By making appeals through direct business partners to other business partners beyond (from “Tier N” to “Tier N+1”), we will work on boosting added value throughout supply chains, and seek to realize prosperous coexistence with business partners through collaborations beyond existing business relationships, company sizes, and the like. In doing so, in pursuit of business continuity in such cases as disasters and work style reforms, we will provide our business partners with support to introduce remote working systems, advice to formulate business continuity plans (BCP), and more.
(Individual item) We will expand the “wa” (circle of harmony) by engaging in sound business with business partners, and make significant contributions to society.

In compliance with desirable business practices between the parent business operators and subcontractors (“Promotion Standards” based on the Act on the Promotion of Subcontracting Small and Medium-sized Enterprises), we will proactively strive to correct trade and business practices that may hinder our partnership building with business partners.

• (1) Price decision method

  The Company will not make unreasonable cost reduction requests. In determining transaction prices, we accept requests for consultation from subcontractors, and hold sufficient discussions to include appropriate profits of subcontractors, taking into consideration the impact of factors such as increasing labor cost. In the course of entering into contracts—including those concerning the determination of transaction prices—the parent business operators clarify and deliver the terms and conditions thereof in writing.

• (2) Payment terms of promissory notes, etc.

  The subcontract proceeds will be paid in cash to the extent possible. If paid by promissory notes, we will not cause subcontractors to bear discount charges or the like, and will set the payment term within 60 days.

• (3) Intellectual property and know-how

  We will engage in transactions in accordance with the guidelines and contract templates regarding intellectual property transactions. Furthermore, we will not engage in acts such as demanding the conclusion of one-sided non-disclosure agreements, or using our advantageous position in transaction to ask for the disclosure of know-how or request the transfer of intellectual property rights without compensation.

• (4) Adverse impact of work style reforms

  To help our business partners implement work style reforms, we will not place orders to subcontractors with short deadlines without appropriately bearing the cost, or suddenly change specifications. In the case of disasters and the like, we will not impose one-sided burdens of business on subcontractors, and upon resuming business, we will consider continuing our business relationships to the extent possible.

Under relationships of mutual trust with our business partners, we will not make unfair or unreasonable requests to them, and will make requests and conduct negotiations in a reasonable manner based on data, market prices, and the like.

This guideline is intended for all business partners related to the Group, including suppliers.

The Group together with all of its business partners, complies with the laws and regulations of the countries and regions in which it conducts business, and respects the International Code of Conduct.

"The Group, together with all of its business partners supports and respects international norms such as the" "International Bill of Human Rights" "and the International Labour Organization ("ILO Declaration on Fundamental Principles and Rights at Work"), based on the United Nations "Guiding Principles on Business and Human Rights," and works on the following matters regarding respect for the human rights of all people involved in the procurement activities of the Company and improvement of the working environment. In accordance with the "K's Denki Group Human Rights Policy.

(1) Prohibition of forced labor

Prohibition of forced or compulsory labor through coercion, restraint, inhuman prison labor, slavery or trafficking in persons

(2) Prohibition of Child Labor and Consideration for Young Workers

Prohibition of child labor under the minimum working age, and prohibition of engaging young workers under 18 years of age in hazardous work that may compromise their health or safety

(3) Consideration for working hours

Prohibition of work beyond the limits of working hours stipulated in applicable laws and regulations, appropriate management of working hours, holidays, and breaks, and reduction and prevention of excessive working hours

(4) Appropriate Wages and Allowances

Payment of remuneration (including minimum wage, overtime pay, and legally required allowances and wage deductions) in compliance with applicable laws and regulations, and consideration of payment of wages at a level sufficient to cover the necessities of life (living wage)

(5) Prohibition of inhumane treatment

Inhumane treatment such as mental and physical abuse, coercion and harassment, as well as prohibition of acts that may result in such treatment

(6) Prohibition of discrimination

No discrimination based on race, nationality, religion, ideology, creed, sex, age, gender identity, sexual orientation, presence or absence of disabilities, physical characteristics, etc.

(7) Safety and health

Maintenance of a safe and hygienic working environment and implementation of appropriate health management for workers

(8) Freedom of association and respect for the right to collective bargaining

Respect for workers' rights, including the freedom to form trade unions and the right to collective bargaining

The Group together with all of its business partners will comply with environment-related laws and regulations, and proactively address global environmental issues such as resource depletion, climate change, and environmental pollution. At the same time, the Group will consider local environmental issues in consideration of the health and safety of the people in the local communities where it is involved, and will address the following issues.

(1) Reducing energy consumption and greenhouse gas emissions

Contributing to the realization of a decarbonized society by improving energy efficiency and continuously reducing energy consumption and greenhouse gas emissions

(2) Emissions into the atmosphere

Implementation of appropriate measures to reduce the emission of harmful substances into the atmosphere

(3) Water management

Monitoring of water used and implementation of monitoring, control, and treatment of water conservation and wastewater

(4) Effective use of resources and waste management

Promote reduction, reuse, and recycling through appropriate management, promote effective use of resources, and reduce waste generation.

(5) Management of chemical substances

Compliance with relevant laws and regulations, identification, labelling and control of chemical and other substances that pose a hazard to humans and the environment, and management to ensure safe handling, transfer, storage, use, recycling or reuse, and disposal

(6) Conservation of biodiversity

Analyze and assess dependence on nature and impacts, and work towards biodiversity conservation

The Group together with all of its business partners will comply with the laws and regulations of the countries and regions in which it conducts business, conduct business activities based on a high level of ethics, and address the following issues.

(1) Prohibition of bribery, corruption, extortion and embezzlement of any kind

(2) Prohibition of inappropriate provision and receipt of benefits

(3) Appropriate Information disclosure

(4) Respect and protection of intellectual property

(5) Prohibition of any relationship with anti-social individuals or organizations

(6) Prohibition of acts that obstruct fair, equitable, transparent and free competition, such as abuse of a superior bargaining position

(7) Establishment of a complaint processing, such as a reporting desk for employees, and protection of whistleblowers

(8) Responsible procurement of minerals

The Group works with all of its business partners to ensure and improve the safety and quality of its products and services and to provide accurate information on its products and services.

The Group, together with all of its business partners, will comply with relevant laws and regulations, appropriately manage confidential information and personal information, and take appropriate information security measures to prevent information leakage, falsification, loss, misuse, etc. through unauthorized access from inside and outside the Group.

The Group respects local culture and conducts activities that contribute to the development of local communities in cooperation with all of its business partners.

[To Suppliers]
Suppliers are requested to establish an implementation and management system in order to comply with each item of this guideline. If you are aware of any violation of these Guidelines (including cases where there is a possibility of such violation) in your dealings with the Company or in the business of a business partner, please contact the Company immediately. We also ask that corrective measures be taken promptly and that measures be taken to prevent recurrence.
We may conduct surveys such as questionnaires to suppliers in order to confirm their cooperation with sustainable procurement activities in accordance with these Guidelines. Please cooperate with us in that case.