARA Group is to provide products and services for maintaining or rapidly restoring these functions in the aftermath of a major disaster. Under the EBARA Group’s

Business Continuity Plan, supporting the restoration of facilities crucial to people’s lives and property is our highest priority as a core task.To carry out this mission described, the EBARA Group created a Business Continuity Management System (BCMS). During an incident, we put into action the following three types of plans under the BCMS with the highest priority on protecting human life.

① Initial Response Plans： Plans for gaining control of the situation by evacuating, ensuring people’s safety, and so on.

② Business Continuity Plans： Plans for rapid resumption of core business activities

③ Business Recovery Plans： Plans for the full recovery and normalization of all business activities.

During normal times, the Business Continuity Management Committee chaired by the president plays a central role in disseminating information on and verifying each plan through measures such as training and drills, gathering the latest information and technologies, and making continuous improvements.In FY2013, training on confirming the safety of each employee during an emergency, which previously was conducted on a regional or organizational level, was implemented simultaneously by all domestic Group companies for the first time, enhancing employee familiarity with the employee safety confirmation system and other means of emergency communications and verifying their effectiveness. We also took measures to reinforce the physical aspects of systems such as distributing emergency priority mobile phones to executive officers and disaster response coordinators, reinforcing communications and power supply systems in general headquarters, and introducing rapid earthquake emergency reporting systems in all plants.Going forward, we will further enhance the range of training and drills, conduct further development of the physical aspects of these systems, and continue to make improvements. We also aim to establish BCMS at overseas subsidiaries.

Information SecurityInformation and communications technology is positioned as key infrastructure supporting the development of business activities. We are working to reinforce security management of electronic information at Group companies in Japan and overseas so that we can engage in effective communications with stakeholders while protecting information, a valuable asset for our business activities. In FY2013, we prepared survey items concerning current conditions at overseas Group companies and started conducting a survey. We plan to expand survey target companies in FY2014 and later. We will investigate and implement measures to ensure that security levels throughout the entire EBARA Group are the same as those in Japan.


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The EBARA Group conducts business with a high standard of ethics.Corporate Governance/Internal Control

Organizational governance

Reorganization of Information Security RulesIn May 2014, we completed a reorganization of internal rules, operating procedures, and manuals relating to information security with the aim of contributing to an enhancement of information security safety, reliability, and flexibility. “The Basic Rule on Information Security” is positioned as the highest rule on information security policy. Based on this policy, we revised and revoked rules and procedures from the perspective of strengthening information security to facilitate responses to changes in the IT environment.

Ensuring Communications during Disasters and EmergenciesWe use webmail, external portal sites, the employee safety confirmation system, and other measures as means of confirming the safety of employees and rapidly gathering and disseminating accurate information during disasters. By using outside services, we enhance the reliability of communication means to ensure internal and external communications even when business operations are suspended as a result of a disaster. The employee safety confirmation system supports rapid responses and status confirmation using mobile phones and smartphones. We are working to further develop information and communications infrastructure so that we can contribute to the rapid restoration and normalization of business following a disaster.

Measures to Enhance the Safety of Electronic InformationWe take ongoing measures to prevent data breaches and impairment of operations caused by unauthorized software or access to information systems. In particular, we are taking countermeasures against malware and targeted threats, which are rapidly increasing in number and cannot be entirely prevented using earlier methods.

● Restrictions are placed on how PCs can be used to prevent security issues.

● User training and education is being enhanced.● Monitoring of communications logs from equipment used for

communicating with external networks and countermeasures based on analytical surveys are being reinforced.

In addition, we are strengthening various measures to prevent external data breaches and the improper use of information in the event malware or other infection occurs.

Future Risk Management MeasuresIn FY2014, in addition to responding to individual risks that occur, we will formulate and implement measures from the perspective of foreseeing and preventing risks based on our policy of reinforcing risk management measures to minimize risks throughout the Group.We used internal control summary tables based on data gathered from companywide control assessments, interviews of Group companies, and other sources implemented through FY2013, and identified the following items as key risk management issues for which measures should be established and implemented with a primary focus on overseas Group companies.

1. Further permeation of Ebara Way (founding spirit, corporate philosophy, CSR Policy)

2. Legal compliance (prevention of bribery, elimination of relationships with anti-social forces, fair trade, environmental compliance, security trade control, occupational health and safety, human rights)

3. Development and implementation of internal controls (formulation of internal control policies, establishment of internal control organizations, creation of internal control operational plan tables, self-inspections by directors, formulation of rules on officer work duties and authority, permeation of the Code of Conduct)

4. Development of risk management systems (creation of the Risk Management Panel and Risk Management Committee and development of whistle-blower system)

5. Crisis response (information security, crisis management)

We will break down the identified issues into concrete action items, create action plans and coordinate with the internal control divisions and corporate divisions of each company while determining priorities to develop and implement measures for each Group company.In Japan, we will work with corporate-related divisions of branches and sales offices nationwide (including affiliates) to address risk issues such as hazardous and chemical substance management, environmental management, compliance with the Construction Business Act and fair trade practices and regulations, and harassment to identify risks in advance and prevent them.


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EBARA Group technologies, products, and services support the development and the creation of safe, secure, and enriched societies around the world.

Ventilating tunnels

◆ Fans

Supplying water to support everyday life

◆ Water Supply Units

Removing dust from steel plate surfaces at steel plants

◆ High Pressure Pumps

Transporting water in amusement parks and aquariums

◆ Standard Pumps

Reducing and recycling waste

◆ Municipal Waste Incineration Plant

Providing air conditioning in facilities

◆ Centrifugal Chillers



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Transporting water for agriculture

◆ Agricultural Pumps

Protecting cities from floods

◆ Drainage Pumps

Pressure feeding process gas at petrochemical plants

◆ Compressors

Safely transporting liquid natural gas (LNG)

◆ Cryopumps

Creating clean environments necessary for healthcare and food industries

◆ Dry Vacuum PumpsFlattening the surface of wafers used in semiconductors

◆ CMP Systems

Transporting water to facilities using seawater

◆ Fabricated Duplex Stainless Steel Pumps

Supplying high-pressure, high-temperature water to power plant boilers

◆ Boiler Feed Pumps


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Medium-Term Management Plan E-Plan2013: Results and Issues

The EBARA Group positioned the period of the medium-term management plan, “E-Plan2013” (FY2011 - FY2013), as “the term to establish a more solid and stable business structure” and focused on strengthening its management foundations while achieving stability in generating profit. Specifically, the Group moved forward with establishing an optimally located production and supply system based on its regional strategies while focusing on expanding the functions of the corporate headquarters in line with the globalization of its business domains, and rolling out its productivity innovation activities in Japan and overseas. As a result of these efforts, the Group maintained steady growth of sales, operating income, and the operating income ratio during the plan term, improved its financial standing, and achieved a certain level of success in solidifying its management foundation. However, the Group has not been able to fully capture the growth of markets and industries because of external environmental factors including the effects of foreign exchange rates, the Great East Japan Earthquake, and the prolonged deflation that has plagued the Japanese economy as well as inadequate growth-oriented investment and insufficient progress in implementing various policies.

EBARA Group Corporate Ethics and Medium-Term Management Plan

Positioning of the Medium-Term Management Plan within Corporate EthicsAs discussed on page 8, the EBARA Group’s corporate ethics are based on three concepts representing Ebara Way — the Founding Spirit; the Corporate Philosophy; and the CSR Policy — and are systemized on the level of individual conduct in the Code of Conduct to create content with universal application.Within this corporate ethics framework, the medium-term management plan is a business plan for carrying out business activities that contribute broadly to society by providing superior technologies and service related to water, air, and the environment, based on the higher-level concepts of the Ebara Way. The ideas that form the basis of all policies and measures specified in the medium-term management plan are linked to Ebara Way.

The EBARA Group’s Business Environment and Medium-Term Business PlanThe Group continues to see rising demand for the development of social and industrial infrastructure—including energy and water infrastructure and environment-related facilities—and for highly efficient equipment, machinery, and systems as the components of such infrastructure. This rising demand is attributable to population growth centered on emerging countries, higher living standards accompanying the economic development in such countries, and aging infrastructures in industrialized countries. These social needs correspond exactly to the Group’s business domains. Thus, addressing such needs through solutions based on products and services is the Group’s social mission. That is to say, the Group inherently aims to fulfill its corporate social responsibility by advancing business activities, acting at all times with a high degree of efficiency based on global social reasoning and norms while maintaining harmony with the global environment. E-Plan2016, the recently adopted new medium-term management plan covering the three years from FY2014 to FY2016 is an expression of the fundamental framework for those activities.

1. Promoting “regional production for regional supply” in priority areas and establishing optimally located production and supply system from a global perspective— Moving with the Tides of Change —

2. Working to enter new markets by expanding core businesses domains— Aiming for Solid Growth —

3. Aiming to optimize “monozukuri” (manufacturing) processes through scientific approaches— Internalizing Ceaseless Productivity Innovation

into the Corporate/Organizational Culture —4. Expanding the functions of the corporate headquarters in

keeping with the globalization of business domains— Restructuring Group Management through

Strengthening Group Headquarters/Global Headquarters Functions —

The basic policies for the Group as a whole under themedium-term management plan

Bases founded during E-Plan2013

Fluid Machinery ＆ Systems BusinessPrecision Machinery Business

Production BaseService ＆ Support ／ Sales BaseStrategic Priority Area

China （Tianjin）／ 2011China （Tianjin）／ 2011China （Xian）／ 2013China （Xian）／ 2013

China （Yantai）／ 2013China （Yantai）／ 2013

Russia ／ 2013Russia ／ 2013

Korea ／ 2012Korea ／ 2012Korea ／ 2011Korea ／ 2011

United States （PA）／ 2011United States （PA）／ 2011

United States （TX）／ 2011United States （TX）／ 2011Thailand ／ 2013Thailand ／ 2013

UnitedKingdom ／ 2011UnitedKingdom ／ 2011

Italy ／ 2011Italy ／ 2011

UAE ／ 2011UAE ／ 2011UAE ／ 2014UAE ／ 2014

E-Plan2013: Results and Issues

Results●Achieved the establishment of an optimally located production

and supply system based on its regional strategies▶ New bases for service & support business▶ New production bases founded on close relationship with

customers

● Rolled out its “productivity innovation activities” both in Japan and overseas

● Expanded the functions of the corporate headquarters in line with the globalization of its business domains

● Improved its financial standing and achieved a certain level of success in solidifying its management foundation

Issues● Achieved only a part of the numerical targets

● Foreign Excange Rate External Factor ● Great East Japan Earthquake ● Prolonged deflation in Japan

Internal Factor ● Insufficient growth-oriented investment ● Failure to implement measures in a timely manner

◆ The Group has not been able to fully capture rapidly-expanding overseas markets and growth of industry, against the intention of business expansion

To be realized by next E-Plan


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Medium-Term Management Plan E-Plan2016

Vision for the EBARA GroupThe E-Plan2016 defines the vision of what we want to become for the Group in order to clarify its practical image, recognizing the medium- to long-term vision shared throughout the Group as “ensuring its standing as a global top-tier manufacturer of industrial machinery” through the development of business activities. We will also undertake the individual measures specified in the medium-term management plan with a sense of urgency.

▶ In pursuing business development on a global scale, establish a high profit-generating structure that maximizes our global presence.

▶ Solidify the position of all businesses in their respective business domains. In the pumps businesses, in particular, we will ensure the Company’s position as one of the world's top three pump manufacturers upon establishing M&A as a viable management option.

▶ Establish an environment that maximizes the capabilities of each employee, regardless of gender, nationality, or other factors, and adopt a system that properly rewards the exercise of such capabilities.

Basic Groupwide PoliciesThe Company has positioned the term of E-Plan2016 as a turning point to a stage of “growth.” By prioritizing quantity (sales) in overseas markets and quality (operating income) in the Japanese market, the Company, through the flexible and focused utilization of both internal and external resources, intends to effect change and accelerate growth in a timely manner. Through these efforts, the company aims by the final year of the plan (FY2016) to reach a point where it will be able to grasp a clear view of the path leading to the vision of what it wants to become by FY2019. To this end, it has established the following four items as fundamental policies.

I. Steadily capture the growth in global market into the Company’s business

II. Become a service provider that targets the entire lifecycle of the product / plant

III. Continuously enhance our core competence (technologi-cal capabilities) as an industrial machinery manufacturer

IV. Enhance the management infrastructure that supports global business expansion

E-Plan2016 Numerical TargetsThe EBARA Group maintains the positioning of return on invested capital (ROIC) specified in E-Plan2013 as a key management indicator and will make efforts to improve ROIC. The target we seek to achieve in FY2016 is 7% or higher. To achieve this target while maintaining a balance between financial stability and the efficient utilization of capital, we will set the D/E ratio, a measure of stability, and return on equity (ROE), a measure of efficiency, as key management indicators and will work to improve the balance.

Relation between E-Plan2016 and Social Mission of the EBARA Group Roadmap for Achieving the Group Vision

Quantity (sales) in overseas

market

〈Ebara Way〉Founding Spirit■ Contribute to the betterment

of society with “enthusiastic and sincere hearts that make the best use of inventiveness”

Corporate Philosophy■ Extensive contribution to

society by providing superior technology and services related to water,air, and the environment

CSR Policy

“Vision of what we want to become “

E-Plan2013 E-Plan2016

FY2017-FY2019FY2011-FY2013 FY2014-FY2016

Quality (operating income) in the

Japanese market

Change and acceleration of growth in a timely manner

Flexible and focused utilization of both internal and external resources

ⅡBecome a service

provider that targets the entire lifecycle of

the product / plant

ⅠSteadily capture the

growth in global market into the

Company’s business

Ⅲ Continuously enhance our core competence (technological capabilities) as an industrial machinery manufacturer

Ⅳ Enhance the management infrastructure that supports global business expansion

ROIC: 7% or higher

D/E Ratio (Stability):

0.4 - 0.6

ROE (Efficiency): 11% - 12%

Ensuring its standing as a

global top-tier manufacturer of

industrial machinery

The term to establish a more solid and stable

business structure

A Turning point to a Stage of “Growth”

Business Scale Expansion

Medium-Term Management Plan

(E-Plan2016)

Showing a Fundamental Platform Business

Conduct shall Follow

Increasing Social Needs■�Social�needs�fit�exactly�what the

Group’s business domains cover■�Fulfill�Corporate�Social�Responsibility�(CSR)�throughout�the�conduct�of�business

Rising Living Standards by Economic Development

Aging Social Infrastructures in Industrialized

Countries

☆ D e m a n d f o r S o c i a l a n d I n d u s t r i a l I n f r a s t r u c t u r e (energy-/ water-related etc.)

☆ D e m a n d f o r h i g h l y -e f f i c i e n c t e q u i p m e n t / s y s t e m s

Growing Populations in Emerging

Countries

Founding Spirit

Corporate Philosophy

CSR Policy

Management Policies

Business-Specific Policy

Code of Conduct

Vision of what we want to become in six years (as�of�the�end�of�March,�2020)

Basic Groupwide Policies of E-Plan2016


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Fluid Machinery & Systems Company

The Fluid Machinery & Systems

Company adopted as its

fundamental policy "striving to

become a truly global company

that continuously grows" from

the E -Plan2013 and positioned

the plan term as a period for

building business structures that

can reliably pursue world-

leading status in key business

areas. We set as a priority issue

achieving competitive

superiority in global markets

from a medium- to long-term

perspective, built overseas regional oversight functions in China,

Southeast Asia, and the Middle East, expanded sales and service

sites, enlarged sales network through organic collaboration by

overseas sales companies and domestic and overseas plants, and

reorganize the domestic pump business.

