Acson Distributor Meeting 2009 FACTORY OVERVIEW 2009 C

Acson Distributor Meeting 2009 FACTORY OVERVIEW 2009 C REATIVE C HALLENGE C HANGE Page 1 Liew Kim Mon Factory Manager Production Department

Contents § § § Page 2 OYLM COMPANY PROFILE & ORGANISATION CHART FACTORY FACILITIES OYLM PRODUCTIVITY & PROCESS IMPROVEMENT OYLM QUALITY IMPROVEMENT HUMAN RESOURCE DEVELOPMENT SAFETY, HEALTH & ENVIRONMENTAL ACTIVITIES

OYLM Company Profile Company Name O. Y. L. Manufacturing Company Sdn Bhd Founder Tun Omar Ong Yoke Lin (OYL) Location Lot 60334, Persiaran Bukit Rahman Putra 3, Taman Perindustrian Bukit Rahman Putra, 47000 Sungai Buloh, Selangor Darul Ehsan. Date Incorporated 7 th February 1974 Core Business Air Conditioner Manufacturer Paid Up Capital RM 276 Million (2008) Shareholder Daikin Industries Ltd Land Area 115, 214 m 2 Factory Area 91, 440 m 2 Production Line 11 production lines Sales RM 980 Million (2008) Production Quantity 1. 308 Million units (2008) Total Headcount 1, 491 person (Apr 2009) Page 3

OYLM Organization Chart Hitoshi Jinno Chief Operating Officer Hirokazu Hirao General Manager Factory Management Tan Yong Cheem Global UP PM Lim Soon Kiong Global UP S&D Sum Chee Chong G. Procurement (Asia) Khor Leong Huat Operating Manager Page 4 Human Resources Ang Chong Kwoi Finance Raghaven Muniyandi Global Procurement Ho Much Jia MIS Loh Cheng Hong Corp. Mfg. Planning Yutaka Hoshino Manager Manager Prod. Engineering Yim Tuck Wah Material Control Chan Yew Lee QAQC Tan Yock Fat Factory 1 Liew Kim Mon Factory 2 Goh Kwee Cheng Manager Manager

Factory Comparison Before Satellites Main Factory Main Plant (Sec 15, Shah Alam) Line E (Sec 16, Shah Alam) Warehouse (Sungai Buloh) Line CE (Banting) OYLM R&D (Sungai Buloh) Present Centralized Manufacturing Plant We Are Here Page 6 Entrance

Factory Facilities Mezz Floor U-Bend Training Room Viewing Gallery Assembly CE Assembly E 2 Assembly E 1 Preparation Area Assembly B 1 Offices Viewing Gallery Product Gallery Assembly B 2 Rest Area Page 7 Material Control Fan Division Material Control CK Panel Wiring Preparation Area Mock Up Area

Factory Facilities Ground Floor Piping Shop Paint Shop Stamping Line Maintenance Coil Line CE Assy CE Coil Line E 2 Assy E 2 Coil Line E 1 Assy E 1 Coil Line B 1 Assy B 1 Coil Line B 2 Assy B 2 Offices Material Control Lobby Rest Area Offices Canteen Offices Rest Area Offices Canteen Coil Line F Assembly F Coil Line C Assembly C Coil Line A Assembly A Coil Line D Assembly D Metal Line Piping Shop Page 8 IE Workshop Coil Line G & H Insulation Area Assembly H Assembly G

