Voluntary Tax Transparency Code Report

Introduction

Kubota Australia Pty Ltd (Kubota Australia) is Australia’s leading supplier of agriculture, construction and power equipment, operating in Australia for over 45 years. It is part of the global Kubota Group of companies.

Since its foundation in 1890, the Kubota Group has delivered a variety of products that contribute to people’s lives and society, including iron water pipes for the development of modern waterworks, and agricultural machinery to increase food production and save labour. Today, the world faces many challenges in the areas of food, water and the environment, which are indispensable for human beings. The Kubota Group believes that its mission is to comprehensively solve the problems of food, water and the environment through its superior products, technologies and services, thereby continuing to support the future of the earth and humanity.

This report provides an overview of Kubota Australia’s tax strategy, governance and tax contributions made to Australian State and Commonwealth governments. The information provided in this Report is released on a voluntary basis in accordance with the recommendations and guidelines contained in the Board of Taxation’s Voluntary Tax Transparency Code (the Code).

Kubota Australia has chosen to voluntarily disclose this information, which is consistent with the Australian Government’s efforts to promote tax transparency. Kubota Australia has made this commitment to transparency because it believes it is important that companies help build trust in society by being transparent about how and where they pay taxes.

John O’Reilly

General Manager Finance and Administration

Kubota Australia Pty Ltd

_______________________________________________________________________________________

Part A Disclosures

The Part A Disclosures required of Kubota Australia by the Code are:

• a reconciliation of the accounting profit to income tax expense;
• a reconciliation from income tax expense to current year income tax payable; and
• Kubota Australia and Kubota Group’s effective tax rates.

Kubota Australia published its tax disclosures in Note 13 of its 2022 and 2021 Financial Reports. The tax reconciliations in Note 13 form the basis of Kubota Australia’s Part A disclosures for the Code (particularly reflected in response to question 1 below).

1. Reconciliation of accounting profit to income tax expense

1. Reconciliation from income tax expense to current year income tax payable

Income tax expense is different to income tax payable, as income tax expense (an accounting concept) reflects amounts of accounting income which are assessable for tax / amounts of accounting expenditure which are deductible for tax, irrespective of when that assessment or deduction arises. Income tax payable reflects amounts which are assessable or deductible in the current year, which does not always align with the timing for these amounts being recognised in the income statement.

1. Accounting effective company tax rates for Kubota Australia and Kubota Group

The above effective tax rates (ETRs) have been calculated as income tax expense divided by accounting profit for the Australian Kubota accounting consolidated group and the global Kubota accounting consolidated group.

The 2022 and 2021 Australian ETRs are 29.35% and 30.76% respectively. This reflects the impact of permanent adjustments in respect of non-deductible entertainment and subscriptions which decrease the ETR below the headline Australian income tax rate of 30%.

_______________________________________________________________________________________

PART B Disclosures

Part B of the Code prescribes minimum disclosure standards in relation to Kubota Australia’s:

• tax policy, strategy and governance;
• total tax contributions;
• international related party dealings.

1. Approach to tax strategy and governance

Kubota Australia is committed to achieving the highest standards in the areas of corporate governance and business conduct and its tax responsibilities are in line with this commitment. Kubota Australia has established a group Tax Governance Framework governing its tax strategy, which was reviewed and approved by the Board in 2017. The Board meeting in December 2022 reviewed and approved the updated version for 2021. It strongly believes in tax governance and has taken various actions to ensure that it follows best practice both on governance and transactional data.

Actions taken by Kubota Australia on “best practice” tax governance

• A Tax Governance Framework document has been prepared and endorsed by the Board and is operational across Kubota Australia. The responsibilities imposed under the framework are carried out by experienced professionals who also draw on the use of external advisors.
• Kubota Australia has implemented appropriate internal controls at a Board and managerial level in relation to the identification and management of tax risk, and a framework for escalation of tax matters from business units to the Kubota Australia Board as necessary.
• Kubota Australia has engaged external advisors to undertake separate corporate income tax, GST and Fringe Benefits Tax operational assessments. The results of these assessments indicated that Kubota Australia operates within a robust, clearly defined control environment.
• Kubota Australia dedicates appropriate resources to managing its tax obligations and has always been able to meet ATO compliance obligations and requests within the timeframes granted. The ATO has previously rated Kubota Australia as a low risk taxpayer under its risk-categorisation framework.

1. Total tax contribution summary

The table below provides an overview of all the Australian Federal and State taxes paid and collected by Kubota Australia Pty Ltd in the 31 December 2021 income year (with comparatives to the 31 December 2020 and 31 December 2019 years).