In recent years social needs for energy and water infrastructure have

been growing at an increasing pace, particularly in emerging

countries, and the Fluid Machinery & Systems Company will fulfill

its social responsibilities through business activities that respond to

demand for social infrastructure such as oil and gas facilities, electric

power, water supply, construction, and wastewater drainage. Under

the E - Plan2016, we will expand our presence (share) in global

markets by pursuing a larger scale of business in continuously

growing overseas markets. To achieve this, we will enhance our

product capabilities to supply the quality, prices, and delivery times

that meet customer needs and generate service business throughout

the product lifecycle. We will make every effort to provide the

products and services that customers around the world want with

enthusiasm and sincerity.

Message from the Company's President

Atsuo OhiPresident

Fluid�Machinery�&�Systems�Company

Europe and AfricaEbara Pumps Europe S.p.A.Sumoto S.r.l.Ebara Pompy Polska sp. z o.o.Ebara Espana Bombas S.A.Ebara Pumps RUS Limited Liability Companyand others (8 firms in total)

Southeast Asia and OceaniaEbara Vietnam Pump Company LimitedP.T. Ebara IndonesiaEbara （Thailand） LimitedEbara Pumps Malaysia Sdn. Bhd.Ebara Engineering Singapore Pte. Ltd.Ebara Benguet, Inc.Ebara Pumps Australia Pty. Ltd.Ebara Thermal Systems （Thailand） Co.,Ltd.and others (10 firms in total)

Middle EastEbara Pumps Middle East FZEand others (4 firms in total)

South AsiaKirloskar Ebara Pumps Limitedand others (2 firms in total)

China and East AsiaEbara Machinery （China） Co., Ltd. EBARA MACHINERY ZIBO CO., LTD.EBARA GREAT PUMPS CO., LTD. YANTAI EBARA AIR CONDITIONING EQUIPMENT CO., LTD.EBARA DENSAN (KUNSHAN) CO., LTD. EBARA DENSAN (QINGDAO) TECHNOLOGY CO., LTD.Ebara Fluid Machinery Korea Co., Ltd.and others (13 firms in total)

North AmericaEbara International CorporationElliott Companyand others (7 firms in total)

South AmericaEbara Industrias Mecanicas e Comercio Ltda.and others (2 firms in total)

JapanEBARA CORPORATIONElliott Ebara Turbomachinery CorporationEbara Refrigeration Equipment & Systems Co., Ltd.EBARA DENSAN LTD.EBARA MATERIAL CORPORATIONEbara Hamada Blower Co., Ltd.Ebara Byron Jackson Co., Ltd.and others (12 firms in total)

Main Sites of the Fluid Machinery & Systems Company

In FY2013, we accelerated global development.The Fluid Machinery & Systems Company provides many products and services for facilities that support the living environment of people and regional industry in Japan and many other parts of the world. Through the efforts of sites established around the world, we are steadily developing ties to business in these regions and engaging in customer-oriented activities.

Examples include large coal-fired electric power generation, LNG combined cycle thermal power generation in China and East Asia, the oil and gas markets and electric power markets in North America, agriculture and urban development in Southeast Asia and Oceania, and desalination of seawater in the Middle East. Going forward, we remain committed to contributing, through the provision of products and services, to solving issues in regions around the world rising in conjunction with rising energy and water demand.



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Pump BusinessResponding to Customer Expectations through Close Community TiesEbara International Corporation (EIC) — which manufactures, sells, and services cryogenic pumps for the liquid natural gas market in North America — marked 40 years since the start of business, Ebara (Thailand) Limited (ETL) — which sells and services fluid machinery products such as standard pumps in Thailand in the southeast Asian region — reached the 20 year mark since its foundation, and EBARA GREAT PUMPS CO., LTD. (EGP)—which manufactures, sells and services large pumps and turbines in China — reached its 10th year since establishment.

Furthermore, during FY2014, in the pump business, we established sales and service sites in Russia, the Middle East, Southeast Asia, and other regions, and in the chiller business, we established a site in Southeast Asia. In the compressor and turbine business, we took measures to enhance service functions at sites in China, the Middle East, India, and other regions. In the pump business, compressor and turbine business, and chiller business, our core businesses, we will continue working to increase installations by overseas sites while providing products that meet regional needs and reinforcing precise service and support to the useful to our customers around the world and further accelerate the globalization of the fluid machinery and systems business.

Providing Solutions to water treatment problems in BahrainWe participated in the Japanese Technologies for Water Environment and Sewerage Workshop held in January 2014 in Bahrain. The workshop was proposed when a Bahrain government official visited Japan and was co-hosted by the Bahrain Ministry of Works, the Japanese Ministry of Land, Infrastructure, Transport and Tourism, the Bahrain-Japan Friendship Society, and the Embassy of Japan in Bahrain as one aspect of investigations into means of solving the water treatment issues that Bahrain is confronting. Currently, 350,000 m³ of sewage is generated each

day, far in excess of the 200,000 m³ per day of domestic processing capacity, and untreated sewage is discharged into the ocean, causing water pollution. At the workshop, five Japanese companies including EBARA gave presentations related technologies for addressing this issue. The company introduced its sewage pumps and explained about passable grain size and types of bladed impeller and their protection. The workshop was attended by approximately 120 persons including government agency personnel, water treatment project contractors, and consultants and generated high levels of interest.

Lecture on Pumps conducted for Customers and Unitra, EMC’s Distributor in MongoliaIn September 2013, Ebara Machinery (China) Co., Ltd. (EMC) held a lecture on pumps in Ulan Bator, Mongolia. During the morning session, the lecture targeted employees of Unitra Co., Ltd., a sales agent in Mongolia, and sales personnel, and the afternoon session was for customers. Unitra conducts sales in Mongolia mainly of machine tool pumps made in Japan, Europe, and the U.S. and became an EMC distributor in 2013. The lecture served to strengthen relationships with Unitra personnel and raised their knowledge of EBARA products. Since EMC signed the distributorship agreement with Unitra, it has received orders for approximately 80 pumps, and the lecture led to new orders. EMC plans to continue holding such lectures in the future.

A�Unitra�sales�office

A�scene�from�the�lecture

40th�Anniversary�of�EIC’s�Establishment

A�scene�from�the�workshop


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Production Innovation ConferencesWe are implementing production innovation programs to improve production activities and raise efficiency so we can provide products to customers at appealing prices in a timely manner. We held group-wide Production Innovation Conferences in July and September 2013. At the July conference, personnel involved in operations at all plants in China gathered at EBARA DENSAN (KUNSHAN) CO., LTD. (EDKM) with the participation of the Haneda Office through live teleconference to share information on the results of productivity improvements made at each plant in China since the Basic Training Conference held in June 2012.

Quality Improvement MeasuresTo raise competitiveness in increasingly global markets in the future, it is necessary to optimize production locations and product supply from the perspective of regional production for local supply. Each production site must build highly efficient production systems while supplying high-quality products. A conference was held at an Ebara Boshan Pumps (now EMZ) plant in China in FY2013 to raise quality. At the conference, the causes of product defects were analyzed and participants discussed

prevention of re-occurrence and confirmed their commitment to undertaking measures to continuously raise quality while exchanging information. Each plant will continue quality-enhancement measures by implementing quality management based on ISO 9001 to meet the expectations of customers. Going forward, they will respond to increasing globalization, reinforce collaboration among production sites even further, and achieve even greater improvements in quality.

Enhancing Procurement CapabilitiesAn international procurement conference for the pump business was held at the EBARA head office in November 2013. 36 employees including participants from the procurement divisions of nine overseas Group companies attended the conference. The purpose of the conference was to share information on best practices relating to procurement operations among pump manufacturing sites and to reinforce the procurement organizations in order to contribute to reduce cost. If cost can be reduced, the Group will be able to provide products and services to customers at more attractive prices.After confirming the roles that procurement must play in the Medium-Term Management Plan, each participating company gave a presentation on its own procurement policies and issues related to operational practices. The presentations were followed by an active question and answer session and an exchange of opinions.

At the Global Procurement Conference, EPE made a presentation on its procurement activities, such as the methods of procurement used and the indicators used to evaluate supplier’s performance.The procurement conference was a great opportunity to know each other’s companies, to understand the best purchasing practice and share information about suppliers. The idea to create a supplier database where each company can access is a synergy that can create advantage for all the group in order to achieve the planned targets. I think it is mandatory for the EBARA Group to standardize the KPI (Key Performance Indicator) in order to have the same supplier evaluation method.

Diego PonzaEbara�Pumps�Europe�S.p.A.�(EPE)�(Italy)

Achieving Management Targets by Generating Synergy Effects

VOICE

I attended the Production Innovation Conference and gave a presentation on production innovation targets, implementation of 5S management, VSM analysis, and DDT production at EMZ (formerly Ebara Boshan Pumps Co., Ltd.).By participating in this conference, I learned about the features of products from other companies, production methods, and the status of production innovation implementation and studied examples of beneficial production innovation methods at other companies.Also, through dialogue with personnel from other companies during the conference, I investigated with others methods of solving product shortfalls that occur during production, raising production efficiency, and improving product quality, producing positive results.I will work to continue implementing production innovations, promote fixed positioning at pipe-laying sites and high-pressure pump assembly flow work, improve work efficiency and product quality while reducing costs, and raise the company’s market competitiveness.

Wang Dong Bing�Production�and�Procurement�Division

EBARA�MACHINERY�ZIBO�CO.,�LTD.�(EMZ)

Raising Corporate Competitiveness through Production Innovation

VOICE


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The EBARA Group conducts business with a high standard of ethics.2. The EBARA Group innovates to supply technologies, products, and services that delight its customers.

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Compressor and Turbine Business

Compliance TrainingThree years after the January 2011 integration of Elliott Company in the United States and Elliott Ebara Turbomachinery Corporation in Japan, the Elliott Group, which handles the compressor and turbine businesses, has more than 2,600 employees from many different countries. To ensure that the entire multi-national workforce has a full understanding of compliance, Elliott Group conducts compliance training via its intranet in nine languages including English and Japanese, and the Elliott Group Code of Conduct is posted on a website in multiple languages. In addition, officers and employees responsible for compliance conduct on-site compliance training at business sites in each country. Training was conducted at the Taiwan and Singapore offices in June 2013 and in the Sodegaura plant in January 2014 with 424 employees participating.

Measures to Raise Customer SatisfactionThe performance of compressor and turbines used at oil and gas plants is becoming even more advanced and consequently requires after-sales service to ensure stable operation of products. After sales service is becoming increasingly more important than ever. Elliott Group is strengthening the development of field service personnel in the Asia-Pacific Region where many of its customers are located. Elliott Group’s Sodegaura facility plays a central role in service within the region; service sites are located in India, Singapore, Taiwan, and China. We plan to increase the number of field service personnel from 47 as of April 2014 to 50 by the end of 2014. In an effort to train new service personnel and enhance the skills of current personnel and reinforce service structures, we have been, for at least three years (since 2011) conducting training that includes in-house basic and practical training as well as practical on-the-job training at customer sites. As of April 2014, twenty-eight service personnel have completed the applied training course. As a result of these efforts, our work during a major periodic inspection and modification project undertaken by a customer in China in 2013 was highly rated as a result of the exceptional skills and teamwork of our service personnel. In fact, Elliott Group received an award as a best supplier. We will continue to build on these types of measures so we can achieve even higher levels of customer satisfaction.

Contributing to Local Society as a Good Corporate CitizenIn 2011, Elliott Group launched the Elliott Leadership Development Program (ELDP) to train the next generation of leaders. Under this program, community-based social contribution activities by employees are encouraged and supported. In October 2013, twenty-four employees from around the world participated in a volunteer program intended to provide food to several hundred people in underprivileged households living within in the geographic area near Langley High School in Pittsburgh, Pennsylvania. The employees supported a process of packing fruit and vegetables for about two hours and delivered food bags by car to senior citizens and disabled persons, providing more than 6,800 kg of fresh food to 330 households. Elliott Group contributes to the development of local communities through this type of program.

I was appointed president in April 2014.Elliott Group is deeply involved in growing energy markets and supplies products that are positioned among the most

important equipment for oil and gas related plants. Our products are characterized by extremely high reliability and efficiency, and customers in countries around the world require timely after-sales service.Under the E-Plan2016, we conduct global “economic activities based on a keen sense of ethics and high-quality communications” in accordance with the EBARA Group CSR Policy and the Elliott Group Code of Conduct. The entire Elliott Group remains committed to contributing to international society by acting as a good corporate citizen and providing outstanding products and optimal after-sales service that achieves high levels of customer satisfaction.

Elliott Ebara Turbomachinery Corporation’s CSR Policy

Compliance�training Elliott�employees�who�participated�in�the�volunteer�program

Kazuro Takamura PresidentElliott�Ebara�Turbomachinery�Corporation


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Chillers BusinessEbara Refrigeration Equipment & Systems Co., Ltd.(ERS) and YANTAI EBARA AIR CONDITIONING EQUIPMENT CO., LTD. (YEACE) in China are the main manufacturing bases for the chillers business. The company supplies high-efficiency thermal energy systems and products including chillers and cooling towers that take into consideration both comfortable HVAC＊1 environments in commercial buildings and plants around the world as well as the global environment and provides high quality service and support.

New Base Established in ThailandEbara Thermal Systems (Thailand) Co., Ltd. (ETST) was established in Bangkok, Thailand in April 2013 as a new base to respond to rising demand for chillers and other thermal energy systems as commercial building construction increases along with economic growth in Southeast Asia.ETST conducts refrigeration equipment business that covers everything from sales, service & support including installation, testing, repair, and maintenance. Based on product, service, and support technologies developed in Japan, the company will provide even more appealing products and services that meet the needs of customers expanding business in Southeast Asia.

Energy-Saving Screw Modular Chiller LaunchIn 2013, ERS launched a screw modular chiller with improved function that provides less space, energy-saving and achieves distribution of the risk of failure, compared to centrifugal chillers.

Total EngineeringIt is estimated that air conditioning equipment accounts for about 40% of energy consumed by buildings (estimate by ERS), and reduction of energy consumption, carbon dioxide emissions, and running costs relating to air conditioning equipment is an important issue for our customers. To address these issues, we conduct total engineering including equipment diagnoses, proposing optimal systems, providing energy solutions that include installation construction, and provide service and support to maintain optimal operation after installation.

Remote Intelligent Service Systems (RISS)ERS proposes a remote monitoring system to customers. The system remotely monitors the operating status of equipment on behalf of customers 24 hours a day, reducing operating management load. In addition, accumulated monitoring data can be used to propose operating plans that will lead to a more comfortable HVAC environment. Safe, secure, and economical operational support is provided, including predictive functions that can detect signals of HVAC equipment failures, systems for providing rapid and appropriate services using monitoring data in the event a failure occurs, and proposals for more effective maintenance plans from the perspectives of life cycle costs and energy savings.

Improved-Function�Screw�Modular�Chiller

Remote�Intelligent�Service�System

Equipment Diagnosis

Solution

Customer Issues

Customer Support Services

Proposal of Optimal System

Remote Monitoring

Center

Chillers perform work under heavy loads

on a daily basis

Customer

Ebara Refrigeration Equipment &

Systems Co., Ltd.

Remote monitoring

Commands

Dispatch of Service Personnel

＊ 24-hour service （including nights and holidays）

Emergency Dispatch＊

Total Engineering

＊1：【HVAC】��Heating,�Ventilation,�and�Air�Conditioning


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Precision Machinery Company

Since the Precision Machinery

Company was founded, we have

been committed to providing

excellent technologies and

exceptional service in the water,

air, and environmental sectors in

relation to all customer

manufacturing processes, and

we continue to make efforts in

these areas.

During the three years of the

E-Plan2013, we provided

optimal technologies,

particularly to meet the demand for green technology in the market

(such as energy saving and environmental preservation). As a result,

our products, tailored to needs and the times, have been broadly

accepted by customers, and we have established a track record of

success.

Going forward, we will provide products and environmental

technologies required by an information society that is undergoing

rapid and unceasing development and that are suited to the times—

such as the Internet of Things (IoT)—while achieving customer

satisfaction and contributing to society and the earth.

The hurdles regarding customer technology and service requirements

are becoming higher every year, and consequently, achieving perfect

customer satisfaction is not possible. It is demanding requests,

however, that educate us. I ask for your continued support and

guidance in the future.


