Chugai considers suppliers essential business partners in maintaining a sustainable supply chain and co-creating social value. To build and maintain fair and transparent relationships with our business partners on equal footing, we have established the following Purchasing Policy and Chugai Ethical Purchasing Standards.

We are also making a “Declaration of Partnership Building” in order to establish new partnerships, by promoting collaboration and mutual prosperity with all of our supply chain partners and businesses seeking to create value. Please see the link below for our Declaration of Partnership Building. (Japanese only.)
https://www.biz-partnership.jp/declaration/18152-05-24-tokyo.pdf

Under this policy and standards, Chugai engages in proactive communications to consider their needs arising from situations such as inflation.

This Policy is defined for the aim of ensuring the appropriateness of the purchasing activities and building sound business relationships with suppliers. Based on the Purchasing Policy, we have the Indirect Materials Purchasing Management Regulations, which stipulate the basic matters relating to the purchasing of indirect materials. And based on the Indirect Materials Purchasing Management Regulations, we have the Supplier Selection Guidelines, which define the procedures necessary for transparent and fair selection of suppliers, and the Supplier Management Guidelines, which define matters for the proper management of suppliers with whom we do business in the indirect materials.

Chugai Group Purchasing Policy

1. Comply with social norms and others as well as the laws and regulations of each country, promoting fair purchasing activities in accordance with the following principles:
   
   1. Purchaser shall engage in transactions with business partners accredited by the Company.
   2. Purchaser shall select business partners appropriately.
   3. Those authorizing purchases shall verify the validity of orders prior to the orders being placed.
   4. Purchaser shall place orders in writing (individual contracts).
   5. Purchaser shall make payment after deliverables (goods or services) have been successfully accepted.
   6. The Purchasing function shall monitor the above (1) through (5).
2. Build fair and equitable business relationships with domestic and overseas business partners.
3. Promote contributions to a sustainable society by advancing green procurement with the cooperation of business partners.
4. Seek high-quality products and services with the cooperation of business partners.
5. Advance lower costs by procurement at a fair price.
6. Faithfully fulfill obligations under contracts with business partners, establish equally cooperative relationships and aim for mutual growth.
7. Protect confidential information learned through business transactions and establish relationships of mutual trust with business partners.

The Rules are based on the Purchasing Policy to prohibit offering and accepting improper benefits in the relationship with suppliers, promote the appropriateness of purchasing direct and indirect materials, and secure and maintain the soundness of the business relationships with suppliers.

Offering

• Having meals with a supplier is permitted if certain requirements are met.
• Giving money and goods is prohibited. However, providing souvenirs when visiting suppliers and at various events organized by the company is permitted if certain requirements are met.
• Giving ceremonial gifts (e.g., Bon Festival gifts, Year-end gifts, congratulatory gifts, condolence gifts and money, etc.) is prohibited. However, only congratulatory or condolence telegrams are permitted.
• Providing entertainment invitations is prohibited.

Accepting

• Requesting meals with the company is prohibited. However, offering meals from Suppliers is accepted if certain requirements are met.
• Receiving money or goods is prohibited. However, it may be permitted if it falls under the general courtesy, and it is in line with the business practice accepted in the region.
• Accepting ceremonial gifts is prohibited.
• Receiving entertainment invitations is prohibited. However, it may be permitted if receiving social events with an invitation is approved by the Department Manager in advance. The expense for the Company shall be borne.