Global Human Resources Policy

Basic Concept
SMC believes that in order to achieve further growth and advance to the next stage, it is necessary to promote diversity and build a system in which the Group engages in business activities as one. Specifically, we will work to establish initiatives and an environment that deepens interaction and collaboration within the Group and in which our talented personnel can perform at their best, as well as establish initiatives to develop personnel.
With this in mind, SMC outlines the following Human Resources Policy:

• ●We will create an environment in which employees can feel a sense of pride, loyalty, and fulfillment in their work, and thereby fully demonstrate their abilities.
• ●We will promote human resource measures grounded in sustainability and diversity to unite employees with diverse personalities together and foster a sense of unity as a Group.

[ Promoting Women's Active Participation ]

SMC believes it is important to create an environment where women can actively participate in professional life without giving up on their careers, and have equal opportunities for advancement into managerial roles. In addition to increasing the percentage of female employees through proactive recruitment activities, we are also working to ensure that it is possible for employees to smoothly return to work after taking maternity or childcare leave, and that they are reinstated in the same workplace as prior to the leave. Furthermore, to support the balancing of work and family/childcare responsibilities, we are working to develop a comfortable work environment by establishing various programs such as introducing shorter working hours and flexible working hours.
In order to increase the number of female employees involved in organizational management and managerial decision-making in the future, it is necessary to foster career awareness from a medium- to long-term perspective. We are working on measures such as creating a work environment that fully harnesses the characteristics and abilities of each employee and providing training to develop managerial talent.

[ Childcare leave users who return to work ]

[ Recruitment of new female university graduates ]

[ Female employees in management positions ]

[ Action plan based on The Act on the Promotion of Female Participation and Career Advancement in the Workplace ]

[ Encouraging Childcare Leave for Male Employees ]

To encourage male employees to participate in childcare, SMC has set up a Subsidy for Taking Parental Leave together with the new Childcare Leave Program. In addition to furthering understanding of childcare throughout the entire workplace, we included a special feature on male employees who have taken childcare leave in the company newsletter, aiming to deepen understanding of childcare throughout the workplace, cultivate a workplace culture that supports childcare, and create an environment that encourages the use of childcare leave. These efforts have furthered the use of the Childcare Leave Program by male employees.
In addition, to encourage employees to take leave for childcare purposes, we increased the number of days of special paid leave granted to employees upon the birth of a child by their spouse.

[ Utilization of childcare leave by male employees ]

[ Target and measures for childcare leave by male employees ]

[ Gender Pay Gap Between Male and Female Employees ]

SMC's pay system follows the principle of "equal pay for equal work" and applies the same pay table to each job group (position or job level category), with no disparity in pay based on gender.
Our analysis shows that the pay gap is caused by the following:

• (a) Difference in the average length of service between male and female employees
• One of the reason why women's average no. of years employed is shorter than that of the men is that there is a greater percentage of women hired as fresh graduates in recent years.
• The percentage of female employees 40 years old or over that joined the company as a new university graduate is 2.9%, whereas the percentage of female employees 25 years old or younger is 18.5%.
• (b) Difference in management ratio between male and female employees
• The percentage of women occupying positions with relatively high pay levels (especially management, engineering, sales, and administration positions) is relatively low.
• For information on SMC’s measures based on these factors, please see the [Promoting Women's Active Participation] section above.

[ Gender pay gap between male and female employees (An index that expresses the value of female employees if male employees are 100) ]

[ Salary disparity, average years of service, and employee rate of male and female employees in management positions ]

[ Securing Diverse Human Resources ]

SMC is actively promoting the use of non-Japanese (foreign national) employees and mid-career hires to meet the challenges of globalization and acquire human resources with specialized knowledge and expertise. We expect to see benefits such as a shift in overall employee awareness and greater organizational vitality.

[ Rate of female, international, and mid-career personnel within full-time workers ]

[ Rate of female, international, and mid-career personnel within management positions ]

[ Rate of female, international, and mid-career personnel within new recruits ]

Global Human Resources Development Policy

Basic Concept
Since its establishment, SMC has conducted HR management with an emphasis on “job satisfaction”. Fostering a free and open minded corporate culture and nurturing personnel through on-the-job experience, we also encourage young employees to grow by entrusting them with tasks that require more responsibility. We will strive to create an environment in which everyone can show what they can do by acting with initiative and always possess a passion for their work and pride in the company.
We will promote HR measures focused on sustainability and diversity, will spare no effort in investing in human resources, and continue to verify and improve the effects of these measures.

