Senju Metal Industry Co., Ltd.
23 Senjuhashidocho, Adachi-ku, Tokyo 120-8555

SMIC
CSR REPORT 2020

TEL: +81-3-3888-5151(Reception)
FAX: +81-3-3870-3032

www.senju.com©2020 Senju Metal Industry Co., Ltd. All rights reserved.

SMIC Group CSR Information

https://www.senju.com/en/csr/
Email Address

web@senju.com

Senju Metal Industry GroupCSR Report

This report is made of material from well-managed, FSC®-certiﬁed
forests and other controlled sources. It uses Non-VOC ink, which does
not include volatile organic compounds, and is printed with Toray
Waterless Plates®, which do not require a dampening solution
containing alkaline developer or isopropyl alcohol.

L

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View of Tochigi Segment Matsuyama
Factory / Former Oshu Kaido Pine
Forest and Houyoku-Rou

EDITORIAL POLICYSMIC Group strives to report on key challenges and topics of high social importance in order to determine materiality.
We declare that this report was made in compliance with the requirements of the GRI standards, and reports the results ofour efforts to solve social problems through our business.
Period Covered

April 1, 2019 - March 31, 2020 (Includes some information from April 2020 onwards)

Report Scope

27 group companies (includes non-consolidated subsidiaries and associated companies).
Note that SMIC's environmental initiatives are listed separately.

Key Changes

1

No changes in the number of consolidated subsidiaries.

Membership

RBA, JWES, JIEP, JAPIA, TEA, JCCI

Publication History

Current Issue: October 2020 (Previous Issue: October 2019)

Next Issue

October, 2021

Reference Guidelines

GRI Standards, Environmental Reporting Guidelines, ISO26000*The GRI standards comparison table will be posted on our CSR website.

SMIC CSR REPORT 2020

DISCLAIMER
This report contains descriptions of plans and strategies pertaining to the future activities of SMIC, as wellas predictions and forecasts related to its businessperformance. Such descriptions include estimates andforecasts formed with information gathered and analyzed based on what is available at the time of creation.
Please be aware that SMIC and its related companies
assume no responsibility whatsoever for damages orlosses occurring either directly or indirectly from theuse of the information or content included in this report.
Furthermore, the original text of this report was written
in the Japanese language and has been translated into
English and Chinese languages for reference. If there areany discrepancies between the Japanese version andthe English or Chinese versions, the Japanese version
shall supersede the other versions. Please be aware that
SMIC assumes no responsibility whatsoever for any andall damages occurring from misunderstandings causedby translated versions of this report.

CONTENTS
Editorial Policy and Table of Contents .....1
Message from the President andManagement Philosophy .....................3

TOPIC 3

New Work Styles We Propose fora New Era ...................................... 13

SMIC Group: Our Vision and CSR .........5
SMIC Group Lifestyle Support Products ...7
TOPIC 1

For a Zero-Emissions society
Release of Our New Environmental
Vision 2050 .......................................9
TOPIC 2

Low-Temperature Solder andHigh-Reliability Solder
Supporting Smart Cities .................... 11

ENVIRONMENT

Environmental Management............... 15

Working with Employees ................... 21
Activities of Social Contribution .......... 25

MANAGEMENT

Governance ................................... 29

The Environment ............................. 16
Company Profile / Network ................ 33
SOCIETY

Working with Customers ................... 19
Working with Suppliers ..................... 20

SMIC CSR REPORT 20202

Message from the President

No onewill be left
behindBuilding a society
where everyone matters

MANAGEMENT PHILOSOPHY

Perform our mission as a socially valued
institution via providing universally beneficial products“Company” is a place where all employees share core values and are able to use the lines of communication as a “dojo” for the mastery of oneself. It is our strongest desire that company growthis directly interwoven with employee happiness – materially and spiritually. In the face of modern
society, as the foundation of a company’s existence, we are expected to continue to provide universally beneficial products year after year. Our management philosophy is to harmonize societal
goals with employee desires, thereby enabling our mission to be a valued institution sharing peace,happiness and progress to all of society.
Three key pillars are necessary under this philosophy in order to advance company development
and ensure the success of our mission: Ability, Integrity and a Fighting Spirit. These pillars are thethree sacred treasures that form the cornerstones of every aspect of life.
When these pillars are indomitable inside our institution, a bright, peaceful and vigorous workplace will naturally emerge. We are confident that with this workplace as a driving force we will
overcome any challenges and the company will continue to grow as long as this pioneering spirit
is encouraged each and every single day. Together, let’s take this philosophy to heart and embraceit as our belief, and build a bridge of peace and friendship across the entire corporate landscapePresident RYOICHI SUZUKI

while progressing into joyful, healthy lives.
June, 1960
The late Mr. Senju Sato, Honorary Chairman
As President: June, 1960 - June, 1978
As Chairman: July, 1978 - May, 2008
As Honorary Chairman: June, 2008 - October, 2008

Transitioning to a holding company
for team unity and to overcome
challenges
It is my pleasure to introduce the SMIC CSR Report
2020.
Last year we started restructuring the SMIC Groupthrough the establishment of Senju Holdings Co., Ltd.
This has made it easier to share capital, human resources, and developed technology between group companies. The number one purpose of our transition to aholding company was to build a system that envisions
us achieving a century in business since our founding.
SMIC began with the establishment of Senju Lead WorksCo., Ltd., the forebear of Senju Metal Industry Co., Ltd.,in April 1938. Several small scale factories in the Senjuhashido-cho neighborhood of Adachi City, Tokyo, thecurrent location of our head office, were consolidated inorder to protect the livelihoods of their employees in the3

SMIC CSR REPORT 2020

chaotic environment before World War 2. Our intentionof the recent transition to a holding company is basedon our hopes and origins - work together even as a myriad of challenging stand before us, pioneering the new
era through growing together with all of our employees.

What SMIC Group can do to achievea sustainable society
Day by day, it is increasingly critical that a company conducts its business activities based on the SDGs (Sustainable Development Goals) and ESG (Environment,
Society, Governance) to take part in realizing a sustainable society and we have listened to our stakeholders
expecting and requesting for us to do so. Starting thisyear we have enriched the environmental, societal, andgovernance contents in our CSR report with our will toachieve a society where No one will be left behind.
First and foremost, we have worked to realize a zero
emissions society through our business activities, andformulated a long-term environmental vision so that we
can contribute to building a sustainable society. SMIC
Group has many business interests that involve handling heavy metals or other chemicals, so it is essential that we conduct business with consideration for theenvironment. In addition to reducing greenhouse gas
emissions, promoting product recycling, and reducing
the amount of harmful chemicals used, we will also
work to expand our selection of environmentally-friendly products, exemplified by low-temperature solder.
Next, anticipating an era of new technologies represented by Society 5.0 and smart cities, SMIC Group will
create highly-reliable, environmentally-friendly products
in order to contribute to this new society. By actively incorporating technologies such as IoT and AI into
our factories, we will interconnect the voices of people
working on the factory floor and those of our customers,
and build a production system that can offer productsthat meet customers' demands.
Since the beginning of 2020, the novel coronavirus(COVID-19) has run rampant around the world. We
handle various products and services that support societal infrastructure, such as manufacturing semiconductor materials. For this reason, we have given firstpriority to fulfilling our obligation to supply customers,
and have continued our business while implementing
thorough measures to prevent the spread of COVID-19
and other contagious diseases. We are also working
to make our facilities welcoming places for employees
to work, such as by improving our workplaces for the
purpose of ensuring the labor safety of employees andreducing the strain of their duties, as well as promoting
flexible work styles such as telecommuting and staggered working hours.
We will listen closely to the opinions of stakeholders including our customers, and work to build relationshipsof trust with them, while also conducting business ina way oriented toward the realization of a sustainable
society. I humbly request your continued support andencouragement in this endeavor.

