Brief Report on the Settlement of Accounts Consolidated for the Business Year Ended March 31, 2015 J-GAAP

Brief Report on the Settlement of Accounts Consolidated for the Business Year Ended March 31, 2015 J-GAAP

Member, Financial Accounting Standards Foundation Brief Report on the Settlement of Accounts (Consolidated) for the Business Year Ended March 31, 2015 (J-GAAP) May 12, 2015 Name of Listed Company: Daikin Industries, Ltd. Listed on TSE Code No.: 6367 (URL: http://www.daikin.co.jp/) Representative: Masanori Togawa, President and CEO Contact: Susumu Okano, Senior Executive Officer and General Manager of the Corporate Communication Department of the Head Office (Tel.: +81-6-6373-4320) Planned date of Ordinary General Meeting of Shareholders: June 26, 2015 Planned date of start of dividend payment: June 29, 2015 Planned date of the filing of securities report: June 26, 2015 Preparation of supplementary explanatory materials for the settlement of accounts: Yes Holding briefings on the settlement of accounts: Yes (for institutional investors and analysts) 1.

Consolidated Business Results for the Fiscal Year Ended March 31, 2015 (From April 1, 2014, to March 31, 2015) (1) Consolidated Business Results Note: Amounts less than one million yen are truncated. Percentages indicate year-over-year increases/decreases.

Net sales Operating income Ordinary income Fiscal Year ended Millions of yen % Millions of yen % Millions of yen % March 31, 2015 1,915,013 7.1 190,587 21.8 194,234 24.9 March 31, 2014 1,787,679 ― 156,537 ― 155,570 ― Note: Comprehensive income was ¥248,650 million (35.6%) for the fiscal year ended March 31, 2015, and ¥183,328 million (―%) for the fiscal year ended March 31, 2014. Net income Net income per share Diluted net income per share Ratio of net income for the fiscal year to shareholders’ equity Ratio of ordinary income to total assets Operating margin Fiscal Year ended Millions of yen % Yen Yen % March 31, 2015 119,674 29.0 410.19 409.75 13.1 9.1 10.0 March 31, 2014 92,787 ― 318.33 317.94 13.1 8.3 8.8 (Reference) Equity in earnings of affiliates was ¥880 million for the fiscal year ended March 31, 2015, and ¥1,652 million for the fiscal year ended March 31, 2014.

Note: Year-over-year increases/decreases for the fiscal year ended March 31, 2014, are not stated as changes in accounting policies have been applied retrospectively. (2) Consolidated Financial Position Total assets Net assets Equity ratio Net assets per share Millions of yen Millions of yen % Yen As of March 31, 2015 2,263,989 1,048,311 45.3 3,511.34 As of March 31, 2014 2,011,870 823,858 39.9 2,748.08 (Reference) Equity capital was ¥1,024,724 million at the end of the fiscal year ended March 31, 2015, and ¥801,853 million at the end of the fiscal year ended March 31, 2014.

Daikin Industries, Ltd.

(6367), Brief Report on the Settlement of Accounts (Consolidated) for the Fiscal Year Ended March 31, 2015 (J-GAAP) (3) Consolidated Cash Flows Cash flows from operating activities Cash flows from investing activities Cash flows from financing activities Cash and cash equivalents at end of period Fiscal Year ended Millions of yen Millions of yen Millions of yen Millions of yen March 31, 2015 160,423 (77,330) (83,073) 286,949 March 31, 2014 179,713 (80,834) (38,249) 257,295 2. Dividends (Annual) Dividend per share Total cash dividends for the fiscal year (Total) Dividend payout ratio (Consolidated) Ratio of dividends to net assets (Consolidated) 1Q-end 2Q-end 3Q-end Year-end Total Fiscal Year ended Yen Yen Yen Yen Yen Millions of yen % % March 31, 2014 ― 23.00 ― 27.00 50.00 14,584 15.7 2.1 March 31, 2015 ― 40.00 ― 60.00 100.00 29,177 24.4 3.2 Fiscal Year ending March 31, 2016 (forecast) ― 55.00 ― 55.00 110.00 24.7 Note: Dividend per share for the 2Q-end of the fiscal year ended March 31, 2015, consists of an ordinary dividend of ¥30 and a commemorative dividend of ¥10 for the Company’s 90th anniversary.

3. Consolidated Business Forecast for the Fiscal Year Ending March 31, 2016 (From April 1, 2015 to March 31, 2016) Note: Percentages indicate year-over-year increases/decreases. Net sales Operating income Ordinary income Net income attributable to owners of parent Net income per share Millions of yen % Millions of yen % Millions of yen % Millions of yen % Yen First half 1,070,000 9.8 125,000 10.2 125,000 8.9 82,000 8.4 280.98 Full year 2,060,000 7.6 212,000 11.2 210,000 8.1 130,000 8.6 445.46 *Notes (1) Changes in Significant Subsidiaries during the Period: None (Changes in specified subsidiaries resulting in change in scope of consolidation) (2) Changes in Accounting Policies, Changes in Accounting Estimates, and Retrospective Restatement (i) Changes in accounting policies relating to revisions to accounting standards, etc.: Yes (ii) Changes in accounting policies other than (i) above: Yes (iii) Changes in accounting estimates: Yes (iv) Retrospective restatement: None Note: For details, see on page 21 and 22 of the attached “(5) Notes to Consolidated Financial Statements (Changes in Accounting Policies)/(Changes in Accounting Policies that are Difficult to Distinguish from Changes in Accounting Estimates)” of “5.

