Chugai considers its business partners to be an essential part of its cooperative framework. To build fair and transparent relationships with our business partners on equal footing, we have established the following Purchasing Policy and Chugai Ethical Purchasing Standards.

The Chugai Group Purchasing Policy is intended to optimize purchasing activity while building fair and transparent relationships with business partners and strengthen cooperation with them.

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 Chugai Ethical Purchasing Standards establish prohibitions against giving or receiving improper benefits in relationships with business partners, with the goal of promoting proper purchasing of direct and indirect materials, and of ensuring and maintaining sound business relationships with suppliers.

Receiving Gifts

Accepting gifts of money or goods is prohibited.
Any gifts received by mail shall be returned and their receipt reported to the head of the organization concerned.
However, generally distributed articles such as hand towels, calendars and datebooks shall be allowed within commonly accepted limits and in accordance with regionally accepted business practices.

Courtesy Gifts

Accepting courtesy gifts (seasonal gifts, monetary gifts, funeral offerings, solatiums, etc.) is prohibited.
Any gifts received by mail shall be returned and their receipt reported to the head of the organization concerned.
However, congratulatory and condolence telegrams may be accepted.

Meals

Requesting meals of business partners is prohibited.
When a meal is being provided, the offer may be accepted if the following do not present any problems. Acceptance of such offers shall be reported to the head of the organization concerned.

• If there is no risk of creating the impression that the meal is an attempt to influence decision making by the other party, and if it is in accordance with the ordinary business process and is otherwise appropriate.
• If the meals are not a frequent occurrence.
• If the meal is not extravagant by socially accepted standards, and the venue is considered an appropriate location.

Entertainment

Accepting offers of entertainment is prohibited.
However, such offers may be accepted provided they involve a social gathering accompanied by a written invitation and are approved in advance by the head of the organization concerned. The Company shall bear its share of any expense.