SUPPLIER HANDBOOK

GKN LAND SYSTEMS

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Contents

Introduction 3

GKN Land Systems: Products and vision 4 – 6Organisation 7

Supply Chain Management Policy 8 – 9

Supplier Performance Management: Quality, Delivery, Cost, Management 10

Forecasting and Capacity Planning 11

GKN Lean Enterprise and Lean Supply Chain 12

General Supply Chain Conditions 13 – 17

Terms and Conditions 18 – 27

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Technology driven growth

Dear SupplierWelcome to the latest edition of the GKN Land Systems’ Supplier Handbook.

GKN Land Systems Division was launched in the first half of 2010 and is a leading global supplier of technologically differentiated power management solutions and services. We design, manufacture and supply products and services for the Agriculture, Construction and Industrial segments, offering integrated powertrain solutions and through-life support.

Having brought together separate businesses into Land Systems in 2010, in 2013 we further integrated all of our activities into ‘One Land Systems’. In particular, we are now focused on offering ‘one face to the customer’, which opens up significant opportunities for us to sell the full Land Systems product range to a broader customer base, allowing us to drive growth in all market conditions.

We cannot succeed in isolation, and are entirely dependent upon our suppliers who form a critical part of our integrated supply chain. We spend around £700m every year with our suppliers and are striving to build long term strategic partnerships that are mutually beneficial for GKN, our suppliers and ultimately our customers.

The challenge we must face together is to continuously improve the supply chain from raw materials all the way through to our end customers. This requires strong collaborative partnerships with suppliers and customers alike, and a desire to continuously monitor supply chain performance so that we can constantly strive for further improvements.

Suppliers who wish to build strategic partnerships with GKN Land Systems will share the same determination to improve by working with us, but also by being proactive with their own internal continuous improvement journeys. Much of our success is built upon offering our customers technologically differentiated products. Working closely with our supplier partners to develop the product and process technologies of the future will be critical as today’s global market becomes ever more competitive.

This Supplier Handbook provides an overview of the new ‘One Land Systems’ organisation and sets out the expectations we have of our suppliers in a number of key areas. It is our intention in the future to make this and further information available online, as well as sharing feedback on your performance across a number of indicators.

GKN Land Systems is committed to communicating openly and honestly with our suppliers and customers, as well as adhering to the highest ethical standards. We expect all of our suppliers to operate with the same integrity. This is reflected in the ‘GKN Supply Chain Management Policy’ you will find later in this handbook.

GKN has been a market leader in many sectors for over 250 years. We intend to build on this position to extend and widen our competitive advantage with the full support of supplier partners that are committed to relentless improvement throughout the supply chain. We are confident that together we can build an even more successful future over the next 250 years!

Paul WyattOperations, Purchasing and Supply Chain DirectorGKN Land Systems

We drive the wheels of hundreds of millions of cars…

We help thousands of aircraft to fly…

We deliver the power to harvest crops and move earth…

And we make essential components for industries that touch lives across the globe.

Every day at GKN…

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A leading global engineering group, with over 250 years heritage of quality and innovation, operating in more than 30 countries.

Technology and engineering from GKN is at the heart of the vehicles and aircraft produced by the world’s leading automotive, off highway, aerospace and defence manufacturers. More than 40,000 people work in GKN companies and joint ventures in more than 30 countries.

GKN operate in four key business areas:

GKN Driveline GKN Land Systems GKN Aerospace GKN Powder Metallurgy

GKN Powder Metallurgy is the world’s largest manufacturer

of sintered components. It comprises Hoeganaes and GKN Sinter Metals.

Hoeganaes produces the metal powder that GKN Sinter metals uses to manufacture

precision automotive components for engines, transmissions and body

and chassis applications. It also produces a range of

components for industrial and consumer applications.

GKN Land Systems offer an integrated Powertrain solution from the power source through to where the power is applied.

“Supporting customers in meeting the demands of a crowded planet. Our product technology delivers the power to harvest crops, move earth, mine resources, handle materials and capture natural energy.”

GKN Driveline is the world’s leading supplier of

automotive driveline systems and solutions. As a global

business serving the leading vehicle manufacturers, GKN Driveline develops, builds and supplies an extensive

range of automotive driveline products and systems – for

use in the smallest ultra low-cost car to the most sophisticated premium

vehicle demanding the most complex driving dynamics.

GKN Land Systems is a leading provider of

technology differentiated power management solutions

and services. It designs, manufactures and supplies products and services for

the global agricultural, construction, transportation, utility vehicles and industrial

machinery markets. In addition, it provides global

aftermarket distribution and comprehensive through-life

support.

GKN Aerospace is a world leading global first tier supplier of airframe and engine structures,

components, assemblies and transparencies to a wide range of aircraft and engine prime contractors and other

first tier suppliers. It operates in three main product areas:

aerostructures, engine components/sub-systems

and special products.