Manabu Tsujimura President

Precision�Machinery�Company

Ebara Precision Machinery Europe GmbH

EBARA CORPORATION

SHANGHAI EBARAPRECISION MACHINERY CO., LTD

Ebara Engineering Singapore Pte. Ltd.

Xian Ebara Precision Machinery Co., Ltd.

Ebara Precision Machinery Korea, Inc.

Ebara Technologies IncorporatedEbara Precision Machinery

Taiwan Incorporated

EBARA FIELD TECH. CORPORATION

11 support shops1 overhaul plant

11 support shops3 overhaul plants

2 development, design, and manufacturing sites

3 support shops1 overhaul plant

1 support shop1 overhaul plant

1 support shop1 overhaul plant

5 support shops1 overhaul plan

7 support shops1 overhaul plant5 support shops

1 overhaul plant

Main Precision Machinery Company Business Sites

Supporting Semiconductor Advances, Responding to Customer Needs

The markets for mobile devices such as smartphones and tablet PCs and for the infrastructure (cloud) that supports communications by these information devices are growing rapidly.The Precision Machinery Company, whose customers are

primarily manufacturers of the semiconductors, LCDs, and solar cells that play central roles in these products and technologies, develops and manufactures systems and equipment for the semiconductor industry and vacuum machinery to meet the needs of its customers.The company will provide manufacturing systems and equipment that can keep up with the rapid advances in semiconductors and achieve the product functions that


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customers want in a timely manner. As a part of those operations, the company promotes reductions in environmental impact through green procurement, chemical substance management, measures to address the conflict mineral issue, reduction and recycling of waste, overhauling equipment, and other measures while using customer comments as feedback for each phase of the process to raise quality as indicated in the diagram below. By doing this, we gain the confidence of customers and meet their expectations. Some of our customers are members of the Electronic Industry Citizenship Coalition (EICC), an electrical and electronic industry trade organization, and consequently, they engage in activities in accordance with the Code of Conduct adopted by the EICC, and the company acknowledges the Code and supports these efforts and engages in various activities.

Quality Assurance

Raising Productivity through Cooperation with Suppliers

The EBARA Group makes collaborative efforts with suppliers in its day-to-day production activities to raise productivity, reduce burdens, and improve quality. We raised efficiency in the delivery of procured goods by adopting a milk run method, a system where we make the rounds of multiple suppliers to pick up goods, and have undertaken production innovation measures to reduce packaging burdens through the introduction of reusable bags. In all instances, we have relevant suppliers participate in the earliest stages of investigations and implement measures in collaboration with them. We also hold suppliers meetings concerning chemical mechanical polishing (CMP) systems and dry vacuum pumps to reinforce communications and collaboration by coordinating responses to market trends and supporting production innovation measures. In addition, we commend those suppliers that provide particularly helpful cooperation with regard to QCD: enhancing quality (Q) that meets customer expectations, achieving optimal cost (C) performance, and making reliable deliveries (D) and supply that provide assurance to customers. Going forward, we

will continue to issue monthly production forecast data, provide information on developments in day-to-day operations and our initiatives, and take action to prioritize good communications so that we can work in concert with suppliers.

Enhancing Quality through Group-Wide Global Systems

Products such as CMP systems and dry vacuum pumps must operate 24 hours a day, 365 days a year. This means that it is necessary for us to provide highly reliable products and services (such as overhauls and maintenance) under rigorous quality control standards and cooperate on a global scale to meet customer expectations.To make timely responses and reduce costs, we need to develop overseas production sites and locally procure production components and service parts based on the concept of regional

The conference was a great opportunity for engineers from dry pump overhaul service sites in various countries to gather and discuss shared issues and goals from their unique cultural and value perspectives. Japanese, English, Chinese, and other languages were used during the discussions, but there was no sense of awkwardness, and it seemed that we were all speaking the same language. I hope to again have this type of opportunity to interact with and learn from other engineers in the future so I can make improvements and provide even better overhaul services.

Chen Chin ChewPrecision Machinery Division

Ebara Engineering Singapore Pte. Ltd.

On Participation in the Borderless Dry Pump Overhaul Technical Conference

VOICE

Supplier Commendations

Development and

designProcurement Production

Sales and Use

Maintenance Support

Taiwan Semiconductor Manufacturing Company Limited (TSMC) is the world’s largest independent semiconductor foundry. Our mission at EPMT is to conduct business by building a win-win relationship with TSMC and gaining their trust.We recently worked with customers to supply and install a number of CMP systems at TSMC’s new plant, and in November 2013, we received the Fab14 Ramping Support Award. Winning this award was not the result of my individual efforts, but the efforts of all cooperating team members, and I am grateful to them. Even though we won an award, this does not mean that we have reached the end of our work, but merely a transit point for further efforts.

Eric LinSemiconductor Equipment Dept.

Ebara Precision Machinery Taiwan Incorporated (EPMT)

Building Win-Win Relationships with Customers and Reinforcing Support Capabilities.

VOICE


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production for regional supply. To maintain the quality of locally-procured parts and production goods, we are standardizing and codifying production and service operations; training workers at overseas sites engaged in production, quality control, service, and so on; auditing and providing guidance on local procurement; and implementing measures to maintain uniform product and service quality levels globally.We held a dry pump overhaul technical conference in 2013. Six employees from Japan and 12 employees from six overseas sites gathered to report on the status of overhaul operations and pump operating conditions following delivery. The participants shared information and exchanged ideas on solving problems and raising quality. We will continue conducting such measures in the future.Group global structures are raising quality and working to supply products and services with quality that meets customer expectations.

Meeting Customer Expectations by Raising Productivity

We have been undertaking production innovations for four years with the aim of raising productivity and reducing lead times in order to enhance customer satisfaction. Assembly lines have been changed from a multi-piece manufacturing flow to a one-piece manufacturing flow, and we have established production systems based on an awareness of linking all divisions and processes from order to shipment. As a result, the dry vacuum pump manufacturing department has cut manufacturing lead times by 75%, while the CMP system manufacturing department reduced manufacturing

lead times by 40% and halved manufacturing man-hours.The knowledge gained from these measures has been used with gas abatement systems as well, and manufacturing man-hours have been cut in half.We will continue to raise the quality of production processes and meet customer expectations by implementing production innovations.

Meeting Customer Expectationsby Ensuring Safety

Under the slogan “Safety First!,” we are creating an occupational health and safety management system (OHSMS) to ensure that all employees can work in a healthy and safe environment.The Kumamoto District, a CMP system production plant, acquired OHSAS 18001 certification in 2008 and became the first EBARA site to introduce an OHSMS to its operations. Other business districts are following Kumamoto’s lead in promoting health and safety programs in compliance with OHSMS and reinforcing safety management systems.Preventive safety was positioned as a priority topic in FY2013, and risk assessment training was conducted according to the positions and roles of management supervisors and on-site workers as a means of enhancing the risk sensitivity of employees. To effectively reduce and eliminate potential product risks (sources of danger) during the development and design stages, we formulated new product safety design rules and continuously worked to enhance product safety in ways that will raise customer trust.

Environmental Preservation MeasuresTo achieve EBARA Group environmental goals, the Precision Machinery Company also undertakes companywide measures.To enable all employees to become involved in environmental preservation measures, each year that organizational restructuring is conducted, all company organizations are assigned to environmental management blocks (there were 45 blocks in FY2013).Within these blocks, organizational heads are environmental management block managers. Block managers take courses on environmental performance reviews, environmental risk management, and other topics and work with block members to propose and carry out environmental measures that will lead to reductions in environmental impact in line with their block operations. A wide range of environmental programs are implemented, and in FY2013 a number of measures were taken to reduce the volume of water and chemicals used in development operations, producing significant results.

We conduct i-Support activities in order to provide the highest-quality after-sales services to customers. As a part of these activities, we established a project team to accumulate detailed data on information systems concerning products delivered to customers, after-sales service histories, parts replacement histories, and so on and to use that data. By doing this, we aim to strengthen collaboration between relevant head office departments and service sites, provide timely after-sales services, and make proposals for preventive maintenance, thereby meeting customer needs, providing high-quality service, and raising customer satisfaction.

Taijiro TaguchiCustomer�Support�Group

EBARA�FIELD�TECH.�CORPORATION

Providing High-Quality After-Sales Services through i-Support Measures

VOICE

One-piece�manufacturing�of�the�CMP�System


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Environmental Engineering Company

Under the E-Plan2013 Medium-

Term Management Plan, we

were able to generate robust

profits in the domestic market,

particularly in the stable O&M＊1

business. Our main issue for the

future is to realize new orders to

maximize profit by operational

improvements challenge steadily

linking demand for facility

reconstruction in Japan.

The new E-Plan2016 Medium-

Term Management Plan states

that our vision for 2019 is to "stand in a leading position in the

market in terms of market share, profitability, and business efficiency

for the construction and operation of waste incineration facilities in

Japan" and sets targets for the next three years. The plan specifies

two basic policies: (1) strengthen stable revenue base while

maintaining and expanding business opportunities and profit in the

domestic market, and (2) improve productivity and profitability by

improving business efficiency. In accordance with these policies, the

five following priority issues are identified.

① Maintain and increase the number of customers, sales, and income

in the Japanese market; ② reinforce field competitiveness through

area-based management and expand market share and range of

business fields; ③ raise competitiveness by standardizing incinerator

product and creating design packages; ④ reinforce the

competitiveness of Ebara Qingdao Co., Ltd. (a wholly-owned

subsidiary of Ebara Environmental Plant Co., Ltd. in China) as a key

component manufacturing base; and ⑤ increase competitiveness by

strengthening and expanding related businesses.

The area-based management referred to in item ② above is a

program for raising customer satisfaction by using our extensive

experience with operational management as a strength to propose

and carry out solutions that meet customer needs through

collaboration among various internal sections. I am confident that by

doing this, we will gain customer trust, expand the scope of our

outsourcing business fields, and secure orders from new customers.


Tetsuji FujimotoPresident

Environmental�Engineering�Company

HokkaidoPublic: 9

TohokuPublic: 10; Private 5

KantoPublic: 27; Private 15

KinkiPublic: 13; Private 3

ChubuPublic: 31; Private 11

Chugoku, ShikokuPublic: 19; Private 4

Kyushu, OkinawaPublic: 7; Private 2

EEP Deliveries in Japan (facilities in operation)

＊1：【O&M】��Operation�and�maintenance�including�operations,�management,�maintenance,�and�inspection.

Ebara Environmental Plant Websitehttp://www.eep.ebara.com/en/


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Environmental Engineering and the Needs of Society

Ebara Environmental Plant Co., Ltd. (EEP), which conducts environmental engineering, provides total services from waste incineration facility design and construction to operation, maintenance, and facility management. The business environment of the waste incineration business has changed substantially compared to before the 2011 Great East Japan Earthquake; disposal of debris caused by the earthquake is proceeding, but electric power shortages have given rise to increased interest in the utilization of waste for generating electricity, and there is new demand for development of waste incineration facilities positioned as regional disaster preparedness centers. Also, as local governments face difficult financial conditions, demand to extend the life of existing facilities so they can be used for longer periods for stable waste processing is rising. It was under these circumstances that in FY2013 EEP received multiple orders for facility construction and long-term facility operation projects (DBO＊1 projects) as well as numerous orders to perform construction extending the life of existing facilities.

Local Production for Local Supply by Using Waste to Generate ElectricityApproximately 25% of all waste incineration plants in Japan have electric power generating facilities. The total rated generating capacity is approximately 1,700 MW (according to General Waste Disposal and Treatment Conditions (FY2012), Ministry of the Environment). Japan is currently experiencing a shortage of electric power, and consequently, disposal facilities with generating facilities are attracting attention as distributed power sources. EEP is a Power Producer and Supplier (a PPS operator＊2) and is purchasing excess power generated by waste incineration facilities and returning it to communities, thereby playing a role in local production for local supply of electric power.The prototype for the local production for local supply scheme for electric power was the Warabi Toda Eisei Center in Saitama Prefecture, which was mentioned in the 2013 CSR Report. Operation and management of the Center is outsourced to EEP, and the total electric output of the Center is purchased by EEP and supplied to the city halls of Warabi City and Toda City and to seven elementary schools in Warabi City. In FY2013, EEP signed a new basic agreement concerning local production for local supply of electric power generated from waste with the Hirosaki Area Environmental Maintenance Association. The Association is a special district authority organized by Hirosaki City, Hirakawa City, Owani Town, Fujisaki Town, Itayanagi Town, and Nishimeya Village. The basic agreement entered into with the Association provides for purchase of the total electric output of two waste incineration plants in Hirosaki City whose operation and management is outsourced to EEP, supply of that power to facilities within the Association's territory including other waste incineration plants and sewage treatment facilities as well as a special district authority, the Hirosaki City Hall,

schools, and other facilities.EEP completed construction of an Environmental Center in Hiratsuka City, Kanagawa Prefecture under a DBO contract at the end of September 2013, transferred possession of the facility, and commenced a 20-year operating project in October. Under the project, general waste from Hiratsuka City, Oiso Town, and Ninomiya Town is incinerated and the heat produced is used to generate 5,900 kW of electric power, and power not consumed by the center is supplied to neighboring areas. All of the incineration ash is supplied to Chubu Recycle, an EEP subsidiary, and other ash recycling companies for melting and resource recovery.＊3 As a result, the facility does not generate any landfill waste and has achieved zero emissions.The fishery processing industry in Kesennuma City in Miyagi Prefecture suffered extensive damage from the 2011 Great East Japan Earthquake. As part of its recovery projects, EEP is cooperating as a PPS operator with efforts by a fishery processing industry association to rebuild Kesennuma as a smart city＊4 EEP purchases electric power generated from waste incineration plants in neighboring areas and supplies power to marine product processing plants affiliated with the association. Operations began in FY2013. A portion of the waste used to generate electricity is biomass, and therefore the generation of electricity from waste is carbon dioxide neutral with regard to the biomass portion, making the power much greener than thermal and other forms of electric power generation. By using this type of green power, EEP is contributing to reducing the carbon dioxide emissions of the city.By promoting the local production for local supply scheme in the generation of electric power using waste, EEP is supporting efforts to position waste incineration facilities as regional energy centers.

Continuously Meeting the Expectations of Customers

In response establishment to the EBARA Group business continuity management system (BCMS), EEP is also developing its own BCMS. The Business Continuity Management Committee chaired by the EEP president and the Disaster Management Committee, a subcommittee that undertakes specific action, are reviewing and developing an incident management plan (IMP) and business continuity plan (BCP)for responding to disasters.In FY2013, the EBARA Group introduced a system to confirm the whereabouts and safety of employees as a first response to disasters, and conducted a drill using the system. In particular

Signing�of�the�basic�agreement�with�Hirosaki�area�entities

＊1：【DBO】�Design,�build�and�operate.�A�method�whereby�a�public�body�raises�funds�and�outsources�design,�construction,�and�operation�to�a�private�company.＊2：【PPS�operator】�Power�producer�and�suppler＊3：【Resource�Recovery】�A�material�recycling�method�for�recovering�zinc,�copper,�nickel,�and�other�metals�from�waste�material.＊4：【Smart�City】�An�environmentally-conscious�city�that�efficiently�uses�electricity�and�maximizes�resource�savings�throughout�the�city�by�using�environmental,�informa-

tion,�and�other�technologies.27EBARA Group CSR Report 2014

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employees who conduct operations at facilities where the company provides operation services work in shifts, and many employees are dispatched to construction sites on a business trip basis, and as a result, making sure that their whereabouts and safety can be confirmed efficiently is essential for the subsequent continuation of business. The results of the drill showed that there are still issues to be resolved concerning the rapid confirmation of employee safety, and the company is currently making improvements.We are also creating a mechanism to report on the status of damaged facilities where the company provides operation services and creating systems for efficient recovery and other measures so that regional waste treatment can be continued even in the event of damage caused by an earthquake or other disaster. Development is proceeding for crisis management systems at facilities where we offer operation and facility management services in consultation with customers based on their approaches to measures during a disaster. Specific plans call for establishing a basic policy, implementing plant preparations, formulating plans, and conducting training and drills in anticipation of an earthquake with an intensity of five or greater on the Japanese scale, an accident such as a fire, explosion, or release of chemicals, or a forecast of a mass outbreak of a new strain of influenza. We are creating mechanisms for taking these actions and making continuous improvements at the approximately 70 facilities where we offer operation and facility management services nationwide.

