Natural Cool : Sustainability Report 2017

ENERGISED FOR WIDER GROWTH

SUSTAINABILITY REPORT FY 2017

CONTENTS

1 ABOUT THIS REPORT 1

2 STATEMENT FROM BOARD 2

3 OVERVIEW OF THE GROUP 3

4 BUSINESS PHILOSOPHY AND VALUES 4

5 APPROACH TO SUSTAINABILITY 6

6 IDENTIFYING MATERIAL ESG FACTORS 7

7 STAKEHOLDERS ENGAGEMENT 8

8 ENVIRONMENTAL 10

9 SOCIAL 11

10 GOVERNANCE 18

GRI CONTENT INDEX 19

1 ABOUT THIS REPORT

Natural Cool Holdings Limited ("Natural Cool" or the "Company", and together with its subsidiaries, the "Group") are pleased to present the first sustainability report covering the Group's sustainability efforts in the financial year ended 31 December 2017 ("FY2017"). This report is set out on a "comply or explain" basis in accordance with Rule 711B and Practice Note 7F of the Listing Manual (Section B: Rules of Catalist) of the Singapore Exchange Securities Trading Limited ("SGX-ST").

As one of the leading air-conditioning specialists in Singapore, we are motivated by the prospect of being a benchmark creator in creating sustainable value for our shareholders and customers. We are committed to applying best practices in sustainability reporting andtransparency to our various stakeholders.

Reporting Scope and Period

This sustainability report provides an overview of Natural Cool's sustainability performance as well as its strategies and practices, while highlighting the economic, environmental, and social impact of the Company's activities and developments. Further information oncorporate governance, which is part of our sustainability, can be found under the section of

"Corporate Governance" on page 87 to 109 of the Group's FY2017 Annual Report.

To reaffirm our commitment towards sustainability, our sustainability report will be publishedno later than 31 May on an annual basis from the financial year ended 31 December 2018

("FY2018") onwards. This report covers the group for FY2017 from 1 January 2017 to 31December 2017.

Reporting Process

In each reporting cycle, Natural Cool's Sustainability Reporting Committee (the "SRCommittee") reviews the content of the report to determine its relevance to our businessas well as to ensure that the current and emerging material issues of significance pertainingto sustainability and the interests of our stakeholders are addressed. The SR Committeeincludes the Chief Executive Officer, Managing Director, Chief Investment Officer, and the management personnel of all our business functions.

GRI Guidelines

We would like to inform our stakeholders that we are benchmarking our sustainability efforts in accordance with the Global Reporting Initiative ("GRI") Standards.

The GRI Sustainability Reporting Guidelines provide a globally recognised frameworkfor companies to measure and communicate their environmental, economic, social and governance performance. We have prepared our report in accordance with the GRIStandards - Core option.

Feedback

We value feedback from our stakeholders as it allows us to continually improve oursustainability policies, processes and performance. Kindly address all feedback to the SRCommittee atreport.sr@natcool.com. Your feedback is important to us so that we canimprove on our future reporting.

With this inaugural sustainability report, which will be published annually, we would therefore like to reinforce our support and management of these newly prioritised matters throughactive engagement with senior management who will lead the Group's sustainability efforts.

2 STATEMENT FROM BOARD

The Board strives to align the Group's policies and practices with internationally recognised standards in the Environmental, Social and Governance ("ESG") themes, thus allowing usto achieve a balance between financial results, social engagement and environmentalinitiatives whilst ensuring the strategic growth of the Group.

The Group established an SR Committee under the guidance of the Board and conducted aformal materiality assessment to better manage non-financial risks such as environmentalcompliance, employment, employee health and safety and corporate governance. The SR

Committee have identified four of the highest ranked material factors for reporting. The SRCommittee reports directly to the Board, which has considered sustainability issues as partof its strategic formulation, determined the material Environmental, Social and Governance

3 OVERVIEW OF THE GROUP

Corporate Profile

Natural Cool Holdings Limited was founded in 1989. The Group is an investment holding company that trades in air-conditioners, air-condition components, systems and units in Singapore, Malaysia and internationally.

Widely regarded as one of Singapore's leading air-conditioning and switchgear specialist, the Group is the first to integrate both the switchgear and air-conditioning business segments in the power management and temperature-control of both commercial and residential properties.

The Group operates primarily in the business of air-conditioning. For instance, the Group through its subsidiaries - Natural Cool Airconditioning & Engineering Pte Ltd offers consulting,implementation, repair and maintenance services for retail, commercial, government and industrial clients. The Group also has a trading department that provides air-conditioners,related accessories and professional services to overseas customers.

Besides engaging in trading and supplying air-conditioners parts, Natural Cool is also involved inproperties investment holding, manufacturing and trading of paint and basic chemicals.

Vision

Natural Cool strives to be considered as the preferred choice in building solutions.

Mission

Natural Cool enhances the strength and trust in our brand name through:

• • Safe, Superior, Reliable Products and Services;

• • Strategic Planning.

Employee Information

As of 31 December 2017, Natural Cool has a total of 298 staff. Embracing strength indiversity, we employ from a wide age group and from both genders.