Consolidated Financial Statements.” (3) Number of Shares Issued (common stock) (i) Number of shares issued at end of period (including treasury shares) As of March 31, 2015 293,113,973 shares As of March 31, 2014 293,113,973 shares (ii) Number of shares of treasury shares at end of period As of March 31, 2015 1,280,652 shares As of March 31, 2014 1,326,704 shares (iii) Average number of shares outstanding during the period Fiscal year ended March 31, 2015 291,755,506 shares Fiscal year ended March 31, 2014 291,484,588 shares

Daikin Industries, Ltd. (6367), Brief Report on the Settlement of Accounts (Consolidated) for the Fiscal Year Ended March 31, 2015 (J-GAAP) (Reference) Summary of Non-Consolidated Business Results for the Fiscal Year Ended March 31, 2015 (From April 1, 2014, to March 31, 2015) (1) Non-Consolidated Business Results Note: Percentages indicate year-over-year increases/decreases. Net sales Operating income Ordinary income Fiscal Year ended Millions of yen % Millions of yen % Millions of yen % March 31, 2015 477,579 (5.2) 24,675 8.0 75,668 69.5 March 31, 2014 503,656 ― 22,837 ― 44,633 ― Net income Net income per share Diluted net income per share Fiscal Year ended Millions of yen % Yen Yen March 31, 2015 64,254 50.9 220.23 220.00 March 31, 2014 42,580 ― 146.08 145.90 Note: Year-over-year increases/decreases for the fiscal year ended March 31, 2014 are not stated as changes in accounting policies have been applied retrospectively.

(2) Non-Consolidated Financial Position Total assets Net assets Equity ratio Net assets per share Millions of yen Millions of yen % Yen As of March 31, 2015 1,346,676 504,270 37.4 1,724.51 As of March 31, 2014 1,264,833 430,633 34.0 1,472.94 (Reference) Shareholders’ equity was ¥503,278 million at the end of the fiscal year ended March 31, 2015, and ¥429,791 million at the end of the fiscal year ended March 31, 2014. Presentation of Implementation Status of Audit Procedures • This Brief Report on the Settlement of Accounts is not subject to audit procedures pursuant to the Financial Instruments and Exchange Act, and audit procedures for financial statements pursuant to the Financial Instruments and Exchange Act had not been completed at the time of the disclosure of this Brief Report on the Settlement of Accounts.

Explanation about the Appropriate Use of the Business Forecast and Other Noteworthy Points • The business forecasts are based on information currently available to Daikin Industries, Ltd. (the “Company”) and certain assumptions that are deemed reasonable. Actual results may differ significantly from these forecasts. For the basis of presumption of the business forecast and the notes on its use, please refer to “(1) Analysis of Operating Results (Business Forecast for the Next Fiscal Year)” of “1. Analysis of Operating Results and Financial Position.” • The Company plans to hold a briefing on business results for institutional investors and analysts on Wednesday, May 13, 2015.

Documents and materials distributed in this briefing will be posted on the Company’s website soon after the briefing.

Daikin Industries, Ltd. (6367), Brief Report on the Settlement of Accounts (Consolidated) for the Fiscal Year Ended March 31, 2015 (J-GAAP) - 1 - Content of Attachment 1. Analysis of Operating Results and Financial Position . . 2 (1) Analysis of Operating Results . . 2 (2) Analysis of Financial Position . . 4 (3) Basic Policy on Profit Distribution and Dividends for the fiscal year ended March 31, 2015, and the fiscal year ending March 31, 2016 . . 5 2. Status of the Company Group . . 6 3. Management Policies . . 9 (1) Basic Management Policy . . 9 (2) Target Management Indicators . . 9 (3) Medium- and Long-Term Management Strategies .

. 9 (4) Tasks to Be Addressed by the Company . . 9 4. Basic Stance Regarding Choice of Accounting Standards . . 9 5. Consolidated Financial Statements . . 10 (1) Consolidated Balance Sheet . . 10 (2) Consolidated Statement of Income and Consolidated Statement of Comprehensive Income . . 12 (Consolidated Statement of Income . . 12 (Consolidated Statement of Comprehensive Income . . 13 (3) Consolidated Statement of Changes in Equity . . 14 (4) Consolidated Statement of Cash Flows . . 16 (5) Notes to Consolidated Financial Statements . . 18 Notes on the Premises of the Company as a “Going Concern .

. 18 Basis of Presenting the Consolidated Financial Statements . . 18 Changes in Accounting Policies . . 21 Changes in Accounting Policies that are Difficult to Distinguish from Changes in Accounting Estimates . . 22 Notes to the Consolidated Balance Sheet . . 22 Notes to the Consolidated Statement of Income . . 22 Notes to the Consolidated Statement of Comprehensive Income . . 23 Notes to the Consolidated Statement of Changes in Equity . . 23 Retirement Benefits . . 25 Tax-Effect Accounting . . 29 Segment Information, etc . . 30 Per Share Information . . 33 Significant Subsequent Events .

. 34 Omission of Disclosure . . 34 6. Non-Consolidated Financial Statements . . 35 (1) Balance Sheet . . 35 (2) Statement of Income . . 38 (3) Statement of Changes in Equity . . 39

Daikin Industries, Ltd. (6367), Brief Report on the Settlement of Accounts (Consolidated) for the Fiscal Year Ended March 31, 2015 (J-GAAP) - 2 - 1. Analysis of Operating Results and Financial Position (1) Analysis of Operating Results Overview of the Fiscal Year Looking at the overall world economy in the fiscal year ended March 31, 2015 (fiscal 2014), the U.S. economy expanded against the backdrop of strong domestic demand. The European economy, while remaining basically weak, received support from quantitative easing and the low price of crude oil. The pace of economic growth is slowing down in the emerging economies, especially in China.

Turning to the Japanese economy, a retreat from the strong demand ahead of the consumption tax hike has been a heavy drag on economic recovery. In such a business environment, the Daikin Group set its New Year’s slogan for 2014 as “Let’s All Accomplish Our Goals Now—Keep on actions one after another.” From the beginning of the year, we concentrated group-wide efforts on improving results by strengthening sales and marketing capabilities and reducing fixed costs, in addition to measures in response to the exchange rate fluctuations, such as shifting production of some items to Japan and benefitting from the effects of yen depreciation.

Amid uncertainty in the global situation, the Group worked to expand profit in order to achieve the objectives of “Fusion 15,” the Group’s strategic management plan that sets fiscal 2015 as its target year.

