2015 - daido metal

2015Corporate Social Responsibility InformationDigest

Company Outline Major Products by Business SegmentGlobal Network

Message from Management

DAIDO METAL GROUP CSR Policies

Special Feature

DAIDO METAL GROUP activities based on the Midterm Business PlanCorporate Governance

Risk Management

Labor Conditions and Training

Environment

Compliance

Product Quality Control and PR Activities

Social Contributions to Local Communities

CONTENTS

Bearings for medium and high-speed diesel engines

Bearings for low-speed diesel engines

Turbo machinery bearings (for turbines, etc.)

Shock absorber bushesThrust bearings for turbochargers

Company Outline (As of 31 March 2015) Major Products by Business Segment

Global Network

(As of 31 March 2015)

(As of 31 March 2015)

80,000

60,000

40,000

20,000

0

(JPY millions)

(FY)2010 2011 2012 2013 2014

■ Sales Non-consolidated Consolidated

55,536

63,451 61,673

70,326

57,454

70,886

58,978

77,350

67,269

85,015

Automotive Engine BearingsA typical car engine contains around 20 bearings. DAIDO METAL is a leading manufacturer of these products, controlling a 31.5%* share of the global market for automotive engine bearings. (*Company estimate, as of 2014)

Large-sized Ship Engine BearingsThe bearings used in the diesel engines of large ships are enormous, often having a diameter of more than one meter. DAIDO METAL is the global leader in bearings used for large ship engines, with a 59%* share of global sales. (*Company estimate for 2014)

Bearings for Construction Equipment and Medium and High-speed Diesel EnginesDAIDO METAL has a large share of the domestic and global markets for bearings used in the engines of construction and excavator equipment, as well as medium and high-speed diesel engines. The company’s bearings are used not only in the engines, but in other components of construction equipment including agricultural equipment.

Industrial Machinery Bearings and Other ProductsDAIDO METAL has been expanding its operations to include bearings for a broad range of industrial equipment, ranging from office equipment to power generation turbine, high-speed train and coach axles, shock absorption and vibration control equipment, among others. The company is developing and selling products other than bearings such as lubrication application products including pumps and centralized lubrication equipment.

Other Automotive Bearings (Automotive Parts Bearings)　Bearings are used not only in automotive engines, but in many other key automotive parts. DAIDO METAL makes bearings for many automotive parts, particularly automotive turbochargers, shock absorbers and other components, holding a large share of the domestic market for these bearings.

Bearings used in key automotive components (transmissions, shock absorbers, compressors, steering columns, etc.)

Main products

Main productsBearings used in automotive engines (passenger cars and trucks), racing engines, motorcycle engines, etc.

DAIDO PLAIN BEARINGS CO., LTD.NDC CO., LTD.DAIDO INDUSTRIAL BEARINGS JAPAN CO., LTD.DAIDO METAL SALES CO., LTD.

DAIDO METAL CO., LTD.

Regional HeadquartersSales subsidiariesProduction subsidiaries

R&D centers

North America

Japan

Asia

ChinaDAIDO METAL U.S.A. INC.

DETROIT H.Q.DAIDO METAL U.S.A. INC.BELLEFONTAINE OFFICE

CHUNG YUAN DAIDO CO., LTD.

European Headquarters

DAIDO METAL GERMANY GmbH

DAIDO METAL RUSSIA LLCDAIDO METAL CZECH s.r.o.

DAIDO METAL KOTOR AD

PT. DAIDO METAL INDONESIA

DAIDO PRECISION METAL (SUZHOU) CO., LTD.

BBL DAIDO PRIVATE LIMITED

DONGSUNG METAL CO., LTD.KOREA DRY BEARING CO., LTD.

DAIDO INDUSTRIAL BEARINGS EUROPE LTD.DAIDO METAL EUROPE LTD.

CHUNG YUAN DAIDO (GUANGZHOU) CO., LTD.

DAIDO METAL MEXICO S.A. de C.V.

DAIDO METAL MEXICO SALES, S.A. de C.V.

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■ PolicyThe CSR activities that are carried out by DAIDO METAL CO., LTD and some of its affiliated companies are detailed in this report. This report is based on DAIDO METAL GROUP'S CSR philosophy. This report also aims to facilitate communication with our stakeholders as well as raising awareness for all DAIDO METAL employees.

■ ScopeThis report covers the activities of DAIDO METAL GROUP and a number of its subsidiaries.

■ Period under reviewFY2014 (April 2014 -March 2015) In some instances, information has been updated to include more recent activities.