SMIC CSR REPORT 2020

4

SMIC Group: Our Vision and CSR
We are engaged in CSR and corporate activities aimed at being an outstanding company
that helps to realize a sustainable environment, society, and governance, based on ourManagement Philosophy, by maintaining sincere relationships with our customers,
employees, suppliers, local communities, the global environment, and other stakeholders.

Key challenges for the SMIC Group andstakeholders to address together
Growth of
the Company and Employees
Contributing to customer
satisfaction and a better society

We value the 5 aspects defined in the code of conduct of the RBA(Responsible Business Alliance), and the following four-step process
recommended by the GRI (Global Reporting Initiative) for identifying
critical issues, organizing prioritized events that should be addressedto achieve a better society together with stakeholders, and realizing
our envisioned society through our activities.

1

CUSTOMERS

step■Provide safe, secure, andstable products andservices■Provide proper eco-friendly
products/services andinformation

PROGRESSION OF
OUR ENTIRE SOCIETYNEXT

GRI aspects and important
RBA self-audit items● Identification of the scope of impact●

2

Prioritization

3

Validation

4

Review

step

LOCAL
COMMUNITIES■Prevent accidents/disasters
at business sites andprovide disaster support insurrounding areas■Respect local cultures/customs and contribute to
local communities

Working together
with all stakeholders
to realize a better society

GLOBALENVIRONMENT■Prevent global warming
and reduce waste■Discontinue use of conflictminerals and control
chemical emissions

SUPPLIERS■Fairly select and conducttransactions with
suppliers■Maintain corporate value
and support socially
responsible investment

Identification of
key issues and events

step

step

Severity assessment for
stakeholders and the company● Qualitative and quantitative
assessment in the monthly CSR
meeting● Planning of ESG management strategy●

Assessment of the scope,
impact and period of GRI items● Approval and disclosure
by the management team●●Distribution and disclosure of
documents in hard and soft copy
(Japanese, English, and Chinese versions)●

Analysis and summary of opinions
in the monthly CSR meeting for
utilizing in future meetings

SMIC Group's focused SDGs items

EMPLOYEESMANAGEMENTPHILOSOPHY
5SMIC CSR REPORT 2020

■Fairly evaluate, treat,
train, and fulfill talent
allocation■Consider occupationalsafety and both mental
and physical healthAs a company that provides metal for products andservices that form the infrastructure of society, We
aim to contribute to the achievement of the SDGs by
positioning the following four SDGs as our focus thatare deeply interwoven with our business activities.

SMIC CSR REPORT 2020

6

SMIC Group Lifestyle Support

Products

SMIC Group's products are used everywhere and support every part of our lives, including everyday
products such as electronic devices and mobility products, as well as infrastructure such as wind turbines, base stations, steel towers, and even satellites. SMIC Group will continue to pioneer the futureof bonding through total solutions, and thus contribute to society.

SOLDERING EQUIPMENT
SMIC soldering equipment
is used for the soldering
mounting process of printed circuit boards and electronic components in manufacturer factories.

BALL SOLDER, PASTE SOLDER

MATERIAL ANALYSIS INSPECTIONSSMIC ball solder and paste solder areused in electronics and appliancessuch as smartphones and PCs, aswell as in solar panels, LED lights,
and wind turbines.

Industrial Analysis Service does analysis inspections of harmful
substances containedin various materials andproducts.

PREFORMED SOLDERBAR SOLDER

SMIC preformed solder
are used for in-vehicle
mounting in automobiles.

SMIC bar solder is used forthe circuit board mounting
process, which uses soldering equipment.

NEXT

7

PLAIN BEARINGSSPECIAL ALLOYSSMIC plain bearings areused in the shock absorbers of automobiles,
as well as the undercarriages of construction
machines.

SMIC zinc/tin/magnesium alloy is used foranti-corrosion surface
treatment of cast ironwater pipes.

SMIC CSR REPORT 2020

SPRINKLERS
Senju Sprinkler's fire sprinklers are used in firefighting
equipment around the world,
including housing, buildings,
underground parking lots,
and public facilities.

ENVIRONMENTAL
ANALYSIS
INSPECTIONS
Industrial Analysis Service
does analysis inspectionsof contaminants in water,
air, and soil.

SMIC CSR REPORT 2020

8

TOPIC 1

For A ZERO-EMISSIONS SOCIETY

Release of Our New
Environmental Vision 2050

Environmental Vision
2050

SMIC Group's Environmental Vision 2050
It is important for us that we address global environmental issues (such as global warming, acidrain, soil pollution, and water contamination) as critical issues deeply connected to the very
existence of humanity, and the common mission for all of us. In order to realize a zero-emission
society and contribute toward building a sustainable society through our business activities,
we have formulated the Environmental Vision 2050, aiming for its realization by the year 2050.

We value our environmental policy which was revised in 2010 towork towards reducing CO2 emissions, reducing waste throughrecycling, and promotion of environmental beautification andnatural protection activities. After formulating our Environmental Vision 2050, we have outlined our environmental activities so
far in our First Environmental Plan, and our mid-term goals from2020 to 2030 to address climate change problems stated in the
Paris Agreement in our Second Environmental Plan. Throughenvironmental footprint reduction activities in our business activities and improvements to the environmental friendliness of
our products, we are working to realize a zero-emission society,and contribute to the development of a sustainable society.

2SecondEnvironmental Plan
(FY2020 – FY2030)
Reduce greenhouse gas
Reduce CO2 emissions from level measured in FY2013(17,328 t-CO2) by 25% by FY2030

First
Environmental Plan
(FY2010 – FY2019)
Reduce CO2 emissions
Achieved our goal of 2% reduction
compared to FY2011
Reduce waste by recycling
Achieved 99% recycling of waste*
Promote environmental beautificationand nature conservation activities

THE THREE GOALS IN SOCIETY

1

TOWARD REALIZATION

Milestones leading toEnvironmental Vision 2050

Realizing a Zero-Emission society andcontribute toward a sustainable world

3

AttainA LOW CARBON SOCIETY
Taking on the challenge of building
a zero-greenhouse gas society

AttainA CYCLICAL SOCIETY
Conserving global resources
through recycling

Attaina society that lives in

HARMONY WITH NATURE
Conserving biodiversity
Challenging to realize a society
with zero-use of harmful chemicals
that pose a risk to the environment

Promoting energy saving in
our corporate activities

Reducing use of ore resources
by promoting product recycling

Conserving biodiversity throughenvironmental conservation
activities
Reducing use of harmful
chemicals that cause soil andgroundwater pollution

Promote product recycling
Develop products using 100% 3R* materials
Cut use of harmful chemical substances to zero
Zero usage of chemical substances that impact thehuman body or the environment
Conserve biodiversity
Conserve biodiversity through environmental conservation activities*3R = Reduce, Reuse,Recycle*Industrial waste and general commercial waste

9

SMIC CSR REPORT 2020

SMIC CSR REPORT 2020

10

TOPIC 2

Low-Temperature Solder andHigh-Reliability Solder
Supporting Smart Cities

SMIC Group contributes to smart cities
SMIC Group will contribute not only in partnership with customers, but also with the manufacturers of parts
used in devices, in order to supply the world with useful products that can contribute to Society 5.0, the SDGs,
and a sustainable society.