The Daikin Group reported record high net sales and profit in the fiscal year under review due to strong sales overseas, especially in China, Asia, and the Americas, in our mainstay Air-Conditioning and Refrigeration Equipment segment, as well as an increase in the yen-equivalent from the weakening yen. The Daikin Group’s consolidated net sales increased by 7.1% year over year to ¥1,915,013 million. Consolidated operating income increased by 21.8% to ¥190,587 million, and consolidated ordinary income increased by 24.9% to ¥194,234 million. Consolidated net income increased by 29.0% to ¥119,674 million.

Results by business segment are as follows: (i) Air-Conditioning and Refrigeration Equipment Overall sales of the Air-Conditioning and Refrigeration Equipment segment increased by 7.1% to ¥1,710,944 million. Operating income increased by 21.9% to ¥170,484 million. In the Japanese commercial air-conditioning equipment market, there was a retreat from the strong demand ahead of the consumption tax hike, but industry demand remained flat against the previous fiscal year, helped by an increase in new construction of commercial facilities and medical and welfare facilities as well as demand due to government measures to support investment in energy saving.

The Daikin Group worked on differentiation on the product front through the “FIVE STAR ZEAS” and “Eco-ZEAS80,” air conditioners for stores and offices that are equipped with the new refrigerant HFC32 (R32) that has a global warming potential value one-third of conventional refrigerants and strove to expand sales of high value-added products such as the “Ve-Up” series of VRV air-conditioning systems. As a result, net sales grew year over year.

In the Japanese residential air-conditioning equipment market, industrial shipments for the full year were down year over year, continuing the trend from the first half, due to unseasonal weather in the summer and a slowdown in recovery of consumption following the consumption tax hike. The Group worked on differentiation by equipping all wall-mounted room air conditioner models with the new refrigerant HFC32 (R32) and strove to expand sales of high value-added products such as the super energy-saving room air conditioner “Urusara 7,” which foreshadowed 2015 energy-saving standards. However, net sales fell year over year due to the large impact from the decrease in demand.

In Europe, although fourth quarter net sales slightly increased year over year, continuing the trend from the third quarter, full-year net sales decreased year over year, reflecting the impact of unseasonal weather during the peak demand period of July–August in Southern Europe, our main market in the region. Net sales of residential air-conditioning systems fell year over year, as increased sales of design-focused high-end products developed in Europe and continued efforts to strengthen sales in the low-price range failed to make up for the cool summer in the Southern Europe. On the other hand, net sales of commercial air-conditioning systems increased year over year thanks to increased sales in the U.K.

and Germany, where construction demand is recovering, as well as comprehensive dealer follow-up and sales activities in each country. Net sales of heat pump hot water heating systems also increased year over year, as the Group was able to capture increased demand from tighter environmental regulations and expand sales significantly in France, a major market in the region. In emerging markets, sales grew in the Middle East and Africa, due to expansion of the business base. Meanwhile, in Turkey, sales of residential air-conditioning systems declined significantly as a result of the impact of the economic

Daikin Industries, Ltd. (6367), Brief Report on the Settlement of Accounts (Consolidated) for the Fiscal Year Ended March 31, 2015 (J-GAAP) - 3 - slowdown and the cool summer. The situation in Ukraine also had an impact, resulting in a decrease in sales year over year in emerging markets overall. In China, while large-scale real estate investments are decreasing amid a trend toward a slowdown in the economy, general consumption remained firm. The Group’s sales in China overall increased year over year, mainly because the Group focused on retail stores. Sales are expanding from major cities to suburban cities.

In particular, in the residential market, the Group strengthened its sales network of its own specialty “PROSHOPs” and expanded sales with the launch of new products such as “New Life Multi.” In the large-scale air-conditioning (Applied Systems) market, sales grew year over year as a result of growth in sales of centrifugal chillers, air handling units, and other equipment, despite sluggish growth in demand due to restraint in capital investment associated with a slowdown in the economy.

In Asia and Oceania, sales were strong, backed by an increase in demand for residential equipment in Australia. In Thailand, we made concerted efforts to visit customers as the political situation started to settle down, and sales rose year over year. In emerging countries where we had been building sales networks, we captured the expanding demand for residential and commercial equipment in Vietnam and Indonesia, and sales grew considerably from the previous fiscal year. As a result of these factors, sales grew year over year in the region as a whole. In the Americas, sales grew year over year in the residential air-conditioning market and light commercial air-conditioning market for medium-scale office buildings as a result of efforts to increase market share by capturing the surge in demand ahead of stronger regulations regarding energy-saving performance and developing fine-tuned sales strategies for each regional dealers, despite the impact from the cool summer, especially in the U.S.

northeast. In the Applied Systems market, sales grew year over year despite demand remaining flat from the previous fiscal year. This was thanks to increased sales of equipment, especially of air handling units. In the marine vessels business, air conditioners and refrigeration units for marine vessels performed strongly due to robust demand in the domestic shipbuilding market. Meanwhile, sales of marine container refrigeration units declined compared to the previous fiscal year.

(ii) Chemicals Overall sales of the Chemicals segment increased by 6.3% to ¥149,558 million and operating income increased by 15.6% year over year to ¥16,550 million. Sales of fluoropolymers in China decreased year over year due to the impact of an overall slowdown in infrastructure demand, mainly in railroads and telecommunications, and deteriorating market conditions. In the United States, although demand for LAN cables and semiconductors stagnated, sales grew year over year due to strong demand in automobiles and other areas. Sales of fluoroelastomers increased year over year, thanks to brisk demand mainly for automobiles in the United States and Asia, despite sluggish demand in China.

Despite slowing demand in some fields in each region and market, overall sales of fluoropolymers increased from the previous fiscal year.