1. Information about international related party dealings

Kubota Australia Pty Ltd engages in various dealings with international related parties. Kubota Australia discloses these dealings at Note 31 of its Financial Report. Material dealings during the year included:

• Purchases of goods from related parties located in Japan, Korea, Thailand, United States of America, Germany, France, Norway and Spain.
• Payment of a fee for management services received from a related party in Japan.
• Kubota Australia established a New Zealand subsidiary in 2019. Kubota Australia raised a fee for Management services in support of New Zealand operations.

Kubota Australia Pty Ltd and its related parties regularly review their transfer pricing policies to ensure their international related party dealings are conducted in accordance with the arm’s length principle.

1. ATO public tax transparency disclosures

Australia’s public tax transparency laws require the ATO to publish specific tax return information of public companies and foreign-owned companies with total income of $100 million or more, and Australian-owned private companies with total income of $200 million or more.

The ATO published data for the 2021-22 income year in September 2023. This would have included the following information in relation to Kubota Australia Pty Ltd based on its lodged income tax return for the year ended 31 December 2022:

Supplier Code Of Conduct

This code of conduct applies to all businesses that provide products or services for Kubota Australia Pty Ltd (Kubota Australia) and its subsidiaries, joint ventures, divisions, or affiliates. Kubota Australia requires suppliers and their employees to commit to this code of conduct as a condition of doing business.

Kubota Australia suppliers must comply with the laws, rules, regulations, and Kubota Australia policies of the countries and locations in which they operate. They are expected to be familiar with the business practices of their suppliers and subcontractors and ensure they operate according to this code of conduct. Kubota Australia may discontinue its relationship with suppliers who fail to comply with this code.

Social Responsibilities

Labour and human rights

Suppliers are expected to provide a fair and ethical workplace, maintaining high standards of human rights, with appropriate labour and human rights policies and practices in place.

At Kubota Australia, we pride ourselves on providing an equal employment and gender equality workplace and expect our Suppliers not to discriminate against any employee based on age, disability, ethnicity, gender, marital status, political affiliation, race, religion, sexual orientation, gender identity, union membership, or any other status protected by law, in hiring and other employment practices. Consistent with the Workplace Gender Equality Act 2012, suppliers are expected to proactively support gender equality initiatives. Kubota Australia strives to promote and influence improvements in gender equality across its Supply Chain through procurement policies and practices. Kubota Australia also encourages Suppliers to explore opportunities to engage Aboriginal and Torres Strait Islander businesses in their supply chain.

Suppliers are expected not to bully or threaten employees or subject them to unlawful or inhumane treatment. This includes, but is not limited to, abuse and harassment which can be verbal, physical, sexual, or psychological. Consistent with The Modern Slavery Act 2018, suppliers are expected to proactively identify, address and where required by legislation, report on risks of modern slavery practices in their business operations and supply chains. You can read more in our Modern Slavery Statement.

Suppliers should take reasonable endeavours to ensure that any third-party labour agency it may use to fulfil services to Kubota Australia, is compliant with The Modern Slavery Act 2018[1], including payments, recruitment-related fees and expenses in recruiting foreign contract workers.

All relevant Suppliers involved in the labour-hire sector must hold a license under this scheme before Kubota Australia can engage their services. Please refer to the Victorian Labour Hire Authority, for more information.

Suppliers are expected to freely allow employees to associate with others, form and join (or refrain from joining) industrial organisations or associations of their choice and bargain collectively, or engage in any lawful industrial activity without interference, discrimination, retaliation or harassment.

Suppliers must abide by The Privacy Act 1988, which regulates the treatment of personal information about individuals. This includes the collection, storage, and disclosure of personal information about individuals.

Health and Safety

Suppliers are expected to provide a healthy and safe work environment, with comprehensive health and safety management practices in place.

Suppliers with employees who need to enter a Kubota Australia premises must ensure those employees meet any applicable requirements (e.g.: current police check) and be able to provide verified evidence.

Suppliers must comply with all other applicable laws relating to workplace health and safety and provide their employees with job-related training and consult with employees in relation to the provision of information and training.

Environmental Responsibilities

Suppliers are expected to conduct their operations in a way that minimises the impact on natural resources and protects the environment, customers, and employees. They must ensure their operations comply with all applicable laws related to air emissions, water discharges, toxic substances, and hazardous waste disposal. Throughout the world, laws and regulations prohibit or restrict certain substances and/or require manufacturers and suppliers to provide information about restricted substances in their products. Suppliers must, therefore, comply with the Kubota Group’s environmental charter and when requested by Kubota Australia, provide regulatory compliance declarations for identified products.

