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Environment / CSR / Procurement Guidelines

Requests for Suppliers

As previously mentioned, the Shinano Kenshi Group's is committed to offer even higher value to our customers in joint effort with suppliers in our global procurement processes. To achieve this goal, we would like to request your special cooperation in each of the following areas: quality, price, delivery lead-time, environment and CSR

(1) Quality
To offer our customers safe quality products, the Shinano Kenshi Group aims to prevent any defected products from leaving its site by improving quality from the following three perspectives:

1) Build-in quality at the design stage;
2) Build-in quality in each process from order receipt to production and shipment; and,
3) Build-in quality starting with the quality of purchased components.

The quality of raw materials, components, facilities, and services, etc. (hereinafter, referred to as "raw materials and components, etc.") provided by suppliers can sway the performance of the product of our company. Moreover, it may lead to serious flaws and defects in our products depending on the quality of items purchased from suppliers. Furthermore, the quality of these raw materials and components, etc. reflects the level of quality assurance system of our suppliers. Therefore, we believe that the quality of our company's products can be assured only in the context of the comprehensive value chain encompassing suppliers.

We request that suppliers make effort to understand our company's perspectives on quality assurance and strive to enhance the quality of their products.

(2) Price
The prices of raw materials and components, etc. provided by suppliers have a significant impact on the price competitiveness of our company's products. We request that suppliers present us competitive prices based on global market conditions. At the same time, we request that suppliers provide sustainable and forward-looking proposals for value-addition and cost-cutting.

(3) Delivery lead-time
The volume and delivery lead-time of customer orders fluctuate over time. While we company give due consideration to various circumstances of its suppliers as it conducts procurement operations, we must adjust our production activity according to the requests from our customers. We request that suppliers ensure proper management of lead times and supply levels that can adapt to changes through close communication with our company.

(4) Environment
In recent years, the roles and responsibilities of corporations in building a sustainable society have become increasingly important. In conducting its business activities, the Shinano Kenshi Group always keep in view that the environmental compatibility of its products is important for the customers' environmental preservation effort as well as to itself, for providing environmentally friendly products and services amounts to meeting its social responsibility as a sensible corporate citizen.

It is difficult, however, to achieve this goal through our efforts alone. We believe that it is essential for suppliers to make an active effort to reduce their environmental impact and deliver raw materials and components, etc. with low environmental burden. Suppliers and the Shinano Kenshi Group need to make a joint effort to build a sustainable society.

From this perspective, in the procurement activities, the Shinano Kenshi Group will give priority to those suppliers who are committed to promote environmental preservation by producing environmentally considerate raw materials and components, etc. We kindly ask for your understanding and cooperation in this respect.

(5) CSR
The Shinano Kenshi Group is committed to fulfill its corporate social responsibilities (CSR) by conducting all of its business activities in a sincere manner and with fair judgments in accordance with Shinano Kenshi's Goals.

CSR can be understood as"generally voluntary effort by a company to promote sustainable development in areas of activity -- such as legal compliance, consumer protection, environmental protection, labor, respect for human rights, and regional social contribution-- other than those for purely financial purposes", (Ministry of Economy, Trade and Industry)

Shinano Kenshi signed the United Nations Global Compact*1 in February 2011, showing its commitment to CSR activities. Meanwhile, CSR activities cannot be conducted by the Shinano Kenshi Group alone, but must be implemented throughout the entire supply chain.

We kindly request understanding of our suppliers in regard to our company's CSR activities as well as their support and cooperation.

In regard to CSR activities, please also refer to ISO 26000, the Electronic Industry Citizenship Coalition (EICC) Code of Conduct, the Supply Chain CSR Promotion Guidebook issued by the Japan Electronics and Information Technology Association (JEITA) in August 2006 and other publications in conjunction with these guidelines.

*1 United Nations Global Compact
The United Nations (UN) Global Compact was proposed by the then UN Secretary-General Kofi Annan at The World Economic Forum (Davos Conference) in 1999, and was officially launched at UN Headquarters in New York in July 2000.

The UN Global Compact is a voluntary initiative in which corporate chief executives are committed to the ten basic CSR principles (the UN Global Compact's ten principles) in the four areas of human rights protection, elimination of inappropriate use of labor, the environmental considerations, and anti-corruption. Under this commitment, companies make continued effort to achieve these goals as well as participate in the worldwide effort to establish the framework for achieving sustainable growth.

For further details regarding the UN Global Compact, please visit the following websites:

<Japanese>
http://www.ungcjn.org/

<English>
http://www.unglobalcompact.org/