Health and Safety Measures and Improving QualityThe company undertakes daily measures and conducts training and drills based on the idea of safety first to eliminate occupational accidents at all plant construction sites and facility operation sites. The company is working to establish a mindset where common sense such as conducting comprehensive training when starting work at a new site and prohibiting employees from working alone is accepted as a matter of course. An occupational accident that occurred in FY2013 at a worksite was used in training to identify the problem factors in the work that led to the accident occurred and for implementation of countermeasures in other sites, and in addition to checking manuals and procedures for the same kind of work, all work manuals were reviewed to determine if other work procedures also posed similar risks. As a result of these efforts, inadequacies in work manuals were reduced. In addition, a program was established where a team of specialists examine monthly reports from each worksite to determine if there are any technical issues present, and if there are, the team investigates countermeasures. These measures are expected to raise service operation quality and lead to higher customer satisfaction.Furthermore, standardization is being undertaken with regard to design, operations, and maintenance. Standardization of design was raised in the E-Plan2013 Medium-Term Management Plan covering the period until FY2013 with the aim of raising design quality. Standards for incinerator design were established and series were created for certain types and sizes. Further enhancements will be made to the design standards and the creation of series for all types and sizes will be completed in the future. Standardization of operating and maintenance technologies started in FY2013, and plans call for the process to

continue this fiscal year and later. These standardization measures will serve as a foundation for health and safety and raising quality, and EEP will implement a steady PDCA cycle of implementation and review.

CSR Action Plan for FY2014Under the Environmental Engineering Company FY2014 CSR Action Plan, the following measures are being implemented: (1) building a BCMS and establishing a scheme of its continual administration; (2) maintaining a system of crisis management at the facilities for which we undertake operational management under contract at about 70 locations nationwide and improving on the scheme continually; and (3) promotion of local production for local supply of electric power generated from waste.

I believe that in order to raise the quality of services and facilities where the company provides operation and facility management services, the most important thing is that problems that occur at the plant should not be handled solely by personnel at the site, but companywide support should be provided. Starting in FY2013, we made substantial improvements to our monthly reporting system to recognize in greater detail the operating status of the plant. The revised reports include information on waste treatment volumes, utility consumption amounts, and the environmental performance of its emissions as well as information necessary for preventing any deterioration of operational status.As a result of the improved monthly reporting system, we are now able to compare the operating status of all facilities where we provide operation and facility management services, and in cases where the information indicates that a problem is likely to occur, we can share the information with relevant divisions and provide support at the earliest possible time to prevent the problem from occurring.With regard to problems that are common to all facilities, we are preparing operating manuals on those problems that are caused by operating procedures, and with regard to problems that arise from maintenance issues, we are reviewing maintenance frequencies and methods. In addition, we are providing feedback to engineering departments concerning problems that arise from design to prevent reoccurrences and taking measures to build systems that can pursue better designs.I am confident that these measures will result in significantly higher service quality.

Kazuo Takano Deputy�Center�Manager

Technical�Center,�Ebara�Environmental�Plant�Co.,�Ltd.

Proactive Measures to Raise Service Operations Quality and standardize

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ComplianceTo gain the trust of stakeholders as a good corporate citizen, the EBARA Group defines compliance as not only observing laws and regulations, but also putting into practice in good faith internal regulations and other rules, social norms, and common and good sense.

Compliance SystemTo ensure the practice of fair and ethical corporate activities, various compliance systems including the CSR Committee (see page 8) have been created to conduct compliance management.In addition, the EBARA Group Compliance Network meets twice annually to share information within the Group and report on the status of individual compliance measures.With regard to compliance with laws and regulations including the Construction Business Act, Subcontracting Act, and Foreign Exchange Act, a specialized division takes measures to ensure that employees throughout the Group are familiar with statutory provisions and establishes systems for confirming proper compliance.

Compliance Liaison SystemIn FY2007, compliance liaison officers (60 employees at each business site, branch office, and Group company) were appointed to serve as nearby consultants on compliance-related issues and to raise awareness of compliance. Each compliance liaison officer undergoes training twice annually, and skill development is conducted to support information sharing and compliance education.With the aim of bolstering the activities of the liaison officers, in FY2013 they were subject to evaluation of the results of their activities, additional members were appointed and existing members were re-appointed, and their areas of responsibility and the details of the system were reviewed. The planning and implementation of training and other measures regarding worksite risks by liaison officers raises employee awareness of compliance even further.

EBARA Group Code of ConductThe EBARA Group Code of Conduct was adopted as a set of standards for conduct by Group officers and employees in compliance with laws and regulations based on a strong sense of ethics.The Code of Conduct was revised in FY2013 to support compliance not only with the laws and regulations of each country, but also practices shared throughout the EBARA Group on a global scale. In conjunction with the revisions, training on corporate ethics was conducted at 47 business site in Japan.Training at overseas Group companies is conducted through visits from EBARA head office personnel as well as training programs made available on the Group intranet.

Whistle-Blowing DesksEBARA has established a variety of internal consultation resources available to whistleblowers to promote rapid improvement and resolution of

legal violations and questionable conduct by organizations and individuals. In addition to a compliance consultation desk operated by an outside attorney provided in consideration of the confidentiality of consulting employees, a harassment consultation counter operated by a specialized division and an audit and supervisory board member helpline for consulting with audit and supervisory board members are also available. In FY2013, a total of 35 inquiries were made. The details of some of the consultation matters were used, with the consent of the consulting individual, as case studies, with summaries and information on the resolution made available to employees with the aim of preventing reoccurrence.

Raising Awareness of ComplianceTo confirm the status of compliance awareness among employees, EBARA carries out a survey of all officers and employees in Japan each year and conducts training to continuously raise awareness of compliance. The survey results confirm that having managers act as models with regard to compliance serves to raise compliance awareness among employees.In FY2013, personnel from the EBARA head office Compliance Department visited 70 sites in Japan and conducted training to raise compliance awareness among employees at the domestic branch offices and sales offices of subsidiaries that merged with EBARA in 2012.

Do you act with a priority on compliance at all times?

Implementation of Compliance-Related Training (FY2013)

Training topics Number of training sessions held Training sites Number of

participants Details

Training conducted at the request of individual divisions

4 times Group companies, other sites 182 Compliance and

other topics

Training based on survey results 16 times Group companies,

other sites 461 Harassment

Branch office and sales office training 96 times Branch offices

and sales offices 1,145 Compliance and other topics

Corporate ethics training 47 times

Head office, branch offices, other locations

1,001 Corporate ethics (Ebara Way)

CSR training E- learning, other topics

EBR and domestic subsidiaries 8,628 Corporate ethics, human

rights, other topics

Business site training 6 times Districts 292Preventing reoccurrence of problems

Manager training 1 times Head office 45 Training by outside instructors

New employee training 2 times Head office, districts 74 Compliance, other topicsNew management-level employees 1 times Head office 94 Human rights, other topics

［%］

［Fiscal Year］2008 2009 2010 2011 20122007 2013

60

30

0

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Moderately, priority for compliancePriority for company profit under any circumstances

Priority for compliance under any circumstancesModerately, priority for company profit

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3.The EBARA Group operates in a spirit of free and fair competition.

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Anti-CorruptionEBARA defines anti-corruption as the prohibition of bribery, promotion of fair and open competition, and elimination of all dealings with anti-social forces. We adopted a Basic Policy on Anti-Corruption, and based on the policy, we created and carry out an Anti-Corruption Program as a mechanism for preventing bribery, unfair competition, and dealings with anti-social forces.

Overview of the Anti-Corruption Program

1. Declaration by the Company's Top management.2. Preparation of internal regulations3. Familiarization and Education regarding Anti-Corruption4. Establishment of consultation hotline5. Implementation of internal audits6. Creation of cooperative systems with external expert

organization

The president issued an anti-corruption declaration based on the Basic Policy on Anti-Corruption.

Following EBARA's lead, domestic Group companies have instituted anti-corruption programs based on the Basic Policy on Anti-Corruption and are taking necessary measures according to their specific business circumstances. Overseas Group companies too have defined specific action items and are taking action based on the EBARA Group Basic Policy on Anti-Corruption according to the conditions in each country. In FY2013, measures were taken by overseas Group companies

with a priority on implementing anti-corruption programs as a part of compliance training.

Prohibition of Unfair CompetitionEBARA Group prohibits unfair competition and established a specialized organization to check on the status of compliance. There were no major violations in FY2013.

Trading Monitoring SystemA specialized division continuously monitors trading from the perspective of compliance with the Subcontracting Act, Construction Business Act, and Anti-Monopoly Act thereafter reporting the results of its findings to EBARA's management to ensure that fair trade practices are conducted. Information concerning areas that require improvement is shared with the relevant divisions and the progress of improvements is monitored.

◆ Overview of Subcontracting Act Monitoring

Periodic monitoring of four duties and 11 prohibitions is conducted as a parent business organization specified in the law, vouchers are used to chronologically confirm processes from requesting quotes to payment, and if any improper procedures are identified, guidance on making improvements is provided, and implementation of the improvements is confirmed.

◆ Overview of Construction Business Act Monitoring

Vouchers are used to chronologically confirm processes from requesting quotes to payment, construction system logs are maintained, and appropriate assignment of engineers is confirmed. In addition, operating status is confirmed based on rules revised by Ministry of Land, Infrastructure, Transport and Tourism (MLIT) notification.

【Examples】

① We confirmed proper implementation of payment in cash of amounts equal to labour expenses as recom-mended by an MLIT notice on proper subcontracting agreements and subcontracting payments and on rigorous work execution management.

② In accordance with a recommendation from the MLIT concerning countermeasures against non-enrollment in social insurance by securing statutory fringe ben-efit expenses, EBARA investigated the status of social insurance enrollment by subcontractors, encouraged un-enrolled companies to enroll, and conducted comprehensive implementation of accompanying standard quotations.

◆ Overview of Anti-Monopoly Act Monitoring

In accordance with EBARA's Detailed Rules on the Preven-tion of Bid Rigging, we chronologically confirm the intent to bid on public-bid projects, cost estimates, and deter-mination of the bid amount. We also conduct individual hearings for projects with high rates of bidding success and confirm order placement and acceptance records with other companies in the same industry to ensure that participation in bids is proper.

Anti-Corruption Programshttp://www.ebara.co.jp/en/csr/

fair-practices/blocking-anti-social.html

A new Anti-Corruption Law came into effect in Brazil at the end of January 2014, and strict legal compliance at the same levels as in Europe and the U.S. is now required. Following compliance training in March 2013, we conducted an anti-corruption program seminar for all employees and sales representatives in January 2014. At that time, we explained the EBARA Group CSR Policy and established among all personnel a shared sense of responsibility and pride as members of the EBARA Group.We have little experience with internal control systems and are still finding our way, but personnel responsible for internal controls as well as executives and employees from each division are actively undertaking the formulation of new rules and risk management. I feel that we have raised the ambitions of each employee to make our firm a much better company.

Kiyoshi Ichikawa�President

Ebara�Industrias�Mecanicas�e�Comercio�Ltda.�(EIMCO)

Raising Awareness of Anti-Corruption by All Employees

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The EBARA Group conducts business with a high standard of ethics.3. The EBARA Group operates in a spirit of free and fair competition.

Fair operating practices

http://www.ebara.co.jp/en/csr/fair-practices/blocking-anti-social.html

Dissociation from Anti-Social ForcesEBARA has created systems to prevent the providing of any economic profit, benefits, favours, etc., whatsoever to anti-social forces for any reason or engaging in any activities that provide profit for anti-social forces.

(1) The Company, with the cooperation of external specialized agencies, centrally manages and accumulates information on antisocial forces, and has established the Anti-social Forces Countermeasure Headquarters to promote initia-tives toward the exclusion of ties with anti-social forces.

(2) The Company, upon performing checks on suppliers and making judgments about the qualities of shareholders, severs any ties with groups and entities once they are de-termined to be antisocial forces. This process is reported at the regular meeting of the Anti-social Forces Countermea-sure Committee and other meetings, and the Company ensures that information is shared within the Group.

(3) The Company has established clauses to exclude or-ganized crime groups in contracts so as to be able to promptly sever ties with its suppliers, once the suppliers are determined to be involved with antisocial forces or any other similar entities.

(4) To deal with false claims, at each business location, branch office and branch sales office, a manager respon-sible for preventing false claims has been appointed. This manager periodically conducts the necessary education and training and prepares the necessary manuals in order to teach the employees methods on how to deal with false claims appropriately, including cases in which contact is initiated by anti-social forces.

Political ContributionsEBARA complies strictly with the Political Funds Control Law and other applicable laws and regulations and does not make any unlawful donations or bribes. Even in the case of lawful political contributions, the details of the political activities are confirmed in advance, and political contributions are provided only in cases where a determination is made that the contribution is appropriate in terms of contributing to local communities and the like.

Fair Trading PracticesThe EBARA Group adopted the EBARA Group Procurement Policy and the EBARA Group CSR Procurement Guidelines and conducts fair trade practices in accordance with these policies and guidelines.

◆ Outline of the EBARA Group Procurement Policy

1. Provide fair and equitable opportunities2. Economic rationality3. Confidentiality4. Mutual trust5. Social Trust6. Green procurement

◆ The EBARA Group CSR Procurement Guidelines

1. Compliance

2. Consideration for human rights, health and safety3. Environmental conservation4. Ensuring proper quality, price, delivery and safety5. Improvement of technical capabilities6. Information disclosure7. Information security8. Protection of intellectual property9. Anti-corruption

10. Dissociation from antisocial forces

The EBARA Group Procurement Policy and the EBARA Group CSR Procurement Guidelines are accessible on our website. We also established a CSR procurement inquiry desk for submitting opinions and [email protected] Procurement Operations Liaison Committee will periodically review the CSR Procurement Guidelines based on the needs of the times.

Implementation of CSR Procurement QuestionnaireIn FY2013, we conducted a CSR procurement questionnaire of our main suppliers to confirm the status of compliance with the CSR Procurement Guidelines. The questionnaire contained questions regarding individual items of the guidelines and other CSR-related topics so that we can understand the status of efforts taken by suppliers concerning compliance with the guidelines.We plan to expand the scope of the survey and to continue to confirm CSR efforts taken by suppliers. When necessary, we will request suppliers, whose CSR measures are lagging, to make improvements.

Results of CSR Procurement Questionnaire�(Points�out�of�a�total�of�50)

Materials Procurementhttp://www.ebara.co.jp/en/csr/fair-practices/procurement-policy/

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3. The EBARA Group operates in a spirit of free and fair competition.

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EBARA Group environmental objectives (FY2020) Achievements in FY20131. Environmental Conservation Activities in Our Daily Business① Keep voluntary standard values for environmental laws and regulations such

as water pollution prevention, air pollution prevention and the like.Each office and business site worked on pollution-prevention and achieved all quantitative standards.

② Continuously reduce the amount of waste output produced from each office and business site. Maintain a waste material recycling rate of 95% or higher. Maintain a final waste landfill rate of less than 3%. Completely comply with the legal terms stipulated in the Construction Waste Disposal Consignment Contract. Utilize recognition system about reliable industrial waste disposers.

Achieved a material recycling rate of 92.6%.The final landfill disposal rate of 7.0% did not achieve the target.Disposal outsourcing agreements with reliable waste disposers were rigorously adhered to and use of the certification system for reliable disposers was encouraged.