Turning to specialty chemicals, demand for oil and water repellants was strong for use in fabrics for clothing in Asia and Europe and for new applications in the United States, and sales grew year over year. Sales of anti-fouling surface coating agents used in devices, such as touch panels, increased significantly compared to the previous fiscal year, due to robust demand in China. Demand for semiconductor-etching products was also strong in Japan and Asia, resulting in an increase in sales year over year. As a result, overall sales of specialty chemicals were up compared to the previous fiscal year.

As for fluorocarbon gas, overall sales of gas declined year over year due to the impact of stagnant demand in Japan and a downswing in sales to local air conditioner manufacturers in China and Asia. (iii) Other Divisions Overall sales of the “Others” segment rose by 9.3% to ¥54,510 million. Operating income increased by 50.9% to ¥3,583 million. Sales of oil hydraulic equipment for industrial machinery grew year over year from strong performance in the Japanese and U.S. markets. Sales of oil hydraulic equipment for construction machinery and vehicles were up year over year due to increased demand both in domestic and overseas markets of our key customers in Japan.

Sales of defense systems-related products grew year over year, reflecting strong sales in products for the Ministry of Defense and home oxygen equipment.

In the electronics business, sales of data base systems for design, development and quality sectors increased thanks to the increased demand in the IT system that improves the product quality and promotes information sharing around the globe. On a non-consolidated basis, the Company’s net sales decreased by 5.2% to ¥477,579 million. Operating income increased by 8.0% to ¥24,675 million. Ordinary income increased by 69.5% to ¥75,668 million, and net income

Daikin Industries, Ltd. (6367), Brief Report on the Settlement of Accounts (Consolidated) for the Fiscal Year Ended March 31, 2015 (J-GAAP) - 4 - increased by 50.9% to ¥64,254 million.

Note: Changes were made to the accounting policies in the fiscal year under review. In accordance with these changes, figures for the fiscal year ended March 31, 2014, have been retrospectively adjusted for comparison purposes. Business Forecast for the Next Fiscal Year With regard to the global economy in the future, we expect the recovery of the U.S. economy to speed up, mainly in personal consumption, while in Europe, expansion in exports associated with quantitative easing and the weak euro are expected to contribute to economic recovery. In emerging economies, the pace of economic growth is slowing, mainly in China.

We expect the Japanese economy to be supported by a rally in personal consumption and recovery in exports thanks to the weak yen as well as the government’s economic measures. Amid this business environment, for this year (2015), the final year of the strategic management plan “Fusion 15,” we set as the Group’s New Year’s slogan “Create the Future, Exceed in a Changing World.” We will not miss the signs of structural change in the global economic system, taking these changes as opportunities and linking them to expansion of our business.

Specifically, we will further refine our efforts to improve the “manufacturer’s lifeline” of product development, production, procurement, and quality capabilities, and to create a robust sales network capable of overcoming the competition and strengthen human resources capabilities as we move forward with implementation of our growth strategies in areas including the emerging countries and volume zone business, solutions business, and environment-related innovation business, which have been declared core strategies.

At the same time, we will increase sales and profit by proceeding with initiatives for establishing a profitable business structure, including careful selection of our investments and making dramatic cuts in our fixed costs.

For the fiscal year ending March 31, 2016, we forecast a 7.6% increase in consolidated net sales to ¥2,060,000 million, with operating income rising 11.2% to ¥212,000 million, ordinary income increasing 8.1% to ¥210,000 million, and net income attributable to owners of parent increasing 8.6% to ¥130,000 million. The estimated exchange rate for the fiscal year ending March 31, 2016, is based on the assumption that US$1 equals ¥115 and 1 euro equals ¥ 125. The business forecasts are based on information currently available to the Company and certain assumptions that are deemed reasonable. A number of factors, some major ones of which are explained below, could cause actual results to differ significantly from these forecasts.

- Drastic changes in demand and supply for products or in the political and economic situations in the major markets of Japan, Europe, the United States, China, and other Asian countries - Fluctuations in demand for air-conditioning equipment due to unseasonable weather - Drastic changes in the exchange rates (especially the U.S. dollar and euro rates) - Serious problems related to quality and manufacturing - Substantial fluctuations in the market value of securities held by the Company - Impairment of non-current assets - Natural disasters (2) Analysis of Financial Position (i) Assets, Liabilities and Net Assets Total assets increased by ¥252,119 million from the end of the previous fiscal year to ¥2,263,989 million.

Current assets increased by ¥115,403 million to ¥1,082,614 million, mainly due to increases in cash and deposits and notes and accounts receivable – trade. Non-current assets increased by ¥136,715 million to ¥1,181,375 million, primarily due to new acquisition of and market value variation in investment securities.

Liabilities increased by ¥27,665 million from the end of the previous fiscal year to ¥1,215,678 million, mainly due to an increase in deferred tax liabilities. Interest bearing debt ratio declined to 29.3% from 34.5% at the end of the previous fiscal year. Net assets increased by ¥224,453 million from the end of the previous fiscal year to ¥1,048,311 million, primarily reflecting fluctuations in foreign currency translation adjustment, as well as an increase caused by posting of net income, despite the decrease due to the payments of dividends.

Daikin Industries, Ltd.

(6367), Brief Report on the Settlement of Accounts (Consolidated) for the Fiscal Year Ended March 31, 2015 (J-GAAP) - 5 - (ii) Cash Flows During the fiscal year under review, net cash provided by operating activities was ¥160,423 million, a decrease of ¥19,290 million from the previous fiscal year, principally due to a decrease in notes and accounts payable – trade, which offset an increase in income before income taxes and minority interests. Net cash used in investing activities was ¥77,330 million, a decrease of ¥3,504 million from the previous fiscal year, primarily due to a decrease in purchase of investment securities.

Net cash used in financing activities was ¥83,073 million, an increase of ¥44,823 million from the previous fiscal year, mainly due to an increase in the repayments of long-term loans payable. As a result, cash and cash equivalents at the end of the fiscal year under review amounted to ¥286,949 million, an increase of ¥29,654 million from the previous fiscal year.