■ Relevant guidelines“Environmental Reporting Guidelines (2012)”, Ministry of the Environment

■ Publication dateDecember 2015

Europe

Rotary pumpsCentralized lubrication equipment (MR-LUB)

Company Name

Established

Head Quarters

Representatives

Common Stock

Sales Amount

Number of Employees(Regular Employees)

Main Business Operations

Main Domestic Production Facilities:

Main Domestic Sales Offices

Domestic and Overseas Subsidiaries


4 November 1939

■ Nagoya Office13F Nagoya Hirokoji Building 2-3-1 Sakae, Naka-ku, Nagoya, Aichi 460-0008, JAPAN

■ Tokyo Office17F Tennozu Central Tower 2-2-24 Higashi Shinagawa, Shinagawa-ku, Tokyo 140-0002, JAPAN

Seigo Hanji, Chairman & Chief Executive Officer (CEO)Kotaro Kashiyama, President & Chief Operating Officer (COO)

JPY 7,273 million

JPY 85,015 million (Consolidated)JPY 67,269 million (Non-consolidated)

4,321 (Consolidated) 1,185 (Non-consolidated)

● Automotive engine bearings● Other automotive bearings● Non-automotive bearings and other products

Inuyama Factory (Located on Inuyama site)Maehara Factory (Located on Inuyama site)Bimetal Division factory (Located on Inuyama site)Gifu Factory (Located in Gifu prefecture)TMBS (Turbo Machinery Bearing Systems)(Located on Inuyama site)

Tokyo Branch, Nagoya Branch, Osaka Branch,Hamamatsu Sales Office, Hiroshima Sales Office, Kyushu Sales Office*Northern Kanto Sales Office (Opened in April 2015)

● 8 domestic subsidiaries, including 　 *DAIDO METAL SAGA CO., LTD. 　 (Established April 2015)● 17 overseas subsidiaries 　 (2 in China, 6 in Asia, 6 in Europe, 　　3 in North America)

DYNA METAL CO., LTD.

DAIDO METAL CSR Report 2015 3DAIDO METAL CSR Report 20152

Corporations have a responsibility to behave as responsible “citizens” or members of society. With this in mind, if the DAIDO METAL GROUP hopes to continue to grow, it must not only contribute to society as a product manufacturer through corporate activities, it must also behave in a responsible way, respecting laws and regulations while making a positive contribution to society through non-business activities. By striving to always act in this way, the company can earn the respect and support of its clients, shareholders, employees, business partners, and the local community in which it operates. To meet the above objectives, the DAIDO METAL GROUP has introduced a multitude of programs and activities which cultivate the qualities of self-discipline, self-correction, creativity and responsibility in every employee or executive officer, under the slogan: “Self-discipline, Self-correction and Creativity.”

DAIDO METAL GROUP’s Approach to CSR

DAIDO METAL GROUP CSR Policies

Increase awareness of DAIDO METAL GROUP’s role in society while increasing

corporate value

Cultivating Self-discipline, Self-correction and Creativity

Contribute tosociety as a

manufacturer throughcorporate activities

Comply with allpertinent laws andregulations anddemonstrate

responsibility throughactive contributions

to society

Our Corporate Philosophy Our Principles

1.Our Duty:

Message from Management

DAIDO METAL GROUP is taking steps to increase corporate value and achieve sustainable growth over the medium and long term.

Seigo Hanji,Chairman& Chief Executive Officer (CEO)

Kotaro Kashiyama,Kotaro Kashiyama,President& Chief Operating Officer (COO)

A global leader in plain bearings through corporate activities that support the axis of the machinery industry ̃ DAIDO METAL aims to capture the top share of the global market ̃

Daido Metal’s Approach to Corporate Social Responsibility (CSR)

All members of the Group are working together to achieve sustainable growth and to increase our corporate value over the medium and long term time frames.

The goal of the DAIDO METAL GROUP is to apply our expertise in plain bearings to all industries that use such products. In this way, we aim to broaden our global impact, and capture the top share of the market for all types of plain bearings. The company’s current Midterm Business Plan (a six-year endeavor which runs from FY2012 to FY2017) provides the blueprint for business expansion on a global basis.The main objectives of the plan are: 1. To consolidate our position as the leader* in the global market for plain bearings, and the only manufacturer in the world to serve all segments of the bearings market. (*based on company estimates)2. To further increase our market-leading share* of the market for automotive engine bearings ‒ one of the core products in the overall plain bearings industry. (*based on company estimates)3. While enhancing the company’s existing leadership in the market for bearings used in large ship engines, to also pursue the largest share* of the global market for non-automotive engine bearings, including those used in turbo machinery, construction equipment and smaller marine-use diesel engines. (*based on company estimates)4. To build and expand a network covering five regions worldwide, in order to support growth in both domestic and international sales.5. To pursue R&D activities that cultivate our status as the technological leader in plain bearings, and apply these technical skills to address the needs of customers in each region worldwide.6. To establish a solid financial base to support operations.

In FY2014, CSR-related activities included development

and presentation of new products, through investor relations (IR) and PR activities (exhibitions, etc.), and efforts to further improve quality. Ongoing energy saving measures were taken to help protect the environment.Safety and human resources are also priorities as the Daido Group continues to provide employees with the best possible working environment. We are making steady progress in the development of systems that will enhance our work activities making it easier for employees, and allowing them to enhance their skill sets.DAIDO METAL GROUP continues to make concerted efforts contribute to social activities and to enhance communication with people in the local area. For example, DAIDO METAL production facilities host tours of students from nearby schools and performs social activities such as donations and clean-up programs.

Dramatic changes are affecting the business environment in which DAIDO METAL operates. The company must therefore focus its efforts on cultivating new markets, responding quickly and appropriately, developing new products that meet the changing needs and trends of each regional market, further improving our production efficiency and delivering a higher level of service to our customers. In addition to maintaining high compliance standards, the Group introduced a new code of corporate governance in June 2015 to bolster the internal organizational structure and earn the trust and cooperation of all stakeholders, including investors, business partners, employees and the local communities in which the Group's companies operate.All members of the Group are working together to achieve sustainable growth and to increase corporate value over the medium and long term. We welcome your continued support.

