Corporate Social Responsibility

JAN 2011

Statutory Statement for Corporate Social Responsibility, cf. the Danish Financial Statements

Act § 99 a

The Aalborg Industries Group is dedicated to earn the trust and respect of our customers, stakeholders and the communities we are part of. We consider it of the utmost importance to be socially responsible in all our actions and act with integrity in all aspects of our business. This statutory statement is part of the Management’s Review in the Aalborg Industries Group’s annual report for the financial year 1 January – 31 December 2010.

In the Aalborg Industries Group, our values shall be the basis of our behaviour and the fundamental principles we believe in when doing business – in all aspects and towards all stakeholders. Thus they also serve as the foundation for our corporate social responsibility (CSR).

Our values are:

We relate the relevant values to the below key principles encompassing our CSR responsibilities:

• We are committed to behave ethically and to contribute to the economic development while improving the quality of life for our workforce and their families as well as the local community at large.

• We take responsibility for our impact on society and the environment.

• We attach great significance to awareness, acceptance and management of the implications and effects of all corporate decision making.

• All entities in the Aalborg Industries Group have obligations to the wider community and we believe that good corporate citizenship extends further than simply following the law.

Based on our values, the philosophy of our corporate social responsibility can be divided into three segments: Commitment, Environmental Sustainability and Working Environment.

Commitment
Aalborg Industries’ business activities have a positive impact on the local communities in which we operate. Involvement is a keyword when it comes to Aalborg Industries’ commitment globally, and we believe that our presence in numerous parts of the world calls for us to get involved in the local communities. Our commitment is among others expressed in the following examples:

SA 8000 certification
In 2007, Aalborg Industries S.A. in Brazil adapted its practices, documentation and processes to the SA 8000 certification. SA 8000 is an auditable certification standard based on international workplace norms and covers issues such as child labour, forced labour, healthy and safe working environment, freedom of association and right to collective bargaining, discrimination of any kind, discipline at work place, working hours and management systems. The certification was not only an important step in relation to customers’ demands, but also in relation to the company’s working environment. Aalborg Industries S.A. is the first boiler manufacturing company in Brazil to have the SA 8000 certification.

Donations
Through local sponsorships, the Aalborg Industries Group supports different organisations and efforts. For instance, we have made contributions to the municipality in Hai Phong, Vietnam for maintenance of the roads, prevention of flooding and restoration and maintenance of a local pagoda. Another case in point is donations given to the Brazilian organisation “Comunidade Jesus Menino” helping young, poor handicapped children and to an orphanage in Vietnam. Moreover, Aalborg Industries Inert Gas Systems BV in the Netherlands has sponsored the Roparun event – a fundraising event in the struggle against cancer. Contributions for charity to the Danish Seaman’s church in Hong Kong have been donated from Aalborg Industries (Shanghai) Limited and support have been provided to a fundraising campaign for South Africa, just to mention a few.

Taking care
In South Korea, Aalborg Industries Ltd. has volunteers visiting an orphanage of light disabled children once a month helping out where needed. Aalborg Industries Pty. Ltd. in Australia has set up a group of employees assisting the Morisset Multi-Purpose Centre and the Bonnells Bay Youth & Community Centre as “working-bees”. This was a great opportunity for the staff to be able to contribute to the community while not requiring specialised skills. Many duties were required such as digging, planting, mulching, mowing and just basically helping out. In Brazil, the São Geraldo School has been subject to a range of voluntary projects carried out by employees from Aalborg Industries S.A., such as maintenance of buildings, supply of furniture, set-up and installation of computer facilities, and IT introduction.

Supporting educational institutions
It is essential to the Aalborg Industries Group’s continued growth and development to attract highly technical skilled labour for development, production and service implying that education is important. As part of our commitment to the local communities, we have sponsored IT equipment to different educational institutions. In Qingdao, China, a donation has been given by the Aalborg Industries Group in connection with the opening of a school for 1500 students – the school has even been named Beiguan Aalborg Primary School. Additionally, we offer trainee periods to students from the local area to introduce them to work life in general and to help them decide on their future career path. In South Korea, Aalborg Industries Ltd. co-operates and delivers a series of lectures at Tokyo University of Marine Science and Technology.

Procurement
The Aalborg Industries Group dissociates from child labour and corruption. A good and valuable relationship between Aalborg Industries, its employees and business associates relies on an open dialogue, unambiguous contracts, mutual confidence and trustworthiness. Only this will result in a beneficial and competitive development of the company.

Environmental sustainability
We ensure that all entities of our business comply with existing environmental legislations, but we also find it natural to go even further allocating resources to reduce the environmental impact of the Aalborg Industries Group’s activities.

The corporate strategy for 2010-2012 focuses on environmental certifications to secure sustainability on a continued basis. Allocating even more resources to this area we ensure an ongoing environmental consideration always offering our customers the most advantageous solution while making sure that our products are developed and manufactured in consideration of existing environmental legislations and best practices.