SMIC technology that supports smart cities
Low-Temperature Solder
Comparison of CO2 emissions in mounting
Down by

30.4%

SAC305
Low-Temperature(Sn-3Ag-0.5Cu)
Solder
8Zone Reflow Oven 8Zone Reflow Oven

Power Consumption / CO2 Emissions

As notebook computers and wearable devices become thinnerand lighter, there is growing demand for low-temperature solder, which is useful soldering parts with low heat resistance andsoldering onto thin circuit boards. SMIC's low-temperature solder
can be used for soldering at temperatures nearly 50˚C lower than regular leadfree Sn-Ag-Cu solder, so it has made mounting of parts with low heat resistanceand mounting on thin circuit boards a reality. Because our solder has a low
melting point, it is possible to lower the set temperature of the mounting device,
reducing power consumption by nearly 60%.

Down by

55.7%

Low-Temperature
Solder6Zone Reflow OvenHigh strength solder capable ofwithstanding harsh environments
Comparison of bond strength20

Strength changes
in bonds caused by heat shock

1000
2000
3000
Repetitions (–40˚C ⇄ +125˚C every 30 minutes)

Soldering materials that enhanceheat dissipation■ Projected growth of
the solder marketof data grows along with the information explosion,leading to semiconductor devices that are ever more
densely integrated. Global demand for various solder
products is currently at ¥115 billion, and is expected to¥130

Excellentcooling
performance¥115

Supercomputer Fugaku was jointly developed by theInstitute of Physical and Chemical Research (Riken)
and Fujitsu Limited with the purpose of creating solu-

billiontions for various issues in modern society and criticalproblems in scientific fields. Currently, it is being tested for use in COVID-19 countermeasures, including
the search for drug candidates and research into
droplet infection prediction.

2026

0

Time (sec) 1

SMIC's low-temperature solder balls are used in the supercomputer FUGAKU

billion2020
SMIC CSR REPORT 2020

Solder TIM: 2,500˚C/s(high-reliability solder)

Plastic TIM: 160˚C/s(conventional product)50

and solder that can help with heat countermeasures inCPUs and semiconductors.

11

Comparison of heat dissipation speed*TIM: Thermal Interface Material. This is placed between a heat sink and a heat emitting body such as theCPU, serving to conduct the heat that is emitted effectively to a cooling system (such as a heat sink).

reach ¥130 billion by 2026. In particular, sales of solder
used in semiconductors are forecast to grow at a rate
6.5% until 2026, so we can expect tremendous growth.
In these circumstances, SMIC Group will contribute tosociety by creating solder that is more environmentallyfriendly, solder that can withstand harsh environments,

170
Temperature (˚C)

In the age of Society 5.0, everything in society will beconnected online through 5G, IoT, and automated driving. Global demand for solder used in semiconductors
is increasing, as data traffic accelerates and the volume

One crucial aspect for stable operation of electronic devices
and mobility is to maintain a constant temperature by releasing the heat generated when an electric current flows througha semiconductor. In order to improve heat dissipation of semiconductors, we stabilize the position of semiconductor connections by evenly
spacing nickel balls and solder TIM* using solder with high heat-dissipationcopper balls at its core or solder with high heat conductivity.

40

SAC305(conventional product)

0

Risingmarketdemand60

High-Reliability Solder

Bond strength (N)As mobility goes electronic, electronic parts have come torequire high-reliability soldering materials that can withstandharsh environments unlike any before (heat, shocks, sudden
temperature changes, etc.). SMIC's high-reliability solder achieves
stronger bonds with three new technologies (higher strength with change offixing solution to Sn, bond interface reaction control with Ni additives, coarsening control of Sn particles).

SMIC's low-temperature solder offers stable quality and an excellent cost/performance ratio, so it
was selected for use in Fugaku. Making use of thislow-temperature solder's high resistance to heatingwhen mounting parts in high performance CPUs, wewere able to contribute to the manufacture of thissupercomputer with its balance of high performanceand high reliability.

2030
SMIC CSR REPORT 2020

12

TOPIC 3

New Work Styles We Propose for a New Era
SMIC Group's products serve important roles in various products and services that support social infrastructure,
Now, as we face the unprecedented crisis caused by the novel coronavirus, we consider it the social responsibility
and are undertaking various initiatives to do so.

Social climate changes relating to
the novel coronavirus
2020

Mar 11

Apr 7

WHO declaresa pandemic

Japanese government declares
state of emergency(expanded nationwide on Apr 16)

mainly in semiconductors. In particular, solder products are essential as materials used in semiconductors.
of SMIC to continue doing business according to government policy,

May 25Present

Japanese government ends
state of emergency

Life with COVID-19
The futureLife with/after
COVID-19

Jan 14WHO confirms outbreak of novel coronavirus

Feb 11
WHO names the novel coronavirus COVID-19

SMIC Group's Response
Before Japanese government declared state of
emergency

After Japanese government declared state of
emergency

We established work environments that ensure infection countermeasures and social distancing to protect the health and safety of
our employees.

We have made efforts to adapt to the new way of life, so that we
can continue our business while reducing contact between people.

Thorough infection prevention
Cleaning and disinfection of common areas inside the company every
day in order to maintain a sanitary company environment.

Placement of hand sanitizer
bottles inside facilities

Placement of alcohol disinfectant
kits in conference rooms andmeetings spaces

Introducing limitation and management of
the movement of people
Using teleconferences to limit
the number of people in meetingrooms

Closing connection corridors between company office buildings tolimit movement between buildings

Placing entry and exit logs at theentrances to work sites

Requesting that visitors participate
in coronavirus countermeasures

Japanese government ends state of emergency:
Life with coronavirusLife with/after COVID-19

Introducing our Group Support System andbuilding a structure for continuation of business

Developing sustainability management
through diversity

We have made it so that skilled and talented employees can be
assigned smoothly to the suitable place among group companies. This effort was aimed at making effective use of skill andtalent according to the needs of society, and maintaining the employment of our staff.

In the future, we believe that it will be necessary to manage ourbusiness with awareness of long-term sustainability in the faceof global crises, including not only pandemics, but also climatechange and natural disasters. SMIC Group will build risk management mechanisms and develop an early recovery system fornatural disasters. Also, because we consider diversity to be essential to promotion of sustainability, we will enhance our diverse
human resources and the overall strength of our business bytransitioning to a holding company. At the same time, we willbuild workplace environments and systems that enable each individual employee to demonstrate their unique strengths.

Responses of overseas group companies to the novel coronavirus
All group companies have continued to operate their businesses while implementing measures against
the spread of the novel coronavirus.
Ensuring social distancing
Staggering lunch times in theemployee cafeteria and enforcing
seating with empty seats

Hanging curtains over reception
counter

Securing distance in smoking
areas

Setting up partitions on desks

Implementing remote-work and office distribution
 e distributed our sales andWback office departments between
the head office, Souka segment,
and Tochigi segment. Employees
go to work at offices close to theirhouse, allowing us to continue
business while also reducing therisk of infection when commuting
Introducing remote-work in oursales, development, and backoffice departments
We introduced staggered
commuting and reduce working
hours to reduce the risk of infection during commutes

13

SMIC CSR REPORT 2020

Senju Comtek Corp.