③ Continuously reduce CO2 emissions Reduced emissions by 3.1% from FY2012.④ Reduce water usage by 30% from the FY2000 level. Reduced usage by 3.1% from FY2012.

Reduced usage by 15.1% from FY2000.⑤ Continuously reduce emissions of PRTR Law controlled substances.

Reduce VOC emissions by 30% from the FY2000 level.Reduced PRTR emissions by 6.7% from FY2012.Reduced VOC emissions by 9.3% from FY2000.

⑥ Identify and minimize environmental risk impact involved in R&D planning and in the planning, installation and operation of facilities at all offices and business sites.

Each office and business site worked on pollution-prevention through environmental audits.No environmental pollution accidents caused by construction.

2. Contribution to Environmental Conservation in Business Activities⑦ Set and implement policies and goals for achieving the industry’s leading

environmental performance per each product.Environmental considerations (reducing energy usage, miniaturization, etc.) were implemented with regard to many products and services based on customer requests.

⑧ Build and run a framework for managing information about the chemical substances found in procured components and communicating information about the chemical substances found in finished products for customers.

Planning is underway for collecting information on and managing chemical substances in procured products used in application services starting in FY2015.

⑨ Reduce the environmental load through a products lifecycle by continuous reanalysis of technological standards of paints, ingredient materials, etc. from a LCA standpoint.Establish and implement standards for topics of environmental concern in the CSR procurement.

The Basic Guidelines on Safety and Environmental Design (Internal Standard No. UB1101) are being implemented to reduce the environmental impact of products. Use of asbestos and paint with hexavalent chromium or lead is prohibited in procured products.

⑩ Enhance the availability of products designed for use in the global warming prevention field.a Dry vacuum pumps for solar cell manufacturingb Desalination pumps and equipmentc Nuclear power plant pumpsd Energy-saving standard pumps driven by high-efficiency motorse High-efficiency chillersf Biomass utilization operations

Ultra-high-efficiency three-phase AC induction motor compliant with the top-runner program under the revised Energy Saving Law were named Top Runner Motors and the lineup of products using those motors was expanded.In the environmental engineering field, measures are being taken to encourage the use of renewable energy through utilization of feed-in tariffs (FIT) and power producer and supplier (PPS) programs at generating plants with long-term operations outsourcing agreements.

3. Efforts for Environmental Management⑪ Run the environmental management system across the EBARA Group and

continuously apply revisions to standardize the system rules in operation.Link environmental management systems to the other management systems such as systems of energy management, occupational safety and health, and quality management.

The Tochigi District acquired ISO 14001 certification on November 26, 2013.All EBARA CORPORATION offices and business sites maintained ISO 14001 certification.Branches and sales offices (36 sites) outside the scope of the ISO 14001 certification of Ebara ET and EYH, which later merged with EBARA, were incorporated into the scope of certification of the Haneda Office.

⑫ Thoroughly manage environmental risk by continuous implementation of second-party audits throughout major business sites of the EBARA Group in Japan and overseas.

Corporate environmental audits of nine organizations in Japan were conducted and necessary improvements were completed.The environmental risks of each organization were assessed and flexible environmental management is conducted.

⑬ Establish an enhanced sense of ecology among all employees in the EBARA Group through promoting education concerning biodiversity, and environmental contribution activities.

A green area was developed within the Fujisawa District site with the participation of employees and four nature observation meetings were held.

⑭ Continuously disclose environmental information associated with business activity by the CSR Report, especially the enhancement of environmental assessment information on products.Continuously increase sales of environmental label certified products.

Issued the EBARA Group CSR Report 2013.Other systematic measures are in the preparatory stage.

⑮ Make contributions to society, such as environmental technology seminars, by utilizing technical knowledge developed through the EBARA Group’s business activity and environmental activities.

The EBARA Hatakeyama Memorial Fund conducted technology seminars in Southeast Asia.

1. The EBARA Group is striving to create a society in which nature and technology are in harmony.

2. The EBARA Group endeavors to conserve the global environment through its technology,product and service supplying.

EBARA Group Environmental Vision

EBARA Group Environmental Vision



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Major Environmental Performance Data

＊1：【Environment�Control�Committee】�The�highest�decision-making�body�concerning�environmental�policy�in�the�EBARA�Group.＊2：【PDCA】�A�system�for�continuous�improvement�through�repeated�implementation�of�the�Plan-Do-Check-Action�process.

EBARA Group Environmental ManagementEnvironmental Management InitiativesEBARA conducts environmental management by integrating the environmental management of individual offices and business sites, which have primary responsibility for preventing pollution, with the environmental management of Group companies, which encourage environmental consideration with regard to products.EBARA and the EBARA Group conduct environmental management in accordance with ISO 14001. The Tochigi District, which mainly performs repair of products, acquired ISO 14001 certification on November 26, 2013.EBARA merged with three consolidated subsidiaries on April 1, 2012. The sales offices of these consolidated subsidiaries located throughout Japan were not included in the scope of the ISO 14001 certification, and accordingly, measures to include them within the scope of certification of the EBARA Haneda Office

continued in FY2013. As a result, 36 of the sales offices were included within the scope of certification by the end of March 2014. Plans call for the remaining 30 sales offices to be included in the Haneda Office’s scope of certification by the end of FY2014.

Understanding Environmental Management Condi-tions at Overseas SitesAs air pollution and other environmental issues become more serious in emerging countries, environmental laws and regulations are being revised and strictly enforced, increasing the need for environmental risk management at overseas sites.The Environment Control Committee＊1 adopted as EBARA Group policy the acquisition of certification under ISO 14001 at all production sites worldwide, compliance with laws and regulations, and improvement of environmental management through implementation of PDCA.＊2 The Committee also conducted questionnaire surveys to confirm the status of environmental management at all EBARA Group sites.

Change in CO2 emissions(Electric�power�and�fuel-derived) Change in material recycling rate and the final landfill disposal rate

Change in emissions of VOC out of substances controlled by the PRTR Law

Change in emissions of substances controlled by the PRTR Law

[In 1,000t]

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20122011201020092000

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2013

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Group consolidated companiesEBARA

2012201120102009

95.895.8 96.796.7 98.698.6

3.63.6 2.62.6 1.21.2

2013

98.698.6

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7.0※7.0※

Target： more than 95％

Target： Less than 3％

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20122011201020092000

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◆��Material�Recycle�Rate:�[Material�recycling�amount�/�� (Material�recycling�amount�+�Final�landfill�disposal�amount)]�×�100%

◆�Final�landfill�disposal�rate(�Final�landfill�disposal�amount�/�waste�amount)�×�100%◆�Final�landfill�disposal�amount:�Includes�the�amount�of�untreated�waste�directly�land-filled�and�the�amount�of�residue�landfilled�without�being�reused�after�intermediate�treatment.

※�Sludge�that�could�not�be�separated�was�released��from�some�business�sites�and�offices,�resulting�in�a�deterioration�of�the�material�recycling�rate�and�the�final�landfill�disposal�rate.

◆�Since�we�set�our�target�back�in�FY2000,�we�have�been�using�an�emission�coefficient�of�0.357�kg/kWh,�in�compliance�with�the�enforcement�order�regarding�the�Law�Concerning�the�Promotion�of�Measures�to�Cope�with�Global�Warming,�which�came�into�effect�in�2000.

◆�PRTR�Law:�Pollutant�Release�and�Transfer�Register�Law◆�Discharged�Amount:�The�amount�discharged�into�the�environment�such�as�into�the�air,�water,�and�the�soil. ◆�VOC:�Volatile�Organic�Compounds

Detailed information concerning the environment is available on the EBARA website: Environmental Preservation Initiatives

http://www.ebara.co.jp/en/csr/env/data/

For details, see our websitehttp://www.ebara.co.jp/en/csr/env/


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Mean Global Warming CountermeasuresEnergy-saving measures using energy monitoring systems continue to be implemented at production sites. The Kumamoto District switched its nitrogen supply from a nitrogen gas generator to cylinders, reducing energy consumption.Sales offices reduced carbon dioxide emissions by updating heating, ventilation, and air conditioning (HVAC) equipment (10 offices) and power receiving and transforming equipment (five offices) to cut energy consumption.The EBARA fleet of corporate vehicles was reduced by 22 from 709 (in March 2013) to 687 (in February 2014) to curtail the use of automobiles and encourage the use of public transportation. Hybrid vehicles account for 120 of the 687 vehicle fleet (17.5%). In addition, the EBARA Fujisawa District installed a photovoltaic system with a total capacity of 300 kW.

Chemical ManagementAs a result of revision of the EU RoHS Directive,＊1 some EBARA products are now subject to the directive. To clarify whether products are in compliance with or exempt from the directive, we prepared a CE Compliance Declaration and an opinion concerning CE mark compliance and exemption from application. In order to certify compliance with the RoHS Directive and the absence of substances subject to the directive (lead, hexavalent chromium, cadmium, mercury, PBB, or PBDE) in products, compliance with the EN 50581 EU standard is required. To comply, we are currently developing management rules concerning chemical substances used in products.We plan to introduce in FY2014 an internet-based service that will reduce the work burdens involved in investigating the chemical substances present in procured products. In preparation, we held repeated meetings with internet service hardware manufacturers, determined installation specifications, estimated installation costs, and investigated installation work processes in FY2013. With regard to surveying chemical substances included in products, we reflected in the Green Procurement Standards matters concerning which we

want supplier cooperation and took measures to make sure suppliers are familiar with them, leading to improved survey efficiency and higher response rates by suppliers.

Responses Regarding Conflict Minerals＊2

Those EBARA’s products that are considered production equipment are exempt from Article 1502 of the U.S. Financial Reform Act (the Dodd-Frank Act). To explain simply to customers the background as to why they are exempt, we prepared the Opinion on Responses Regarding Conflict Minerals. Also, regarding products which are subject to the Act, we disclose the necessary information to customers and strive to comply with the said Act.

Normalization and Streamlining of Waste Disposal OperationsEBARA offices and business sites do not dispose of waste material, but outsource all disposal. Offices and business sites comply strictly with laws and regulations concerning the outsourcing of waste disposal and take measures to increase operational efficiency. Specific measures include the introduction of electronic manifests and widespread use of model waste disposal outsourcing agreements prepared by the legal divisions and the environmental management divisions. Also, introduction of an internet-based service to check contractual provisions required by statute proceeded and arrangements were completed at main offices and business sites in Japan by the end of FY2013.The more than 60 nationwide branches and sales offices of subsidiaries that merged with EBARA in 2012 concluded more than 150 waste disposal outsourcing agreements. To efficiently and appropriately renew and review the agreements with disposal companies while ensuring compliance by each branches and sales offices with waste disposal laws, we investigated the introduction of a service to perform all waste disposal outsourcing operations on behalf of the Company. Acting in cooperation with a leading waste disposal firm with a nationwide network of more than 1,000 collection and transportation, intermediate processing, and recycling companies, the service outsources all operations to industrial waste disposal companies including supporting contract execution operations, submitting requests for waste collection to collection and transportation companies, preparing and managing electronic manifests, and conducting internal audits and reliability surveys of disposal companies. As a result, the waste disposal outsourcing and management operations of EBARA branches and sales offices was greatly reduced and appropriate disposal is reliably performed in accordance with laws and regulations.

March 13, 2014 news (Japanese site only)http://www.ebara.co.jp/news/2014/20140313.html

Photovoltaic�modules�viewed�from�above�the�Fujisawa�District

＊1：【RoHS�Directive】�A�law�governing�the�use�of�specified�hazardous�materials�in�electrical�and�electronic�devices.＊2：【Conflict�Minerals】�Minerals�concerning�which�Article�1502�of�the�U.S.�Financial�Reform�Act�requires�the�disclosure�of�information�on�use


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Proper Disposal of PCB WasteMany EBARA business sites store large quantities of low and high concentration PCB waste. In FY2013, in internal coordination committee met four times and PCB waste disposal companies visited four sites to confirm on-site disposal conditions with the aim of steadily disposing of PCB waste. EBARA aims to dispose of all stored PCB waste by about 2019.

PCB Waste Disposal Results in FY2013◆ 205 drums with low-concentration PCB oil stored at the

Sodegaura District◆ 41 and a 2500 kVA transformer with high-concentration PCB

stored at the Tochigi District

Biodiversity Preservation Measures at the Fujisawa DistrictThe Fujisawa District, which has a green space of more than seven hectares, conducted a vegetation survey starting in FY2011 to preserve biodiversity and identified 128 species of plants in 51 families. In FY2013, a Green Space Development and Nature Observation Group made up of employees met four times to enhance and preserve biodiversity.The green space development included thinning of stone oak and other trees, elimination of black locust, and invasive species, and cutting of brush that became overgrown during the summer. This allowed for greater sunlight, and the grassy area was expanded. In conjunction with learning about biodiversity, participants also held nature observation meetings to observe trees from the perspective of an insect, make an acorn flute, build a rhinoceros beetle pasture, and conduct other activities. In addition, the trees removed for thinning were used to build walkways and steps. Through these measures, biodiversity in the Fujisawa District green space has increased and interest in biodiversity among employees is higher.

Future DevelopmentsIn his message in the CSR Report 2013, President Maeda stated, “CSR activities may be defined as practice and confirmation, by each and every employee, to see that the corporate economic activities are in accordance with social logic and standards, at harmony with the global environment, and always efficient.” In accordance with this approach, effective maintenance and management of ISO 14001 certification in Japan as well as efficient management of waste material are among the outstanding issues concerning which we will review existing mechanisms.To respond promptly to the adoption and revision of environmental laws and regulations in Japan and other countries and to conduct reliable environmental risk management and pollution prevention, we will actively investigate outside collaboration.For overseas Group companies, in FY2014 we will set the prevention of pollution and public waters and the atmosphere and rigorous waste management as basic policies. We will also encourage the acquisition of ISO 14001 certification and maintain strict compliance with environmental laws and regulations.

Removal�of�stored�PCB�(EBARA�Tochigi�District)

Employees�use�scythes�to�cut�weedy�brush

Building�steps



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Founding Spirit: Netsu to Makoto (Enthusiasm and Sincerity)

The EBARA Group CSR Policy of demonstrating passion and integrity in all its dealings incorporates the ideas of the founding spirit. As discussed on page 8, the founding spirit is positioned at the highest level of the EBARA Group corporate ethics. It is an expression of the values that all EBARA Group officers and employees should hold.Netsu to Makoto (enthusiasm and sincerity) is a term that was promoted by founder Issey Hatakeyama since EBARA’s founding period. He always dealt with people and performed his work with enthusiasm and sought to meet the expectations of society and customers through sincerity while implementing numerous creative innovations. He adopted as EBARA’s core principles improving technology as well as contributing to society by enhancing EBARA quality in all business processes and providing greater value to society. Netsu means acting with enthusiasm in one’s dealings with others and in one’s work — not just doing one’s assigned work, but also continually taking on new challenges and solving them through creativity and innovation.Makoto expresses a stance of sincerity and good faith. It means that we are sincere in our dealings with society and valued stakeholders we deal with through our business, act in good faith with regard to the skills of each employee, and seeking interpersonal harmony to achieve the shared goals of employees through concerted action. Enthusiasm and sincerity in conduct lead to EBARA quality and are the driving force behind the EBARA Group’s sustainability.Netsu to Makoto has been handed down in an unbroken line throughout the history of EBARA extending more than a century. By continuously meeting the expectations of society and our valued stakeholders, we enhance the feelings of responsibility and pride of every employee. We are aware that contributing to society under a spirit of enthusiasm and sincerity is the EBARA Group’s very reason for existing.

Building Trusting Relationships with Valued Stakeholders

CustomersWe provide outstanding products and services that take quality and safety into consideration throughout their life cycles through fair business practices (pages 18-28).We respond to customer requests and inquiries with enthusiasm and sincerity, address complaints promptly and appropriately, identify causes, and strive to prevent reoccurrences.Group companies or business divisions have established quality management systems and acquired ISO 9001 certification.