(Reference) Trends in Cash Flow Indicators Fiscal Year ended March 31, 2011 Fiscal Year ended March 31, 2012 Fiscal Year ended March 31, 2013 Fiscal Year ended March 31, 2014 Fiscal Year ended March 31, 2015 Equity ratio (%) 43.1 43.3 35.6 39.9 45.3 Market value equity ratio (%) 64.2 56.5 61.9 83.9 103.7 Cash flows/interest-bearing debt ratio (years) 4.8 8.7 6.8 3.9 4.1 Interest coverage ratio (times) 11.8 6.9 15.3 18.0 16.8 Notes: 1. Equity ratio = Equity capital/Total assets Market value equity ratio = Aggregate market value of shares/Total assets Cash flows/Interest-bearing debt ratio = Interest-bearing debt/Operating cash flow Interest coverage ratio = Operating cash flow/Interest payment 2.

Each indicator is calculated based on the consolidated financial values. 3. Aggregate market value of shares is calculated as follows: (term-end closing stock price) × (term-end number of shares issued (after deducting shares of treasury shares)) 4. Operating cash flow represents the “Net cash provided by (used in) operating activities” in the consolidated statement of cash flows.

5. Interest-bearing debt indicates the liabilities for which interest is paid on all the liabilities posted in the consolidated balance sheet. Interest payment corresponds to the amount of “Interest expenses paid” in the consolidated statement of cash flows. (3) Basic Policy on Profit Distribution and Dividends for the fiscal year ended March 31, 2015 and the fiscal year ending March 31, 2016 The Company will continue to focus on expanding its businesses while investing its assets strategically, and improving its financial structure by such means as proceeding with the reduction of overall costs and enhancing its fiscal position.

Through these initiatives, we are committed to being a truly global and excellent company while at the same time further improving our corporate value and enhancing profit returns to our shareholders. Specifically, by striving to maintain a consolidated ratio of dividend to net assets (Dividend on Equity, DOE) of 3.0% while at the same time aiming for an even higher consolidated dividend payout ratio, we will roll out initiatives to further increase returns to our shareholders with the core goal of stable and continuous dividends. Internal reserves will be applied to strategic investments in order to expand business and increase competitiveness such as reinforcing management practices, promoting global businesses, and accelerating eco-conscious product development.

For the fiscal year ended March 31, 2015, the Company has proposed an annual cash dividend of ¥100 (¥40 for the interim dividend and ¥60 for the year-end dividend) with a ¥10 dividend included in the interim dividend to commemorate the Company’s 90th anniversary, representing a ¥50 increase over the previous fiscal year. For the fiscal year ending March 31, 2016, the Company proposes an annual cash dividend of ¥110 (¥55 for the interim dividend and ¥55 for the year-end dividend).

Daikin Industries, Ltd. (6367), Brief Report on the Settlement of Accounts (Consolidated) for the Fiscal Year Ended March 31, 2015 (J-GAAP) - 6 - 2.

Status of the Company Group The Daikin Group (the Company and its subsidiaries and associates) is engaged in the manufacture (including installation), and sale of products in the fields of air-conditioning and refrigeration equipment, chemicals, hydraulic equipment, defense systems–related products and others. The filer of the consolidated financial statements (or “the Company”) engages in the manufacture and sale of all these business lines and the subsidiaries and associates partly engage in the manufacture and/or sale of any of the respective business fields of air-conditioning and refrigeration equipment, chemicals, hydraulic equipment, and defense systems-related products.

The major business lines of the Company and the respective subsidiaries and associates are shown below.

(1) Air-Conditioning and Refrigeration Equipment A) Major Products For residential use: Room air conditioners, Air purifiers, Dehumidifiers, CO2 heat pump-water heaters, Far-infrared electric heaters, Heat-pump type floor heating systems For commercial use: Packaged air conditioning systems, Spot air conditioners, Water chilling units, Centrifugal chillers, Screw-type chillers, Fan-coil units, Air handling units, Packaged air conditioners for low temperatures, Air purification systems, Total heat exchangers, Duct ventilating fans, Deodorizers, Far-infrared electric heaters, Freezers, Ammonia water chilling units, Air filters, Industrial dust collectors, Rooftops For marine vessels: Container refrigeration units, Marine vessel air conditioners and refrigeration units B) Company Names (i) Domestic subsidiaries and associates [Consolidated subsidiaries] Daikin Applied Systems Co., Ltd., Daikin Airtechnology & Engineering Co., Ltd., and one (1) other company for sales, installation of air conditioners, Daikin HVAC Solution Tokyo Co., Ltd., and ten (10) other sales companies, OK Kizai Ltd., Daikin Rexxam Electronics Co., Ltd., Daikin Trading Co., Ltd., Nippon Muki Co., Ltd., and six (6) other companies [Entities accounted for using equity method] Moritani Daikin Co., Ltd., and two (2) other companies (ii) Overseas subsidiaries and associates [Consolidated subsidiaries] Daikin (China) Investment Co., Ltd., Daikin Air-conditioning (Shanghai) Co., Ltd., Daikin Air-conditioning (Suzhou) Co., Ltd., Xian Daikin Qingan Compressor Co., Ltd., Daikin Device (Suzhou) Co., Ltd., Daikin Motor (Suzhou) Co., Ltd., Shenzhen McQuay Air-conditioning Co., Ltd., McQuay Air-conditioning & Refrigeration (Wuhan) Co., Ltd., McQuay Central Air-conditioning (China) Co., Ltd., Daikin Industries (Thailand) Ltd., Siam Daikin Sales Co., Ltd., Daikin Compressor Industries Ltd., Daikin Airconditioning (Singapore) Pte.

