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Supply Chain Management

DKS Group Basic Sustainable Procurement Policy

This policy is communicated to all suppliers worldwide.

Basic Approach

The DKS Group has established the Sustainable Procurement Basic Policy as a code of conduct to be observed when procuring products and services. We aim to realize a sustainable society by promoting activities based on this Policy throughout the entire supply chain.

(1) Fair and Equitable Procurement

  1. We conduct business activities in compliance with laws, regulations, and social norms.
  2. We comply with domestic and international competition laws and do not engage in acts that impede fair and free competition.
  3. We do not cause disadvantage to business partners or others by abusing our superior bargaining position.
  4. We work to prevent corruption in all its forms (bribery, extortion, etc.).
  5. We have no association with anti-social forces.
  6. We respect intellectual property rights and take measures to prevent unauthorized infringement.
  7. We have established whistleblowing contact points accessible from both inside and outside the company. We ensure the protection of whistleblowers and conduct fair investigations.

(2) Environmental Preservation

  1. We promote efficiency in energy use and aim to reduce energy consumption.
  2. We promote the reduction of greenhouse gas (GHG) emissions and work to mitigate the impacts of climate change.
  3. We promote the efficient use of water resources and work to reduce water usage.
  4. We promote efforts to minimize our impact on biodiversity.
  5. We properly manage and dispose of chemical substances in accordance with laws and regulations.
  6. We promote the reduction of pollutants. We reduce the use of harmful chemical substances that cause environmental problems and promote the procurement of safe and clean products.
  7. We promote the reduction of waste and encourage the use of recyclable materials.
  8. We promote efficient resource usage. We actively use renewable and recyclable resources to enhance the efficiency of resource usage.

(3) Respect for Human Rights

  1. We respect human rights and prohibit inhumane treatment.
  2. We strictly prohibit child labor and forced labor.
  3. We prohibit discrimination based on race, gender, religion, nationality, disability, sexual orientation, etc.
  4. We respect employees’ freedom of association and support the right to collective bargaining.
  5. We ensure appropriate management of working hours. We comply with the working hours stipulated by relevant laws and regulations and strive to reduce overtime and excessive working hours.
  6. We pay appropriate wages. We comply with minimum wage levels stipulated by relevant laws and regulations and aim to pay wages that exceed the minimum wage.
  7. We provide a workplace environment that places the highest priority on the health and safety of employees. We implement appropriate safety measures and strictly enforce measures to mitigate health risks so that workers do not work in dangerous environments.
  8. We promote responsible mineral procurement regarding conflict minerals.

(4) Information Security

  1. We strictly prevent the leakage of confidential information obtained through business activities.
  2. We appropriately manage and protect the personal information of all stakeholders, including employees and business partners, in compliance with relevant laws and regulations.
  3. We strive to strengthen cybersecurity and implement appropriate technical and organizational measures to ensure data safety.

This Policy was approved by the Board of Directors in March 2025.

March 24, 2025
DKS Co. Ltd.
President & CEO
YAMAJI Naoki

Initiative

Sustainable Procurement Questionnaire

As part of our sustainability initiatives, to promote mutual development and build trust with our business partners, we request cooperation from new and existing supply chain partners in completing a survey (questionnaire) to understand their ESG practices, including labour, human rights, environmental, and anti-corruption measures. We use the results as a basis for decision-making or as reference information when selecting business partners. The 2024 survey was conducted using tools developed by an external ESG support company, targeting key suppliers. Where necessary, interviews regarding the survey content were also conducted. This survey enabled us to more accurately ascertain the current status of suppliers' sustainability-related activities and identify potential risks in their efforts concerning labour, human rights, the environment, and anti-corruption. Going forward, we will consider providing feedback on the survey results to suppliers and exploring initiatives related to improvement.

Key items in the sustainable procurement questionnaire

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Evaluation criteria Content
1. ESG in general In-house initiatives, supply chain management
2. Environment Environmental management, greenhouse gases, wastewater and water resources, air quality, chemical substance management, waste, biodiversity
3. Society and Human Rights Forced labour, child labour, working hours and holidays, wages, discrimination and harassment, indigenous peoples' rights, freedom of association and collective bargaining, occupational health and safety, conflict minerals, emergency response, community development and health and safety
４. Governance Business Integrity, Prohibition of Improper Granting and Receipt of Benefits, Disclosure of Information, Intellectual Property, Fair Business Practices, Advertising and Competition, Whistleblowing System and Protection of Whistleblowers, Privacy, Exclusion of Anti-Social Forces, Information Security, Product Quality and Safety

Managing chemicals

Chemicals enrich our lives and are essential for convenient and comfortable lifestyles. To mitigate environmental risks from chemicals, we comply with regulations concerning the manufacturing, handling, and release of chemicals, while appropriately managing them in accordance with our voluntary regulations. For chemicals contained in raw materials and the packaging materials used in our products, materials used in manufacturing processes, and chemicals related to our facilities, we obtain information from our suppliers, assess relevant aspects in design and development, and manage quality to appropriately control for any risks that may arise from the use of such chemicals.

Legal compliance

We comply with desirable transaction practices between prime contractors and subcontractors (“Promotion Standards” based on the Act on the Promotion of Subcontracting Small and Medium-sized Enterprises), and actively correct transaction and commercial practices that hinder building business partnerships.

  1. Pricing methods
    We do not request unreasonable cost reductions. In determining transaction prices, we conduct thorough discussions with our subcontractors at least once a year to make sure that they can secure adequate margins and improve their working conditions. When making decisions, we appropriately follow the Guidelines on Price Negotiations for Proper Transfer of Labor Costs. If material and energy costs surge, we seek the appropriate transfer of the increased costs. In signing contracts, including determining transaction prices, we clearly indicate and provide terms and conditions in writing and other formats.
  2. Payment conditions
    We pay subcontracting fees in cash.
  3. Intellectual property and know-how
    We do not sign one-sided confidentiality agreements without reasonable cause, nor do we leverage our business position to demand disclosure of know-how or gratuitous transfer of intellectual property rights.
  4. Adverse effects resulting from work style reforms
    In order to allow our business partners to implement work style reforms, we do not request short-lead-time orders or sudden specification changes from subcontractors without appropriate cost compensation. In the event of a disaster or other emergency, we make necessary arrangements to prevent a unilateral burden from befalling our subcontractors. In resuming operations, we strive to maintain our partnerships and make other necessary efforts wherever possible.
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