Ethical Expectations

Ethics, Gifts and Gratuities

Suppliers must not offer gifts to Kubota Australia employees. This includes gifts of nominal value. Although giving gifts is acceptable in some cultures, Kubota Australia requests that suppliers respect its policy of not accepting gifts.

Improper Payments

Bribes, kickbacks, and similar payments are strictly prohibited. This ban applies even when local laws may permit such activity. Employees, suppliers, and agents acting on behalf of Kubota Australia are strictly prohibited from accepting or giving such considerations under any circumstances. Suppliers must, therefore, comply with the Kubota Australia’s Anti-bribery policy.

Confidential Information

Proper management of confidential information is critical to the success of both Kubota Australia and suppliers. Suppliers must protect all Kubota Australia information, electronic data, and intellectual property or Kubota Australia technologies with appropriate safeguards. Any transfer of confidential information must be executed in a way that secures and protects the intellectual property rights of Kubota Australia and its suppliers. Suppliers may receive our confidential information only as authorised by a confidentiality or non-disclosure agreement and must comply with their obligations to not disclose the confidential information, to not use the information except as permitted by the agreement, and to protect the information from misuse or unauthorised disclosure. Our suppliers can expect Kubota Australia to similarly safeguard their confidential information when authorisation is provided to Kubota Australia. Suppliers may not use the Kubota Australia trademark, images, or other materials to which Kubota Australia owns the copyright, unless explicitly authorised.

Supplier Management System

Suppliers are expected to have a management system that ensures they comply with applicable laws, regulations, and Kubota Australia policies, conform to this Supplier Code of Conduct, and identify and reduce operational risks related to this code. The system should also promote continuous improvement and compliance with changing laws and regulations.

Supply Chain Transparency

Supply chain transparency is required to confirm compliance to this code of conduct. To monitor this, Kubota Australia’s Compliance Officer will request documentation, conduct onsite audits, review, and approve corrective action plans, and verify implementation of corrective action.

Communication

Suppliers are expected to assist Kubota Australia in enforcing this Supplier Code of Conduct by communicating its principles to their supervisors, employees, and suppliers.

Corrective Action

Kubota Australia will address confirmed Supplier Code of Conduct non-compliance and Actions may include but not be limited to any of the following:

• Require a supplier to implement behaviour change and confirm implementation in writing
• Require a supplier to implement behaviour change and provide evidence of this either in writing or via an on-site inspection by Kubota Australia representatives
• Require specific action to be taken by a supplier and evidenced by a specified date
• Terminate a contract.

Contact Information

Any supplier may direct questions or comments about this code of conduct to his/her Supply Management representative or Kubota Australia’s Compliance Officer.

Non-Compliance Reporting

Violations of the Kubota Australia Supplier Code of Conduct can be reported confidentially via any of the following ways:

Telephone: 1300 582 582

Website: https://kubota.com.au/company/contact/

Mail: Compliance Officer 25 – 29 Permas Way Truganina VIC 3029 Australia

Whistleblower Complaint Process

About whistleblowing

In accordance with Australian law, a team member, former team member and their relatives, dependents, spouse or associates and suppliers may make a whistleblowing complaint with legal protection.

Making a Whistleblowing complaint is a way to report, and bring to the attention of Kubota, actual or suspected serous wrongdoing. It is important to note that any party may make a report to appropriate authorities at any time where they feel they have reasonable grounds and do so in good faith.

Kubota strongly encourage the making of whistleblowing complaints to ensure we live our shared values and possess a safe and compliant company culture which will ensure our reputation and standing within in the markets and communities in which we operate.

What to report

As a person external to our business, should you have reasonable grounds or belief to suspect that misconduct has occurred, or that an improper state of affairs or circumstances exist within Kubota Australia you may choose to make a report. The subject of any report may include current or former team members (including employees and contractors), officers or Board members of Kubota Australia.

Misconduct may include, but is not limited to:

• Breach of specific legislation
• Dishonest, corrupt, or illegal activities
• Serious breach of Policies and Procedures, including serious risks to health and safety
• Fraud, theft, money laundering or misappropriation
• Offering or accepting a bribe
• Damage or sabotage
• Harassment including sexual harassment, discrimination, bullying or victimization
• Instruction to cover up or attempt to cover up serious wrongdoing
• Engage in conduct that is likely to contribute to, or is likely to be considered as, a form of Modern Slavery.