Help leading global original equipment manufacturers keep the world running efficiently, reliably and safely.

Design, manufacture, market and service powertrain products and systems to transmit and control power from source to application.

Enable agricultural, construction/mining and industrial customers’ machinery to propel, position and perform.

An Aftermarket & Services organisation ensuring that we continue to support customers and products to offer through life support, using our own distribution and service centres across Europe.

Tokyo: Driveshafts

Huading: WheelsLiuzhou: Wheels, Driveshafts

Telford: Wheels, StructuresGrove: eDrive

Carcastillo: Reman driveshafts

Nagbøl: Wheels

Dessau: BrakesLohmar: Driveshafts, TASSohland: GearboxesUnna: Clutches, Brakes, Couplings, Controls, Sensors, Discs

Bruneck: DriveshaftsCarpenedolo: Wheels

Cachoeirinha: DriveshaftsSão Paulo: Clutches, Brakes, Couplings

Armstrong, Wichita: WheelsDayton: Clutches, Brakes Rockford: DriveshaftsWoodridge: Driveshafts, Wheels

Pune: Clutches,Brakes

La Guerche: Discs, BrakesRibemont: Reman driveshafts

Taicang: Brakes, Couplings, Clutches, Controls

– engineering centresBruneckCarpenedoloDessauLa GuercheLohmarRockfordUnnaWoodridge

GKN Land Systems – manufacturing locations

CouplingsClutchesDriveshaftsGearboxesBrakesControlseDriveWheelsTractor Attachment Systems (TAS)SensorsDiscs

We drive the wheels of hundreds of millions of cars…

We help thousands of aircraft to fly…

We deliver the power to harvest crops and move earth…

And we make essential components for industries that touch lives across the globe.

Every day at GKN…

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A leading global engineering group, with over 250 years heritage of quality and innovation, operating in more than 30 countries.

Technology and engineering from GKN is at the heart of the vehicles and aircraft produced by the world’s leading automotive, off highway, aerospace and defence manufacturers. More than 40,000 people work in GKN companies and joint ventures in more than 30 countries.

Tokyo: Driveshafts

Huading: WheelsLiuzhou: Wheels, Driveshafts

Telford: Wheels, StructuresGrove: eDrive

Carcastillo: Reman driveshafts

Nagbøl: Wheels

Dessau: BrakesLohmar: Driveshafts, TASSohland: GearboxesUnna: Clutches, Brakes, Couplings, Controls, Sensors, Discs

Bruneck: DriveshaftsCarpenedolo: Wheels

Cachoeirinha: DriveshaftsSão Paulo: Clutches, Brakes, Couplings

Armstrong, Wichita: WheelsDayton: Clutches, Brakes Rockford: DriveshaftsWoodridge: Driveshafts, Wheels

Pune: Clutches,Brakes

La Guerche: Discs, BrakesRibemont: Reman driveshafts

Taicang: Brakes, Couplings, Clutches, Controls

– engineering centresBruneckCarpenedoloDessauLa GuercheLohmarRockfordUnnaWoodridge

GKN Land Systems – manufacturing locations

CouplingsClutchesDriveshaftsGearboxesBrakesControlseDriveWheelsTractor Attachment Systems (TAS)SensorsDiscs

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The ever changing world in which we live brings with it new opportunities… and takes GKN’s capabilities to new markets.With a focus on technology leadership, lifetime costs and aftermarket services, GKN Land Systems is an operationally excellent global manufacturing business delivering value and reliability to its existing and new markets.

GKN Land Systems

Looks to exploit GKN’s capabilities in existing and new markets to more effectively serve existing markets and their aftermarkets.

Will bring GKN group wide technology and operational capability to new attractive markets.

Is leveraging GKN group wide technology to provide value added systems and solutions to existing markets and their aftermarkets.

Is delivering through a world class global capability.

GKN Land Systems offers a full range of integrated electro-mechanical PowerTrain components, systems and solutions that transfer power from the source to your application and with a continually expanding capability for electric and hybrid drives.

GKN Land Systems

GKN Land Systems’ drivers for new business opportunities

The world has an ever increasing population and ever decreasing availability of land and water resources. Changing diets and the migration of labour places growing pressure on improving yields, automating farming and construction. The market trend towards electrification of vehicles as a means to facilitate increasing efficiencies, already seen in automotive, brings opportunities for GKN.

Increased urbanisation, development of existing infrastructure and new mass transit transportation systems means opportunities are emerging to utilise capabilities already practised by GKN in the passenger car or light commercial vehicle sectors.

Growth in renewable energy around the globe, driven by scarcity of resources: land, water and oil, is resulting in new opportunities

which align with our capabilities in terms of use of lightweight materials, drive and positioning systems and high integrity structures.