We hold ourselves responsible for the happiness of everyone in our organization and the contributions we make to global society.

2.Our Resolve: We will create a vigorous and open-minded corporate culture through diligent self-discipline and ethical behavior.

3.Our Foundation: We will learn from our markets, respond to our customers' requirements, and surpass our customers' expectations.

4.Our Approach: We will devote ourselves to creation, innovation, and the realization of dreams.

5.Our Objective: We will strive to be the world leader in tribology through constant technical improvement, development, and innovation.

1. We will always approach business from a global perspective.

2. We will always attend to the needs and desires of our customers.

3. We will continue to recognize the importance of the environment.

4. We will continue to value individuality and work to achieve synergy between people.

5. We will always remain open to new ideas and proposals.

6. We will always respond with speed and agility.


SpecialFeature

DAIDO METAL GROUP activities based on the Midterm Business PlanDAIDO METAL’s Midterm Business Plan “Together To The Top” (a six year plan from FY2012 to FY2017) aims to make DAIDO METAL the leader in all varieties of plain bearings, with the top share of the global market for each product segment.In Stage 1 of the plan (FY2012-FY2014) the company set out to build a global network of production, sales and product development to serve as the foundation for a business that could capture the top market share in each segment. This included measures to expand production capacity on a global scale and boost competitiveness in the non-automotive bearings markets.In Stage 2 (FY2015-FY2017), DAIDO METAL will implement plans aimed at achieving the top market share in each category of plain bearings by the final year of the plan.

Providing customers with quick, easily accessible technical supportMedium-term plans to expand the global R&D network received a major boost with the opening of a second R&D facility in Europe, at a site owned by DAIDO METAL CZECH s.r.o. The “European Technical Center” commenced operations in February 2014. In addition to providing quick and responsive technical support to customers, the center will enhance DAIDO METAL’s ability to attract and expand customers in the European market.

Research & Development European Technical Center

Contract with Alstom S.A (France) to supply thrust bearing pads for hydroelectric power generation turbineDAIDO METAL concluded a supply contract with Alstom S.A of France, a leading global developer of electric power generation and transmission systems. The contract is to supply thrust bearing pads (special resin-coated bearings) used in hydroelectric power generation turbine.

Sales Expansion Non-automotive bearings

Pursuing further growth in AsiaOn 23 November 2012 Dyna Metal held a ceremony to launch its third production facility ̶ a 5,300 square-meter factory which manufactures bearings for automobiles, general machinery and small turbochargers. In addition to the new facility, the footprint of the No. 1 and No. 2 factories was expanded, further increasing Dyna Metal’s production capacity for these bearings and creating space for further production capacity increases.

Production DYNA METAL CO., LTD.Expanding sales prospects in the US, Mexico and South AmericaDAIDO METAL MEXICO S.A. de C.V. commenced manufacturing operations in July 2013, and in the autumn of that same year it began supplying automotive bearings to both Japanese and US automakers. Production levels at the new factory have been rising steadily since it opened. In addition to serving as the cornerstone of production activity for DAIDO METAL in the US and Mexico, the subsidiary is opening up sales possibilities in South America, and it is expected to begin generating positive profits in the near future.

Breakdown ofemployees by region

Breakdown ofsales by region

Japan

50.1%

Asia24.7%

Europe14.8%

North America7.3%

Others3.1%

● Production facilities …… 4● Sales offices …………… 2● Research and Development Centers … 2

Eu r ope

● Production facilities …… 6● Sales offices …………… 3● Research and Development Centers … 1

Japan

● Production facilities …… 6● Sales offices …………… 2

As i a● Production facilities …… 1● Sales offices …………… 2

No r t h Ame r i c a

Japan

47.1%

Asia25.2%

Europe23.5%

North America4.2%

Total

JPY85.0billion

(As of end-March 2015)

Total

4,321

(As of end-March 2015)

*

*

Bearings forSmall Turbo

PolymerBearings

Bearings forLow SpeedEngines

TurboMachinery Bearings

Current Target

Bearings forMedium and High-Speed

Disel Engines

*Top share of the global market (based on company estimates for 2014)

MidtermBusiness Plan (FY2012 - FY2017)

Gain the largest global share of all fields

“Together To The Top”

Expand and upgrade operating base to help capture top market share

Stage 2

Stage 1

[FY2015-FY2017]

[FY2012-FY2014]

Group object ives

S l o g a n

Strengthenproduction control

(Pull production)

Increase productivity(new manufacturingmethods, bimetal,

quality)

Establishglobal systemsfor production,sales and R&D

Strengthendevelopment ofnon-automotive

fields

Improvequality

Increaseglobal

productioncapability

Automotive Halfshell Bearings

Production DAIDO METAL MEXICO S.A. de C.V.

Stabilisemanagementat all globallocations

Strengthen R&Dto maintaintechnicalsuperiority

Establishstrongfinancialfoundations

*

DAIDO INDUSTRIAL BEARINGS EUROPE LTD.

DAIDO METAL EUROPE LTD.

DAIDO METAL KOTOR AD

DAIDO METAL GERMANY GmbH

DAIDO METAL RUSSIA LLC

DAIDO METAL CZECH s.r.o.