SuppliersWe conduct fair business and provide competitive opportunities to all suppliers, build trusting relationships and partnerships with them, and seek to engage in cooperative and creative business that supports mutual development (page 31).We also established a commendation program to express our gratitude toward suppliers that cooperate with EBARA Group production innovations and health and safety measures in plants and at work sites.

Quality Managementhttp://www.ebara.co.jp/en/csr/customer/quality-policy.html

Global Environment

Shareholders and Investors

Suppliers Local Communities

Employees

Customers

EBARA Group

Miura-Giken-Kogyo engages primarily in installation, repair, and maintenance of water and sewer facility machinery. We were responsible for installation of the pump, engine, and other machinery in the Hiroshima City Shinsenda Pump Station, which won a JS Director’s Award＊1. The work involved installation of additional equipment at a large rain water pump station that was in operation, and it was necessary to take into consideration the considerable risks posed by inflows of large amounts of water during heavy rainfall as well as managing operation of existing equipment, and we investigated the construction methods and confirmed procedures with EBARA. By implementing strict safety measures, the project was completed without incident. I believe that this was the result of ongoing training and a commitment to maintaining proper functioning of infrastructure. Going forward, I hope to make further advances with employees so we can provide reliability and safety while keeping in mind our contribution to society.

Kenichi Miura Director

Miura-Giken-Kogyo Co., Ltd.(Recognized as an excellent contractor at FY2012

Safety Convention)

Ensuring that Social Infrastructure Functions Properly is Our Mission and Our Source of Pride

VOICE Supplier's Voice

＊1：See table on page 47.


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5. The EBARA Group demonstrates shared passion and integrity in all its dealings.

Shareholders and InvestorsThe EBARA Group CSR Policy pronounces our duty to “strive to achieve mutual understanding through transparent information disclosure.” We are fully aware that accurate, timely, and appropriate disclosure of information relating to corporate management, operations, and finances to shareholders, investors, and other stakeholders is fundamental and essential for the EBARA Group to maintain social confidence as a publicly-traded company, and we undertake measures to fulfill this responsibility.

Main Relations concerning Shareholders and Investors① Delivery of business reports and interim business reports to

shareholders② Primarily for security analysts and institutional investor fund

managers:● Briefings on financial results at the end of the fiscal half and

the fiscal year (the president and the directors responsible for individual business segments directly explain results and management strategies)

● Periodic business site (plant) tours and small-group meetings held at appropriate times

● Individual IR meetings held on a quarterly basis (conducted as many as 200 times each fiscal year)

③ For individual institutional investors, primarily in Europe and the United States (held one to two times annually):● Briefings for foreign investors (the president directly

explains results and management strategies)● Participation in briefings (conferences) held by securities

companies as appropriate④ Enhancement of investor relations tools including websites

EmployeesWe established a program to recognize individuals, divisions, and organizations that make significant contributions to their company’s achievements in sales, technology, business improvement, CSR, and inventions.

Also, President’s Dialogue Meetings are held each year to provide an opportunity for direct dialogue between the president and employees.In FY2013, nine meetings were held with the participation of 95 employees from five Group companies in Japan with the aim of facilitating dialogue with employees who will be responsible for running the EBARA Group in the future, sharing information concerning EBARA’s vision for the near future, and confirming our intent to carry out that vision.

Local CommunitiesThe EBARA Group fulfills its social responsibility through its business activities and undertakes proactive measures to contribute to local communities as a good corporate citizen in five main areas: technology and arts promotion, interaction with the community, sports promotion, social welfare, and environmental preservation.When conducting social contribution measures, Group companies and individual divisions undertake independent action and work in cooperation with local governmental bodies, academic institutions, nonprofit organizations, and nongovernmental organizations. Social contribution programs do not produce results immediately, and a key feature of EBARA Group’s social contribution measures is the steady continuation of activity over long periods.In the area of technology and arts promotion, the EBARA Hatakeyama Memorial Fund has held technical seminars continuously for a quarter-century (page 38).EBARA has also supported the activities of the Hatakeyama Culture Foundation and the Hatakeyama Memorial Museum of Fine Art, which have been active in the area of technology and arts promotion since they were founded more than 50 years ago.The Hatakeyama Culture Foundation was established in 1960 by Issey Hatakeyama, the founder of EBARA, to support research and the dissemination and promotion of science and technology, develop education and academics through scholarship programs, and support industrial growth and cultural development.The Hatakeyama Memorial Museum of Fine Art was established in 1964. It has a collection of 1,300 works including six National Treasures and 32 Important Cultural Properties. The collection is made up of tea ceremony utensils, paintings, calligraphy, pottery, lacquerware, Noh costumes, and other items. Exhibits are held according to the seasons.In the areas of social welfare, environmental preservation, and interaction with the community, the EBARA Group donates goods and funds and also conducts programs in which Group employees and their families can participate (pages 38-39).In FY2013, a concert was held at the Haneda head office to provide an opportunity for young musicians to perform as a new social contribution program. The EBARA Group will continue programs with strong local ties and actively undertake new programs to support development by local residents.

Area No. of Awards

Sales 41Technology 33Business improvement 15

CSR 3Inventions, etc. 361

FY2013 Award Results

A President Dialogue Meeting held at the EBARA Kumamoto District


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EBARA Hatakeyama Memorial FundThe EBARA Hatakeyama Memorial Fund (EHMF) was established in 1989 in accordance with the wishes of the late Seiji Hatakeyama, the fifth president of EBARA. Guided by the belief that “EBARA does not monopolize environmental preservation technologies, but co-exists and prospers along with regional communities,” the fund has held technical seminars to share with various countries worldwide the technologies and experience EBARA has gained in order to construct and improve basic social infrastructure. EBARA Group employees participate in the seminars as lecturers. Through the end of FY2013, a total of 240 seminars have been held in 18 countries, mainly in Southeast Asia, with 11,083 participants.In response to strong requests from participants, the seminar topics have been extended in recent years beyond the basic technology of fluid machinery and pumps to basic planning and basic design of pump facilities used for irrigation, drainage and water supply systems and pump and chiller operation control and maintenance, contributing to the further development of the skills of local engineers. Last year, seminars were held for the first time in Colombia, South America and at Thammasat University in Thailand. In August 2013, a five-day seminar was held at the Asian Institute of Technology in Thailand with 44 participants from eight neighboring

countries attending lectures that focused on pump equipment used for water supply facilities.These seminars support the active development of the young employees from EBARA Group Companies not only in Japan but also overseas who serve as lecturers. In FY2013, employees from EBARA CORPORATION as well as Ebara Vietnam Pump Co., Ltd. and P.T. Ebara Indonesia gave lectures.

Community Interaction

I gave a lecture on operation and maintenance inspection of chillers and cooling towers at a technical seminar held by EHMF in Cikarang, Indonesia in February 2014. It was a tremendous honor for me to participate in the seminar as a lecturer.At the seminar, I gave a lecture on the importance of operation and maintenance inspections for maintaining optimal performance of chillers and cooling towers over the long term. My objective was for the participants to gain an adequate understanding of proper methods for maintaining equipment in good condition and saving energy.The international seminars held by EHMF are effective opportunities for conveying to customers the extensive knowledge that EBARA has accumulated. I believe it is extremely important to continue these seminars as a part of the social contribution programs of the EBARA Group.

Puandra Adithya GathmirP.T. Ebara Indonesia

Seminars Provide Opportunities for Effective Communications with Customers

VOICE

A seminar held at the Asian Institute of Technology in Thailand

Chronology of Main Social Contribution Programs (results through FY2013) (Year)

Area Main programs 1960 1970 1980 1990 2000 2010 2013

Technology and arts

promotion

Support of the EBARA Hatakeyama Culture Foundation

Support of the Hatakeyama Memorial Museum of Fine Art

International seminars held by the EBARA Hatakeyama Memorial Fund

Social welfare Donation of clothing to refugee camps

Sports promotion

Support for Haneda Vickies (basketball)

Ebara Shonan Sports Center (tennis and other sports programs)

Environmental preservation

EBARA Green Fund (forest preservation, tree planting)

EBARA Group Children around the World Environmental Art Exhibition

Participation in the Tokyo Greenship Action

Participation in the water source forest maintenance project "Kanagawa Suigen no Shinrin-Zukuri"

Interaction with the Community Plant tours for local residents

Technology and Arts Promotion


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Social WelfareSupport Programs for Disaster AreasIn addition to carrying out restoration projects for the areas affected by the Great East Japan Earthquake, the EBARA Group provides support in disaster areas through a variety of social contribution programs. We have been cooperating with a disaster area volunteer program conducted by Ota-ku since immediately after the earthquake in August 2011. In FY2013, thirteen employees participated in this program.The EBARA Green Fund, which is funded from money saved by reducing copy paper use by using both sides and making double-sided copies, supports the Ohana Ippai Plan, a local community restoration project being undertaken in Higashimatsushima City in Miyagi Prefecture by the Enishi Project, a volunteer organization in Ota-ku and the Tohoku Disaster Area Nature Observation and Environmental Education Program conducted by the Nature Conservation Society of Japan. It also donates funds to the National Land Afforestation Promotion Organization and the Organization for Industrial Spiritual and Cultural Advancement-International (OISCA) in order to cooperate with tree planting and coastal forest restoration projects near residential areas and schools in areas affected by disasters.

Social Welfare Programs of Ebara (Thailand) LimitedEbara (Thailand) Limited (ETL) commemorated the 20th anniversary of its foundation by donating submersible pumps to the Chonburi Province Environmental Sanitation Bureau and everyday sundries to the Rajvith Home for Girls, a relief facility for girls in Bangkok. In addition, 40 ETL employees conducted a cleanup of Bang Saen Beach.At Christmastime, employees visited the Baan Fuengfah childcare facility in Nonthaburi Province and held a Christmas party for the children.

Donation of clothing to refugee campsThis program began in 1998 when EBARA CORPORATION updated its uniforms and donated the old uniforms to a refugee camp and has been conducted every year since then. Clothing sent by EBARA Group employees around the country is collected at a facility near the EBARA head office and is sent to refugee camps around the world through nonprofit organizations. The work of sorting and boxing the clothing is performed by employee volunteers with cooperation from facilities for disabled individuals in the area of the head office. In FY2013, cooperation was received from Midori no Ayumi, an organization located in Ota-ku, Tokyo.

Sports PromotionThe EBARA Group focuses its efforts on promoting basketball and tennis. At the Ebara Shonan Sports Center, EBARA deepens its ties with the local community through tennis by providing a superior facility and services to local residents with the aim of nurturing world-class players.With regard to basketball, EBARA supports the Haneda Vickies, part of the Women’s Japan Basketball League. The Haneda Vickies got its start in 1971 as the Ebara Women’s Basketball Club. In 2013, the name was changed to the Haneda Vickies Women’s Basketball Club to promote closer ties with the local community. The EBARA Group is committed to continuing its support of the Haneda Vickies.

Environmental Preservation and Interaction with the Community

EBARA Group Children around the World Environmental Art ExhibitionThis event is an exhibit of art works concerning nature or the environment created by the children of EBARA Group employees around the world. The exhibit has been held since 1998, and to date, some 6,151 children have submitted works. In FY 2013, a total of 394 works from 11 countries and regions were submitted to the 16th exhibition. At the time of the exhibition, works on the theme “the beautiful global environment” created by students at five elementary schools in Ota-ku, Tokyo, where the EBARA head office is located, were also displayed. The student created the works over a period of four months. Personnel from the “Kirinkan” of the Continued Employment Support Type B Office, an organization that provides support to disabled persons to obtain or maintain qualifications for employment, assisted with the exhibit preparations and site operation.During the exhibition at Ginza Art Hall, the advantages of the site were used to hold the Nature Observation in Hibiya Park & Art Program, which involves observing wildlife, insects, and so on at the nearby Hibiya Park and expressing through art the impressions that participants received at the park. Also, a Nature Game and Bamboo Ware Class, an environmental education program for families with biodiversity in Satoyama semi-natural areas as the theme.

Other Community Interaction ProgramsEBARA Group companies as well as the offices and branches of individual companies engage in active community interaction programs. Among these programs are cleanup activities in the vicinity of offices and branches, crime prevention activities (support by the Chubu Branch Office for responding to consultation calls made by children), summer evening festivals to which local residents are invited (Fujisawa and Futtsu Districts, etc), and plant tours and internships (Sodegaura and Futtsu Districts), putting into practice the concept of the EBARA Group acting as a good member of its community.

The Christmas party held by ETL employees

Additional information on community interaction programs can be found on the "Together with Community" page of the EBARA website.http://www.ebara.co.jp/en/csr/communication/community/


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Basic Idea on Respecting Human RightsWe protect and respect the human rights of persons associated with our business as well as individual with an interest in EBARA Group activities. Our approach to respect for human rights is based on the International Labour Organization’s international labor standards.We conduct education and training on human rights for employees on an ongoing basis and make efforts to maintain and improve good relations within worksites and with customers, suppliers, and local residents.

Consultation service to solve human rights problemsIn-house and outside human rights consultation hotlines are available to Group companies in Japan. The in-house hotline, operated by a specialized department, deals mainly with issues of harassment, while the outside hotline is operated by an outside attorney to address compliance issues. In FY2013, approximately 35 inquiries were made to in-house and outside hotlines, of which approximately 15 concerned harassment and were addressed through collaboration with consultation hotlines in individual Group companies. In response to an increase in harassment issues due to misunderstandings caused by poor communications, we conducted discussion-based training on what types of statements can cause discomfort in others. The CSR Committee also reported on incidents of harassment addressed by the consultation hotlines in individual Group companies and shared information on preventing reoccurrences.Overseas Group companies were instructed in FY 2012 to establish and operate consultation hotlines. As of the end of FY2013, 23 Group companies in China, Southeast Asia, Europe, and the United States have established and are operating hotlines.

Human rights enlightenment activitiesWe have conducted human rights education on a continuous basis by including human rights topics in the annual CSR training conducted for all EBARA Group employees in Japan (including contract and temporary employees) since FY2009. In FY2013, familiar examples from within the Group were used to deepen understanding of harassment. The results of the compliance survey conducted at Group companies in Japan since FY2007 indicate that incidents of workplace harassment are in a downward trend. Individual training on improved communications is conducted at organizations (divisions or companies) that have higher concerns regarding harassment compared to other worksites to raise awareness. Human rights training is conducted for all personnel assigned to overseas sites, new management-level employees, and new employees. We will continue to conduct human rights education and training in the future.

Compliance QuestionnaireConducted at 19 Group Companies in Japan in FY2013

Basic Approach to Respecting DiversityWe fully understand that when engaging on global corporate business, one aspect of our corporate social responsibility is being aware of differences in culture and practices in different regions around the world, recognizing diversity in human resources, and maintaining employment. We strive to enable employees with diverse attributes to exercise their full potential without regard for nationality, sex, or other characteristics.

〈Basic Policy on Respecting Diversity〉

◆ Hiring without regard for nationality◆ Provision of greater opportunities to female employees◆ Employment of older workers◆ Employment of the disabled

Hiring Foreign EmployeesWe hire diverse employees who have enthusiasm and sincerity for being innovative and original regardless of their nationality. Of 55 career-track employees hired in April 2014, fifteen were nationals of countries other than Japan including China, Taiwan, South Korea, and Vietnam.

Provision of Greater Opportunities to Female EmployeesWe support the career advancement of our female employees and strive to ensure that their work is satisfying. We offer shortened working hours, half-day leave, childcare and nursing care leave, and other programs to support a balance between work and family life. In FY2013, we enhanced the range of work styles by introducing a program that allows employees to take vacation time on an hourly basis and a flexible working hours program so that both men and women can engage in housework, childcare, and nursing care. In conjunction with the introduction of these programs, we conducted briefings for line managers＊1 to promote a good work-life balance.We also take measures to develop environments where women can exhibit their individual strengths in a variety of areas and work with peace of mind.

［%］

2008 2009 2010 2011 20122007 2013

20

10

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30

Experienced power harassment

Experienced sexual harassment

[Fiscal Year]

＊1：【Line manager】 A term used in the EBARA Group to managers on the section head and general manager level.