The trend in the military environment sees lighter, more agile, well protected all-terrain vehicles, providing high level performance with high occupant protection provides new market opportunities in terms of driveline, structures, lightweight materials and ballistic protection.

GKN recently acquired Williams Hybrid Power Limited, the new business will be known as GKN Hybrid Power. The company specialises in the design and manufacturer of composite flywheel-based energy storage systems which reduces fuel consumption and emission while increasing efficiency. This provides the opportunity to industrialize exemplary technology to global markets, helping solve the emissions and efficiency challenges faced by nations around the world.

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GKN Land Systems Organisation – Purchasing

Technology driven growth

CEO GKN Land Systems

Phil Swash

Finance & IS/IT Director

Simon Meadows

Operations, Purchasing &

Supply Chain Director

Paul Wyatt

Human Resources

Director

Stephen Schrahe

Director, Purchasing & Supply Chain

America & Asia

Marc Mueller

Manager, Purchasing & Supply Chain

Structures & Wheels Europe

Dave Hatton

Manager, Purchasing Driveshafts

Europe

Bernd Ludewig

Director, Global Steel &

Capex Purchasing

Keith Lister

Director, Supply Chain

Excellence

Gary Jacklin

Director, Global Commodity

& Indirect Purchasing

Paul Gurney

Manager, Supply Chain – EU Shafts

Andreas Kaufmann

Director, Purchasing & Supply Chain,

Powertrain Services & Solutions

Guido Rossbach

Manager, Purchasing EU Motion Controls

Herbert Roenchen

VP, Sales & Business

Development

Patrick Mares

Manager, Supply Chain – EU Wheels

Lars Lykke

Engineering & Product Management

Director

Dr. Robert Rank

MD Global Services

Wolfgang Lemser

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GKN Land Systems

General Principles

In their dealings with suppliers and potential suppliers, all GKN companies must:

Before engaging a supplier, take account of its standards of behaviour and avoid dealing with any supplier that might damage GKN’s reputation through its association with suspect or unethical practices. Amongst others, these may include:- Inadequate health and safety standards for their employees.- Infringing internationally accepted standards of workers’ rights.- Use of child or forced labour.- Unsound environmental practices.- Failure to act ethically.- Poor standards of social responsibility.- Failing to comply with relevant laws and regulations.

Before contracting with a supplier, take appropriate steps in order to eliminate risks of corruption, including:

- Make suppliers aware of GKN’s Ethical Standards Policy.- Ensure suppliers themselves have anti-corruption policies and procedures in place, and require the suppliers to ensure their sub-contractors comply with similar policies and procedures.- Carrying out due diligence on the supplier proportionate to any identified risks.

Employ effective processes for procurement, risk management, supplier assessment, communicating with suppliers and monitoring their performance, in order to ensure that:- We do business with suppliers who meet our standards of technical competence, innovation, product quality, reliability, delivery performance, cost, financial soundness, safety, ethics and social responsibility.- Supply of the product or service does not infringe any third party intellectual property rights.- Where suppliers provide contractors or staff to carry out work at GKN premises, such persons operate in an acceptable and safe manner without undue risks to themselves, GKN employees or others, and the health, safety and other essential arrangements pertaining at the site where they are operating are fully communicated.- All hazards and risks associated with the use of the products/services supplied are properly identified and assessed and adequate safeguards and working practices are put in place.

Supply Chain Management PolicyStatement of Policy

GKN operates to high standards of integrity, honesty and fair dealing through a lean organisation which produces world class products. Our suppliers are integral to our continued success and it is essential that they conduct their business in a manner that supports this commitment to strong ethical standards and a world class performance. To this end we aim to develop and maintain value-adding relationships with our supply base.

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Technology driven growth

Commit to development of the supply chain through:

- Developing long-term relationships where it is practical to do so.- Assisting suppliers in their development by assessing their capabilities and needs and providing support such as training where appropriate.- Providing regular feedback from and to suppliers on both their own contribution and that of GKN to the supply chain.- Sharing of best practice to build on the strengths of GKN and the supplier to optimise the whole supply chain.

Conduct business in an open and ethical manner by:

- Requiring our employees to act with integrity at all times when representing GKN with suppliers.- Ensuring that suppliers are paid in accordance with agreed terms.- Determining through clear contractual arrangements the ownership of any intellectual property rights arising from the supply of the product/service.- Avoiding situations that create conflicts of interest for organisations and/or their employees.- Not tolerating corrupt practices or the acceptance of bribes, other unauthorised payments or inducements from suppliers or potential suppliers.- Safeguarding the ownership and security of the property and confidential information of the supplier.

