We work to increase added value across the supply chain by approaching other business partners through our direct business partners (from Tier N to Tier N+1), and we aim to build mutually beneficial relationships with business partners through cooperative efforts that go beyond existing business partners and company sizes. At the same time, we help partner companies implement teleworking and formulate business continuity plans (BCPs) from the perspectives of continuing business in the event of a disaster, and work-style reforms.

(Separate stipulation)

• In light of the "Voluntary Action Plan for Ensuring Fair Subcontracting and Order-Taking Activities" formulated by the Japan Federation of Construction Contractors, we ensure fair trade, strive to spread fair trade to partner companies, and provide support related to human resource development.

Apart from the matters described above, we also actively engage in the following initiatives:

• Collaboration between companies (open innovation)

• Support for IT implementation (promotion of electronic transactions in trade, advice and support for cybersecurity measures, etc.)

• Expert human resource matching (support for recruitment activities)

• Green initiatives (promoting the use of alternative fuels to light oil, jointly developing technologies for carbon neutrality or low carbon emissions, spreading and deploying our system for automated operation, and developing and deploying schemes for recycling construction waste products as resources.

We observe desirable and customary practice when trading with new business partners and subcontractors (following the Promotion Standards based on the Act on the Promotion of Subcontracting Small and Medium-sized Enterprises), and we actively work to correct trade practices and business customs that may hinder the development of partnerships with business partners.

(1) Methods to Decide Prices

We do not request unreasonable cuts to costs. We strive to build an equal contractor-subcontractor relationship and to achieve fair and transparent trade by making sure to follow correct steps based on the Guidelines for Compliance with the Construction Industry Law formulated by the Ministry of Land, Infrastructure, Transport and Tourism.

We conclude subcontractor agreements, including decisions on transaction prices, in writing (as paper or electronic contracts) before the start of construction, while working in compliance with the Construction Business Act and other relevant laws and regulations to clarify contract details as a prime contractor, as well as calling out to partner companies through the Partner Company Association or other means to carry out annual or similarly periodic deliberations in order to prevent conflicts and to mitigate one-sidedness. As a main contractor, we conclude agreements on terms that are satisfactory to both parties after carrying out appropriate actions as indicated in the Guidelines for Price Negotiations to Appropriately Pass Through Labor Cost and after deliberation with the subcontractor on equal footing.

In the event raw material prices or energy costs increase, we aim to pass on the total amount of appropriate cost increases. We engage in initiatives across the entire supply chain to pass on costs, regardless of the lead contractor and subcontractors, with the premise of passing on the total amount to the ordering party as the point of origin.

(2) Terms of Payment of Bills etc.

Subcontractor payments will be made in cash whenever possible. In cases where payment is made by bill or other similar means, the amount of the subcontractor payment shall be determined through sufficient consultation with new business partners and subcontractors before deciding on the amount of subcontracting fees in consideration of costs including discounts related to converting such bills or other means into cash, so that subcontractors will not bear such costs, and we define the term of payment as within 60 days.

(3) Intellectual Properties and Knowledge

We carry out transactions in consideration of the "Basic Approach" and "Contract Template" given in the Guidelines on Intellectual Property Transactions, and we do not demand the conclusion of a one-sided non-disclosure agreement or exploit our trading advantage for the disclosure of knowledge or the voluntary conveyance of intellectual properties.

(4) Negative Effects Caused by Work-Style Reforms etc.

We do not request quick delivery of orders or make abrupt changes to specifications without bearing appropriate costs, so that subcontractors can also act toward work-style reforms. In the event of a disaster, we do not impose trade-related burden on subcontractors in a one-sided manner and, when resuming our business, we give as much consideration as possible to the continuation of partnerships.

(1) Securing the Next Generation of Workers

By passing increases in labor costs on to transaction prices, among other efforts, we aim to improve the treatment of engineers and technicians while also striving to build work environments that facilitate operations and workplaces that respect diversity, equity, and inclusion (DE&I) in which diverse human resources can play active roles. By doing so, we seek to secure employees who will lead the next generation.

(2) Boosting Productivity through Mechanization and Robotization, and Creating a Safe and Secure Working Environment

As the working population declines and grows older, we strive to improve productivity and create a safe and secure working environment through the mechanization and robotization of physically-demanding or dangerous tasks.