Talent We Seek to Secure and Foster
SMC will secure and foster the following types of people.

• ●People who proactively take on challenges without fearing failure
• ●People who can play an active role from a global perspective
• ●People who are self-directed and take initiative to think and act on their own
• ●People who aspire to develop their expertise and become specialists

Work Environment Improvement Policy

Basic Concept
SMC stipulates in its SMC Group Code of Conduct : “We will strive to maintain a safe and pleasant work environment where the employees respect the personality and individuality of each other, have their own motivation and can demonstrate their abilities without experiencing unreasonable discrimination based on nationality, race, ethnicity, faith, religion, sex or any other personal attribution”.

Creating a safe, secure, and healthy working environment
SMC prioritizes safety and security in all of our business activities. We have established a "Safety Dojo" at each of our production sites and thoroughly conduct training and other measures to ensure total safety management. In particular, sexual harassment, power harassment, and other forms of harassment violate human rights and harm the work environment. We strictly prohibit such acts and does not overlook the behavior of others. When an issue arises, we will promptly investigate the situation and take decisive action to help the victims and prevent recurrence. We will continue to conduct harassment prevention training for all employees and are working as an organization to create a harassment-free work environment.

Fair, impartial, and transparent personnel evaluation and compensation
SMC strives to cultivate a free and vibrant corporate culture while maintaining a positive and rewarding work environment. We conduct fair, impartial, and transparent personnel evaluations and compensate employees based on their roles, abilities, and achievements. We are working to create a workplace environment that inspires a sense of pride and loyalty to the company and fulfillment in one's work, where each employee is self-motivated and able to demonstrate his or her abilities, thereby improving productivity.

[ Employee Engagement ]

SMC is working to create an environment in which employees can feel a sense of pride, loyalty and fulfillment in their work, and thereby fully demonstrate their abilities. We conduct an employee engagement survey with the aim of increasing each employee's motivation and fostering a sense of unity as an organization. In FY2022, we began conducting a survey on employees' level of satisfaction with personnel evauations, and in FY2023, we began a survey on employee engagement under the categories of "job/responsibilities", "support/supervisors", "environment/colleagues", "culture/vision", and "benefits/ compensation". We plan to measure two aspects of engagement: employees' "vitality and enthusiasm for work (work engagement)" and "sense of loyalty and belonging to the organization (organizational commitment)". The results will be used to create a better work environment and evaluate our human resource policies.

[ Turnover rate of full-time workers ]

[ Rate of new graduate employees leaving within 3 years ]

Multi-Stakeholder Policy

[ Return to Employees ]

SMC will work to maximize its added value through sustainable growth and productivity improvement by focusing management resources into growth areas, developing the skills and competencies of employees. And based on the earnings and results generated, we will raise wages in an appropriate manner based on the company's own situation and, as part of other comprehensive improvements to compensation, we will actively invest in human resources to improve employee engagement and further increase productivity, with the aim of providing a sustainable return to its employees. We aim to provide a sustainable return to our employees through proactive efforts centred on investing in human resources to improve employee engagement and further increase productivity.
We have continuously increased salaries in the past and will continue to do so in the future, taking into account the socio-economic situation and the business environment. With regard to investment in human resources, we will work to expand flexible working systems, education and training and recognition systems, with the aim of maintaining a safe and secure working environment where a diverse workforce can flourish regardless of gender, nationality, disability or other factors.

[ Raising Pay Levels ]

SMC will work to maximize its added value through sustainable growth and productivity improvement by focusing management resources into growth areas, developing the skills and competencies of employees. And based on the earnings and results generated, we will raise wages in an appropriate manner based on the company's own situation and will actively invest in human resources to improve employee engagement and further increase productivity, with the aim of providing a sustainable return to its employees as part of other comprehensive improvements to compensation. We aim to provide a sustainable return to our employees through proactive efforts centered on investing in human resources to improve employee engagement and further increase productivity.

[ Trends in the rate of salary increase for full-time workers ]

[ Trends in the average annual salary of full-time workers ]