Balance the economic needs to utilise low cost sources with the desire to support local commerce. Where low cost sources are used, they will be subject to all of the requirements set out here;

Use contractual terms and conditions that support the implementation of this Policy and review supplier performance in order to ensure compliance.

This Policy must be read in conjunction with the GKN Code, any written guidelines, the GKN Land Systems Ethical standards Policy, the other GKN Policies and the requirements regarding their implementation.

For further information visit www.gkn.com/corporateresponsibility

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GKN Land Systems

Supplier Performance is therefore a vitally important element of our success; this is currently measured locally by the sites (as detailed in the appropriate site Quality Manual), but will be integrated and assessed against the following targets:

Quality – defect rate <10ppm

Delivery – on time delivery (including quantity) >98%

Cost – cost down initiative/VA/VE 5% pa

Management – continuous improvement – Lean e.g. Lead Time Reduction 20%

Supplier performance will be reviewed at a formal Supplier Business Review or Quarterly Review for all key and major suppliers, which will then be the basis for agreeing joint improvement activities, supplier developments etc.

GKN Supplier Business Review

The Supplier Business Review is a formal business review process between GKN Land Systems and our key suppliers, covering all aspects of our business together. The goals of the reviews are simple – improve customer satisfaction, risk mitigation and build better business results and relationships to continue to strive for a true partnership.

What is the Supplier Business Review?

The review involves a face to face meeting on the supplier’s site involving senior leadership/management. The purpose of the meeting will be cross functional and would generally include a tour of the site. The standard agenda is:

• Safety

• Delivery

• Quality

• Cost

• Technology

• Relationship Management

Why is the Supplier Business Review important?

GKN Land Systems consider the Supplier Business Review an important meeting because we consider suppliers an extension of our business. It helps us to create a better understanding of total supply chain and market pressure on cost and flexibility.

Supplier Performance ManagementQuality, Delivery, Cost, Management, Technology

In today’s global market, success is dependent on an integrated supply chain, from raw material to end user. GKN Land Systems’ objective is to continuously improve the supply chain by developing co-operative partnerships with our suppliers and customers, where possible integrating suppliers within our processes.

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Technology driven growth

Forecasting

In order for the supply chain to function efficiently, our customers, our suppliers and their suppliers need to be operating at the same pace. Just as material must flow through the supply chain towards the end user, information concerning this pace must flow backwards towards the suppliers.

In order to fulfil this requirement for information flow GKN companies will provide rolling forecast data for a 3 to 6 month period on a monthly basis. Due to market variations and other unforeseen factors this forecast information cannot be considered a guarantee of future demand. It does however represent GKN current best estimate of the future demand situation and reflects the information used by GKN for internal planning.

GKN does not commit to purchasing materials outside of agreed lead times unless otherwise stated in the purchasing contract.

Flexibility and responsivenessWhilst GKN will make all reasonable endeavours to provide accurate forecast data, both GKN and our customers operate in a very competitive market, where flexibility and responsiveness to market demand are the key to success.

GKN may therefore ask suppliers to set up Consignment Stock Warehouses local to our manufacturing locations, particularly for long lead time items and/or where the transport lead time from supplier to GKN site is more than 2 weeks.

Call off schedulingIn general, the purchase of production material will be by daily or weekly call offs from an open purchase order. These call offs will be in the form of a schedule, which consists of a fixed period, a semi fixed period and beyond this, a forecast.

For further information contact us at: purchasing.landsystems@gkn.com

Forecasting and Capacity PlanningYearly budget forecast and capacity planning

For Key Commodities, each year a budget forecast will be provided for the following calendar year based on GKN’s sales budget. This information will form the basis for any agreements regarding available capacity. This forecast information is for planning purposes only and is provided to the supplier in good faith and represents GKN’s best estimate at the time of issue. It is, however, a non-binding forecast.

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GKN Land Systems

GKN Lean Enterprise and Lean Supply ChainFor GKN Lean represents the systematic pursuit of perfection and waste reduction within the organisation through continuous improvement. Lean thinking is a part of everything we do and has become a part of GKN’s culture.

The Lean Enterprise (LE ) model, developed by GKN plc in 2003, uses a system of tools and measures to facilitate and track continuous improvement throughout the GKN Land Systems organisation. Tools, such as 5S and Visual Management, provide a common approach for manufacturing and support operations. A common set of performance indicators is focused on several key items such as Not Right First Time and Value Added Per Person.

Each GKN site has at least one designated Site Continuous Improvement Leader (SCIL) to provide focus and leadership to the location. A comprehensive, 46-week leadership training program involves all GKN divisions and is designed to ensure that site leaders have the necessary skills to co-ordinate and lead continuous improvement activities.

