Daikin Malaysia Sdn. Bhd. Site Report 2016 Location Sungai Buloh, Selangor, Malaysia Site area 115,214 m 2 Established 1974 No. of employees 1,851 Major products Air conditioners, refrigeration equipment ISO 14001 certified December 2007 ISO 9001 certified September 1992 OHSAS 18001 certified January 2011 Environment: Environmentally Conscious Products From 2017, we have been working on developing HFC-32 inverter room air conditioners. These products meet European market requirements with an energy-saving label rating of A+ and A++, and use a low-gwp refrigerant of HFC-32. Developing and selling air cooling VRV products: We have released three series of VRV systems that balance temperature and humidity, which include energy-saving technology that achieves an IPLV value of 6.30. The dehumidifying, drying, and ventilation functions of these products enable comfortable rooms and provide a better living environment. 1
Environment: Major Efforts to Reduce Environmental Impact Reducing the power supply load of cooling systems Our Co-Gen project collects heat from a gas engine driven compressor via an absorption chiller (ADC) to reduce the power supply load of spot cooling systems at our production site. This enables our electricity consumption to be reduced by 437,760 KWh/year, which equates to an annual saving of 188,018 ringgit. Reusing wooden pallets We have reduced our wood waste by reusing wooden pallets and redesigning packaging boxes. Wooden pallets are reused for storage and collection of scheduled waste materials. This reduces our wood waste by approximately 300 kg per month. Redesigning the packaging boxes for aluminum fin rolls provided by a local supplier enables wood use to be reduced by approximately 35% per box. Using renewable energy by installing solar panels 3,136 solar panels are installed on our plant roof, which generate approximately 1 MW of power at peak supply times, for an expected annual CO 2 reduction of approximately 1,010,724kg. The panels are estimated to generate approximately 1,364,000 kwh of power annually. Environment: Examples of Environmental Communications Raising employee awareness During environment week in June 2016, we held an exhibition for sharing information on corporate environmental issues, such as energy and water conservation, CO 2 emissions, and waste management and conducted a quiz on the exhibition materials. We also had the Waste Management Association of Malaysia hold a talk on the 3Rs (reduce, reuse, and recycle), which was attended by 48 employees, who were able to raise their awareness regarding waste management. 2
Environmental practice hall Our new employees are obligated to participate in environmental training to learn about what can be done to save energy and water, reduce waste and CO 2 emissions, and prevent pollution due to leaks. Employees are also encouraged to participate in volunteer activities. In fiscal year 2016, 733 of our employees including leaders and supervisors received training. Eco Safe Educare (ESEC Program) We conducted a program to teach local elementary school students about safety and the environment via games and talks, which was participated by a total of 365 teachers, PTA representatives, and students. The talks and games are designed to enable students to implement safety and environmental care at their schools and in everyday life. We also donated recycle bins to schools after performing a demonstration at a ceremony, in order to promote recycling habits. This event was held by 22 volunteer employees from Daikin. 3
Environment: Emergency Response Emergency response team Our emergency response team (ERT) received competency training to prepare for emergency situations. Last year, our firefighting team, first aid team, and chemical leak team received training. On August 29, 2016, our 1,544 employees and related people from the fire station and neighboring public hospital, etc. joined together to conduct emergency training for a fire or explosion in order to test our emergency response plan. 4
Environment: Environmental Performance Data Greenhouse gas emissions Energy-induced CO2 Waste Water used VOC emissions 5
Human Resources: Training for Employees PDS training 68 of our employees participated in a PDS training program for the purpose of improving their ability to improve production lines. Daikin management also conducted Kaizen audits on 33 groups in order to promote employee awareness after the training was complete. Human Resources: Promoting Diversity Corporate appreciation dinner In November 2016, Daikin Malaysia Sdn. Bhd. held a DAMA GROUP APPRECIATION DINNER, which was attended by 2,600 employees. This event was created as an opportunity for all employees to get to know each other and promote harmonious relationships. During the event, 142 Daikin Malaysia Sdn. Bhd. group employees were awarded and school bags were donated to 500 orphans. The event was held to give employees an opportunity to present their talent, promote work-life balance, and increase employeesʼ sense of belonging to the organization. Family day In October 2016, a family day was held to promote a sense of unity amongst employees. It featured various activities such as aerobics, painting for children, and workplace family tours. A total of 380 people participated in the event, and employee families were able to gain a better understanding of the workplace. 6
Human Resources: Occupational Safety and Health Promoting healthy lifestyles Daikin Malaysia Sdn. Bhd. conducts various activities all year round to promote the health and work-life balance of our employees. For example, many of our employees participated in our paint ball/speed ball tournament (120 employees), FIFA futsal tournament (200 employees), and fishing tournament (200 employees). We also participated in a bowling tournament with the Federation of Malaysian Manufacturers and maintain good relations with local residents. In this tournament, two teams represented our company and won the best support team award. Safety practice hall In order to raise awareness about occupational health and safety, we teach our new employees about important methods for ensuring safety at our safety practice hall before starting work. In fiscal year 2016, 1,006 of our employees received training. We also implement five improvement activities for our practice hall to make the training more effective. 7
Quality, Customer Satisfaction: Quality Improvement Improving quality with suppliers In addition to periodic supplier audits, we held two supplier meetings for the upper management of our suppliers. These meetings gave us the opportunity to convey our quality policy, announce our supplier performance and improvement activities, etc., and indicated our commitment to producing high quality products, which were understood by the upper management and quality managers of our suppliers. - Social Contribution: Environmental Protection Environmental protection On October 15, 2016, 120 of our employees and their families volunteered to plant trees and clean up with the Forest Research Institute Malaysia (FRIM), and the participants planted a total of 80 seedlings. Social Contribution: Support for Educational Activities Factory tours for students We provide plant excursions for students from various schools and universities to enable them to learn about the manufacturing process for air conditioners up-close. Daikin Malaysia Sdn. Bhd. Hopes that these excursions will provide the next generation of students with an opportunity to consider a future career in the air conditioning industry. In fiscal year 2016, we received 10 visits from public and private universities in Malaysia. 8
Internship program In fiscal year 2016, a total of 56 interns participated in our industrial practical training program. We also held a free talk session with the interns to obtain feedback on how they felt about our company during the internship and their hopes for the future. Daikin Malaysia Sdn. Bhd. Group scholarship program Daikin Malaysia Sdn. Bhd. provides a scholarship program to provide financial assistance to poor students in order to promote higher education in Malaysia. Our scholarship program was introduced in 2012 for students enrolling in university, and currently supports seven students enrolled in undergraduate studies at public and private universities in Malaysia. The program provided a total of 82,500 ringgit in assistance in fiscal year 2016. Social Contribution: Other Regional Activities Blood donor clinic In May 2016, we cooperated with the National Blood Centre to conduct a two-day blood donation campaign. Thanks to the participation of our employees, we were able to collect 194 bags of blood. Health screening (for breast cancer) In order to raise female awareness of breast cancer, we cooperate with Breast Cancer Welfare Association Malaysia (BCWA) to conduct chest examinations and awareness raising talks at the Daikin Malaysia Sdn. Bhd. plant. This two-day operation was held in May 2016, and was attended by 113 of our female employees. Fundraising activities We conducted fundraising by selling old promotion items, and raised 12,575.10 ringgit, which we donated to an NGO called Mercy Mission Malaysia. Mercy Mission Malaysia is a charity that helps homeless people and the elderly. 9