NDC CO., LTD.DAIDO INDUSTRIAL BEARINGS JAPAN CO., LTD.ASIA KELMET CO., LTD.DAIDO METAL SAGA CO., LTD.*Established 10 April 2015DAIDO METAL SALES CO., LTD.NDC SALES CO., LTD.DAIDO LOGITECH CO., LTD.

DAIDO METAL CO., LTD.KOREA DRY BEARING CO., LTD.DONGSUNG METAL CO., LTD.

DAIDO PRECISION METAL (SUZHOU) CO., LTD.

PT. DAIDO METAL INDONESIA

BBL DAIDO PRIVATE LIMITED

CHUNG YUAN DAIDO CO., LTD.

CHUNG YUAN DAIDO (GUANGZHOU) CO., LTD.

DAIDO METAL U.S.A. INC.DETROIT H.Q.

DAIDO METAL U.S.A. INC.BELLEFONTAINE OFFICE

DAIDO METAL MEXICO SALES, S.A. de C.V.

Czech

Europe

Asia

Japan

North America

Thailand

Mexico

FranceJapan


Sender

E-mail messageto recipientoutside

the company

Transmissionof e-mailMessage confirming

transmission ofe-mail

Initial transmissionrequest (0 min)

Encoding andtransmission ofattachments

Message sent(5 min after transmission)

Attachments sent(10 min after transmission)

Message confirmingtransmission of

e-mail

5 min aftertransmission

10 min aftertransmission

■ Corporate Governance Structure (As of 1 July 2015)

Auditors(3, including 2 from outside the company)

Auditing

Selection or terminationNon-reappointment

Selects and dismisses Board members

Suggestions on how to manage operations

Reporting onoperatingactivities

Instructions

Proposals

Advice

Reporting

• Executive operations manager (3 members)• Senior operations manager (6 members)• Operations manager (4 members)

Board of Directors

Board of Auditors

Auditing Center (internal auditing activities)

Corporate auditors(accounting auditor)

Individual operating divisions or branches

Board Members(4 members including at least 1 from outside the company)

(Reports directly to the President & COO)Selected from among Board members,executive officers and managers

Reporting

• Chairman & Chief Executive Officer (CEO)• President & Chief Operating Officer (COO)

Chief Representative Officers (2 members)

Corporate GovernanceCommittee(6 members )

Corporate Activities EthicsCommittee(6 members )

Risk ManagementCommittee(11 members)

Advisory Board(4 members)

Auditing

Auditing

Cooperation Cooperation

Cooperation

Termination

SelectionDecisions on the appointment or termination of corporate auditors

Shareholders Meeting

Management Strategy Council

Management of operations

Includes 2 members from outsidethe company and 2 from within

Nagoya Stock Exchange IR Expo 2014(25-26 July 2014)at Fukiage Hall in Nagoya, Japan

Nagoya Stock Exchange Stock Investment Summer Seminar (26 August 2014)at Chuden Hall in Nagoya, Japan

Committee Chairman: President &Chief Operating Officer (COO)

Vice-Chairman: Human ResourcesPlanning Division Manager

Risk Management CommitteeSecretariat (Legal Affairs Dept.)

Board Members andExecutive Officers (9 members)

Diagram of IT systems

Practicing life-saving CPRPractice using fire hoses

Type of risk Division responsible

Bi-Metal Division

Business Promotion Dept. of each company

Technology Division

Quality Management & Planning Dept.

Environmental & Safety Management Dept.

BCP Secretariat

Legal Affairs Dept.

Business Promotion Dept. of each company

Purchasing Dept., Legal Affairs Dept.

General Affairs Dept., Corporate Planning Dept.

Finance Dept.

Human Resources Planning Dept.

Information Systems Dept.

Production-related risk

Technologicalrisk

Product quality risk

Environmental safety risk

Fire/disaster risk

Purchasing risk

Management risk

Sales risk

Financial risk

Human resources-related risk

IT-related risk

Production capacity risk

Technological development risk, information disclosure risk

Product failure risk, product liability lawsuit risk

Environmental pollution risk, safety and health risk

Fire/disaster risk (includes earthquake, flood, lightning and other disasters)

Customer-related risk, anti-monopoly law-related risk

Subcontractor Act-related risk

Business continuity risk, overseas expansion risk

Financial information reporting risk, insufficient funds risk and exchange rate risk

Human resources and labor-related risk

IT systems interruption risk, information disclosure risk

Corporate Governance

Investor relations activities are conducted with the aim of actively increasing corporate value and gaining favorable evaluations from financial markets

■ IR-related EventsDAIDO METAL took part in the “Nagoya Stock Exchange’s IR Expo 2014,” as well as the “Nagoya Stock Exchange Stock Investment Summer Seminar.” At these events investors ranging from individual equity investors to institutional investors were provided with detailed information on the company, as well as its current Midterm Business Plan. In the future the company will continue to pursue an active IR program, to engage with, and earn the support of investors and other stakeholders.

■ Publication of “FACT BOOK (2014)”In addition to providing investors with timely and appropriate information on an ongoing basis, DAIDO METAL regularly publishes a “FACT BOOK” (Japanese and English versions) containing updated summaries of the company and its operations, its earnings performance, and key financial indicators for investors both in Japan and overseas.