GKN has focused heavily on creating a flow in the value stream. This flow can be broken down into three levels:

- Level 1: Flow in the production cell

- Level 2: Flow within the factory

- Level 3: Flow in the supply chain, from suppliers through to customers

The third level of flow is arguably the most important as it can have the greatest impact on the value provided to an end customer. GKN therefore places a great importance on the co-operation of our suppliers and customers in the Lean process.

One of the Lean tools used extensively by GKN in the area of supply chain improvement is Value Stream Mapping (VSM). VSM is the process of graphically representing all of the steps within a given process from start to finish. The current state map is then used to identify waste and plan an improved future state. The process being mapped could be anything from a single production cell through to an entire supply chain from raw materials through to the end user. When the value stream extends beyond the walls of a single company it is called Extended Value Stream Mapping (EVSM).

As a supplier to GKN Land Systems, it is likely that you will be asked to participate in the EVSM process. Your support in this area is expected and appreciated.

The principles of Lean Enterprise will be applied also in the area of Supply Chain Management. This will allow us to achieve Supply Chain Excellence.

GKNVision

ProductionExcellence

BusinessProcess

Excellence

People Excellence

Business Excellence

LEAN ENTERPRISE

SUPPLY CHAIN EXCELLENCE

LEAN SUPPLY CHAIN

For further information visit www.gkn.com/aboutus/lean-enterprise

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Technology driven growth

General Supply Chain ConditionsCall-Off Scheduling• In general, the purchase of production material will be by daily or weekly call-offs from an open purchase order.

• These call-offs will be in the form of a schedule, which consists of a fixed period, a semi-fixed period and beyond this, a forecast.

Consignment Stock• Where beneficial, GKN will request that the supplier set up a consignment stock. In general, the consignment stock will have fixed minimum and maximum stock levels and will be managed by the supplier.

• Commercial details of the consignment stock will be detailed in a separate contract.

Supply to Order• In certain circumstances suppliers will supply directly to GKN against specific fixed purchase orders.

• This is, however, not a desirable solution for normal production materials. Lead times and payment terms will be stated within the purchasing contract.

Supplier Call-Off Warehouse• When advantageous to the supply chain a supplier call-off warehouse may be utilised. This is generally the case when a high volume supplier has production sites with a transport lead time of more than 2 weeks from the GKN site in question.

• The warehouse is maintained by the supplier at a location near to the GKN site being supplied. The warehouse contains a minimum safety stock of material for GKN as well as the normal flow of production materials based on forecasts and demand schedules. Material is then called-off from the warehouse by GKN in agreed lot sizes with a lead-time of 1-3 days.

• The safety stock held by the supplier in the warehouse may either be an agreed fixed amount or a variable amount based on forecast demand for the coming months.

• Specific conditions and parameters regarding the call-off warehouse will be specified in the purchasing contract.

Supplier Production

Supplier Local Warehouse

Demand Forecast& Call-Offs

Demand Schedule

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GKN Land Systems

Material Custody• All production materials remain the property of GKN at all times. Materials enter the custody of the subcontractor when they are collected by the subcontractor at GKN or delivered to the subcontractor.

• All materials remain in the custody of the subcontractor until acceptance by GKN’s goods receiving department. The subcontractor accepts responsibility for any damage, loss or deterioration of materials which occurs while in his custody. The subcontractor also accepts responsibility for any ensuing cost related to the damage, loss or deterioration of materials in his custody. This may include but is not limited to the cost of replacement materials and expedited freight for both replacement materials and processed materials further along the supply chain.

Material Storage • The subcontractor agrees to store materials in accordance with best practice while in his custody.

• This includes protection against corrosion or any other physical or chemical damage. The supplier also agrees to store material according to the FIFO (First In First Out) principle. The supplier will immediately inform GKN if materials in his custody are damaged, lost or rendered unusable in any way.

Direct Delivery of Material• In the case where material purchased by GKN is delivered directly to the supplier by a third party, material becomes the property of GKN when accepted by the supplier. As a minimum the subcontractor will be required to check the quantity of material delivered. The supplier may also be required to carry out quality checks on the material. The subcontractor must report any deviations to the nominated GKN supply chain contact immediately.

Stock Control• Stock levels held by the subcontractor shall be kept up to date by the supplier and GKN Land Systems advised accordingly.

Identification of GKN owned materials• All GKN owned material and GKN tooling whether provided by GKN or purchased by GKN shall be segregated and conspicuously labelled or designated as the property of GKN. Further, it shall be accounted for as material held for GKN. In addition, the subcontractor shall ensure that any financing statement filed as to the subcontractor’s property to specifically exclude material and tools owned by GKN.

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Technology driven growth

Packaging• Packaging must guarantee protection against any quality concern that may arise between the supplier’s production and the beginning of production at GKN (e.g. rust and physical damage).