Resumed operations in late March

Senju Manufacturing Europe s.r.o.

Continued business uninterrupted

Beijing Senju Electronic Materials Co., Ltd.

Resumed operations in early February

Senju Metal (Tianjin) Co., Ltd.

Resumed operations in late February

Senju Metal (Shanghai) Co., Ltd.

Resumed operations in early February

Senju Metal (Huizhou) Co., Ltd.

Resumed operations in early February

Senju Electronic Materials (Hong Kong) Co., Ltd.

Continued business uninterrupted

Senju Metal Industry Co., Ltd. Kaohsiung BranchContinued business uninterrupted

Senju (Malaysia) Sdn. Bhd.

Resumed operations in late April

Senju (Thailand) Co., Ltd.

Continued business uninterrupted

Senju Solder (Phils.) Inc.

Resumed operations in early May

Senju Metal Korea Co., Ltd.

Continued business uninterrupted

SMIC CSR REPORT 2020

14

ENVIRONMENTENVIRONMENT

Environmental Management
Environmental Policy

Greenhouse Gas Reduction

ENVIRONMENTAL PHILOSOPHY

CORE PRINCIPLE

We believe conservation of the global environment is the shared mission of all humanity. Based on our mission and withthe purpose of realizing a sustainable society, we strive to harmonize our business activities with the global environment, and make every effort to protect our rich nature and diverse ecosystems.

We track our energy usage and greenhouse gas emissions by taking quantitatively monitoring and measuring the environmental footprint caused by its business activities, and promote energy conservation and CO2 emissions reduction
activities to prevent or mitigate global warming.

Environmental Administration Structure■ Environmental Organizational Chart

We established the Environment Committee as an organization totake measures necessary for reducing our burden on the global
environment. The committee deliberates on the formulation andimplementation of plans related to pollution prevention and environmental conservation. Every year at the Management Committee, we identify environmental risks and opportunities, and decide
our environmental activity policies based on items identified.

Management Committee
Emergency
Reports

We determine various environmental risks such as climate change
problems and pollution caused by waste, sets strict voluntary administrative standards for preventing environmental accidents andpollution accidents, and takes various measures to address thesein conducting business. In order to minimize damage expected in
the event of an emergency, we conduct emergency response drills
once per year. In FY 2019, we did not have a single environmental
accident or pollution accident. We will continue to take preventive
measures against environmental accidents in the future.

Environmental Training
We conduct various types of environmental training, such as
general environmental training (once per year), ISO14001 training(regularly), waste management training (regularly), and emergency response training (during emergency response drills) to raise
employee awareness of the environment and to maintain and improve our environmental management system.

Environmental Audits
Compliance evaluators work with managers of related departments to conduct environmental law compliance evaluations
twice a year, in order to check that environment-related measurements and notifications have been carried out properly, that there
are no problems, and that measures required by law have beentaken. They also conduct internal audits once a year to confirm
the effectiveness of ISO14001.
SMIC CSR REPORT 2020

We have improved work efficiency in its factories, upgradedmachinery such as air conditioners and transformers, converted to LED lighting in offices and factories, and promoted otheractivities to save energy as part of its efforts to reduce greenhouse gas emissions. In FY2019, we reduced our greenhousegas emissions by 304.94 t-CO2.

Operating Officer
Proposals
OrdersCSR Promotion Headquarters
Environmental Measures
Department

We defined an environmental philosophy and environmental policy that serve as the guiding principles for environmental activities, and built an environmental management system based on
ISO14001 so that we can conduct PDCA. With regard to our fourpriority themes relating to the environment (reducing greenhousegases, reducing waste, reducing harmful chemicals, and nature
conservation activities), each site and business unit both in Japanand abroad set annual goals and action plans, and conduct activities aimed at reducing our environmental footprint.

Environmental Risk

Reduction of greenhouse gas emissions (Scope 1, Scope 2)

President

Environmental Management System

15

Environment

Reports

Requests

Environment Committee■ Domestic Sites: CO2 reduction madeHealth & Safety Committee

Environmental Footprint Material Balance
INPUT

OUTPUT

13,942 t
460,264 ㎥

EnergyGHG(All domestic bases)

10,471

Upgraded air compressors(optimized machines)

317,700

Removed transformers containing PCB(upgraded to substitute machines)

36,391Other Improvements

15,7017,300

304.94236.49

Scope 1

3,768 t-CO 2

Scope 2

13,412 t-CO 2

Drainage

455,662 ㎥

32,712 MWh

City Gas

1,467 k㎥

BOD

1.35 t

LPG

22 t

COD

2t

A Fuel Oil

22 kl

ChemicalSubstances

15 t

19 kl
112 kl*PRTR Notification Targets

CO2
reduction
made(t-CO2)245.26

159.63150.00

Final Amount ofWaste Disposed

0.8 t

Amount Recycled

1,150 t25 kl

*PRTR Notification Targets

1.400

7,243

1.350

7,093
1.235
6,903

6,875

6,900

1.300

1.275
1.250

1.233

1.200

6,830

6,800

1.150

Energyusage
6,700 (kl)

2015

2016

2017

2018

2019

6,600

1.100

2015

2016

2017

2018

2019

1.000

Scope 3 Emissions
We calculate our annual consignment volume of cargo in Japan from the transport segment and distance for each product category, and monitor and report the items required by
Scope 3 of the CDP (Carbon Disclosure Project). In FY2019,
our emissions in Scope 3, Category 9 (downstream transport)of the CDP were 1,221.9 t-CO2. We also do monitoring of CO2
emissions related to employee commutes. By aggregating
truck packages used for product shipping, we are reducing
CO2 emissions in our transportation.

■ Domestic Sites: CO2 emissions and revenue output rate
1,400
1,200
1,000

4

Output Rate
(t-CO2/¥100,000,000)

1,110.9800

1.66

1,221.9
3

958.3

833
1.63

1.93

2.28
2

600
400
1
200
0

ChemicalSubstances

1.376

7,000

141.87

50.00
0

1.394

Output Rate
7,200 (kl/¥10,000,000)
7,100

200.00100.0017,180 t-CO 2

Electricity

Light Oil

Removed mercury lamps(switched to LED)

■ Domestic Sites: Energy usage and revenue output rate

350.00250.00Gasoline

376,588*Figures in FY2019

300.00Kerosene

Removed R22 coolant air conditioners(upgraded to substitute machines)

Overseas Sites

Committee at each site

Water Supply

PREDICTED ANNUAL
POWER SAVINGS (kWh/year)

Requests

Domestic Sites

Raw Materials

IMPROVEMENTS(Tochigi Segment)

CO2 Emissions(t-CO2)
2016

2017

2018

2019

0

921 t

Intake/output diagram of Tochigi Segment, which accounts for the majority of all our Japanese bases

SMIC CSR REPORT 2020

16

ENVIRONMENT

Environment
Waste Reduction/Recycling

Reduction of harmful chemicals

CORE PRINCIPLE

CORE PRINCIPLE

We conduct waste reduction and recycling activities based on the principles of 3R (Reduction, Reuse, Recycling).

