Procurement Policy

We conduct our production activities globally in Japan and overseas.
In the course of our global production activities, we provide fair opportunities to all domestic and overseas companies, and use fair evaluations to procure superior materials that meet the conditions we seek.
In our materials purchasing activities (including when we outsource manufacturing, etc.), we will comply with all laws and social norms, work to build mutual cooperation and relationships of trust with our business partners, and actively promote initiatives to fulfill our social responsibilities, such as global environmental conservation, with the cooperation of our business partners.

1. Basic Procurement Concept

• 1) We will comply with laws and social norms and give due consideration to the environment.
• 2) Aiming for optimal procurement from a global perspective, we will build partnerships based on mutual understanding and trust with our business partners.
• 3) We provide our business partners with open and fair opportunities to enter, and select our suppliers based on QCDDE satisfaction, regardless of nationality, company size, or business performance.

2. Guidelines for procurement activities

• 1) Fair and impartial purchasing activities and procurement and purchasing of materials at optimal costs are based on the principle of market competition, with fairness and fairness as our first priority.
• 2) Building mutual cooperation and trust
  All of our executives and employees will comply with and practice the Code of Conduct, which was established as a guideline for corporate behavior that embodies the Management Philosophy and Conduct Guidelines, as well as observance of laws, regulations and social norms, in an effort to build mutual cooperation and trusting relationships with business partners.
• 3) Environmental Conservation
  Based on our "SG Environmental Charter" and "SG Environmental Action Plan," we will engage in environmentally conscious product development and business activities. In addition, we will strengthen our environmental conservation activities in cooperation with our business partners and promote environmentally conscious purchasing activities, such as the procurement of materials with low environmental impact.
• 4) Securing good product quality
  It is our responsibility as a manufacturer to provide products that earn the deep trust of our customers. In order to create the "best products," we will strive to secure materials that satisfy the quality demanded by us.
• 5) Securing steady delivery time and stable supply
  In order to provide our customers with a stable supply of products, we will strive to secure materials in a stable manner with the necessary timing (delivery deadlines). In addition, as a manufacturer's obligation, we will secure repair parts for the future.
• 6) Advanced technology capabilities (technological development and proposal capabilities)
  We will actively adopt materials and parts with advanced technologies, such as original technologies and special technologies, in order to create new demand through our revolutionary technological capabilities.
• 7) Implementation of supply chain BCP
  ■ Establishment of supply chain BCP
  To ensure continued supply to our customers, we will investigate the information of our suppliers' manufacturing companies and manufacturing locations in preparation for disasters and unforeseen circumstances, and build a BCP system. We also conduct a questionnaire on the status of supply chain construction, depending on the amount of transactions and the degree of importance.
• 8) Implementation of CSR Questionnaires
  ■ CSR procurement
  In order to fulfill our social responsibilities, including respect for human rights, consideration for safety and health, and compliance with laws and regulations, it is essential to promote appropriate efforts to address these issues in the supply chain as well. We investigate and evaluate the status of our suppliers' CSR efforts and carry out corrective activities for items with low evaluations.
• 9) Responsible Mineral Procurement
  ■ Responsible Mineral Procurement
  We will strive to exclude minerals from the supply chain and conduct responsible mineral procurement so as not to use minerals that are involved in human rights infringement activities. We ask our business partners to understand our policies and make efforts to comply with them.

3. Requests to suppliers

In conducting our business, we are required to fulfill our social responsibilities as a supply chain that includes not only us but also our business partners. In order to respond to this, we ask our business partners to comply with the following items.

• 1) Compliance with laws and social norms In addition to the following examples, we ask our business partners to comply with applicable laws and social norms in each country and region in which they conduct business.
  • Compliance with laws and regulations related to the manufacture and sale of materials
  • Compliance with laws related to labor
  • To comply with laws and regulations concerning safety and health, and to develop an appropriate working environment
  • Prohibition of child labor and forced labor
  • Prohibition of discrimination based on race and sex and respect for the dignity of each employee
  • Abidance by statutes on the environment
  • Prohibition of bribery and unfair proceedings
• 2) Promotion of sound business operations
  We ask you to promote sound, fair, and honest business management in order to continue conducting business transactions and build mutual cooperation and trust. In addition, we ask you to disclose appropriate information on business conditions and other matters.
• 3) Consideration for the environment
  We request that you actively carry out environmental conservation and environmental management, engage in environmentally conscious business activities and product development, and provide materials in accordance with our Green Procurement Guidelines and Green Procurement Guidelines.
• 4) Securing optimal quality and cost
  In order to provide our customers with the best products, we ask them to comply with the necessary safety standards in each country and region, satisfy the quality that we require, and provide materials at appropriate prices based on the principle of market competition.
• 5) Stable supply of parts and materials
  In order to provide our customers with stable products, we ask them to secure reliable delivery times and provide stable materials.
• 6) Leading technology
  Please propose materials with advanced technologies, such as original technologies and special technologies.
• 7) Response to conflict minerals
  We urge you to confirm the use and non-use of the four minerals (tin, tantalum, tungsten and gold) as defined in Section 1502 of the Financial Regulatory Reform Act (Dodd-Frank Act) and to make available the actual conditions.
• 8) Secrecy of Confidential Information
  We ask you to strictly manage the information you know through transactions with our materials, maintain confidentiality, and not disclose it outside the company without our understanding.
• 9) Strengthening Compliance
  
  • Establishment of a compliance system for suppliers
  • Thorough compliance with the basic business agreement and quality assurance agreement
  • Cooperation in Confirming the Status of Compliance Activities
  • Strengthen compliance guidance for suppliers that supply parts and materials to suppliers