Ltd., OYL Manufacturing Company Sdn. Bhd., Group Associated (C&L) Sdn. Bhd., Daikin Airconditioning India Pvt. Ltd., Daikin Australia Pty. Ltd., Daikin Europe N.V., Daikin Industries Czech Republic s.r.o., Daikin Device Czech Republic s.r.o., Daikin Airconditioning France S.A., Daikin Airconditioning Italy S.p.A., Daikin Applied Europe S.p.A., Daikin Airconditioning UK Ltd., Daikin Isıtma ve Soğutma Sistemleri Sanayi ve Ticaret A.Ş., Daikin Applied Americas Inc., Goodman Global Group, Inc., and 138 other companies [Entities accounted for using equity method] Zhuhai Gree Daikin Device Co., Ltd.

and two (2) other companies

Daikin Industries, Ltd. (6367), Brief Report on the Settlement of Accounts (Consolidated) for the Fiscal Year Ended March 31, 2015 (J-GAAP) - 7 - (2) Chemicals A) Major Products Fluorocarbon gas: Refrigerants, Cleaning agents Fluoropolymers: Ethylene tetrafluoride resins, Molten type resins, Fluoroelastomers, Fluoro paints, Fluoro coatings Chemicals: Semiconductor-etching products, Oil and water repellants, Mold release agents, Surface acting agents, Fluorocarbons, Fluorinated oils, Pharmaceutical agrichemical intermediates Chemical engineering machinery: Solvent deodorizing equipment, Dry air suppliers B) Company Names (i) Domestic subsidiaries and associates [Consolidated subsidiary] Toho Kasei Co., Ltd.

(ii) Overseas subsidiaries and associates [Consolidated subsidiaries] Daikin Fluorochemicals (China) Co., Ltd., Daikin Arkema Refrigerants Asia Ltd., Daikin Chemical Europe GmbH, Daikin America, Inc., and ten (10) other companies [Entities accounted for using equity method] Arkema Daikin Advanced Fluorochemicals (Changshu) Co., Ltd. and three (3) other companies (3) Others A) Major Products Oil Hydraulics: Hydraulic equipment and systems for industrial use: Pumps, Valves, Hydraulic systems, Oil cooling units, Inverter-controlled pumps and motors Hydraulic equipment for construction machinery and vehicles: Hydraulic transmissions, Valves Centralized lubrication units and systems: Grease pumps, Control and stack valves Defense System: Ammunitions, components for guided missiles, and aircraft components for the Ministry of Defense, Home oxygen equipment Electronics: Process-improvement and knowledge-sharing systems for the design and development sector, IT infrastructure management systems (network, security, and asset management), Computer graphics solutions such as CAD systems for facility design B) Company Names (i) Domestic subsidiaries and associates [Consolidated subsidiaries] Daikin-Sauer-Danfoss, Ltd., Daikin Hydraulic Engineering Co., Ltd., and one (1) other company (ii) Overseas subsidiaries and associates [Consolidated subsidiaries] All World Machinery Supply, Inc., and two (2) other companies

Daikin Industries, Ltd. (6367), Brief Report on the Settlement of Accounts (Consolidated) for the Fiscal Year Ended March 31, 2015 (J-GAAP) - 8 - [Schematic Diagram of the Company Group] A schematic diagram of the business lines of the Daikin Group, including two hundred and ten (210) consolidated companies (twenty-eight (28) domestic, one hundred and eighty-two (182) overseas) and ten (10) entities accounted for using equity method (three (3) domestic, seven (7) overseas), is shown below. Customers Daikin Industries, Ltd.

(The Company) Air-Conditioning and Refrigeration Equipment Domestic subsidiaries and associates [Consolidated subsidiaries] Daikin Applied Systems Co., Ltd., Daikin Air Technology & Engineering Co., Ltd., and one (1) other company for sales, construction and installation of air conditioners, Daikin HVAC Solution Tokyo Co., Ltd., and ten (10) other sales companies, OK Kizai Ltd., Daikin Rexxam Electronics Co., Ltd., Daikin Trading Co., Ltd., Nippon Muki Co., Ltd., and six (6) other companies [Entities accounted for using equity method] Moritani Daikin Co., Ltd., and two (2) other companies Overseas subsidiaries and associates [Consolidated subsidiaries] Daikin (China) Investment Co., Ltd, Daikin Air-conditioning (Shanghai) Co., Ltd., Daikin Air-conditioning (Suzhou) Co., Ltd., Xian Daikin Qingan Compressor Co., Ltd., Daikin Device (Suzhou) Co., Ltd., Daikin Motor (Suzhou) Co., Ltd., Shenzhen McQuay Air-conditioning Co., Ltd., McQuay Air-conditioning & Refrigeration (Wuhan) Co., Ltd., McQuay Central Air-conditioning (China) Co., Ltd., Daikin Industries (Thailand) Ltd., Siam Daikin Sales Co., Ltd., Daikin Compressor Industries Ltd., Daikin Airconditioning (Singapore) Pte.

Ltd., OYL Manufacturing Company Sdn. Bhd., Group Associated (C&L) Sdn. Bhd., Daikin Airconditioning India Pvt. Ltd., Daikin Australia Pty. Ltd., Daikin Europe N.V., Daikin Industries Czech Republic, s.r.o., Daikin Device Czech Republic s.r.o., Daikin Airconditioning France S.A., Daikin Airconditioning Italy S.p.A., Daikin Applied Europe S.p.A., Daikin Airconditioning UK Ltd., Daikin Isıtma ve Soğutma Sistemleri Sanayi ve Ticaret A.Ş., Daikin Applied Americas Inc., Goodman Global Group, Inc., and 138 other companies [Entities accounted for using equity method] Zhuhai Gree Daikin Device Co., Ltd., and two (2) other companies Chemicals Domestic subsidiaries and associates [Consolidated subsidiary] Toho Kasei Co., Ltd.