• All packaging materials must comply with all laws and regulations, including in regards to health and safety and environmental protection, of both the sending and receiving countries as well as any third parties involved in the storage or transport of goods. It is the supplier’s responsibility to ensure that these requirements are met.

• When practical, reusable packaging shall be employed. Exact packaging requirements will be provided to suppliers in the form of a packaging specification or approval of a supplier’s packaging recommendations.

• In the event that a packaging solution is recommended by the supplier, responsibility for the suitability and legality of packaging remains with the supplier, regardless of approval by GKN.

Documentation • Labelling and documentation should be in accordance with the requirements of the receiving site.

Transport

• Detailed transport instructions including Incoterms will be stipulated in the purchasing contract.

• Where the supplier arranges delivery, transport method and frequency between the supplier’s site and the GKN location shall be agreed with the GKN supply chain function.

• Goods receiving department working hours vary from site to site. Contact the local GKN supply chain or purchasing function for hours of operation. Deliveries outside of normal hours of operation will not be accepted unless agreed in advance.

Delivery Problems• The supplier must make every effort to avoid arrears against the agreed schedules. If a delivery problem occurs or is foreseen by the supplier, the supplier must alert the GKN location immediately. GKN reserves the right to check the delivered total quantity and the quantity per bin. Non-conformance with quantities declared in paperwork is a severe fault and will lead automatically to the issue of a concern report.

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GKN Land Systems

Incorrect & Excess Deliveries• In the event that excess material or the wrong material has been delivered, the supplier shall be informed of the error immediately. A compromise solution may be met; however, GKN reserves the right to return the material in question at the supplier’s cost. Incorrect or excess deliveries will result in a concern report.

Special Transport• The supplier shall inform GKN if an agreed delivery schedule will not be fulfilled in time and provide a new delivery date. In such a case, GKN will assess the new delivery date and inform the supplier if expedited freight will be required. If expedited freight is deemed to be necessary, the supplier will accept responsibility for costs. The use of expedited freight in such cases is at the discretion of GKN.

• Expedited freight at the cost of the supplier may also be required in the case of quality discrepancies or shortfalls in delivery quantity.

• GKN will only accept responsibility for expedited freight if an earlier delivery date has been requested outside of the agreed and accepted lead-times and/or order flexibility as detailed in the purchasing contract.

Quality System Requirements• The preferred Supplier Quality System certification requirements are to be certified by an accredited third party Certification body to TS 16949:2002 or ISO9001:2000 with evidence provided to GKN with a copy of a Certificate.

• The minimum Subcontractor/Supplier Quality System certification requirements as stated in TS 16949:2002 or ISO9001:2000 standard is, (unless otherwise specified by the customer): Suppliers to GKN shall be 3rd party registered to TS 16949:2002 or ISO9001:2000 by an accredited certification body or other requirements locally agreed.

• Each GKN site shall manage each Supplier’s Quality System Certification compliance status by obtaining evidence of Certification and provide the results to GKN purchasing function.

• For each new subcontractor added to the supplier base, evidence of compliance shall be provided to GKN Land Systems Purchasing prior to issuing of purchase orders for series production.

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Technology driven growth

Risk of Business Interruption• The supplier must prove that his facilities are well protected against risk of business interruption (e.g. fire, arson, environmental pollution). Special emphasis is placed on housekeeping in potentially hazardous areas. Third Party Audit results and certificates from insurance companies are acceptable and should be made available to GKN Land Systems.

• The supplier shall maintain an emergency strategy with the goal of ensuring supply in the event of a disruption to the normal production and procurement processes. The plan may include but is not limited to alternative production locations, alternative sub-suppliers, or safety stocks. The supplier shall make available an up to date emergency strategy summary to GKN Land Systems.

• GKN encourages suppliers to adopt Total Productive Maintenance (TPM) as part of an overall risk reduction strategy.

Planned Shutdown Periods• The supplier must inform the GKN supply chain function via Email of any planned shutdown periods with 3 months notice. GKN will assess the impact of the shutdown on material planning. If requested the supplier must provide alternative means of delivery (against call-offs or otherwise) during the shutdown period. This may include the suppliers despatch remaining open on certain days during the shutdown period.

• The supplier must provide an appropriate contact number for the duration of the shutdown period.

Tooling & Equipment• Any and all tooling owned by GKN, which is in supplier’s possession or possession of supplier’s agents shall remain the property of GKN. The supplier shall mark such tooling as the property of GKN. Such tooling shall not be sold, assigned by way of security, pawned, mortgaged, charged or otherwise encumbered or disposed of nor used for the manufacture of goods for parties other than GKN without the express prior written consent of GKN.

Supply Chain Audit• GKN reserves the right, given reasonable notice, to inspect any supplier premises where material destined for GKN is stored, processed, assembled or despatched for the purpose of ensuring compliance with this document and any other agreements.