Our development, purchasing, manufacturing, and environmental departments manage chemical substances based on
our environmental management system to protect our health and the environment and to realize safe and secure social
life. In particular, per our plans we are implementing a reduction or prohibition of the use of chemicals that have a large
environmental footprint. We also define reduction goals every year and make focused efforts.

Efforts to reduce waste emissions
We made efforts to reduce waste emissions since 2013, such as recycling solder, collecting plastic byproducts, and recycling
bearing product scraps. We have now achieved a recycling rate of 99% of waste.
■ Domestic Sites: Total Waste Emissions and■ Domestic Sites: Breakdown of Waste Emissions

Recycling Rates
1,400

1,028

992.9

99.9
1,297.2

1,259.7

1,071.8

967.3
73.7

800

1,070.7

99.9

Recycling
Rate (%)

Sludge11％5％（52.2t）

933.1

23.7

Waste
Plastic

Waste Oil

（60.2t）（174.8t）

5％

40

15％

Metal
Scraps

2014

2015

2016

2017

2018

Total Waste Emissions (t)We are taking the following initiatives as soil and groundwaterpollution countermeasures. We also work to prevent pollution
by conducting emergency response drills, as well as risk training to prevent leaks of polluted water.

60％
1,149.7t （690.4t）

12,000

Solder Collection and Recycling System

ChemicalTransportation
(kg)

9,474

8,338

0
2015

0
2016

0
2017

0
2018

Soil

Voluntary component analysis (once per year)

Water quality
and groundwater

Final drain and groundwater inspections (chlorine
residue, pH, etc. conducted daily)
Component analysis and measurement of drainwater and groundwater (conducted monthly)

Rainwater

Voluntary component analysis (twice per year)

0
2019

Environmentally-friendly products■ Solder Recycling System

CORE PRINCIPLEThe Sn-Ag-Cu lead-free solder we launched in 2001 has become a global standard. Since then, we have continued todevelop environmentally-friendly products that create new value, based on our management philosophy that we "perform our mission as a socially valued institution via providing universally beneficial products."

Overseas Site Data and Initiatives

Energy Saving

Environmental Conservation

We contribute to energy saving through low-temperature,
time-saving mounting, as well as improving thermal efficiency.

We contribute to environmental conservation by refusing
to use materials that cause environmental pollution.

Low-Temperature
SolderHalogen-free
products■ Overseas Sites: Total Waste Emissions and Recycling Rate
400,000

343.1
302.2

300,000
Recycling Rate
(%)

50.7

80

367.2
66.7

322.0
66.2

53.3

200,000

100,000

0

SMIC CSR REPORT 2020

10,910

3,000
（kg）0

17

ChemicalEmissions
(kg)

6,000

Recycling Output (t)We conduct environmental activities at its overseas sites anddomestic sites alike based on four priority themes related tothe environment (reducing greenhouse gases, reducing waste,
reducing harmful chemicals, and nature conservation activities). This includes collecting and recycling product containers
and packaging, as well as reducing power usage by managing operations of manufacturing equipment. We hold meetings
with each overseas site once annually in order to ascertain
their annual plan and initiatives, so we can promote initiatives
aimed at environmental conservation suitable for their region
and circumstances.

11,686

9,000

2019

We have responded to demands from its customers to promote zero emissions and materials recycling, as well as recycling of resources to realize a cyclical society for conservationof the global environment and effective use of resources. We
have achieved this by collaborating with our affiliate company
TAK-G in 1997 to develop special technology that minimizes
creation of harmful substances, and develop a solder recycling system that can produce high purity solder using an original refining system. We collect used solder from our customers and recycle it with our solder recycling system, striving to
make effective use of resources. Additionally ｗe do in-houserefinement recycling of return scraps produced in the manufacturing process.

14,84615,000235.1
2013

We comply with the PRTR law to track the amount of applicable substances we handle, emit, and transport.
law-specified chemicals

FY2019:Total Waste
Emissions

60

Soil and groundwater pollution
countermeasures■ Emissions and movement of PRTR

（127.9t）

Paper

200
0

Other

4％（44.2t）

1,296.3 1,149.7
1,148.9 80

757.5

600
400

99.9

1,260.9

1,200
1,000

99.9

96.5

Emissions and movement of PRTR
law-specified chemicals

60

40

Solder paste that canbe stored at room
temperature20

Total Waste
Emissions
(t)
2016

2017

2018

2019

0

Energy-saving
reflow oven

Lead and cadmium
free fusible plugs

Lead-freeplain bearings

SMIC CSR REPORT 2020

18

SOCIETY

SOCIETY

Working with Customers

Working with Suppliers

Securing the quality and safety of our products

Procurement Activities

CORE PRINCIPLE

CORE PRINCIPLE

We have defined a Quality & Safety Policy, and in order to enable customers to use our products with peace of mind, we
strive to improve the quality of our products throughout the product lifecycle.

We comply with laws relating to procurement and automotive industry fair trade guidelines set forth by METI (the Japanese Ministry of Economy, Trade and Industry) in order to define the basic stance of our purchasing policy (practicefair and faithful procurement with emphasis on respect for suppliers), as well as our CSR procurement policy when
conducting procurement from suppliers.
Our basic stance toward our suppliers is to request they follow the requirements of ISO9001 and ISO14001, as well as
item 14 of the supply chain assessment guidelines defined by the RBA.
We will continue to observe procurement compliance and work towards establishing a safe and secure supply chain inorder to contribute to society through procurement and build good relationships with our suppliers.

《 Quality and Safety Policy 》

1.	We shall comply with related laws and regulations as well as customer demands, and improve customer satisfaction by
supplying products and services with consideration for quality and safety.
2. We shall construct, implement, and maintain a quality management system in accordance with our established quality
manuals, and continuously improve the effectiveness of this system.
3.	We shall set quality policies and targets for activities, conduct regular reviews and as necessary, and evaluate opportunities
for improvement (intervals, frequency, and circumstances) of the management system.
4.	We shall evaluate the necessity of changes to our quality management system, and if changes are necessary, we shallreview our system to maintain its adequacy in light of our management philosophy.

CSR Sourcing Policy
1 Senju Metal Industry Co., Ltd. "Quality and Safety Policy"

Obtained Quality Management System
Certification
We have obtained the international standard ISO9001 at 21
manufacturing sites both in Japan and abroad. Additionally
we have obtained the automotive industry quality management system certification IATF16949 at 16 sites in Japan andabroad.

Quality Audits
We conduct internal quality audits twice per year in order tomaintain IATF16949 certification, in both our solder divisionand bearings division at our Japanese manufacturing sites andsales locations including group companies. We also conduct
regular quality audits once per year at all of our manufacturing
sites both in Japan and abroad.

Initiatives to Improve Quality

Preventing Quality Defects

To eliminate defects in our deliveries and processes we have formulated
annual quality activity plans and require each business unit to set its
own goals to work towards in reducing defects. When there is a defect,
we compile recurrence countermeasures, incorporate analysis results
into our improvement plans for the following year, and make quality improvements continuously according to the PDCA cycle. We also givequality excellence awards to overseas factories that have made excellent
achievements, in order to elevate the level of quality of the entire group.

We established our affiliate company Industrial
Analysis Service (IAS) in 1972 for defect prevention
purposes. As a third-party institution, IAS conducts
inspection and analysis processes that are typically done internally. We decide pass or failure results
based on the results of that analysis, which helps toprevent cheating and false pretenses in the inspection process.

