Cosmo Seiki declares our commitment to building new partnerships through collaboration and mutual prosperity with our suppliers and business partners who strive for value creation. To this end, we focus on the following key areas:

1. Coexistence and Co-Prosperity Across the Supply Chain, and New Collaborations Beyond Supplier Size and Affiliation

We aim to enhance the overall value of our supply chain by encouraging communication and improvement efforts beyond our direct suppliers, from "Tier N" to "Tier N+1."
Furthermore, we strive to establish mutually beneficial relationships by promoting collaboration across existing partnerships, business scales, and affiliations.

In doing so, we will support our partners in areas such as telework implementation and the development of Business Continuity Plans (BCPs), particularly in light of disaster preparedness and workstyle reforms.

(Specific Initiatives):
Together with our suppliers and partner companies, we will work toward a “sustainable society” by respecting human rights, conserving resources, protecting the environment, and contributing to local communities through education.
We will also pursue new business development through open innovation.

2. Compliance with the "Promotion Criteria"

We will fully comply with the appropriate trading practices between parent and subcontractor businesses as outlined in the Small and Medium-sized Enterprise Promotion Act. We also commit to correcting any unfair trade or business practices that hinder partnership building.

i. Pricing Practices

We will not make unreasonable requests for cost reductions. When determining transaction prices, we will engage in sincere dialogue with subcontractors, especially when labor costs increase, ensuring fair compensation. Written contracts will clarify all conditions.

ii. Payment Terms

We will pay subcontractors in cash wherever possible. When using promissory notes, we will avoid passing on discount fees to subcontractors and strive to limit payment terms to within 60 days.

iii. Intellectual Property and Know-how

All intellectual property transactions will be based on contracts and guidelines. We will not request one-sided non-disclosure agreements, nor will we demand free transfers of intellectual property or know-how.

iv. Impact of Workstyle Reforms

To ensure that our suppliers can also comply with workstyle reforms, we will avoid placing last-minute or unreasonable orders. In the event of a disaster, we will avoid imposing one-sided burdens on our partners and will make efforts to continue business relations after recovery.

3. Other Key Initiatives

• We will share the benefits of business success and cost reductions with our partners on a “50/50” basis.
• We will conduct employee training to ensure that all staff members act on the "Cosmo Seiki CSR Action Declaration."
• We will carry out an annual “Partner Satisfaction Survey” to improve our relationships and enhance business practices.
• We will work toward abolishing the use of promissory notes, transitioning to cash payments or electronic records.
• We will conduct tool transactions based on contracts and will not impose unnecessary storage of unused tools on subcontractors.

January 31, 2024
Cosmo Seiki Co., Ltd.
President and CEO, Katsuhiko Kinoshita