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GKN Land Systems

Standard Terms and Conditions of Purchase - UKThese are a sample of the UK Terms and Conditions. Please follow the link for the latest T&Cs and for your relavent country and translation: www.gkn.com/landsystems/about-us/Pages/Suppliers.aspx

1. DEFINITIONS AND INTRODUCTION

“we”, “us” and “our” refers to the applicable purchaser among GKN AutoStructures Ltd, GKN Driveline Services Ltd, GKN Land Systems Ltd, GKN Stromag UK Ltd, Chassis Systems Ltd or other members of the Group.

“Group” means GKN plc and its group companies.

Our agreement with you (the “Contract”) consists of: (i) any duly signed contract which applies to our purchase of goods and/or services from you;

(ii) any purchase order or delivery schedule order (an “Order”) that we issue to you and you confirm;

(iii) these General Purchasing Conditions;

(iv) any specifications and safety, health and environmental requirements that we agree with you;

(v) any supplementary terms and conditions of purchase that we agree with you; and

(vi) our quality and other requirements or procedures which can be found at www.gkn.com/landsystems, or are otherwise made available to you. If there is any inconsistency between any parts of the Contract, the parts placed higher in the list will prevail.

2. YOUR CONDITIONS EXCLUDED

If you seek to impose additional or different terms on our purchase, they will not form part of the Contract and are excluded and rejected by these General Purchasing Conditions.

3. DELIVERY

3.1 You must deliver goods and/or services that we order in accordance with the delivery terms and dates set out in the Contract. If any goods and/or services are not delivered on time or are delivered incorrectly, we may terminate the relevant Order.

3.2 Goods must be delivered DDP (as defined in current Incoterms), unless another part of the Contract states different delivery terms. Ownership of the goods you deliver will transfer to us on delivery.

3.3 All goods must be packaged so as to protect them adequately before, during and after delivery and, if we require, each delivery shall be accompanied, in a form acceptable to us, by a certificate of conformity and/or an up-to-date material safety data sheet.

4. QUALITY, REJECTION AND INDEMNITY

4.1 Any goods supplied by you must be: (i) of the quantity and description specified in the Contract; (ii) of satisfactory quality; (iii) fit for their normal purpose and any specific purpose we inform you about or which you ought reasonably be aware of; (iv) free from defects in design, material and workmanship; and (v) free from any encumbrances.

4.2 Any services supplied by you must be: (i) performed efficiently, safely and competently by suitably qualified and experienced personnel, in conformity with any applicable industry code of practice; and (ii) of the quality which would reasonably be expected from a skilled and experienced operator providing equivalent services in the same circumstances.

4.3 Any goods or services (and any associated technology) supplied by you must: (i) comply with all applicable legal requirements and regulations, including those relating to transportation, health, safety and the environment; (ii) not infringe the intellectual property rights of any third party; (iii) conform to any specification or other requirements referred to in the Contract; and (iv) conform to any sample approved by us.

4.4 We may (but are not obliged to) inspect and test the goods delivered by you and may reject and return (at your risk and expense) any goods that fail to conform with the terms of the Contract. You must replace such rejected goods within a reasonable time (being not more than 15 days after notice of rejection) with goods which do comply with the Contract.

4.5 You will reimburse each member of the Group for all losses, damages, costs and expenses (including reasonable legal fees) or other claims (including third party claims and costs relating to recalls and service measures implemented by our customers or their customers) arising from or incurred as a result of: (i) any breach by you of the Contract; and (ii) any negligent act or omission by you or your employees, agents or sub-contractors in supplying goods and/or services pursuant to the Contract.

5. INVOICING AND PAYMENT

5.1 We will pay you the price set out in the Contract (which will be inclusive of delivery costs and exclusive of sales tax) for the goods and services that you deliver in accordance with the Contract. You may only invoice us after delivery of the goods and/or services ordered by us and in accordance with any payment schedule in the Contract.

5.2 Invoices must show: the date of delivery, Order number, delivery address and description of goods/and or services delivered, and must be sent to the invoice address specified in the relevant Order.

5.3 Unless otherwise set out in the Order, payment will be due from us within 90 days of the Thursday following the end of the month of receipt by us of a validly issued invoice.

5.4 We may deduct from the price of the goods and/or services ordered by us any sums due to the Group under the Contract or any other contract between you and the Group.

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Technology driven growth

6. CONFIDENTIALITY AND INTELLECTUAL PROPERTY

6.1 You must not disclose to any other person or entity any confidential information belonging to the Group or any of its divisions, customers, suppliers or collaboration partners (including, without limitation, this Contract, specifications, formulae, manufacturing processes, know- how and any technical or economic information) or use such information for any purpose except for the supply of goods and/or services to us or as expressly authorised in writing by us. You must return to us such information and any copies if requested.