3 Senju Metal Industry Co., Ltd. "Purchasing Policy"
4

Senju Metal Industry Co., Ltd. "Basic Stance
Required of Suppliers"

5

IATF 16949 requirements that must be considered
for deliverables

6

Environmental management requirements that must
be considered for deliverables

1 Compliance with laws and social norms
2 Promotion of sound business management
3

Emphasis on achieving quality, deadlines andstable supply

4 Emphasis on Business Continuity Plans (BCP)

We are striving to drive CS (Customer Satisfaction)
through working to improve our sales activities and technology innovation by making proposals to customers,
engaging in joint development, participating in technology seminars and technology conferences, and exhibiting
at exhibitions. These efforts have been highly evaluated,
and in FY2019 we won the awards shown on the right.

5 Consideration for the environment
6 Prohibition of sourcing from conflict zones
7 Emphasis on Value Engineering (VE)
8 Emphasis on providing information
Intel Supplier Continuous
Quality Improvement Award

ASE Group Sustainability
Partnership Award

Nissan Supplier
Score Card Excellent Quality
Letter of Appreciation

We conduct management of chemicals based on our environmental management system, in order to comply with the
RoHS directives and REACH rules, which are European chemical regulation laws made to protect human health and theenvironment. We have laid out a dedicated team system andare complying with chemical inspections of our products.

SMIC CSR REPORT 2020

Per REACH rules, we have completed full registration of thechemicals we handle and acquired SDS from our suppliers, inorder to relay information to customers based on Articles 31
and 32. We supply customers with SDS & GHS labels, compliant with GHS (Globally Harmonized System of Classificationand Labelling of Chemicals).

Our procurement departments and the related development
and manufacturing departments conduct audits of suppliersboth in Japan and abroad, according to yearly plans. In FY2019,as in previous years, our suppliers in Japan and abroad cooperated with our supply chain assessment, and no problems were
found.
We also conduct bilateral visits and seminars with our suppliers,
as an effort towards better communication.

Basic Requirements of Suppliers

Initiatives to Improve CS

Product Chemical Management

19

2 Senju Metal Industry Co., Ltd. "Environmental Policy"

CSR Procurement Initiatives

9

Emphasis on initiatives to shorten the material
sourcing period

10 Strict confidentiality

Initiatives in Responsible Mineral
Procurement
In January 2011, we joined the RBA (Responsible Business Alliance), and have built close relationships with customers in theelectronics industry. Since 2014, we have been a member ofthe RMI (Responsible Minerals Initiative), and have urged ourrefineries to submit to the RMAP (Responsible Minerals Assurance Process) and obtain third party certification. In February
2015, all of our supplier refineries received RMAP certification.
Moving forward, in order to conduct responsible mineral procurement as a means to address a wider range of risks thanthe conflict minerals we have addressed so far, we will call on
all of our supplier refineries to renew their RMAP certification,with the aim of sustaining a safe and secure supply chain for
SMIC products.

11 Emphasis on utilizing IT
12 Information security
13 Eliminating ties to anti-social forces
14 Social contributions

SMIC CSR REPORT 2020

20

SOCIETY

Working with Employees
Our Principle on Human Resources

Health & Safety

CORE PRINCIPLE

CORE PRINCIPLE

We consider our employees to be important assets. In light of this, we respect the human rights and personality of eachindividual employee, and are striving to build workplace environments where a diverse range of human resources canrealize their potential.

We have clearly stated the basic steps necessary to prevent workplace accidents, with the aim of enriching its health and safety
activities. We have also established health and safety management regulations and a Health & Safety Policy, for the purposes of
ensuring the health and safety of our employees, and promoting the formation of comfortable workplace environments.
《 Health & Safety Policy 》

Respect for Human Rights■ Basic policy on Human Rights and Labor
We define our policy and goals for human rights and labor in its
Basic CSR Policy and Practical CSR Goals, respectively. Embracing the principles of Ability, Integrity, and Fighting Spirit noted in our management philosophy, we are striving to build anenvironment where employees can work enthusiastically. Basedon the belief that harassment absolutely must not be tolerated,
we conduct harassment prevention training to better educate
our employees.

■ Fair Evaluation and Our Personal Statement System
We conduct human resource evaluations twice a year, in order
to apply the results to proper guidance for capacity development
and human resource training. Through this process, we fairly
evaluate the work performance abilities of employees, and reflect our findings on promotions, raises, and bonuses. We havealso established a personal statement system with the purposeof improving our workplace environments. Individual employees
answer an annual questionnaire of what they think about andwhat they want from their jobs and workplace environments.
Through these initiatives, we are working to make improvementsthat will enable employees to better demonstrate their potential.

Human Resource Training
We encourage all employees to constantly work to obtain new
knowledge, with the aim of cultivating professionals who arecapable of making rational decisions from a broad perspective.
We conduct training appropriate for each rank, having examined
effective methods based on training implementation regulations.
Since FY2020, we have conducted soldering aptitude tests withthe purpose of improving quality and skill of soldering among employees. While such a program exists for employees, we aim to
expand training to include a soldering school for our customers as
well, as an effort to establish the new culture of SMIC Group firmly.

Rank-Based Training
Group Training

Distance Training■ Education Support System
We have established a scholarship fund grant program with the
purpose of aiding employees as they advance to undergraduate or graduate university programs to obtain more advanced
and sophisticated knowledge and skills. In order to encourage
employees to engage in voluntary self-improvement and support them as they obtain more sophisticated skills and knowledge, we also offer Assistance for Acquiring Special Skills.

Role Based Training Drills

Theme-Based
Self Education

Fieldwork
Training

Upper
Management
Manager Training(Advanced)

MiddleManagement

Manager Training (Beginner)

New Hire
Employees

21

Mid-Career Employee
Training

Mid-Career Employee(Advanced)
Mid-Career Employee(Beginner)

New Hire Employee
Follow-up Training
New Hire Employee Training

SMIC CSR REPORT 2020

■ Labor Health & Safety Management
Based on the law, we have established health and safety management systems according to the scale of each site. We prepare
annual activity plans that define activity goals and priority activities,
and conduct health and safety activities based on these plans.
■ Incidence of Serious Labor Accidents
We have kept our rate of labor accidents (accident rate) below theindustry average for the entire Japanese manufacturing industry.

Accident Rate

Distance Training
for New Hire
Employees

FY2015FY2016FY2017FY2018FY2019

0

0

0.47

0.49

0

*Rate of Labor Accidents: (Time off work accidents + No time off work accidents) / Total
Working hours × 1,000,000

We conduct health examinations and has established a consultation
counter in accordance with the law. In order to reduce the burden of
personal injury and illness suffered by employees, we have established a system for employees to enroll in cancer insurance at thecompany's expense. We also have a system for the company to bearpart of medical expenses incurred at a medical institution for one
month. This helps to relieve the individual burdens for employees.
Various Systems

Soldering
Aptitude
Test

Salesperson
Training(Advanced)

Salesperson
Training(Beginner)

Technical
Sales
Position
Training

EEnglishlearning
Conver(Ranksation Overseas
Based)OJT■ Safety Training
We regularly conduct the following training for employees, sothat they can learn knowledge and skills relating to health andsafety.
•Training at the time of hiring•Education and training when responsibilities are changed•Special training for employees doing hazardous orharmful work
•Foreman training•Other health and training for supervisors•Health and safety training to improve health and safety
standards for employees doing hazardous or harmfulwork•Training for qualified personnel (forklift drivers, etc.)