■ Earnings announcement and explanatory meeting (Nagoya Stock Exchange)After settling accounts for the second quarter of each financial year, and for the full year, DAIDO METAL holds a regularly scheduled explanatory meeting at the press club of the Nagoya Stock Exchange. The meeting covers company earnings results for the period, the status of progress on our Midterm Business Plan, overseas expansion activities and other key issues related to the DAIDO METAL GROUP’s overall condition. The President｠ and individual executive officers are present at the meeting and provide explanations in an effort to provide comprehensive information on the company’s business activities.

Investor Relations (IR) Activities

Corporate Governance Structure

In order to develop a strong and thorough system of corporate governance, the company introduced several principles. First, to clarify responsibility for all activities division managers also serve as executive officers.

Second, outside individuals have been appointed as Board Members in order to strengthen monitoring and supervisory functions. Third, outside auditors have been appointed to ensure the effectiveness of auditing activities. Finally, the company set up a “Management Strategy Council” to help facilitate management decision-making. The corporate governance system is outlined below.

Risk Management

DAIDO METAL has established a Risk Management Committee to consider the many potential risks which may arise in the course of company activities.The process of risk management is intended to create a structure for reducing risk, and it proceeds in cyclical fashion, as follows: Identification of risks (brainstorming) → Risk evaluation → Developing responses to risks → Report results to Risk Management Committee or Board of Directors.

■ Measures to protect and manage data/information

Information Management Division implemented measures to protect against improper leaks or release of information. This included company policies limiting the copying or storage of information on USB memory sticks or other portable memory media.A system was also introduced to temporarily delay all e-mail transmission as a means of preventing the release of information through erroneous transmission of e-mails.These measures have been implemented on a company- wide basis, to help reinforce the IT management structure.

■ BCP Response (Earthquake and Fire Prevention at Each Site Office)

Every year the company conducts earthquake and fire drills. Also during FY2014 fire department officials supervised as employees took part in drills with fire extinguishers and equipment, and practiced CPR and the use of AEDs.Members of the local community were also invited to take part in the events, including the use of fire extinguishers and other equipment, and a “bucket relay." Participants also practiced the safety check procedures used in the event of an earthquake, and steps to be taken to resume operations. These activities will continue to be organized on an ongoing basis to ensure that the company is fully prepared in the event of an earthquake or other disaster.

Fire and disaster risk

IT-related risks

Risk Management Committee Members (As of April 2015)

Risk Management

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Newly hired employees in training (Bearing assembly training)

Certificate number:JQA-OH0045

Slogan (left)Photo (right)

Traffic safety lectures(FY)'14'10 '11 '12 '13

15

12

9

6

3

0

(People)

■ Number of workplace accidents

Accidents that did not result in missed workAccidents requiring employees to miss work

76

■ Training Structure

Position-specific Training Daido Metal College Courses

DivisionManagers

DepartmentManagers

Experiencedemployees

GeneralEmployees

NewlyHired

Employees

Departmentmanager training

Training formanagerial candidates

Training forthird-year employees

Training forsecond-year employees

Follow-up training fornewly hired employees

Training program fornewly hired employees

Career design training

Selective, next-generationleadership training

Skill enhancem

ent stage

Skill develo

pm

ent stage

(FY)2010 2011 2012 2013 2014

20

15

10

5

0

(People)

100

50

0

（%）

■ Number of workers taking child care leave and percentage returning to work after leave

Percentage returning to workNumber taking leave

4

100 100 100 100 100

7

13

8 8

Technical instructio

n

Entry-level course

Mid

-level course

Training fo

r Sup

ervisor

cand

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Training fo

r Sup

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cand

idates II

Operations covered by OHSAS18001 certification• Inuyama Plant • Maehara Plant • TMBS Plant • NO.4 company • Bi-Metal Division • Gifu Plant • Environmental & Safety Management Dept.

1213

12

22

334422

1010 99 99

55

22

44

■ Employee Training ProgramsDAIDO METAL’s Human Resources Planning Division oversees a training system which provides employees with continuous training in the skills and qualities needed at each stage of their employment. The knowhow, technical skills and expertise that the company has amassed over the years is passed on to workers through “Daido Metal College (*1)”, and new training programs are developed over the course of the year. By educating employees at each stage of their career, the company promote effective personnel development throughout the company.

Personnel Training

■ OHSAS18001 CertificationDAIDO METAL has adopted a management philosophy that places great emphasis on people. Accordingly, the company pursues worker safety policies aimed at completely eliminating workplace accidents. The company’s domestic production facilities have been certified as compliant with the global standards set for management systems under OHSAS. The company has continuously complied with these standards since 2003.

■ Efforts to Ensure Accident-Free OperationsDAIDO METAL takes intensive measures to prevent workplace accidents. In FY2014, the company introduced a safety program under the slogan: “Safety Awareness to Eliminate Risk ‒ Rule-based Activity to Prevent Accidents”, which included a comprehensive risk assessment and measures to increase safety awareness.Production supervisors regularly observe work activities on the shop floor, and check that safety procedures are being followed. Any time a potential hazard or problem is identified, workers are expected to immediately consider

the possible causes and take the appropriate steps to ensure a continuously safe working environment. As a result of these measures, the company was able to reduce workplace accidents in FY2014, even beyond the reductions achieved in the previous year.