Overseas subsidiaries and associates [Consolidated subsidiaries] Daikin Fluorochemicals (China) Co., Ltd., Daikin Arkema Refrigerants Asia Ltd., Daikin Chemical Europe GmbH, Daikin America, Inc., and ten (10) other companies [Entities accounted for using equity method] Arkema Daikin Advanced Fluorochemicals (Changshu) Co., Ltd., and three (3) other companies Others Oil Hydraulics Defense Systems Electronics Domestic subsidiaries and associates [Consolidated subsidiaries] Daikin-Sauer-Danfoss, Ltd., Daikin Hydraulic Engineering Co, Ltd., and one (1) other company Overseas subsidiaries and associates [Consolidated subsidiaries] All World Machinery Supply, Inc., and two (2) other companies

Daikin Industries, Ltd. (6367), Brief Report on the Settlement of Accounts (Consolidated) for the Fiscal Year Ended March 31, 2015 (J-GAAP) - 9 - 3. Management Policies (1) Basic Management Policy Under “Our Group Philosophy,” which sets forth the fundamental mindset of our management, the Company will, as a corporation that continually supplies customers with the highest level of conveniences and amenities, enhance its technical bases, carry out management emphasizing a capital increase and strive to maximize corporate value through the provision of high-quality products, materials, and services.

The Company will conduct fair corporate activities based on a high level of ethics and fair competition, information disclosure and the fulfillment of accountability in a timely and appropriate manner, proactive responses to the global environment and active contributions to local communities as action guidelines common to the Group. Moreover, the Company will make efforts to expand profitability and business operations for the entire Group by enforcing complete information sharing within the Group, establishing a resilient management structure most appropriate for the solution of problems and tasks that may come up from time to time, and facilitating the Company’s tradition of a “Fast and Flat” management system.

(2) Target Management Indicators The Company considers the maximization of corporate value to be the most important management task, and by setting up FCF (free cash flow), DVA (Daikin value added), ROA (return on total assets), ROE (return on equity) and other indicators of “Ratio Management” as important management administration indicators, the Company is developing businesses and strengthening the management structure. The Company is emphasizing FCF as a source of corporate value and as an integrated indicator that enhances all management indicators and is endeavoring to reduce notes and accounts receivable - trade and inventories while taking measures to expand profit and improve investment efficiency so as to create cash flow from operating capital.

(3) Medium- and Long-Term Management Strategies In fiscal 2013, the Company formulated the strategic management plan, “Fusion 15 Latter-Half Three-Year Plan.” This plan defined fiscal 2015 as its target year and set out concrete strategies for achieving its targets. We will execute new growth strategies by the full-scale entry into new markets where demand for air-conditioning is expected to grow, such as the Middle East and Central and South America, expanding our business in China and Asia, developing our solutions business by enhancing our service and maintenance businesses, and expanding our lineup of environmentally-conscious products that have high energy efficiency or improve air quality.

In addition, we will also take up themes to build a more advanced management base such as improving profitability by reducing variable and fixed costs across the Daikin Group and building a more efficient supply chain management (SCM) system.

(4) Tasks to Be Addressed by the Company In 2015, which will be the final fiscal year of the strategic management plan “Fusion 15,” we will further refine our efforts to improve the “manufacturer’s lifeline” of product development, production, procurement, and quality capabilities, and to create a sales network, strengthen human resources capabilities, and reduce fixed costs, as we commit ourselves to achieving the targets of our growth strategies in areas including the emerging countries and volume zone business, solutions business, and environment-related innovation business, which have been declared core strategies.

In addition, we will work to draw up a new strategic management plan aimed at sustainable development in the medium and long term and enhancement of the corporate structure. 4. Basic Stance Regarding Choice of Accounting Standards The Daikin Group applies Japanese general accepted accounting principle (J-GAAP). In terms of the International Financial Reporting Standards (IFRS), the difference between IFRS and J-GAAP, its potential impact on the Daikin Group and other effects are currently being studied. We will address the application of the IFRS appropriately upon taking into account various circumstances both in Japan and abroad.

Daikin Industries, Ltd. (6367), Brief Report on the Settlement of Accounts (Consolidated) for the Fiscal Year Ended March 31, 2015 (J-GAAP) - 10 - 5. Consolidated Financial Statements (1) Consolidated Balance Sheet (Millions of yen) FY2013 (As of March 31, 2014) FY2014 (As of March 31, 2015) Assets Current assets Cash and deposits 257,295 286,949 Notes and accounts receivable – trade 317,584 354,480 Merchandise and finished goods 218,671 248,027 Work in process 40,976 40,493 Raw materials and supplies 57,912 65,638 Deferred tax assets 29,897 38,745 Other 51,470 55,175 Allowance for doubtful accounts (6,598) (6,896) Total current assets 967,211 1,082,614 Non-current assets Property, plant and equipment Buildings and structures, net 104,645 117,718 Machinery, equipment and vehicles, net 108,529 122,808 Land 33,624 37,561 Leased assets, net 3,012 2,755 Construction in progress 21,899 33,834 Other, net 28,005 33,077 Total property, plant and equipment 299,716 347,755 Intangible assets Goodwill 361,667 369,964 Customer relationship 123,700 137,970 Other 60,389 68,789 Total intangible assets 545,756 576,724 Investments and other assets Investment securities 158,550 205,772 Long-term loans receivable 495 341 Deferred tax assets 6,235 2,933 Net defined benefit asset 10,069 19,426 Other 24,456 29,155 Allowance for doubtful accounts (622) (735) Total investments and other assets 199,185 256,894 Total non-current assets 1,044,659 1,181,375 Total assets 2,011,870 2,263,989 Liabilities Current liabilities Notes and accounts payable – trade 162,084 153,937 Short-term loans payable 43,325 41,897 Commercial papers ― 16,000 Current portion of bonds 30,000 ― Current portion of long-term loans payable 65,885 39,010 Lease obligations 1,731 1,913 Income taxes payable 17,428 21,514 Deferred tax liabilities 13,356 22,658 Provision for directors’ bonuses 250 300 Provision for product warranties 46,112 50,547 Accrued expenses 84,368 96,075 Other 68,925 81,768 Total current liabilities 533,467 525,624