Health MaintenanceCapable Manager
Basic Course(New Appointees)

Capable Manager
Basic Course(New Appointees)

Lower
Management

Mid-Career
Employees

Evaluator
Training(New
Appointees)

1. We shall enrich our health and safety activities based on the Labor Standards Act and Industrial Safety and Health Act
of Japan, in order to promote the formation of comfortable workplace environments.
2. The company shall establish a health and safety management system, and actively promote necessary measuresthough its organizations and managerial posts in order to prevent labor accidents.
3. Employees shall comply with the law and rules established by the company, and work to prevent labor accidents andpromote maintenance of health.

HealthManagement

Site
Engineer
Training

WelfareOther

Frequency/Period■ Support Suited to Each Workplace
At our factories, we supply employees with salt-fortified foods asa preventive measure against heat stroke in summer, and also
milk as a health measure, in order to support employees theirability to work safely.

Details

General Health Examinations

1 time/year

Lifestyle-related Disease
Medical Examination

2 times/year

Special Health Examination

2 times/year

We conduct health examinations with special items for employees engaged in work that canharm the body.

Stress Checks

1 time/year

Complete questionnaires and offer advice to encourage individual mental health care awareness and lifestyle changes.

Cancer Insurance System

25 years old
or olderThe company pays the insurance premiums for employees 25 years of age or older who enroll incancer insurance, thereby reducing the burden of unexpected cancer-related diseases on employees.

Medical Expense
Reimbursement System

As needed

The company bears part of the cost of medical insurance required for treatment of illness andinjury suffered by employees in their private lives.

Consultation Office

Any time

Workplace and job counseling with vocational counselors.

Implementing general health or lifestyle-related disease medical examination for employees.

SMIC CSR REPORT 2020

22

SOCIETY

Working With Employees■ Employee Data

Making Worker-Friendly Workplaces

FY2015FY2016FY2017FY2018FY2019In Japan

1,645

1,584

1,694

1,731

1,747

Overseas

632

601

643

627

631

Employees

CORE PRINCIPLE

We are working to build workplace environments where employees can work energetically, such as by providing support
for work/life balance and conducting activities to improve the welfare and mutual kinship of employees. In addition, we
have taken various measures and made improvements so that employees can work with peace of mind, such as reducing
and managing long working hours by tracking working hours and hours in the office with an employee attendance system.

2,277（35.8%）

2,185（37.3%）

2,337（35.0%）

2,358（36.0%）

2,378（36.8%）

Male

—

—

—

1,233

1,242

Female

—

—

—

569

533

In Japan

—

—

—

518

488

Overseas

—

—

—

38

115

Total *Numbers in parentheses are the ratio of women

—

—

—

Total *Numbers in parentheses are the ratio of women
Regular Employees■ Supporting Work/Life Balance
We have established childcare leave and family careleave systems based on the Child Care and Family Care
Leave Act, so that employees can maintain work/life balance and work with peace of mind.
We have also taken measures to reduce prescribedworking hours at the request of employees. This system
is mostly used by employees who have children in elementary school, so that they can balance childcare with
their career.

■ Welfare and Social Interaction For Employees
Our in-house organization Senyukai holds group and recreational
activities with the purpose of encouraging social interaction among
employees. We have also established a Labor Committee with the
purpose of improving workplace environments and ensuring safety at work as therepresentative of employees. This committee actively
contributes to realizing safe,
worker-friendly workplaces
and the development of thecompany.

Contract Employees

Male

97

104

100

105

116

Female

4

5

5

6

7

3.96%

4.59%

4.76%

5.41%

5.69%

Male

—

—

—

—

74

Female

—

—

—

—

42

Ratio of Female Managers

—

—

—

—

36.21%

Managers (Overseas)

Diversity
CORE PRINCIPLE

We respect the diversity of differences between individual employees, such as ethnicity, gender, work history, age, values, family structure, and lifestyle. By utilizing these differences, we can effectively adapt to the constantly changing
business environment and diversifying needs of customers, and believe in the potential of each individual employee
so that they can demonstrate their abilities. In order to make this possible, we are addressing diversity, with the aim ofrealizing workplaces where employees feel happy, can stay longer, and do rewarding work with peace of mind.

■ Training & Seminars
We regularly host training and seminars according to needs
and circumstances to promote ambitions among our employees. In FY2019, we conducted career design seminars inorder to support career building mainly for female employees
in clerical positions.
■ Employment of Disabled People
We have long worked to employ disabled people, and has
developed workplace environments where people with disabilities can work enthusiastically and with peace of mind.

23

SMIC CSR REPORT 2020

603（56.6%）

Managers (In Japan)

Ratio of Female Managers■ Promoting Advancement of Women
We have formulated a general entrepreneur action plan basedon the Act on Promotion of Women's Participation and Advancement in the Workplace, and is working to promote theadvancement of women.

556（50.2%）■ Hosting Diversity Study Groups
At diversity study groups, we set themes each time with a focus on
differences between employees and have the participants speakwith each other about their experiences and circumstances. This
allows participants to share their own ideas, advice, and efforts,
so they can make new discoveries. These study groups also offera chance to build more worker-friendly environments, and allow for
deeper mutual understanding between employees and between
the company and employees.
In FY2019, these diversity study groups were held 6 times, with a
total of 48 participants. For the first time since starting the study
groups, a guest lecturer was invited tomake a lecture titled"Self Management:
Fortifying Your Mental
Foundation." Many
employees attended
this lecture, including
young employees.

Recruiting-Related
Male

24

34

44

79

47

Female

8

14

16

23

18

Total

32

48

60

102

65

3.1%

20.8%

10.0%

15.6%

16.9%

9.13

8.65

7.4

9.8

8.5

Average Rate of Paid Leave Taken

57.74%

57.50%

59.41%

62.63%

62.49%

Employees Taking Child Care Leave

12

11

8

12

10

Return Rate After Child Care Leave

100%

100%

100%

91.70%

100%

Employees Taking Family Care Leave

1

0

3

1

0

Return Rate After Family Care Leave

100%

100%

33%

100%

100%

9.96

14.2

13.7

15.6

14.4

20

21

18

17

16

Turnover (3 years after hiring)
Various Leave Systems
Average Days of Paid Leave Taken / Year (Days)

Labor Related
Average Overtime Hours / Month (hours)
Employment of Disabled People
Number of Disabled Employees
Ratio of Disabled
Employees*Numbers in parentheses are
the legal employment ratios

2.7%（2.0%）

2.6%（2.0%）

2.2%（2.0%）

2.2%（2.2%）

2.1%（2.2%）

SMIC CSR REPORT 2020

24

SOCIETY

Activities of Social Contribution
Natural Environment Protection

25

Moka Environmental Partnership Conference

Woodland conservation volunteering

Khlong Khon mangrove tree planting

River cleaning activities (inside PEZA Zone)