Protections

Kubota Australia shall apply principles of procedural fairness and natural justice to the conduct of any investigation and resultant findings arising under our Whistleblower Protection Policy and relevant laws.

A whistleblower’s identity, or any information likely to lead to the identification of the whistleblower must be kept confidential and not disclosed. The only exceptions are where:

• the identity of the whistleblower is disclosed with the consent of the Whistleblower, is provided to ASIC, APRA or the AFP, or is given to a lawyer in order to obtain legal advice or representation; and
• information likely to lead to the identification of the whistleblower (but not the whistleblower’s identity) is disclosed because it is reasonably necessary for the purpose of investigating the matter, and Kubota takes all reasonable steps to reduce the risk that the whistleblower will be identified.

Kubota have no ability to offer Whistleblower/s immunity against criminal or civil legal action that may be taken against them because of matters reported.

Who to report to

You may make a report to:

• The nominated Whistleblower Protection Officer, Kubota’s Compliance Officer.

by emailing at: kau_g.whistleblower@KubotaAustralia.com.au

or

Anonymously via post to Kubota Australia Pty Ltd, Whistleblower Protection Officer (Compliance Officer), 25-29 Permas Way, Truganina, VIC, 3029.

• A General Manager or officer of Kubota Australia (such as a Board member) on 1300 582 582 on the understanding that they will need to refer this to the nominated Whistleblower Protection Officer.

Content of report

It is strongly preferred that you make a report in writing to ensure clear communication and to enable the best possible management of the matter.

Information you should pass on in your report should include:

• Date of report
• Identity of reporter (if disclosed/ known)
• Substance of report
• Any dates or details of when, where or how the reportable conduct occurred
• The identity or level of seniority of the person/s who are the subject of the report
• The perceived level of risk or gravity of the reportable conduct
• Any other pertinent matters or evidence.

More Information

For more information you may contact our nominated Whistleblower Protection Officer, Kubota’s Compliance Officer.

Telephone: 1300 582 582

Email: kau_g.whistleblower@KubotaAustralia.com.au

Mail: Compliance Officer, Kubota Australia Pty Ltd, 25-29 Permas Way, Truganina, VIC, 3029

Modern Slavery Policy

Purpose of policy

This policy affirms our commitment to contribute to ending all forms of modern slavery and outlines our approach to reducing the risk of modern slavery practices within our supply chains and operations. It is consistent with our Ethical Framework, that expects a culture of high ethical standards, including compliance with applicable laws, contractual and other obligations. As a result, this Modern Slavery Policy is part of the Ethical Framework. This Policy supports the Modern Slavery Act (Cth) 2018

Context

Modern slavery describes situations where coercion, threats or deception are used to exploit individuals and undermine or deprive them of their freedom. Kubota Australia (KAU) strives to use, insights gathered through its business activities to contribute to ending all forms of modern slavery by ensuring our own supply chains and operations don’t contribute to modern slavery practices, and to take appropriate action to respond to the humanitarian impacts of modern slavery

Scope of policy

This Policy applies to all employees, suppliers, and business partners of entities controlled by KAU, including Kubota Finance and Kubota New Zealand

Definitions

Modern Slavery Act 2018 (Cth) being the Commonwealth legislation (the Act) enacted by the Parliament of Australia on 29 November 2018 (and may be amended from time to time).

Modern slavery for the purposes of this policy is defined as including eight types of serious exploitation and outlined in Section 4[1]

Operations is defined as activity undertaken by KAU and any of its subsidiaries.

Partnership means all relationships between KAU and a Partner whereby KAU grants the Partner the possibility of using its name, emblem/logo or image in its communication and promotional materials, thereby potentially creating a public association of image between the Partner and KAU. This relationship includes arrangements of; sponsorships, cause-related marketing initiatives, and strategic alliances.

Risks of modern slavery practices means the potential for KAU to cause, contribute to, or be directly linked to modern slavery through its supply chains and operations.

Kubota Australia is the term used to refer to Kubota Australia Pty Ltd and its subsidiaries, not the broader Kubota Corporation.

Kubota People include any current:

Members of a Governance Body (members of the KAU board)

Employees.

Suppliers is defined as any organisation or person who provides us with goods or services, including their subcontractors, agents, related entities, and consultants.