Factory Capacity Line Product Range Refrigerant Type Design Capacity ( ½ Yr) 2009 Actual Output ( ½ Yr) Loading Residential Assembly B 1 Single Split (0. 75 HP to 3 HP) Outdoor Unit R 22, R 410 A 339, 300 169, 650 127, 994 75. 45% Assembly B 2 Multi & Single split (2 -6 HP) Outdoor Unit R 22, R 410 A 156, 600 78, 300 45, 191 57. 72% Assembly E 1 Wall Mounted (0. 7 to 3 HP) Indoor Unit N/A 287, 100 143, 550 91, 606 63. 81% Assembly E 2 Wall mounted (1 to 3 HP) Indoor Unit N/A 261, 000 130, 500 85, 901 65. 82% 1, 044, 000 522, 000 350, 692 67. 18% Sub Total Light Commercial Assembly C Single split (3 -6 hp) Water Source (1 -6 HP) Outdoor Unit R 22, R 407 C, R 410 A 117, 450 58, 725 37, 926 64. 58% Assembly CE Ceiling Expose (3 -6 hp) Ceiling Conceal Indoor Unit N/A 78, 300 39, 150 23, 932 61. 13% Assembly F Ceiling Cassette Ceiling Expose E Indoor Unit N/A 99, 180 49, 590 37, 007 74. 63% 294, 930 147, 465 98, 865 67. 04% Sub Total Commercial Assembly A Outdoor/Indoor 5 HP to 12 HP Outdoor & Indoor unit R 22, R 407 C 20, 880 10, 440 6, 803 65. 16% Assembly D Outdoor/Indoor 15 HP to 35 HP Outdoor & Indoor Rooftop 5 HP to 12 HP unit R 22, R 407 C 10, 440 5, 220 2, 262 43. 33% R 22, R 407 C, 4, 176 2, 088 1, 559 74. 66% 35, 496 17, 748 10, 624 59. 86% 1, 374, 426 687, 213 460, 181 66. 96% Assembly H Rooftop 15 HP to 47 HP Indoor 40 HP to 75 HP Outdoor & Indoor unit Sub Total Overall Total Page 9

Process Improvement Activities 1 • Page 10 Acquired Production Daikin System (PDS) knowledge 5 S Training PDS Basic Line Balancing Kanban System Training

Process Improvement Activities 2 § Kitting & Picking System Residential Indoor Residential Outdoor Ceiling Exposed Indoor Light Commercial Outdoor Accessories Picking Base Pan Picking Blower Kitting Base Pan Picking Ceiling Cassette Panel Ceiling Cassette Commercial Outdoor Package Unit Parts Kitting Metal Parts Picking Piping Picking Page 12

Quality Improvement 1 § Acquired Japan Most Advanced Air Cond. Manufacturer Technology Inverter Testing Module (Indoor Unit) Indoor inverter testing ready Inverter Testing Module (Outdoor Unit) Single split inverter testing ready Multi split inverter testing ready *Included data logging Page 13

Quality Improvement 2 § Commercial Unit Air Tight Test fulfill PED Standard Air Tight Testing Pressure Refrigerant Coil Line Assembly Line R 22 3. 29 Mpa 1. 55 Mpa R 407 c 3. 29 Mpa 1. 78 Mpa R 410 a 4. 19 Mpa 2. 51 Mpa Page 14 No operator is allowed inside the safety fence while air tight test in progress for safety purpose.

Quality Improvement 3 § Packing Watch Dog – Be sure before we ship High Side Label Carton Label Residential Indoor Unit Label Page 15 Residential Outdoor

③ Quality Improvement 4 § Drawing Revised Example Plastic fan (supplier drawing) 【Production, QC request】・・・Improvement of fan vibration ・Each size of boss parts is not indicated ・Request to put in full length tolerance 200+0. 0 　　　　-0. 0 Φ 15. 0+0. 06 　　-1. 0 43. 0 Indoor fan bearing (OYL drawing) 23° Φ 14. 0+0. 075 　　　　-0. 100 Page 16 【Revise contents】 ・Append to detailed drawing & tolerance ・Hundreds of parts are measured by cooperation with supplier, product evaluation is performed and tolerance is determined. 【Supplier request】 ・Part measures outside position (Φ 14. 0) is not clear. ・Request to unite outside(Φ 14. 0) tolerance with process capacity 【Revise contents】 ・Angle from central line to outside measurement part is added. ・ Hundreds of parts are measured by cooperation with supplier, product evaluation is performed and tolerance is determined

OYLM Productivity Improvement Domestic Recovery Increase. Sales of local sales Increase of local sales Economics Crisis Page 17

