Supplier Management Policy – Nichidenbo Corporation

Supplier Management Policy

NICHIDENBO CORPORATION (hereinafter referred to as ” NICHIDENBO “) adheres to the supplier policy of “viewing suppliers as partners and guiding long-term cooperation with suppliers.” NICHIDENBO plans its supplier management approach and conducts control and guidance based on the following criteria, aiming to establish a sustainable supply chain management mechanism for long-term growth.

1.NICHIDENBO has established a “Supplier Code of Conduct” as the standard for suppliers’ social responsibility behavior.

2.NICHIDENBO conducts supplier assessments every two years. Based on the results of the rating evaluation, the purchasing order quantity may be adjusted at NICHIDENBO ‘s discretion to require suppliers to meet NICHIDENBO ‘s standards. If a supplier continuously fails to meet the requirements, they will be downgraded to an unqualified supplier, and purchasing will be refused. Supplier Evaluation Criteria:

The interaction among relevant departments is good, and delivery deadlines can be effectively controlled.
Whether the quality control organization is sound, and if there are enough quality control and R&D personnel.
Whether quality certification has been obtained (e.g., ISO).
Packaging and transportation conditions.
Process quality control, and whether there are self-checks or intermediate inspections.
Whether there are inspection systems in place for incoming and outgoing shipments, and if they are rigorously enforced.
The attitude of employees and the quality of service.
Whether there are production records, and if the defect rate is reasonable.
How customer complaints are handled.
Whether there is a dedicated department responsible for shipping matters.
Compliance with ESG-related standards (for example, obtaining ISO 14001 environmental management system certification, compliance with chemical substance restrictions (REACH), no violations of major environmental regulations, and no violations of significant local labor laws) are bonus items.

3.If a supplier experiences abnormal incoming shipments or customer complaints, NICHIDENBO ‘s Quality Assurance and Operations Management departments will issue a parts abnormality notification based on the abnormal items. They will require the supplier to respond with the cause of the abnormality and propose improvement measures, with the aim of jointly enhancing quality, refining processes, improving yield, and strengthening performance in environmental, health, and safety standards.

4.NICHIDENBO continuously monitors updates on chemical usage regulations in various countries and actively requests original suppliers to provide declarations of compliance with international regulations and relevant documentation for individual product requirements based on customer needs, to ensure compliance with regulations and industry standards.

5.In response to customer requests, NICHIDENBO does not procure product materials containing conflict minerals such as tin, tantalum, tungsten, and gold sourced from the Democratic Republic of the Congo and other countries with human rights issues. NICHIDENBO regularly reviews the original suppliers’ policies regarding conflict minerals to ensure that they are consistently implementing responsible sourcing requirements.

6.To enhance quality, reduce costs, ensure timely deliveries, and improve sustainability performance, NICHIDENBO holds regular or ad-hoc meetings with suppliers to collaboratively implement sustainability concepts and goals.

Implementation Status –

In 2023, evaluations were completed for 6 original manufacturers, 2 processing plants, and further for 8 seasoning suppliers, totaling 16 suppliers, achieving a completion rate of 100%. No major deficiencies or risks were found in the evaluation results. The next supplier evaluation is scheduled for 2025.

In 2023, there were a total of 6 supplier abnormality notifications, all of which have required suppliers to improve and propose effective countermeasures.

In 2024, there were a total of 4 supplier abnormality notifications, all of which have required suppliers to improve and propose effective countermeasures.

For details on the supplier environmental, social, and governance (ESG) risk assessment items, please refer to the Company’s sustainability report.

Supplier Management Policy

NICHIDENBO has established a “Supplier Code of Conduct” as the standard for suppliers’ social responsibility behavior.

NICHIDENBO conducts supplier assessments every two years. Based on the results of the rating evaluation, the purchasing order quantity may be adjusted at NICHIDENBO ‘s discretion to require suppliers to meet NICHIDENBO ‘s standards. If a supplier continuously fails to meet the requirements, they will be downgraded to an unqualified supplier, and purchasing will be refused. Supplier Evaluation Criteria:

The interaction among relevant departments is good, and delivery deadlines can be effectively controlled.
Whether the quality control organization is sound, and if there are enough quality control and R&D personnel.
Whether quality certification has been obtained (e.g., ISO).
Packaging and transportation conditions.
Process quality control, and whether there are self-checks or intermediate inspections.
Whether there are inspection systems in place for incoming and outgoing shipments, and if they are rigorously enforced.
The attitude of employees and the quality of service.
Whether there are production records, and if the defect rate is reasonable.
How customer complaints are handled.
Whether there is a dedicated department responsible for shipping matters.
Compliance with ESG-related standards (for example, obtaining ISO 14001 environmental management system certification, compliance with chemical substance restrictions (REACH), no violations of major environmental regulations, and no violations of significant local labor laws) are bonus items.

If a supplier experiences abnormal incoming shipments or customer complaints, NICHIDENBO ‘s Quality Assurance and Operations Management departments will issue a parts abnormality notification based on the abnormal items. They will require the supplier to respond with the cause of the abnormality and propose improvement measures, with the aim of jointly enhancing quality, refining processes, improving yield, and strengthening performance in environmental, health, and safety standards.

NICHIDENBO continuously monitors updates on chemical usage regulations in various countries and actively requests original suppliers to provide declarations of compliance with international regulations and relevant documentation for individual product requirements based on customer needs, to ensure compliance with regulations and industry standards.

In response to customer requests, NICHIDENBO does not procure product materials containing conflict minerals such as tin, tantalum, tungsten, and gold sourced from the Democratic Republic of the Congo and other countries with human rights issues. NICHIDENBO regularly reviews the original suppliers’ policies regarding conflict minerals to ensure that they are consistently implementing responsible sourcing requirements.

To enhance quality, reduce costs, ensure timely deliveries, and improve sustainability performance, NICHIDENBO holds regular or ad-hoc meetings with suppliers to collaboratively implement sustainability concepts and goals.

Implementation Status –

In 2023, there were a total of 6 supplier abnormality notifications, all of which have required suppliers to improve and propose effective countermeasures.

In 2024, there were a total of 4 supplier abnormality notifications, all of which have required suppliers to improve and propose effective countermeasures.

For details on the supplier environmental, social, and governance (ESG) risk assessment items, please refer to the Company’s sustainability report.