■ Implementing “Safety Week” at all Domestic Plants (Collecting Slogans, Photos)To further increase safety awareness among workers the company has introduced a “Safety Week” program at all facilities in Japan. During this period workers are asked to submit safety slogans, photos and other contributions that help to raise awareness of safety. Everyone is encouraged to take part, and the company seeks to obtain an average of at least one entry per employee. This helps to keep safety issues firmly in the minds of all workers.

■ Activities to promote traffic safetyDAIDO METAL values its employees highly, and does its utmost to promote their welfare and that of their families, by taking steps to eliminate workplace accidents and to promote awareness of safety issues even outside the workplace.In FY2015 local police officers were invited to provide lectures on traffic safety issues, with the aim of reducing traffic accidents while commuting to work, or during job activities. The company also conducted informational campaigns warning employees not to use mobile devices while walking, due to the danger of "Slip, Trip, Fall."

Safety-related Activities

■ Work-life BalanceDAIDO METAL is taking steps to create a working environment more conducive to workers who have to balance work with the job of raising children. Even when employees are on maternity or child-care leave, they are provided with regular information and support, and when they return to work, both their department chiefs and the Human Resources Manager lend support to ensure a smooth re-integration into the company. This program has succeeded in ensuring that 100% of employees who take child care leave eventually return to work at DAIDO METAL.

Expanding eligibility for reduced work hoursTo help workers balance the demands of their job with those of their private life, the company has expanded the range of eligibility for a “reduced work hours (*2)” program. Parents of young children are now eligible until their child finishes third grade of elementary school. In this way, DAIDO METAL is offering employees greater flexibility in their work schedules.

Extending “relaxation leave”, “anniversary leave” and “no overtime day (every Wednesday)” programsAs DAIDO METAL wants its employees to lead a full and enjoyable life, the structure of paid vacation and other leave is being revised. For example, a special “relaxation leave” program has been introduced for workers to take as they approach their 30th, 40th and 50th birthdays. Workers are able to take days off on their birthday, wedding anniversary, a child’s birthday etc. enabling them to spend quality time with their families. The company has also introduced company-wide “no overtime days” (every Wednesday), and continues to explore new ways of enriching the lives of employees.

Zero Accidents!Stay vigilant anddon’t let knowledge ofdangers lull youinto complacency

(First prize slogan)

Promoting Diversity

Labor Conditions and Training

Fundamenatal PolicyBased on its people-oriented management philosophy, DAIDO METAL does its utmost to protect the health and safety of its valued employees. Maintaining high levels of worker safety is a top company priority, and the company invests whatever management resources are required to maintain the highest possible levels of safety.

(*1) Daido Metal College, established in May 2005, offers programs that help employees hone their technological skills, hand down them, and also develop mental qualities needed in their individual job roles.

(*2) The reduced hours program allows workers to reduce work schedules in 30-minute increments, and up to 2 hours for a single day.


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Contents of company magazine

Separate (past) Joint supply (current)

Production line A

Compressors for production line A

Production line B

Compressors for production line B

Thermal insulation coatings (Inuyama Site Office)• Stage 1 installation (July 2012)• Stage 2 installation (July 2013)• Stage 3 installation (July 2014)

Thermal insulation film installation (Gifu Factory)

45,000

40,000

35,000

30,000

36,824

614.1648.3 633.3 43,018

（ t ）650

600

550

500

(g-CO2 /thousand yen)

565.1565.1

609.3609.338,878 39,569 40,357

Emissions per unit of productionCO2 emissions

■ Schematic diagram of changes

Production line A

Compressors for production line A

Production line B

Compressors for production line B

■ Trends in CO2 emissions

(FY)20142010 2011 2012 2013

Shared supply

Intermittentoperation

ComplianceEnvironment

Compliance Activities

Efforts to Address Environment

DAIDO METAL GROUP Environmental Policy

Measures to Control Factory TemperaturesIn the summer, solar radiation causes temperatures inside buildings to rise, and reduces the efficiency of air conditioning systems. In response, the company introduced a variety of measures to reduce this ambient heat, including thermal insulation coatings in the Inuyama Site Office and thermal insulation film at Gifu Factory, thus reducing power use and easing the burden on air conditioning systems.

Fundamental philosophyDaido Metal Group views the global environment as a precious resource for all people to share, and considers protection of the environment to be one of the most important issues facing mankind. The company will focus all of its efforts and technology on preserving the environment.

Code of Conduct

Fundamental policies1) The Daido Metal Group will fulfill its responsibility to preserve the global environment, while observing all relevant laws and regulations.

2) The entire Group will take steps to address environmental issues and strengthen environment management.

3) In all work activities, comprehensive efforts will be made to reduce energy consumption and use of materials, recycle materials, and reduce industrial waste to a minimum.

4) Through the development of products and technologies, the Group will employ its overall technical abilities in an effort to preserve and clean up the environment.

5) The Group will take active steps to inform customers, the local community and other related parties of its efforts to preserve the environment, and promote communication regarding the issue.

6) Through environmental education and informative activities, the Group will seek to boost environmental awareness among all employees, and encourage them to take it upon themselves to participate in environment-related activities.