Supply chains is defined as the products and services (including labour) that contribute to KAU’s own products and services. This includes products and services sourced in Australia or overseas and extends beyond direct suppliers

What is modern slavery

Modern slavery is defined by the Modern Slavery Act (Cth) 2018[2] to include eight types of serious exploitation and which can be understood as:

Trafficking in persons, which is the recruitment, harbouring and movement of a person for the purposes of exploitation through modern slavery. Exploitation also includes the prostitution of others or other forms of sexual exploitation, forced labour or services, slavery or practices like slavery, servitude or the removal of organs.

Slavery, which is where the offender exercises powers of ownership over the victim.

Servitude, which is where the victim’s personal freedom is significantly restricted, and they are not free to stop working or leave their place of work.

Forced labour, which is where the victim is either not free to stop working or not free to leave their place of work.

Forced marriage, which is where coercion, threats or deception are used to make a victim marry or where the victim does not understand or is incapable of understanding the nature and effect of the marriage ceremony.

Debt bondage, which is where the victim’s services are pledged as security for a debt and the debt is manifestly excessive or the victim’s services are not applied to liquidate the debt, or the length and nature of the services are not limited and defined.

The worst forms of child labour, which involves situations where children are: exploited through slavery or similar practices, including sexual exploitation; or engaged in hazardous work which may harm their health or safety, or used to produce or traffic drugs.

Deceptive recruiting for labour or services, which is where the victim is deceived about whether they will be exploited through a type of modern slavery[3]

KAU approach to limiting the risk of modern slavery practices

KAU will work proactively to reduce modern slavery within our supply chains and operations, and we expect all organisations we engage with to do the same.

Supply Chain

KAU Supplier Code of Conduct

We expect all existing and new Suppliers to comply with the principles set out in our Supplier Code of Conduct. Fundamental to the Supplier Code of Conduct is an expectation that all Suppliers operate in full compliance with the laws and regulations in the jurisdiction where the goods are sourced, procured or services are performed. Suppliers must use best endeavours to ensure that there is no modern slavery in their supply chains and operations. In the event Suppliers identify any occurrence of, or material risk of modern slavery in their supply chains or operations they are to take practical and effective steps to address that occurrence or risk. Suppliers must notify KAU as soon as practicable of any occurrence of, or material risk of modern slavery they have identified and notify relevant authorities where appropriate.

KAU’s contractual terms

Our contractual terms reflect Supplier obligations outlined in the Supplier Code of Conduct, including compliance with Australian modern slavery laws and those foreign modern slavery laws that apply in the locations in which they operate.

Supply chain mapping and risk assessment

We encourage our suppliers to complete a Corporate Social Responsibility questionnaire which contains questions relevant to modern slavery. Answers to this questionnaire will provide us with a greater understanding of the risk of modern slavery within a supplier’s supply chains or operations and enable us to work with a supplier to reduce the risks identified. We will actively and progressively improve our understanding and oversight of all tiers of our supply chains

Operations

Modern Slavery Policy

KAU maintains a Modern Slavery Policy (this Policy) outlining our approach to reducing the risk of modern slavery practices within our supply chains and operations. The Policy provides guidance on the steps KAU takes to work with suppliers to reduce risks and the range of supports available for when a KAU person becomes aware that someone is at risk of or affected by modern slavery practices.

Incorporating modern slavery into other policies

When existing policies undergo policy review or new polices are under development, policy owners are required to identify existing modern slavery commitments that can be enhanced, or where modern slavery protections can be incorporated.

Human Resources

We are committed to ensuring the health, safety and wellbeing of our workforce and we maintain a suite of policies that are informed by and compliant with Australian workplace occupational health and safety law.

Supplier Screening

The Supplier Code of Conduct requires KAU to complete a supplier screening tool before entering into a partnership with another organisation. Prospective suppliers automatically disqualify from public association with KAU if they are knowingly or deliberately engaged in activities running counter to:

The Movement’s objectives and Fundamental Principles

Principles of International Humanitarian Law

Internationally recognised standards of human rights, labour rights and protection of health

Communications, Engagement and Training

KAU team members will be provided communications and training opportunities to enhance their understanding of the causes and humanitarian impact of modern slavery, the Modern Slavery Policy and our approach to limiting the risk of modern slavery within our supply chains and operations. KAU team members with purchasing responsibilities are provided additional training on the KAU Supplier Code of Conduct, Corporate Social Responsibility tool and supporting suppliers to undertake due diligence. KAU team members who initiate and periodically review relationships with third parties are provided with training to apply due diligence processes.

Continuous improvement approach to reducing the risk of modern slavery

We are committed to applying a continuous improvement approach to how we reduce the risk of modern slavery practices within our supply chains and operations. We will seek feedback from KAU team members, Suppliers, and other parties regarding the success or otherwise of the actions we have taken to reduce the risk of modern slavery.