Quality Improvement OYLM Market Defect Ratio 2009 Market Defect Ratio Percentage 2. 5% 2. 0% 1. 99% 【Market Quality ・New Development Quality】 • On site checking (CY 09: 40 cases)which enable to find the root cause. ・Established the concurrent activity from which development project leader took the lead. • Drawing(revised 20 pcs, CY 09 )which reflect the opinion of supplier and production dept. have improved. ・PJ (Pilot Judge meeting) and FJ (Final Judge meeting) have been established certainly. At that time, we confirm past trouble measure, drawing, parts receiving inspection, production preparation. 1. 5% 1. 0% 0. 5% 1. 30% Descriptions 2007 2008 2009 Market Defect Ratio (All Products) 1. 99% 1. 30% 1. 21% - - Market Defect (Products in 2009) Market Defect (New Products) 0. 0% Page 18 1. 21% - - 0. 27% 0. 18% 2007 2008 2009

Quality Improvement OYLM Manufacturing Defect Ratio 2009 Manufacturing Defect Ratio Percentage 3. 0% 2. 52% 【Production Quality】 ・Quality awareness (sense) of supervisors and workers have been improved ・Workers can discover the fault by themselves ・The process has become easily to discover the fault 2. 0% 1. 53% 1. 5% 0. 93% 1. 0% 0. 5% 0. 0% Page 19 Descriptions 2007 2008 2009 Manufacturing Defect Ratio 2. 52% 0. 93% 1. 51% 2007 2008 2009

Quality Improvement OYLM Purchased Parts Defect Ratio 2009 0. 40% 0. 37% Purchased Parts Ratio Percentage 0. 35% 0. 33% 0. 30% 0. 25% 0. 20% 0. 15% 0. 10% 0. 05% 0. 00% Page 20 【Purchasing Parts Quality】 ・Creation of inspection standard (MIR) ・Communalization of OYLM receiving inspection items and 　supplier delivery inspection items ・Periodical inspection at supplier　(CY 09: 28 times) ・These activities change constitution to prevent same problem. Descriptions 2007 2008 2009 Purchased Parts Defect Ratio 0. 37% 0. 33% 0. 23% - 6 times 60 times FTA Analysis 2007 2008 0. 23% 2009

HR Development (HRD) New Operator Training Program Pre Orientation Test Orientation Program Skill Shop Training (1 Day) (2 Days) (3 Days) 1 st Day • Orientation • Company Background • Rules & Regulation & Test • Safety & Health Awareness & Test 1 st Day • Walk Test • Run Test • Stick Test • Cards Test 2 nd Day • Basic of Air Conditioner & Test • Environmental Awareness & Test • OYLM Product • 5 S Housekeeping & Test • Motivation Pass Evaluation Not Pass Termination Page 23 Pass Evaluation Not Pass 1 st Day • Product Quality • Ro. HS Compliance • Accident Case • Dangerous Materials • Basic of Screw Driving & Test 2 nd Day • Indoor Split Assembly & Test 3 rd Day • Outdoor Split Assembly & Test Pass Evaluation Not Pass To Line

HRD – New Operator Training Program Pre Orientation Test Orientation Program Skill Shop Training (1 Day) (2 Days) (3 Days) Walk Test Stick Test & Card Test Page 24 Orientation Safety & Health Awareness Screw Test Outdoor Assembly Test

HRD – Special Skill Training Program Brazing Training Page 25 Required Nomination Forklift Training Wiring Training

HRD – Safety Training Operator Safety Training Program Importance of E-Stop Pneumatic Pressure Test Safety Training Table Page 26 24 V Electrical Shock Chain Drive Pinching Force

HRD – Daikin Skill Pre-Olympic Title : Daikin Asia Oceania Skill Pre-Olympic Competition 2009 Venue : Thailand 4 th – Mr. Norhafiz Page 27

Safety & Health Policy Page 28

Safety & Health Activities Page 29

Safety & Health Activities Page 30

SAFETY & HEALTH MONTH Safety & Health Week Page 32 PPE WEEK To educate employees on selection, usage and maintenance of PPE HEALTH WEEK Increase health awareness by providing health screenings, activities & exhibitions. FORKLIFT COMPETITION Enhance skills and knowledge in driving forklift. Promote safety driving through healthy competition.

Environmental Policy 3 C 4 R Page 33

Environmental Activities Main Station Factory 2 Satellite Station Factory 1 Page 34

Environmental Activities Page 37

Corporate Social Responsibility Activities Page 38

O. Y. L. Manufacturing THANK YOU & WELCOME Page 39