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Status of Programs Related to Work-Life Balance at Key Group CompaniesCompany

name EBR ED EHB ERS EETC EEP EFT EA

Total number of employees 4,016 210 160 679 422 2,072 198 151

Paid holiday acquisition rate(%) 66.3 64.1 71.4 51.4 66.6 60.1 43.0 76.0

Number of child-care leaves taken 35 2 1 4 3 3 1 4

Number of family-care leaves taken 4 0 0 1 0 0 0 0

EBR：EBARA CORPORATION ED：EBARA DENSAN LTD.EHB：Ebara Hamada Blower Co., Ltd. ERS：Ebara Refrigeration Equipment & Systems Co., Ltd.EETC：Elliott Ebara Turbomachinery Corporation EEP：Ebara Environmental Plant Co., Ltd.EFT：EBARA FIELD TECH. CORPORATION EA：EBARA AGENCY CO., LTD.

In FY2013, we conducted seminars with the labor union to promote greater opportunities for female employees. At the seminars, group discussions were held on how to provide greater opportunities to female employees in the EBARA Group. The participants presented a variety of opinions such as the need to provide opportunities to women to increase enthusiasm for work and enhance skills and the importance of woman developing their own career plans.

Employment of Older WorkersEBARA Group companies in Japan have set 60 as the mandatory retirement age, but we encourage the employment of older workers and have programs to rehire individuals who have special skills, abilities, qualifications or knowledge and employees who have highly matured, practical expertise after they reach the mandatory retirement age. The engagement of older workers is useful for handing down skills and abilities obtained over many years to younger employees. We will seek to understand the working style needs of older workers and promote employment in ways that facilitate their individual abilities.

Employment of the DisabledThe EBARA Group is working with local communities as well as broader society to increase the proportion of its workforce accounted for by persons with disabilities by promoting vocational independence and creating opportunities for social participation. As a part of these efforts, we established EBARA EARNEST Co., Ltd., a special affiliate company, in FY2012. In April 2014, the company hired six persons with intellectual disabilities and assigned them to the Haneda, Futtsu, and Fujisawa offices. Together with employees hired in FY2012, EBARA EARNEST employs a total of 11 persons.

Diversity Data for Principal Group CompaniesCompany

name EBR ED EHB ERS EETC EEP EFT EA

Total number of employees 4,016 210 160 679 422 2,072 198 151

Number of female employees 819 23 19 149 51 151 30 71

Number of female management-level

employees44 4 0 6 6 4 1 1

Actual disabled person hiring rate(%) 1.80 0.50 ―※ 1.20 1.90 1.80 ―※ ―※

Number of non-Japanese hired 38 1 1 2 18 0 1 0

Number of retired employees hired 305 22 14 46 34 52 6 16

EBR：EBARA CORPORATION ED：EBARA DENSAN LTD.EHB：Ebara Hamada Blower Co., Ltd. ERS：Ebara Refrigeration Equipment & Systems Co., Ltd.EETC：Elliott Ebara Turbomachinery Corporation EEP：Ebara Environmental Plant Co., Ltd.EFT：EBARA FIELD TECH. CORPORATION EA：EBARA AGENCY CO., LTD.※ A dash indicates that the company is exempt from the Act for Promotion of Employ-

ment of Persons with Disabilities.

The EBARA Chubu Branch Office and Nagoya Branch were recognized by city of Nagoya for their proactive efforts to contribute to the local community raising awareness of childcare and a good work-life balance by employees.These two sites were commended for creating the creation of a home-like atmosphere in the workplace, leading to a high number of employees returning to work after taking long-term childcare leave and many employees making use of their annual paid leave.

EBARA Sites Receives Award for Excellence under Nagoya City Corporate Certification and Commendation Program for

Childcare Support for FY2013

A seminar on providing greater opportunities to women

The awards ceremony(From the left: Nagoya Mayor Kawamura, Chubu Branch Office General Manager Miyazaki, and Managing Executive Officer Shibuya)

The City of Nagoya mark for certified childcare-supporting businesses


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Our View on Information Disclosure and Communication

The EBARA Group believes that building mutual understanding and trust with our stakeholders through high-quality communication is indispensable to the continued growth of our group. Our basic stance is to proactively disclose information so that stakeholders can gain better understanding of the Group.We disclose important financial and corporate information in a fair, timely and appropriate manner, and do so in compliance with laws and regulations such as the Financial Instruments and Exchange Act and the timely disclosure regulations stipulated by the Tokyo Stock Exchange. Even in the case of information not required by the timely disclosure regulations, if we believe the information is necessary for evaluation, we will use various methods (news releases, postings on our website, exhibitions and briefings for analysts and institutional investors) to disclose the information in a fair, timely, and appropriate manner. We also seek two-way communication with stakeholders, such as using their opinions as feedback for the Group.

Global Website LaunchedThe EBARA Group engages in business globally, and since the fiscal term ended March 2013, overseas sales have contributed to more than 50% of the Group’s business.We launched a global website so that stakeholders, customers and suppliers from around the world can gain a better understanding of the EBARA Group. The site was launched

December 2013 in three languages: Japanese, English, and Thai. We later added Chinese, Indonesian, Vietnamese, Italian, and Portuguese to bring the total number of languages to eight. The global site provides corporate information as well as videos introducing our pump business.We began posting videos with company information on the Japanese and English websites. We use a range of tools to enhance our stakeholder’s understanding of the EBARA Group and we will continue to make proactive information disclosures.

EBARA Group Information Disclosed to Key Stakeholders and Opportunities for CommunicationStakeholder Disclosed Information Communication Opportunities

Customers ■ Product and service information

● Communication with customers in our day-to-day marketing activities is very important to us.● Product and service information is offered through catalogs and websites.

Shareholders and investors

■ Management, business and financial information

● The EBARA Group discloses management, business and financial information in a fair and timely manner.

● In addition to opportunities for direct dialogue, through result briefings and general shareholders' meetings, we publish annual reports and business reports, which are available on our website.

Suppliers

■ Business status■ Policies and goals

regarding procurement, the environment, product quality and safety

● The EBARA Group's business highlights, policies, top priority tasks for the current year and other information presented through the "Partner Companies Association," which is an organization of suppliers involved in the implementation of the Group's businesses.

● The Partner Companies Association joins the Group's training sessions to help maintain a safe and healthy work environment.

Society and community

(including public administrations and academic institutions )

■ Environmental impact on the community from corporate activities

■ R&D information

● We invite local residents to attend plant tours and summer evening festivals to promote comradery, communication and to maintaine our relationships of trust.

● Environmental impact data, such as waste water and gas emissions from our major production bases, and other environmental data, such as energy consumption and waste discharge, are periodically published and updated on our website.

● Plant tours conducted in response to requests from local schools.● Results of the EBARA Group's research and development are released quarterly in the EBARA

Engineering Review (booklet and website) to promote collaboration among industry, government, and academia.

Employees

■ Management policy and goals

● Our group magazine (an informational magazine for employees in Japan), domestic intranet, and overseas intranet (in English and Chinese) are used to share information on EBARA Group's management policies and related topics.

● We hold Joint Labor-Management Conference meetings with the labor union periodically and when needed, work together to solve problems and share information with our Group companies, creating a better workplace environment.

The EBARA Global Websitehttp://www.ebara.com/global/


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7. The EBARA Group strives to achieve mutual understanding through transparent information disclosure.

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Transparency

Basic Approach on Personnel and Employment

Policies for Human Affairs, Resources and DevelopmentWe established human resource programs that respect individual diversity and enable personnel to function effectively in accordance with management plans through the end of FY2013.Our basic missions are to recruit and develop a diverse workforce from around the world that takes on challenges with creative innovation and to establish a working environment that enables all employees to make the most of their individual skills. To achieve this, we make sure to create and implement human resource development programs and perform personnel management operations from a group-wide perspective and to reflect the following policies in human resources and staff development.

① Establish conditions for effective governance including the creation of nomination and compensation committees for each of our overseas affiliates to support autonomous management.

② Hire talented international personnel at the Group head office and develop the human resources necessary for the development of global business.

③ Establish and implement a human resource rotation system to achieve the optimal placement of personnel.

④ Introduce systems to encourage young employees hired in Japan to gain experience working overseas and become human resources capable of contributing to global business development. See that more than half of the employees hired in Japan gain overseas work experience by their 10th year of employment.

⑤ Establish work environments that enable each employee to fully invest their skills into their work regardless of individual attributes such as sex or nationality.

We will formulate and implement the policies set forth in ① through ⑤ above from a group-wide perspective starting in FY2014.

Development of Personnel SystemsEBARA creates personnel systems that will foster the growth and prosperity of the company and its employees while keeping in mind the following five items.

1. Upgrade systems to align the vectors of operational objectives and the actions of each individual.

2. Reform policies that encourage promotion by seniority to assess employees and determine how they are rewarded based on their role and performance.

3. Set up systems that heighten awareness of personal responsibility and develop autonomy.

4. While considering the individual circumstances of each company, set up systems to look at things from a comprehensive corporate-wide perspective.

5. Make the systems transparent and easy to understand.

Human Resource Development of EBARA Group

Ten Group companies in Japan implemented EBARA Group Training 2013, a group-wide human resource development program, with 1,346 employees participating. Previously, the program was intended primarily to nurture career-track and management-level employees, but starting in FY2013, new training programs for administrative staff and technical duties were introduced. In the first year of the program, 132 administrative staff members and 155 technical personnel underwent training concerning independent action, communications, leadership, followership, and other topics and prepared concrete action plans for putting their training into practice at the worksite starting the following day.The EBARA Group Human Resource Development Committee, which is made up of members selected from EBARA and the EBARA Group’s six main domestic companies, meets monthly to discuss the particulars of individual training programs. Starting in FY2014, we are planning to conduct senior line manager training on the division manager (general manager) level and higher. We are committed to making further enhancements to human resource development programs throughout the EBARA Group.

EBARA Group Training 2013

Programs by Job Group

Purpose

Business Person Training Advanced 1

(for employees that have been at the company for 7 years )

Business Person Training Advanced 2

(for employees that have been at the company for 9 years )

OJT Leader Training (director equivalent)

Administrative Staff Training

Progress 1 (35 Years Old)





Technical Personnel New

Employee Business Etiquette Training

Technical Personnel Training 1

(20-29 Years Old)


(50-59 Years Old)


(40-49 Years Old)


(30-39 Years Old)

Newly Appointed Management-level Employees Training

(for newly appointed management positions other than Line Managers)

Evaluator Training (Evaluators of Past Non-

Participants)

Line Manager Training (group leader, section

head)

New Employee Follow-up Training

New Employee Training

Business Person Training Basic 2(for employees that have been at the

company for 5 years)

Business Person Training Basic 1(for employees that have been at the

company for 3 years)

Career-Track Employees / Management-level Employees

Administrative Staff Technical Work

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Global Human Resource Recruiting and Development Programs

EBARA is taking measures to globalize its domestic business sites to decrease the gap in awareness between overseas and domestic bases. As a part of that effort, we are focusing our efforts on recruiting international employees that bring diverse perspectives to the company. In April 2014, we hired 15 international employees including eight engineers who graduated from universities in China, South Korea, and Taiwan as well as seven foreign students from China, South Korea and Vietnam. We offer a pre-employment internship for new international hires so they can become acclimated quickly to the new culture and life in Japan as well as gain a feel for the workplace atmosphere and gain work experience before the official start of their employment, enabling them to start their working lives in a foreign country stress-free. We also conduct third-party interviews of international employees so they can become established in their new positions. Third parties from outside the company interview the employees in their native languages to identify any areas of concern or dissatisfaction, and the information is used to make improvements. In addition, detailed guidance that reflect the results of the third-party interviews is provided to the departments where the international employees work.We have great expectations for international employees as key personnel in our global business and as contributors to the globalization of domestic worksites.

Personnel Measures to Support International Employees

Assignment to Overseas Group CompaniesThe Global Human Resources Training Program has been implemented since FY2011 to nurture personnel who are capable of supporting global business by assigning them to overseas Group companies. We believe that global human resources must have flexible business sensibilities not constrained by conventional wisdom in Japan and the ability to adapt to different cultures. Targeting more than half in total of the young employees in the Fluid Machinery & Systems

I prepare estimates for custom pumps to be used overseas and provide technical support in the sales division.I underwent training in a development department for about six months in Japan prior to starting work with the aim of learning about pumps and becoming acclimated to life in Japan. I became accustomed to living in Japan while learning many different things during the new employee training. I am also studying Japanese in the Japanese language program provided by EBARA. My job became much easier as my Japanese improved, and I intend to continue studying Japanese. I experienced cherry blossom viewing and snowboarding for the first time with my colleagues and enjoyed those experiences very much.I participate in the Eisa Team＊1 formed by the labor union and enjoy interacting with people from different divisions. I hope to cooperate with many others and contribute to society.

When I first heard about the overseas assignments, I was little unsure, but I felt that I was being presented a good opportunity, so I decided to do it. Sales activities in South Korea present difficulties different from those in Japan. During a meeting with a South Korean customer, the customer said some harsh things and I felt frustrated. After the meeting I was feeling down, but a female engineer from the customer’s company encouraged me by telling me about Korean business practices and her own experiences, and thanks to her I became determined to try even harder and improve my skills. I used these difficulties to achieve personal growth. Women working on the front lines of business are steadily increasing in South Korea. I hope to continue making progress so I can work even harder and model myself after women who work with enthusiasm.

Arjun Desai Custom Pump Business Unit

Ebara Fluid Machinery & Systems Company(Joined the company in April 2013; from India)

Miwa Shiga Pump Sales Department

Ebara Fluid Machinery Korea Co., Ltd.(Assigned in April 2013)

I Hope to Cooperate with Many Others and Contribute to Society I Hope to Model Myself

After Women Perform Their Work with Enthusiasm

VOICE

VOICE

＊1：【 Eisa Team】 A voluntary organization of fans of eisa Okinawan folk dance formed by the Labor Union. The group participates in various events inside and outside the company.

※ Pre-employment internships are offered only to international employees who are recruited overseas (excluding foreign students)

Workplace

Human Resources ① Pre-employment

internship② Japanese language

lessons (training continued until the highest level of the Japanese-Language Proficiency Test is passed)

③ Worksite guidance

④ On-the-job leader training

⑤ Third-party interviews

International Employees


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The EBARA Group builds relationships of trust with stakeholders.8. The EBARA Group creates secure, safe, and positive work environment.

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Company, they have overseas experience performing the same roles as the employees of the companies where they are assigned. Their direct supervisors are in principle local employees of the company, and the aim is to obtain effective communication skills as well as language skills. Through the end of FY2013, approximately 30 employees were assigned to countries such as the United States, Brazil, China, South Korea, Italy, Thailand, Vietnam, Singapore, and Bahrain.In January 2014, Results Briefings were conducted by employees assigned to a foreign country in the first year of the program prior to their return to Japan. Proposals and opinions from unique perspectives were presented to EBARA executives. We will continue this program in the future and will seek to raise the level of global human resources even further.

Training for Directors Assigned to Group Companies

We conduct training for new directors of Group companies as a part of our manager training programs. The aim is to teach employees involved in management who are assigned to Group companies as directors the fundamentals of the Companies Act and their roles and responsibilities as Group company directors.In light of the rising importance of our overseas business in conjunction with the progress of business globalization, employees who work as directors assigned to overseas Group companies were added to this program. The content of the training was reviewed to cover the CSR Policy at the core of EBARA Group corporate ethics so that directors can perform their role in spreading the EBARA Group corporate identity.We provided training for 81 employees in total, which took place in October 2013 and March 2014. Each of the instructors appointed by the relevant departments, including the president and Audit and Supervisory Board members, gave lectures on the position, roles, and responsibilities of directors, the legal duties of directors, CSR, and group governance so that directors assigned to group companies can perform their duties with a strong sense of ethics.We will continue this training program for assigned directors who play important roles in enhancing the quality of CSR programs at Group companies in Japan and overseas. This creates opportunities to deepen understanding of their roles and responsibilities and raise awareness concerning corporate ethics frameworks.

