DMG MORI’s Declaration of Partnership Building

We declare our commitment to the following items in order to build new partnerships through the promotion of cooperation and coexistence with our supply chain partners and value-creating businesses.

１．Coexistence and co-prosperity throughout the supply chain & New collaboration beyond scale, affiliations, etc.

By explaining the purpose and content of this declaration to our direct suppliers (from "Tier N" to "Tier N+1") and encouraging their understanding and cooperation, we will work to add value to the entire supply chain, while aiming to build coexistence and co-prosperity with our suppliers through cooperation that goes beyond existing business relationships and corporate scale. In doing so, from the perspective of business continuity in the event of a disaster, etc., and from the perspective of reforming work styles, we will support our business partners in fields such as the introduction of home office, business continuity plans (BCPs), etc.

(Individual items)

• a.Inter-company collaboration (promotion of operational efficiency improvement through information sharing and visualization of the entire supply chain)
• b.IT implementation support (construction of common EDI, mutual use of data, improvement of production and quality through production site support application (TULIP), and sharing of production plans)
• c.Establishment and coordination of monitoring systems for human rights and environmental due diligence along the supply chain
• d.Initiatives for carbon neutrality (joint development of low-carbon technologies, shift to low-carbon production processes, green procurement)
• e.Initiatives related to health management (introduction and implementation of health management, implementation of health promotion measures)

２．Compliance with "Promotion Standards"

We will comply with desirable business practices between parent companies and subcontractors ("Promotion Standards" based on the Law for the Promotion of Small and Medium-Sized Subcontractors) and actively work to correct business practices and commercial practices that hinder the establishment of partnerships with business partners.

• (1)Method of price determination
  We will not make unreasonable requests for cost reduction. For determining transaction prices, we will hold discussions with subcontractors at least once a year and make decisions after sufficient consultation to ensure that the price includes appropriate profits for the subcontractor and enables improvement of their working conditions. In doing so, decisions will be made after appropriately taking the actions set forth in the "Guidelines for Price Negotiations for Appropriate Shifting of Labor Costs." In the event of a sharp rise in raw material or energy costs, we will aim to pass on the full amount of the cost increase in an appropriate manner. In making contracts, including the determination of transaction prices, we will clearly state and deliver the terms and conditions of the contract in writing, etc.
• (2)Cost burden of mold management, etc.
  We will promote proper management of molds. We will promote the disposal of unneeded molds and agree with subcontractors on the payment of storage costs for molds that need to be stored after due consultation.
• (3)Payment terms for notes, etc.
  Subcontract proceeds will be paid in cash as in the past.
• (4)Intellectual property and know-how
  We do not require the conclusion of one-sided confidentiality agreements, the disclosure of know-how by taking advantage of our position in business transactions, or the free transfer of intellectual property rights.
• (5)Shift of burden caused by reforms in work styles, etc.
  To allow our suppliers to properly respond to work style reforms, we will not place orders asking for short delivery times or short-notice specification changes without bearing appropriate costs. In the event of a disaster, etc., we will not impose a one-sided burden on subcontractors in terms of transactions. Also, when resuming business, we will aim to continue our existing business relationships with subcontractors as much as possible.

３．Others (declared voluntarily)

• ・We are disclosing our Management Philosophy on our official website to present the full scope of our initiatives.
  We will build fair and equitable business relationships with our business partners based on our management philosophy of “prospering together with our partners.”
• ・We will not make any unreasonable or unfair requests to our business partners. We will only request and negotiate transaction prices based on market prices (market quotations) and sufficient discussions with our business partners.