By 31 December each year we will publish a Modern Slavery Statement that outlines the steps we have taken over the reporting year to identify where our supply chains and operations may be contributing to modern slavery practices, and the actions we have taken to minimise these risks.

Reporting Concerns of modern slavery

Reporting unethical or unlawful conduct

A key part of supporting ethical standards is enabling KAU team members and suppliers to feel free and safe to speak up when there are reasonable grounds to suspect that KAU team members or any of KAU’s suppliers are not acting ethically or in accordance with laws and obligations. Concerns about compliance or ethical issues or illegal or unethical activities are to be reported according to our whistleblower policy

Responding to concerns of modern slavery practices

The Australian Federal Police is responsible for investigating suspected cases of modern slavery and can be contacted on 131 237 to discuss or report a suspected case. Contact can be made anonymously.

In an emergency and if someone is in immediate danger, please call Triple Zero (000) for police assistance

[1] Modern Slavery Act (Cth) 2018. Available from : https://www.legislation.gov.au/Details/C2018A00153

[2] Department of Home Affairs. Commonwealth Modern Slavery Act 2018: Guidance for reporting entities (2018). Available from https://modernslaveryregister.gov.au/resources/

Modern Slavery Statement 2022

Kubota Australia Pty Limited, ACN 005 300 621 (Kubota Australia) is pleased to present our third Modern Slavery Statement, as required in Section 13 of the Australian Modern Slavery Act 2018. We are committed to maintaining a vigilant approach towards identifying any potential risks of modern slavery and taking appropriate measures to mitigate them. Through ongoing education and communication with our members and supply chain, we continue to deepen our understanding of this important issue and work towards a slavery-free future.

This statement outlines the measures implemented by Kubota Australia and its controlled entities (together referred to as "KAU") to combat modern slavery within our business operations and supply chain, as well as any future strategies planned to address this issue. Our efforts during the calendar year ending on 31 December 2022 were aimed at mitigating the risk of modern slavery and promoting ethical practices throughout our organisation and beyond.

About Kubota Australia

For over 40 years, Kubota Australia has been a leading supplier of agriculture, construction, and power equipment. Our products are known for their high performance, durability, and reliability. We're committed to protecting the environment and offer equipment with powerful performance and reduced emissions. With over 140 dealers across Australia, our authorised dealer network distributes and services all Kubota equipment. We provide efficient and reliable service support, backed by immediate access to our substantial spare parts inventory nationwide.

KAU is part of the global Kubota Group of Companies and a subsidiary of Kubota Corporation (KBT)

KBT was founded in 1890 in Osaka, Japan, with a vision to create quality products that benefit customers, communities, and the environment.

Brand Statement

For Earth, For Life. The Kubota Group promises to continue supporting the prosperous life of humans while protecting the environment of this beautiful earth.

Mission

Food, water, and the environment are indispensable for human beings. The Kubota Group continues to support the future of the earth and humanity by contributing products that help the abundant and stable production of food, help supply and restore reliable water, and help create a comfortable living environment through its superior products, technologies, and services.

Vision

To be a company that can make the greatest contribution to society by earning the trust of the greatest number of customers.

Kubota Australia’s Structure, Operations, and Supply Chains

Structure

Kubota Australia is an Australian company with its registered office located at 25-29 Permas Way, Truganina, VIC 3029. Operating under the trading name of Kubota Australia Finance (KAF), we offer competitive finance options for both consumers and business operators.

Kubota Australia is a wholly owned subsidiary of Kubota Corporation (KBT), a Japanese multinational company headquartered in Osaka, Japan. KBT is listed on the first section of the Tokyo Stock Exchange. We are recognised as one of the world's leading manufacturers of compact engines and produce agricultural, construction, and power equipment that is distributed to over 31 countries.

In New Zealand, our operations are conducted through Kubota New Zealand Limited, which is a wholly-owned subsidiary of Kubota Australia. Additionally, we provide equipment finance solutions to businesses in New Zealand under the trading name Kubota New Zealand Finance (KNZF).

Operations

The major function of KAU is the marketing and distribution of Kubota-engineered products as well as Kubota-supplied products in Australia and New Zealand. Our product range includes agriculture, construction, and power equipment. Additionally, we offer retail finance options for these equipment types to both Australian Businesses & consumers as well as New Zealand Businesses. KAU carries out its function with the help of authorised dealers across Australia and New Zealand. We currently have more than 150 dealerships across both countries.