Daikin Industries, Ltd. (6367), Brief Report on the Settlement of Accounts (Consolidated) for the Fiscal Year Ended March 31, 2015 (J-GAAP) - 11 - (Millions of yen) FY2013 (As of March 31, 2014) FY2014 (As of March 31, 2015) Non-current liabilities Bonds payable 120,000 140,000 Long-term loans payable 430,475 420,874 Lease obligations 2,526 2,717 Deferred tax liabilities 73,299 95,115 Net defined benefit liability 9,975 10,709 Other 18,268 20,636 Total non-current liabilities 654,544 690,054 Total liabilities 1,188,012 1,215,678 Net assets Shareholders’ equity Capital stock 85,032 85,032 Capital surplus 83,549 83,443 Retained earnings 514,093 617,128 Treasury shares (4,549) (5,220) Total shareholders’ equity 678,126 780,384 Accumulated other comprehensive income Valuation difference on available-for-sale securities 40,065 67,818 Deferred gains or losses on hedges 606 (464) Foreign currency translation adjustment 87,938 179,566 Remeasurements of defined benefit plans (4,882) (2,580) Total accumulated other comprehensive income 123,727 244,340 Subscription rights to shares 841 992 Minority interests 21,162 22,594 Total net assets 823,858 1,048,311 Total liabilities and net assets 2,011,870 2,263,989

Daikin Industries, Ltd. (6367), Brief Report on the Settlement of Accounts (Consolidated) for the Fiscal Year Ended March 31, 2015 (J-GAAP) - 12 - (2) Consolidated Statement of Income and Consolidated Statement of Comprehensive Income (Consolidated Statement of Income) (Millions of yen) FY2013 (April 1, 2013, to March 31, 2014) FY2014 (April 1, 2014, to March 31, 2015) Net sales 1,787,679 1,915,013 Cost of sales 1,219,356 1,265,112 Gross profit 568,323 649,901 Selling, general and administrative expenses 411,785 459,313 Operating income 156,537 190,587 Non-operating income Interest income 4,325 5,966 Dividend income 2,152 2,907 Share of profit of entities accounted for using equity method 1,652 880 Foreign exchange gains 482 2,954 Other 3,458 5,110 Total non-operating income 12,071 17,820 Non-operating expenses Interest expenses 9,454 9,063 Other 3,583 5,109 Total non-operating expenses 13,038 14,173 Ordinary income 155,570 194,234 Extraordinary income Gain on sales of land 159 43 Gain on sales of investment securities 55 4,006 Gain on reversal of subscription rights to shares 208 100 Total extraordinary income 423 4,150 Extraordinary losses Loss on disposal of non-current assets 335 480 Loss on sales of investment securities 0 ― Loss on valuation of investment securities 1,531 ― Impairment loss ― 4,578 Loss on abolishment of retirement benefit plan ― 811 Other 10 6 Total extraordinary losses 1,878 5,877 Income before income taxes and minority interests 154,115 192,508 Income taxes – current 50,389 60,969 Income taxes – deferred 5,569 6,995 Total income taxes 55,959 67,965 Income before minority interests 98,156 124,542 Minority interests in income 5,369 4,868 Net income 92,787 119,674

Daikin Industries, Ltd. (6367), Brief Report on the Settlement of Accounts (Consolidated) for the Fiscal Year Ended March 31, 2015 (J-GAAP) - 13 - (Consolidated Statement of Comprehensive Income) (Millions of yen) FY2013 (April 1, 2013, to March 31, 2014) FY2014 (April 1, 2014, to March 31, 2015) Income before minority interests 98,156 124,542 Other comprehensive income Valuation difference on available-for-sale securities 21,632 27,752 Deferred gains or losses on hedges 1,217 (1,071) Foreign currency translation adjustment 59,499 93,434 Remeasurements of defined benefit plans ― 2,317 Share of other comprehensive income of entities accounted for using equity method 2,822 1,673 Total other comprehensive income 85,172 124,107 Comprehensive income 183,328 248,650 Comprehensive income attributable to Comprehensive income attributable to owners of parent 176,479 240,224 Comprehensive income attributable to minority interests 6,848 8,425

Daikin Industries, Ltd. (6367), Brief Report on the Settlement of Accounts (Consolidated) for the Fiscal Year Ended March 31, 2015 (J-GAAP) - 14 - (3) Consolidated Statement of Changes in Equity FY2013 (April 1, 2013, to March 31, 2014) (Millions of yen) Shareholders’ equity Capital stock Capital surplus Retained earnings Treasury shares Total shareholders’ equity Balance at beginning of current period 85,032 83,016 438,671 (6,772) 599,948 Cumulative effects of changes in accounting policies (1,397) (1,397) Restated balance 85,032 83,016 437,273 (6,772) 598,550 Changes of items during period Dividends of surplus (11,946) (11,946) Net income 92,787 92,787 Effect of changes in accounting period of subsidiaries (4,021) (4,021) Purchase of treasury shares (3) (3) Disposal of treasury shares 532 2,226 2,759 Net changes of items other than shareholders’ equity Total changes of items during period ― 532 76,819 2,223 79,575 Balance at end of current period 85,032 83,549 514,093 (4,549) 678,126 Accumulated other comprehensive income Subscrip- tion rights to shares Minority interests Total net assets Valuation difference on available-for- sale securities Deferred gains or losses on hedges Foreign currency translation adjustment Remeasure- ments of defined benefit plans Total accumulated other comprehensiv e income Balance at beginning of current period 18,430 (145) (115) ― 18,169 1,335 16,543 635,996 Cumulative effects of changes in accounting policies (1,397) Restated balance 18,430 (145) (115) ― 18,169 1,335 16,543 634,599 Changes of items during period Dividends of surplus (11,946) Net income 92,787 Effect of changes in accounting period of subsidiaries (4,021) Purchase of treasury shares (3) Disposal of treasury shares 2,759 Net changes of items other than shareholders’ equity 21,634 751 88,053 (4,882) 105,557 (493) 4,619 109,683 Total changes of items during period 21,634 751 88,053 (4,882) 105,557 (493) 4,619 189,259 Balance at end of current period 40,065 606 87,938 (4,882) 123,727 841 21,162 823,858

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