Leader in the field of non-ferrous metals – HANSAE Co., LTD.

Purchasing Policy

HANSAE is a global corporation
To provide customers with the best values by pursuing sustainability management.

1. Purchasing policy and regulations

Every person who is in charge of purchasing business should work efficiently according to standard regulations company established. In case there needs additional stipulation or correction for any business procedure, responsibility and right, new standard regulations should be made or existing regulations should be revised according to regulated procedure.

Purchasing policy

Every person who is in charge of purchasing business should work efficiently according to standard regulations company established. In case there needs additional stipulation or correction for any business procedure, responsibility and right, new standard regulations should be made or existing regulations should be revised according to regulated procedure.

Standard regulations

Purchasing policy is established and controlled by the leader of purchasing team. Also, purchasing policy is commonly applicable to any organization and person who performs purchasing activities authorized by the leader of purchasing team of the head office. Unless regulated otherwise, purchasing policy has to be applied in the manner of equality and equivalence. However, in case inevitable exception is required, it must be approved by the leader of purchasing team of the head office.

Core value of Purchasing

Purchasing Division should secure the most competitive supply network by responding to market changes flexibly so that company can provide product and service with which customers in and out of company satisfy. Also, it should improve purchasing capability and skill constantly to increase value of company and strengthen competitiveness.

Vision of Purchasing

The vision of Purchasing Division of HANSAE is to be recognized as the best purchasing organization of the world. To make the vision come true, it should provide people concerned purchasing with the best competitive advantage for all factors for purchasing business such as price, quality, service and delivery.

Purchasing process and execution

Scope of purchasing activities

Scope of purchasing activities includes raw material to be input for production, all tangible/intangible material and ser-vices required for managerial activities for HANSAE.

– Direct material: Material used for production of goods to be sold (including raw material, sub-material, outsourced material like carry-in material, goods and equipment). – Sub-material: Material used commonly for production.
– Material for research: Material used temporally for development of product and parts.
– General material or service: Facilities for business, equipment, office supplies, publishing/marketing(including adver tising expense), travel, transportation, software and other goods and services relative to general administration/sales.

Standard process for purchasing

Purchasing activities is executed per request of department which requires material or service. Department which requires such material or service has to have permission of the head of the department prior to request.

2. Business norms

Rule of ethics

All of directors and staffs concerned purchasing activities must understand and observe the rule of ethics and regula-tions. Important regulations out of rule of ethics to apply to Purchasing Division are as follows.

– Receiving remuneration or reward from the interested person(s) or party (parties) is prohibited.
– Unjust participation in the equity of cooperative company is limited.
– Fairness and transparency should be kept when select cooperative company.
– Illegal and unjust use of company asset is prohibited. – Manipulation of document/figures and false report are prohibited
– Improper collection of information is also prohibited.

Informing violation rule of ethics

Anyone who finds out case of , or has information about violation of Fair Trade Act and rule of ethics has to inform or report immediately to Management & Planning Department or tube@hansaeglobal.com.

The Code of conduct

The Code of conduct of HANSAE is principles on activities, which applies to all directors and staffs equally and con-sistently. Therefore and naturally, people in charge of purchasing business also have to conform to the code of conduct. Especially, parts of the code of conduct relating to purchasing business must be strictly observed.

Business etiquette for purchasing

Anyone who works on purchasing business should carry out task ethically and fairly with attitude of representing com-pany. Word and behavior have to be right so that company’ s reputation will not be damaged and ‘Attitude of purchas-ing professional of HANSAE’ should be understood and kept at all times.

Information security

Internal information

Every person concerned purchasing business has to keep confidentiality of information which company defined as confi-dential information and security for information relating to business strictly and should never disclose such information to the third party in any event. The right to produce and disclose such confidential information is given to the top manage-ment of applied department only. This provision applies equally to all cooperative companies which supply products to HANSAE.

3. Managing cooperative company

Information of cooperative company

Any activities or attempt to disclose information relating to cooperative company to the third party out of company is strictly prohibited.

Attitude of purchasing professional of HANSAE

The Code of conduct of HANSAE is principles on activities, which applies to all directors and staffs equally and con-sistently. Therefore and naturally, people in charge of purchasing business also have to conform to the code of conduct. Especially, parts of the code of conduct relating to purchasing business must be strictly observed.

Rule of transaction HANSAE

establishes and operates management policy for cooperative company so that company will pursue mutual benefit with all of cooperative companies with which company deal business. Also, company will not deal with any coop-erative company which violated Fair Trade Act or takes unethical activities.

Selecting cooperative company and pricing

Development and registration of potential/new cooperative company

HANSAE selects qualified cooperative company with which to deal out of cooperative companies. Development and registration of potential/new cooperative company is processed through procedure for evaluation of cooperative company and no separate registration of cooperative company is allowed. Registration of new cooperative company for general purchase item is in accordance with ‘Regulations for selecting new cooperative company for general purchase’ . Registration and control for new cooperative company relating to direct material and sub-material is in accordance with ‘Regulations for registration of new cooperative company’ .

Selecting cooperative company

Purchasing Division should select cooperative company for supply which is optimized for technique, quality, responsibil-ity, price, delivery and management control to maximize benefit for HANSAE. Also, selection of cooperative com-pany and finalized pricing should be valid for specific period only as competitive advantage of cooperative company is not absolute one and changes as time passes. Therefore, Purchasing Division should carefully watch the changes of com-petitiveness of cooperative company and deal always with cooperative company which holds the best competitiveness. When select new cooperative company, select one with the best competitiveness preferentially in the pool of cooperative companies for multiplication of cooperative company on the basis of competitiveness evaluation aiming multiple candi-dates. In addition, cancellation of purchase order which has already been placed on the reason of too much stock will not be allowed without prior consent of cooperative company.

Pricing

Generally, price is decided through competitiveness evaluation process. The process also should conform to the rule of fairness and transparency and the best purchasing price should be resulted using various skills.

Performance evaluation for cooperative company

All of cooperative companies which have transaction records with HANSAE for the latest 1 (one) year from the point of evaluation will be evaluated. In case a company should be excluded from the evaluation, such exclusion must be ap-proved by the top management of applied department and the reason of the exclusion should be cared and controlled.