■ Reducing Power ConsumptionDAIDO METAL is making progress in efforts to reduce power consumption, as a way to address the issue of global warming and to conserve scarce natural resources. The goal in FY2014 was to limit CO2 emissions to less than the amount generated in FY2013.

However, due to substantial increases in production output as well as a change in methods used to calculate the CO2 conversion rate, total CO2 emissions for the year amounted to 43,018 tonnes, a 6.2% increase over the FY2013 levels. Nevertheless, unit values for CO2, which measures the company’s energy efficiency, show a reduction of 3.9% compared with FY2013, to 609.3 g-CO2/thousand yen.

■ CO2 Reduction at Company Site OfficesStandardization and Mutual Use of Compressors to Cut CO2 EmissionsIn the past, each factory used separate compressors to supply compressed air to each manufacturing line. By unifying the airflow piping used to supply the compressed air, the system was adjusted to supply air to all production lines mutually, allowing some compressors at some factories to be shut down intermittently, thus reducing electric power consumption and CO2 emissions.

DAIDO METAL is aware of the importance of compliance as part of a company’s social responsibility, and does its utmost to promote awareness of and adherence to compliance policies throughout the group. This means

not only observing all relevant rules and regulations, but also showing good faith in all business activities. In FY2014, efforts to ensure compliance included the measures outlined below.

■ Creation of an Outside Compliance HotlineDAIDO METAL took steps to improve the structure of the current system by which employees report or consult concerns about non-compliance. This included the creation of an external reporting hotline, which allows employees to discuss their concerns with an external legal advisor.Furthermore, in order to ensure and improve anonymity female staff are assigned to the reporting hotline make it easier for female employees to report gender-specific concerns.

■ Training on Compliance Training for employees hired mid-careerAs of December 2014, the company introduced a training program to give those employees hired

mid-career the same training on compliance as all newly hired employees. The curriculum for this training includes a full explanation of the company’s Code of Conduct, performance standards and the reporting structure. After receiving this training employees sign a formal pledge confirming that they understand the standards of behavior and compliance that they are expected to follow as members of the DAIDO METAL GROUP, and are aware of the importance of compliance standards.

Training for newly hired employees includes proper use of SNSIn April 2014 the company introduced specific training for all newly hired employees which cover the standards of behavior they must observe on social media sites.As the use of social media increases, employees need to be aware of the potential dangers, and avoid inappropriate behavior when using social media sites.

1. Development of Sound Corporate ActivitiesWe, the DAIDO METAL GROUP (Daido Metal Co., Ltd. and its affiliated companies), make every effort to understand and comply with international and regional rules, applicable laws, regulations and corporate rules in the various countries where we conduct business in order to practice our corporate activities in a fair and sound manner. We endeavor to become a company which is trusted by all stakeholders such as customers, shareholders, employees, suppliers and the community while maintaining ethical relationships with government officials and public administration.

2. Provision of Valued Goods for CustomersWe develop and provide valued and safe products for the satisfaction and trust of our customers.

3. Information DisclosureWe communicate with shareholders and society at large and disclose corporate information actively and fairly. In addition, we strictly protect and manage a variety of confidential information, including personal and customer information. We produce reliable financial reports based on appropriate accounting processing.

4. Respect for PersonalityWe respect and encourage the diversity, personality and individuality of employees and ensure a harmonious and cooperative working environment in which health and safety are of the utmost importance.

5. Protection of the Natural EnvironmentWe recognize that protecting the environment, humankind's shared asset, is one of the most important priorities, and we promote environmental conservation and protection through our beliefs, practices and technology.

6. Social ContributionWe are aware of our important responsibility as a corporate member of society and promote activities which contribute to society.

7. Attitude towards Antisocial Forces and OrganizationsWe take a firm stance against any forces and organizations which threaten social order or our corporate activities, and we do not maintain any relationship with them.

8. Global Business ActivitiesWe continue to evolve as a global company by contributing to business activities in other countries while respecting the laws, cultures, local customs and interests of stakeholders of each country and region.

9. Problem Solving and Responsibility of Top ManagementIn order to fulfill our commitment to this "Code of Conduct", top management establishes firm "Rules of Action" and ensures the full dissemination of these rules to all employees. Top management also ensures the ongoing development of these rules and integrates them within the entire DAIDO METAL GROUP.If a situation occurs which goes against the spirit of the "Code of Conduct", then top management takes immediate responsibility to find the cause, solve the problem and take appropriate action against the people concerned, regardless of position, in order to prevent a recurrence.

* CO2 emissions volume is calculated using the methodology provided by the “Energy Saving Act”, which can change from year to year.

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Participants at the DQC Circle Convention

QC presentation (First prize recipient)

Compilation of the essays received from students

Local cleanup efforts in neighborhoods near the Inuyama Office Site

Students attending a presentation at the plant

Local cleanup efforts at the Gifu Factory

Traffic patrols have been conducted in Inuyama for over 20 years

“Good products and good production

facilities are the source of customer satisfaction”

■ Product Quality PolicyIn order to build a work ethic in which all employees strive to meet product quality goals, the company adopted the following “Quality Control” (QC) slogan for FY2014: “If any problem is identified in any process, take quick action and reform the operation or the work environment to ensure that it doesn’t happen again.” As this slogan implies, every employee is expected to work in cooperation with others to identify shortcomings in the work process, and thus improve product quality. Each DAIDO METAL plant ‒ whether in Japan or overseas ‒ has a product quality planning section which oversees QC activities and promotes QC policies.