6.2 You must, on request, transfer to us, free of charge and free from encumbrances, any documents, specifications, plans, drawings, samples, information or goods created or prepared for us by you or your employees, subcontractors and consultants, which we may use without any charge.

6.3 Intellectual property rights in any information, documentation, prototypes or tooling provided by us to you shall remain owned by us or our customers or our suppliers and shall only be used for the sole purpose of supplying goods and/or services to us. If any intellectual property rights are created or generated from such information, documentation, prototypes or tooling or in performing the Contract then such rights shall be owned by us.

7. OUR PROPERTY

7.1 This section relates to all property (including tooling of any kind) and any related information, documentation and intellectual property rights therein: (i) purchased by us and/or manufactured by you pursuant to an Order;( ii) provided by us to you for use in the supply of goods and/or services or for any other purpose; whether or not modified, repaired or replaced (“Our Property”).

7.2 Our Property (and any scrap resulting from it) is solely owned by us and we shall keep title to it at all times. If we disagree as to who owns any of Our Property, the presumption will be that we do.

7.3 Where you are in possession or control of Our Property it is on a fiduciary basis as our bailee and you have no rights in it. You have a revocable non-exclusive licence to use Our Property at your premises only for performing the Contract until we request its return, which we may do at any time. You may not sub-licence the use of Our Property or use it for any other purpose.

7.4 Risk in Our Property passes to you on delivery and remains with you until it is returned to us. Whilst Our Property is in your possession or control you shall: (i) be responsible for any loss or damage to it (other than fair wear and tear); (ii) store and use it at your premises in a proper and secure manner; (iii) clearly label or identify it as belonging to us; (iv) maintain insurance against all loss or damage; (v) use it with care; (vi) inspect it and maintain it in good order and condition; (vii) immediately notify us if it is lost, damaged or seized; (viii) not modify or tamper with it, or attach it to anything, or anything to it; (ix) not part with possession of it or allow anyone else to use it (x) not sell, dispose or encumber it; (xi) give us free and unrestricted access to it on reasonable notice during ordinary business hours; (xii) make it available for collection by us at any time and allow us access to your premises to remove it; and (xiii) not copy or reproduce it in any way.

7.5 We have an exclusive, irrevocable option to purchase all bespoke tooling owned by you and put in place for the production of goods pursuant to the Contract at its present value.

8. TERMINATION

8.1 We may cancel all or any part of any Order by giving you notice at any time prior to your full performance of the Order and in such event we will not be liable to pay the price for such goods or services but shall reimburse your reasonable costs arising directly from such cancellation.

8.2 We may terminate the Contract: (i) for convenience by providing you with written notice; (ii) immediately if you or your parent company become subject to a bankruptcy or insolvency event or enter into a composition with any of your creditors; or (iii) if you breach the Contract, and, if the breach can be remedied, you fail to remedy such breach within 10 days of receiving notice of the breach.

8.3 Termination of all or part of an Order or the Contract will not prejudice accrued rights.

8.4 You may be required to continue to supply spare parts and related services up to 15 years after termination or expiry of the Contract.

9. GENERAL

9.1 You and your suppliers must comply with all applicable laws, regulations and codes including those concerning anti bribery and anti corruption and also with the GKN Code and the GKN policies set out at: www.gkn.com/corporate responsibility. We have the right to visit your premises on reasonable notice to audit and ensure compliance.

9.2 You must provide us with any information we request relating to the goods and services supplied by you, all of which must be complete and accurate.

9.3 You and your employees, agents and sub-contractors must abide by applicable site and safety rules when on our property and you shall provide evidence of your applicable insurance.

9.4 Our rights or remedies under the Contract will not limit any of our other rights or remedies, whether under the Contract or otherwise.

9.5 You will not be entitled to transfer or subcontract any of your rights or obligations under the Contract without our prior written consent. Each company within our Group shall have the benefit of the Contract and may purchase goods and/or services pursuant to the terms of the Contract.

9.6 Any failure or delay by us to enforce or partially enforce any provision of the Contract will not be a waiver of any of our rights.

9.7 If any of your employees transfer to us by law then we may dismiss him/her and you shall indemnify us for all costs arising from such dismissal.

9.8 The provisions of the United Nations Convention on Contracts for the International Sale of Goods are excluded.

10. LAW AND JURISDICTION

The Contract shall be exclusively governed by English law. The courts of England shall have non-exclusive jurisdiction to settle any disputes or claims that arise out of or in connection with the Contract or its subject matter.

GKN Land Systems Headquarters

lpsley HouseIpsley Church LaneRedditchWorcestershire B98 0TLUnited Kingdom

Tel: +44 (0) 1527 517715Email: purchasing.landsystems@gkn.comwww.gknlandsystems.com

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