In our production units, energy saving initiatives have been implemented and in Aalborg Industries A/S in Denmark, the consumption of gas, electricity, district heating and waste management was examined by a local energy centre in Denmark. All possibilities for saving energy were to be found and the results and experiences are to apply to Aalborg Industries’ other production facilities as well to reduce our total energy consumption profile – and within other aspects of our business, this is naturally also the case. Likewise, the general focus on the implementation of energy saving plans has increased.

Based on our values of being innovative and high performing, we take part in a range of different initiatives such as the “Green Ship of the Future” focusing on the development and demonstration of new green technologies, with significant reductions of emissions. The partnership of “Green Ship of the Future” enables us to make a strong collective effort reducing CO2 emissions and air pollution from ships, thus being a natural choice for the Aalborg Industries Group to support.

The Aalborg Industries product range clearly demonstrates this enhanced focus on the environment and among Aalborg Industries’ latest environmentally friendly products and technologies are an exhaust gas cleaning (EGC) system to clean exhaust gas from ship engines and a ballast water treatment system. The EGC system is a combined (hybrid) wet scrubbing system able to operate in seawater mode (open loop) and freshwater mode (closed loop). The combined EGC system offers maximum flexibility, and moreover, the operational costs are kept to a minimum. With Aalborg Industries’ long-term experience we also focus on a continued optimisation of large waste heat recovery systems, and in co-operation with our business partners we are still improving and developing the systems further to obtain future efficiency improvements for the benefit of our customers and the environment. Other green solutions involve the MISSION™ TCi boiler series, MGO burner modifications, superheaters for aux. boilers, cooling systems for LNG, economisers after aux. diesel engines and electrical steam generation.

Working environment
Different initiatives are constantly initiated to ensure the continued well-being and development of our employees. Satisfied employees form the basis of a good business and in the end this is for the benefit of both the employees and the company.

Below is an extract of some of the initiatives made in the Aalborg Industries Group to ensure an ongoing adaption of the working environment.

Health and safety organisations
The Aalborg Industries Group has factories in Brazil, China, Vietnam and Denmark, and here health and safety organisations and systems have been established to ensure the safety of our employees.

Policies
As part of our commitment to total care, Aalborg Industries A/S in Denmark has set down and implemented policies and procedures for abuse, harassment, sexual discrimination and psychological working environment. In addition, a senior policy exists showing consideration for employees nearing retirement. Our long-term sick policy has been updated in 2010 ensuring that sick employees are taken care of at an earlier stage not only for the benefit of the employee and the company, but also for the benefit of the local authorities. Finally, a global health and safety policy exists applying to the entire Aalborg Industries Group.

Company healthcare programme
Aalborg Industries A/S in Denmark initiated a company healthcare programme in the beginning of 2007. With this programme, the company has put a fitness centre at the disposal of its employees and their families while offering different exercising classes. In addition to that, a physiotherapist has been engaged providing all employees with the opportunity to seek guidance and treatment, just like weight and diet guidance has been initiated for interested employees. Similar examples exist in our subsidiaries: in Aalborg Industries (Shanghai) Limited in China, a “Healthy & Green Office” project has been jump-started, and in the Netherlands, periodical health checks and sponsorship for gym memberships are offered. In Vietnam, health checks are also granted and possible medication is defrayed by the company, and in Japan, occupational health and safety are also in focus, among other things by means of a close co-operation with a physician. Furthermore, soccer matches and other sporting events are arranged regularly in some of our subsidiaries encouraging social interaction across departments usually followed by other social events.

Education
Aalborg Industries S.A. in Brazil offers a 50 percent company support for post graduation classes and internally, English classes are offered to the employees. Aalborg Industries A/S in Denmark is represented in different non-profit organisations and councils, and in addition we are represented in various boards of local educational institutions co-operating to secure the most advantageous conditions and possibilities for all concerned. Also, production facilities and instructor have been put at the disposal of the local technical college in Aalborg Industries A/S in Denmark.

Accident insurance
Employees at our factory in Jiaozhou City, China are offered accident insurance exceeding the mandatory insurance as the rate of traffic accidents in particular is very high in China. In Vietnam a full time accident insurance is also offered to our employees.

Precautionary measures against diseases
As a global company with subsidiaries in 14 countries and several travelling employees, we consider it our duty to inform and take precautionary measures against diseases. In general, efforts are made continuously to raise the awareness of infectious diseases and in continuation hereof, some subsidiaries provide necessary vaccinations for the employees. In 2009, as the H1N1 flu pandemic spread, disinfectants were arranged for and guidelines for prevention of the disease were set up. In areas with numerous cases of AIDS and HIV infections, seminars for the employees are arranged.