Industrial Health and SafetyFundamental ApproachesThe high priority that we place on ensuring industrial health and safety and physical and mental health management is discussed in the EBARA Group Code of Conduct, Chapter 2: Our Commitment, 5: Good Working Environments.A Health and Safety Committee at each worksite sets annual targets and takes measures to achieve those targets.

StructureHealth and Safety Organizational Chart

In the EBARA Group, each business site has a Health and Safety Committee and a Health Promotion Committee, and the Central Health and Safety Committee and Central Health Promotion Committee centrally manage relevant information.Also, the Industrial Safety Liaison meeting was established to raise health and safety levels companywide through measures such as mutual safety patrols.

Occurrence of Industrial Accidents※ in Principal Group CompaniesIndustrial

accident status FY EBR ED EHB ERS EETC EEP EFT EA

Total number of employees 2013 4,016 210 160 679 422 2,072 198 151

Frequency(%)

2010 0.00 0.00 13.80 0.00 0.00 1.12 0.00 3.14

2011 0.38 2.53 4.60 0.00 0.00 0.79 0.00 6.52

2012 0.24 2.42 11.40 4.53 5.32 0.89 0.00 3.25

2013 0.00 5.02 3.70 3.00 1.28 1.06 0.00 8.10

Number of industrial accidents

2010 10 0 3 0 4 25 0 1

2011 10 1 1 0 8 31 0 2

2012 20 1 5 7 4 34 0 1

2013 18 2 1 7 1 39 0 3

EBR ： EBARA CORPORATIONED ： EBARA DENSAN LTD.EHB ： Ebara Hamada Blower Co., Ltd.ERS ： Ebara Refrigeration Equipment & Systems Co., Ltd.EETC ： Elliott Ebara Turbomachinery CorporationEEP ： Ebara Environmental Plant Co., Ltd.EFT ： EBARA FIELD TECH. CORPORATIONEA ： EBARA AGENCY CO., LTD.

※Including minor accidents that are not serious enough to cause industrial accidents.

Business site Health and

Safety Committees

Central Health

Promotion Committee

Central Health and

Safety Committee

Business site Health

Promotion Committees

Industrial Safety Liaison

Meeting

Business site executive general

managers

Department heads

Employees

Construction Division Health

and Safety Conference

Industrial Physician

Health and Safety Managers

Health and Safety Divisions

Health and Safety Divisions

Company presidents

Department heads

Construction Division

Employees

President


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Occupational Health and Safety Management SystemOrganizations with OHSAS 18001

Certification Year certification obtained

EBARA Kumamoto District 2008年Ebara Machinery (China) Co., Ltd. 2011年Ebara Refrigeration Equipment & Systems Co., Ltd. 2013年

Safety ConferenceThe EBARA Group conducts safety-related events at each company and business site during National Safety Week each year to promote industrial accident prevention activities, raise awareness of safety, and improve workplace safety programs even further.In 2013, safety events were conducted under the slogan “Comply with Rules to Make Workplaces Safe: Eliminate Accidents through Combined Efforts.” Individual business sites implement programs such as safety training, safe workplace commendations, and safety slogan campaigns and awards.

Mutual Safety PatrolsThe EBARA Group conducts mutual safety patrols of each business site and shares information regarding best practices at individual sites to create opportunities to identify risks that normally would be overlooked because employees become accustomed to them.

Mental HealthWe are working to strengthen our mental health measures so that employees can maintain good mental and physical health and perform their work enthusiastically every day. We set up a specialized Mental Health Consultation Service to support early

response and early treatment, and employees can undergo a clinical examination by a mental health doctor (neuropsychiatric) at the EBARA head office. We also hold ongoing training sessions for employees at individual workplaces as part of our mental health measures. In FY2013, we created a new Mental Health Outside Consultation Service, making it possible for employees to conduct consultations on a wide range of issues and receive counseling by outside experts without the need to go through the company. One feature of this program is that experts will go to any site in Japan designated by the employee for consultations. This provides fair use conditions not dictated by the employee’s workplace or residence. Mental health measures require ongoing efforts, and we are committed to continuing and enhancing these measures in the future.

Life Improvement ProgramsTo decrease the number of abnormal diagnoses during regular health check-ups and prevent and address lifestyle-related diseases, we have an ongoing walking program called “Walk Well.” We lend pedometers to program participants, and each participant records the number of steps taken each day on a dedicated website so that the participants can check on each other’s daily distances. In addition to individual participation, there are workplace and voluntary groups that participate as teams, which serves as a way of initiating communication among employees. This program started in FY2009 with 160 participants and expanded to more than 1,000 participants in FY2013. During the program period, various activities are conducted to encourage enjoyable participation including periodic body composition measurements, distribution of a column written　by a doctor, and campaigns that award prizes to the participants with the highest number of steps. A regular check-up conducted at the end of the eight-month program measures weight, blood pressure, and blood sugar levels, and participants who show improvement in their health data are given prizes to encourage participation. We believe that concrete results such as “I lost more than 10 kg” and “I no longer have abnormal health data results” are not only a source of joy for the employees themselves, but also lead to an improved workforce, which in turn is an asset to the company. We will continue to support efforts that help employees maintain their health as they work.

Number of Walk Well Participants

An event conducted in conjunction with national safety weekAwards were presented for safe workplace and excellent safety slogans.

A mutual safety patrol

［Persons］

2009 2010 2011 2012 2013

160160

378378446446

740740

1,0041,004

600

400

200

0

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1,000

800

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The EBARA Group builds relationships of trust with stakeholders.8. The EBARA Group creates secure, safe, and positive work environment.

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High Quality CommunicationsWe believe that trusting relationships are built with customers, suppliers, shareholders and investors, local communities, and employees through high-quality communications. High-quality communications is achieved by practicing items ① through ⑧ of the EBARA Group CSR Policy (page 8). The EBARA Group will move forward with pride in its mission of making extensive contributions to society by providing superior technology and the best possible service while striving to act in ways that make our stakeholders feel pride in the EBARA Group.

■ Customers take pride in their use of EBARA Group technologies, products, and services.

■ Suppliers take pride in doing business with the EBARA Group.■ Shareholders and investors take pride in their investments in

the EBARA Group.■ Local Communities take pride in building better communities

in collaboration with the EBARA Group.■ Employees take pride in working for the EBARA Group.

Proof of Trust in the EBARA GroupThe awards that we have received from customers, suppliers, community members and other stakeholders speak to the trust that they feel in the EBARA Group.

Turbomachinery Society of JapanSpecial Contribution Award Com-memorating the 40th Anniversary of the Society’s Foundation

Trophy presented to ETI employees

Proof of the Trust Placed in the EBARA Group by Stakeholders

Customers

● Supplier Excellence Award in the local site category received from Analog Devices, Inc. (Ebara Technologies Incorporated)● Office manager received an award for excellent construction repair work on fire safety equipment in the Airport North Tunnel from the

Tokyo National Highway Office of the Kanto Regional Development Bureau, Ministry of Land, Infrastructure, Transport and Tourism (EBARA)● Pump course conducted in Mongolia (Ebara Machinery (China) Co., Ltd.)● Received award for excellent safety management at a worksite from the Tokyo Bureau of Sewerage, specifically for Miyagi Water

Reclamation Center main pump repair construction (EBARA)● Received Director’s Award granted by the Japan Sewage Works Agency for excellent execution of construction work, specifically for the

second phase of Shinsenda Pump facility construction in Hiroshima City

Suppliers ● Invited to New Year’s party and other events held by the Partner Companies Association and provided opportunities to give lecture (EBARA)

Shareholders and Investors

● EBARA is included in the Socially Responsible Investment Index as a company that takes excellent CSR measures. Website: http://www.ebara.co.jp/en/ir/sri.html

Community Members

● Came in second place in a firefighting technique competition held by the Fujisawa City Plant Fire Prevention Liaison Council (EBARA)● EBARA products used at 24 of 102 agricultural water sources selected by Niigata Prefecture (EBARA)● In the United States, American Made Movie selected 30 companies that are contributing to local communities and society as recipients of

its Be A Part Award. Elliott Company was the only manufacturer in the Pittsburgh region selected. (Elliott Company)● Received a Special Contribution Award commemorating the 40th Anniversary of the foundation of the Turbomachinery Society of Japan

(EBARA)● Received a New Energy Foundation award, along with Hokkaido Electric Power Co., Inc. and Fuji Electric Co., Ltd. for effective use of

irrigation water discharge from Shumarinai Lake for generating electricity (EBARA)● Received Award for Excellence as a company that supports childcare by employees under the Nagoya City commendation program for

FY2013 (EBARA, EBARA DENSAN LTD., Ebara Environmental Plant Co., Ltd. and other Group companies)

Employees

● Established a program to commend efforts that contribute to business development In FY2013, the results of 92 projects in technology, sales, improvement of operations, and CSR were commended. (EBARA) EBARA Group companies have also established commendation programs to recognize outstanding efforts by employees (EBARA Group companies)

● President Dialogue Meetings are held between employees from EBARA Group companies and the president to discuss the future of the EBARA Group. In FY2013, meetings were held nine times at five Group companies with a total of 95 employees participating. (EBARA Group companies in Japan)

● Ebara Qingdao Co., Ltd. employees and family members traveled to Japan to foster interaction with Ebara Environmental Plant Co., Ltd. officers and employees. (Ebara Environmental Plant)


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CSR Committee Advisor Comments

Impressions concerning the EBARA Group CSR Report 2014

In contrast to the business reports, financial statements, and securities reports whose preparation is required by laws and regulations, CSR reports are voluntarily prepared by companies based on their own determinations and knowledge, and the content and method of presentation are an expression of the corporate group’s identity. As indicated by the statement on the front cover and P14-15 that “EBARA Group technologies, products, and services support the realization of a safe, peaceful and enriched society and development in different regions of the world,” the content of the EBARA Group CSR Report 2014 is intended primarily to convey the current status of EBARA Group business activities to its stakeholders. President Toichi Maeda comments in the report that “All of EBARA Group employees will share Ebara Way and engage in businesses that will contribute to society,” and in line with that, I took this report to be intended primarily as a presentation of the Group’s business activities and the E-Plan2016, the Group’s new medium-term management plan, in accordance with its CSR Policy.Within the report, the presentation of environmental information by the EBARA Group describes the relationship between the results of the Group’s business activities and society based on specific quantitative analysis and contains multifaceted and comprehensive detail. When reporting on CSR results, it is important to use quantitative data to perform analyses of the results, and when there is continuity of data, it serves as evidence of the effects of CSR measures. The environmental report contains graphs of major environmental performance data that allow for comparisons over the most recent five years

with 2000 as the base year. This type of data presentation is commendable.It is desirable that company reports not be limited to presentations of business activities but also make reference to the types of solutions that are provided to society.The human rights report presents information on the status of programs related to the work-life balance at key group companies and on diversity data at principal Group companies. References to the relationship between the results of these data analyses and articles on briefings and seminars held on these topics are desirable. Similarly, the report on labor practices provides data on the incidence of occupational accidents at key Group companies, but there is no analysis in the prior discussion referencing this information. Looking at the data, it appears that occupational accidents are increasing, and a discussion of the specific measures being taken in response would be welcomed.In the report on community participation and development, awards presented by various organizations are described under the heading Proof of Trust in the EBARA Group, but in future CSR reports, I would expect information concerning the results of communications with various external groups that tend to be critical of the Group’s business activities or with which the Group tends to have a confrontational relationship.I look forward to the publication of future CSR reports with more multifaceted and specific information regarding the current circumstances of the EBARA Group, which conducts good-faith business activities with an emphasis on compliance.

Member of the Dai-ichi Tokyo Bar Association. Has been a CSR Committee Advisor for EBARA CORPORATION since April 2013. Provides wide-ranging support to the relationships among the company, employees and labor union and engages in activities based on the belief of raising the social value of businesses.

Ms.Shione Kinoshita AttorneyDaiichi Fuyo Law Office


EBARA's CSR as a Global Corporate Group

Third Party VerificationThe EBARA Group CSR Report 2014 has received verification to a limited level of assurance by Bureau Veritas Japan Co., Ltd. (hereinafter, Bureau Veritas) with regards to reporting on greenhouse gas (GHG) emissions for fiscal 2013. (Dated June 30, 2014.)

We have quoted key points from the Greenhouse Gas Emissions Verification Statement issued by Bureau Veritas below.

1. Scope of VerificationScope 1 and Scope 2 GHG emissions■ CO2 emissions from energy use through business operations of the EBARA Group's 48 sites within Japan for the period from April 1, 2013

to March 31, 2014.

2. MethodologyBureau Veritas conducted the following activities as a part of the verification to a limited level of assurance in accordance with the requirements of ISO 14064-3:2006 "Greenhouse gases Part 3: Specification with guidance for the validation and verification of greenhouse gas assertions."■ Interviews with relevant personnel of EBARA responsible for the identification and calculation of GHG emissions;■ Review of EBARA's information systems and methodology for collection, aggregation, and analysis of information used to determine

GHG emissions; and■Audit of a sample of source data to check the accuracy of quantified GHG emissions.

3. ConclusionBased on the verification work and processes followed, there is no evidence to suggest that the GHG emission assertions shown below:■are not materially correct and are not a fair representation of the GHG missions, as per the scope of work;■were not prepared in accordance with methodology for calculating GHG missions established by EBARA.

【Statement of Independence, Impartiality and Competence】No Bureau Veritas verification team member has a business relationship with EBARA beyond that required of this assignment.

Business Activities and Future CSR MeasuresFY2013 was the final year of the E-Plan2013 Medium-Term Management Plan and was the year for review of the three-year period from 2011 and also when the E-Plan2016 new medium-term management plan was adopted. The E-Plan2016 clearly states with respect to the relationship between the Ebara Way including the CSR Policy and business activities that the concept that forms the basis of all policies and measures implemented under the Medium-Term Management Plan is closely linked to the Ebara Way.The themes of the EBARA Group’s CSR programs anticipates that social and economic conditions are not the same in all regions around the world. In addition, social values are fluid and it is possible that responses to new topics will be required. Some possible areas where responses will be needed include occupational safety, human rights, and diversification of working styles. By prioritizing the measures that will be addressed in the relationship with business activities, however, I believe that employees can participate in CSR programs with a sense of conviction. Besides, as Attorney Kinoshita points out in her comments, by clearly specifying key performance indicators (KPI) regarding the issues identified and the measures to be taken and making the degree of attainment visible, we will be able to conduct our CSR programs with the understanding and agreement of customers, suppliers, shareholders, and investors.

Promoting the Ebara Way and Risk ManagementAs a global corporate group, EBARA bears social responsibility in regions around the world with diverse and unique cultures, and it is necessary to conduct business based on values that can be accepted globally. This is the Ebara Way. We will more promote the Ebara Way, regardless of the country, region, or cultural differences, through dialogue among employees and training in order to create a shared EBARA Group identity and to achieve the same quality acceptable throughout the world not only of products and services, but also of employees and companies.In addition one of the practical activities of CSR is risk management, and this requires internal systems within each group company. Starting in FY2014, we will conduct a risk survey primarily of overseas group companies concerning compliance, human rights, the environment, safety, and other topics. We will use the results to identify priority issues, develop risk management systems, and reinforce operation of the risk management systems.

Verified greenhouse gas emissions

Scope 1 Scope 2

9,888t-CO2e 27,552t-CO2e

Tsuneyuki UekiDirector Division

Executive, Enterprise Risk Management Division, EBARA CORPORATION



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11-1, Haneda Asahi-cho, Ohta-ku, Tokyo144-8510, JapanPhone: 81-3-3743-6111 (switchboard)F a x : 81-3-5736-3109U R L http://www.ebara.co.jp/en/Please direct inquiries to:CSR Promotion Departmenthttp://www.ebara.co.jp/en/contact/(Other Inquiries)

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