To support KAU operations, we have a team of 178 employees in Australia and New Zealand. Each team member is adequately compensated and employed in compliance with the regulations of their respective localities.

Supply Chain

KAU maintains a diverse network of suppliers from around the world. Our supply chains encompass manufacturers of automotive products, machinery parts, and various other services that contribute to supporting our operations. In order to meet the demand for Kubota-supplied equipment in Australia and New Zealand, we annually procure goods and services worth more than $500 million from our suppliers.

We engage in a range of transactions with international related parties. Notably, during the past year, we have conducted material dealings that involved purchasing goods from both related and unrelated parties of KAU situated in various countries, including Australia, New Zealand, Norway, the Netherlands, Indonesia, Japan, South Korea, Thailand, the United States of America, Germany, France, and Italy. As of the year ending on December 31, 2022, we had a supply chain comprising approximately 600 active suppliers for the year.

KAU places significant importance on collaborating with suppliers that uphold Kubota values and adhere to principles relating to modern slavery and human rights. We provide our supplier code of conduct to every supplier we engage with during the onboarding process, outlining our expectations regarding supplier activities.

Our Modern Slavery Risk Identification

KAU recognises the potential modern slavery risks associated with its business operations and supply chains, both domestically in Australia and New Zealand, as well as internationally.

Building upon our efforts in 2021, we are committed to further understanding and addressing modern slavery risks in our supply chain throughout 2022. We have initiated a categorisation process for new vendors, considering factors such as their industry type, geographic location, and their commitment to the Modern Slavery Act, ensuring our Modern Slavery Clause is included in contracts. For this, we require all new vendors to complete an onboarding questionnaire on modern slavery to gain insight into their organisational structure and risk exposure.

Additionally, we have conducted a comprehensive risk assessment of some of our existing vendors to evaluate their current circumstances and identify any potential impact on our anti-slavery commitment.

Based on our assessment and understanding gathered in 2022, we have identified certain risks that require vigilance:

• Suppliers operating in high-risk geographical areas where modern slavery practices are more prevalent require closer scrutiny.
• Additionally, within Australian and New Zealand vendors, we have identified companies primarily providing labour-oriented support services to businesses such as cleaning services can be a potential area of risk. Although KAU's spending in this sector may be relatively low compared to other vendors, we acknowledge and surveyed these sectors as they tend to attract a significant number of low-skilled immigrants, necessitating our understanding of the modern slavery threat within this context.

As outlined in our 2021 statement, KAU's workforce resides and operates within Australia and New Zealand. Our dependency on labour-hire employees engaged through agencies is minimal. When it comes to labour-hire, KAU exclusively collaborates with reputable agencies located in Australia. We ensure that all our workforce members are employed under either an Australian or New Zealand workplace contract, following standardised background checks and screening procedures. Consequently, KAU believes that it possesses robust systems and controls to effectively manage any potential risks of modern slavery arising from our employment practices.

KAU understands that its business operations and supply chains can include a range of modern slavery risks, which can occur in Australia and New Zealand, as well as overseas.

Our Actions and Further Plans for Assessing and Addressing Modern Slavery

KAU is fully committed to eradicating modern slavery from all aspects of its operations, supply chains, and business practices. As mentioned in this statement, KAU has continued its efforts in 2022 to enhance its understanding of potential areas of modern slavery risk within its operations and supply chains. This year, the focus has been on implementing the policies developed in 2021.

To strengthen our efforts, KAU has worked towards self-sufficiency by developing internal tools to assess the risk levels of all vendors and devising strategies to eliminate modern slavery. In addition, KAU has started using a service from Equifax Ethical, a risk rating service provider, to independently verify and assess new and existing modern slavery threats that may be posed by vendors.

Transparency is a key principle in our business, and we strive to tackle modern slavery through our operations and supply chains while fulfilling our disclosure obligations under the Modern Slavery Act 2018. Adherence to our Modern Slavery policy is mandatory for all executives and employees, and is part of the employment induction and training process. It is essential for employees to familiarise themselves with our modern slavery policy and procedures to identify and prevent instances of modern slavery and conduct business in a manner that prevents its occurrence.

While we acknowledge our legal obligation to outline the measures we have implemented to prevent modern slavery, we also recognise that we do not have direct control over the actions of individuals and organisations within our supply chains.