■ DQC* Circle Convention (Promoting QC Circle Activities)On 17 December 2014 the members of nine “QC Circles” from domestic plants and one QC Circle from an overseas subsidiary were selected to participate in DAIDO METAL’s “DQC Circle Convention”. The convention was held to recognize the efforts of employees to introduce product quality improvements, energize the work environment and enhance product improvement capabilities. The top prizes awarded at the convention were as follows: First prize ‒ Training exchange with overseas (Thai) affiliate; Second prize ‒ Training exchange with overseas (Chinese) affiliate; Third prize: Participation in the nationwide QC Circle Convention (Fukuoka). The awards helped motivate participants by recognizing their QC Circle efforts.

■ Implementing a “5S” CampaignDAIDO METAL conducts a “5S Campaign” with the aim of enhancing product quality, promoting workplace safety, boosting productivity, and creating an enjoyable work

environment. This is based on the idea that continuous attention to the “5S’s” ‒ Seiri (Sorting), Seiton (Set in order), Seiso (Shine), Seiketsu (Standardize) and Shitsuke (Sustain) ‒ will ensure the success of production factories. The DAIDO METAL GROUP pursues “5S Campaigns” at both domestic and overseas factories.

■ Technology ExhibitionsPromoting materials technology in bearings, as key components of machinery DAIDO METAL took part in the “Mechanical Components & Materials Technology Expo Osaka” held at INTEX Osaka on 24-26 September 2014, with exhibitions to promote the company’s lead-free bush bearings and other products that have eliminated the use environmentally hazardous substances.In the future the company intends to continue developing new materials and technology (environmental technology) while exploring new applications as part of the effort to protect the environment.

PR for Pumps and Lubrication Technology ProductsOn 10-13 June 2014 DAIDO METAL took part in “FOOMA JAPAN 2014 International Food Machinery & Technology Exhibition” ‒ one of Asia’s largest exhibition of services and technologies used in the food processing and packaging machinery industries ‒ at the Tokyo Big Sight exhibition center. The Company displayed its rotary pump equipment, a product segment in which DAIDO METAL has over 30 years of experience.The company hopes these products will continue to contribute to the food processing industry, helping to promote food safety and food quality.

Product Quality Control and PR Activities

Serving Customers

Social Contributions to Local Communities

Contributions to a local child care center

Commemorating the anniversary of a children’s welfare center

Social Contribution Activities

Activities of overseas subsidiaries

■ Providing tours to local elementary school studentsAs a part of DAIDO METAL GROUP’s social contribution activities, the Inuyama Site Office Site offers plant tours to children from local elementary schools. In FY2014, the factory held tours for 150 third graders. The event included a DVD viewing for the students, an actual tour of the factory, and a chance to look at sample products and displays.After the visit, the children wrote essays in which they described their impressions of watching plant workers operate the equipment and manufacture products. Some of the students even expressed their desire to become DAIDO METAL employees when they grow up, which also gave current employees a sense of their role and responsibilities, reflected in the expectations of these youngsters. The company plans to continue offering such factory visits in an effort to convey the purpose and nature of our business to people in the local community.

■ Cleanup operations and traffic patrolsFor more than 20 years, employees at the Inuyama Site Office Site have taken part in local cleanup efforts, and served as traffic patrol supervisors to oversee students and other pedestrians at busy intersections. These activities reflect DAIDO METAL’s interest in maintaining a clean and safe environment and making the local area a better place to live. Similar programs have been introduced at the Gifu Plant, where employees take part in local beautification efforts on the first Sunday of August. After a morning meeting, participants pick up bottles, cans and other litter in the areas around the factory.

Through continuing efforts such as the local beautification campaign and traffic patrols, the company hopes to earn the respect of local citizens and be viewed as a valued member of the local society.

■ Donation activities [PT. DAIDO METAL INDONESIA]PT. DAIDO METAL INDONESIA makes a social contribution to the local community through volunteer (donation) efforts, which help to fund and develop local social services.

■ Support for local children [DAIDO METAL RUSSIA LLC]DAIDO METAL RUSSIA LLC is involved in efforts to support a child welfare facility in the local town of Gorodets, Nizhny. Every year the company takes part in activities to maintain the buildings, and provide supplies, as well as bringing presents to the children at the facility. In FY2014, on the anniversary of the facility’s opening, the personnel manager of DAIDO METAL RUSSIA and the head of its labor union visited the facility to present commemorative gifts, and to strengthen ties between the company and the children who live there.

*DQC = Daido Quality Control

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13F Nagoya Hirokoji Bldg.2-3-1 Sakae, Naka-ku, Nagoya, Aichi 460-0008, JAPAN


● Universal Design Fonts are utilized to ensure good visibility and legibility.

［ Contacts ］● For inquiries regarding environmental or safety issues:　Environmental & Safety Management Dept. 　TEL 81-568-61-2976 FAX 81-568-62-1361● Other CSR-related inquiries:　General Affairs Dept.　TEL 81-52-205-1401 FAX 81-52-205-1411

http://www.daidometal.com

2015 - daido metal

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