To reinforce our commitment to eliminating modern slavery, we consistently implement the following measures:

1. Conducting risk assessments to identify the areas of our business and vendors that are most susceptible to modern slavery. This includes administering a Modern Slavery questionnaire for new vendors during onboarding and an annual survey for existing We have developed an internal risk rating methodology that considers factors such as geographical location, industry type, and the vendor's response to the Modern Slavery questionnaire.

Example of KAU's internal risk rating on suppliers:

2. Engaging with our vendors to communicate our Modern Slavery Policy and gain an understanding of the measures they have in place to prevent modern slavery in their own business                    operations. Our service agreements include a standard Modern Slavery clause, and vendors are required to provide relevant information about their supply chain and operations to                        assess their modern slavery risk. Our supplier code of conduct, established in 2021, is an integral part of our procedures and ensures supplier accountability and adherence to our                          standards.
3. Identifying and monitoring potential risk areas within our supply chains to ensure compliance with our Modern Slavery We have a dedicated Compliance department responsible for                    ensuring adherence to the policy within the organisation.
4. Protecting whistleblowers who report concerns about suspected modern slavery within the company or our suppliers. Our whistleblowing policy provides guidance on how concerns                      can be communicated, and individuals who come forward are fully Contact persons within the organisation are available to receive reports of potential breaches, including information                related to human rights violations and labour standards infringements.

Further Steps

In the year 2023, our dedication to supplier compliance with legislation will remain a top priority. We will take the following specific steps to ensure continued progress:

• Conducting annual risk assessments of our supply chain, including any new partners and service providers, to identify potential areas of concern related to modern slavery.
• Continue to carry out regular surveys of our suppliers to proactively monitor their compliance with KAU expectations and legal requirements, keeping a vigilant eye on any signs of non-compliance.
• Updating the Supplier agreements in 2023 to explicitly address the issues of modern slavery, clearly communicating our expectations and requirements to our direct
• Providing additional training for relevant employees to enhance their understanding of modern slavery and human rights, enabling them to identify and respond effectively to any related concerns.
• In two years' time, we are planning to assess and benchmark its Modern Slavery Risk Management maturity against the leading This will help us to understand if there are any gaps and can be repeated to track progress over time.
• Organising an interactive modern slavery risk workshop with key functions from across

These measures will serve as crucial steps in our ongoing efforts to combat modern slavery and uphold human rights throughout our supply chain.

Assessing and Reporting on the Effectiveness of Actions Taken

KAU has already commenced and intends to continue further developing frameworks and processes to appropriately review the effectiveness of KAU's actions in assessing and addressing modern slavery risks in our operations and supply chains.

Assessing the effectiveness of our actions is a vital component of our commitment to continuous improvement. We employ various methods to evaluate our approach, including:

• Monitoring key indicators such as the number of modern slavery-related reports received through our whistleblower mechanisms and the completion of modern slavery questionnaires by our suppliers. No instances of modern slavery have been reported or alleged in 2022.
• We consistently track relevant data and collect information from vendors to measure progress towards our goals. This may include conducting surveys, gathering feedback from stakeholders, and analysing relevant metrics. We have started using the service of Equifax Ethical, which helps us to independently run checks on our vendors to see any alleged or reported modern slavery incidents.
• Reviewing complaints raised under the dispute resolution

During the reporting period, we did not receive any reports or complaints related to modern slavery. Additionally, KAU completed and submitted a number of reports to law enforcement bodies, and none of these reports was concerned with modern slavery risks.

KAU is continuously reviewing how to effectively monitor modern slavery risks further as part of our 2023 compliance program.

KAU is committed to addressing the issue of modern slavery in our operations and supply chain. We recognise that this is an ongoing process, and we will continue to take steps to ensure that we are not contributing to or benefiting from modern slavery in any way. We will also continue to engage with our suppliers and stakeholders to ensure that they share our commitment to this important issue.

Consulting with entities that Kubota Australia own and Control

This Modern Slavery Statement covers all controlled entities of Kubota Australia and was developed in consultation with each of the reporting entities covered by the statement. Each controlled entity relies on Kubota Australia for the resources they require for its operations. Kubota Australia provides and procures all goods, services, and personnel requirements. All controlled entities under Kubota Australia's management operate in accordance with Kubota Australia's directives. A draft of this statement was reviewed by one or more directors from each reporting entity and controlled entity.

KAU will continue to monitor and report on the effectiveness of this Modern Slavery Statement to the Board of Directors of KAU

Kubota Australia's Modern Slavery Statement 2022 was approved by its Board of Directors on the 29th of June 2023.

Yuji Tabira

Managing Director

Kubota Australia Pty Ltd