TOCHIGI SEGMENT | 4 times / year

KANSAI SEGMENT | May 19 & November 10, 2019

SENJU (THAILAND) CO., LTD. | August 17, 2019

SENJU SOLDER (PHILS.) INC. | November 2019

NPO Mori Wa Umi no Koibito tree planting festival

Satetsu River group cleaning

Tree planting at Beijing Gongqing Forest Farm

Cijin Island beach cleaning

SENJU SPRINKLER CO., LTD. (IWATE) | June 2, 2019

SENJU ELECTRONIC CORP. | April 20, 2019

BEIJING SENJU ELECTRONIC MATERIALS CO., LTD. | March 27, 2019

SENJU ELECTRONIC (TAIWAN) CO., LTD. | February 15, 2020

Mt. Kureha bamboo grove maintenance volunteering

Ishizakihama beach cleaning

Forest conservation district volunteer cleaning

Cleaning the vicinity

SENJU SYSTEM TECHNOLOGY CO., LTD. | April 20, 2019

SENJU GIKEN CO., LTD. | August 3, 2019

SENJU COMTEK CORP. (CHICAGO) | September 7, 2019

SENJU MANUFACTURING EUROPE S.R.O. (CZECHIA) | May 26, 2020

SMIC CSR REPORT 2020

SMIC CSR REPORT 2020

26

SOCIETY

Activities of Social Contribution
Culture / Education / Community Outreach
Manufacturing Lessons (at elementary schools)
HEADQUARTERS | July 22, 2019

Providing soldering materials to junior high school
technology classes

Supported the Nishiwaki Taka Rookie Senior High School
Ekiden Race

HEADQUARTERS | 2019

KANSAI SEGMENT | February 16, 2020

Visits to orphanages

Donations to food pantries

SENJU (MALAYSIA) SDN. BHD. | November 16, 2019

SENJU COMTEK CORP. (CHICAGO) | November 26, 2019

Cooperation with Minna no Medal Project
SENJU ELECTRONIC INDUSTRY | 2019

Sekido Museum of Art
Sekido Museum of Art inside the SMIC headquarters building was established by the
Satoh Artcraft Research & Scholarship Foundation in April 2006, with the purposes ofpromoting cultural exchange and mutual understanding between countries and refining culture in Japan, both through arts and crafts. Works in the museum's possession
were built up from the collection of the late Honorary Chairman Senju Sato, and themuseum's name Sekido is in fact the alias of Mr. Sato himself.
Sekido Museum of Art conducts activities to help everyone in the community enjoy
fine art, including special exhibits with a focus on works in the museum's collection,

Concert in the Museum

such as Concert in the Museum events.

Donations of clothing and books to disadvantaged
households

Participation in firefighting skills competition

SENJU METAL (SHANGHAI) CO., LTD. | December 2019

SENJU METAL (HUIZHOU) CO., LTD. | November 9, 2019

Myoko Cafe
Myoko Cafe is operated by the Adachi City disabled people's organization Yu-Ai Kai
as a place for disabled people to learn skills for independent living and to participate insociety. Adjoining the Sekido Museum of Art, they sell bread baked at Ayase Himawari
En, a support office staffed by people with mental disabilities, and people with mental
disabilities work happily at the cafe every day.
SMIC provides the cafe space for free and offers various other forms of aid, in orderto support the activities of Yu-Ai Kai.

27

SMIC CSR REPORT 2020

SMIC CSR REPORT 2020

28

MANAGEMENT

Governance
Board of Directors andBusiness Execution System

Corporate GovernanceBASIC POLICY

We will develop and operate its management system and construct its corporate governance system, while maintaining
sound, fair, and highly transparent management, and adapting to the changing times. The basic policy of the group is tofulfill its explanation responsibilities by disclosing information in a fair manner to all stakeholders.

Corporate Governance System
We are working to augment our governance through our meetings of shareholders and board of directors based on the law, as well
as by assigning corporate auditors, inspectors, and tax auditors, and by developing the CSR Promotion Headquarters, Management
Committee, and Strategy Committee.

Senju Holdings Co., Ltd.
General Meeting of
Shareholders
Appointment/Dismissal*1: Includes operation of subsidiaries*2: Includes monitoring of subsidiaries

Disclosure of Information

Senju Metal Industry Co., Ltd.

Auditors
Board of Directors

AuditsReportPresident

Code of Ethics

Decision Making in Management

Information Disclosure
Guidelines

Appointment
DirectCSR Promotion
Division

Proposal

Challenge Proposals

ApprovalManagement Committee*1

ProposalReportDirection/
Supervision

Submission and Reportingof Important Matters

Strategy Committee
Sales Committee

DirectCSR & Public Relations
Division

Submission andReporting ofImportant Matters

Direction/
Supervision
Solder Department

Bearings and Special
Products Department

AuditsDevelopment Technology
Department

Production Technology
Department

International Business
Department

Audits

Quality Assurance
Department

Finance Department

General Affairs
Department

Audits29

Domestic Affiliates

Industrial Analysis
Service Ltd.

Overseas Affiliates

EuropeSMIC CSR REPORT 2020

Disaster Prevention
Committee■ Management Committee
The Management Committee consists of directors and executive
officers. It deliberates on legal matters and determines or approves
important matters in the execution of business. It also submits
matters related to business execution to the Board of Directorsthat should be deliberated or decided by the Board of Directors.
We have established various other regulations, BCP management
regulations, crisis management regulations, and information security regulations, which are defined separately as indicators fordeliberations and decisions by the Management Committee.
■ Executive Officer System
We have introduced an executive officer system, and the executive
officer general managers appointed by the Board of Directors manage the division of duties among departments they are in chargeof. Based on the business plan of the company, they formulate andexecute the business plan of the departments they are in charge of.
As officers in charge, they give direct orders on important matters in
guidance of the department they are in charge of.

■ Auditors and Inspectors
We have appointed one auditor and one inspector. These officers
carry out audits of daily management activities, including the execution of duties by directors.
Corporate auditors and inspectors attend the Board of Directors,
where they fulfill their duty to prevent illegal or exceedingly unjust
resolutions from being made, as well as to ensure the conduct ofactivities according to the law.

Introduction to Directors, Auditors, andExecutive Officers
Operating
Officer

Name

Board ofDirectors

Management
Committee⃝⃝

President

Ryoichi Suzuki

Representative
Director

Tomohide Hasegawa

⃝

⃝

⃝

Executive
Director

Yuji Kawamata

⃝

⃝

⃝

Board ofDirector

Yuka Sato⃝⃝⃝

Board ofDirector

Tetsuya Okuno

⃝

⃝

⃝

Corporate Auditor(External)

Shoju Sato

Inspector

Kazutoshi SakaguchiCounselor

Motoyuki Ohtake⃝⃝

Counselor

Yasuhiro Ishii⃝⃝

Counselor

Setsuo Tanaka⃝⃝

Deputy Director

Toshimaru Sumiyashiki

⃝

⃝

⃝
⃝

⃝

Compliance
CORE PRINCIPLE

Environment Committee

We consider our philosophy of management to be essential to compliance, and so has defined its basic compliance policy andpractical goals based on the Basic CSR Policy. We have also explicitly stated the importance of compliance in our employee
work rules. Employees faithfully follow these policies, goals, and rules, and work to maintain order within the company. The SMIC
Group's Basic CSR Policy and Practical CSR Goals serve operate our companies in compliance with fair trade ethical principles.

DirectTraining Committee

Other Guidelines

Industrial Machinery
Department

Direction/Supervision

Health and Safety
Committee

Labor Committee

Execution of BusinessInformation System
Division

Tax
Audit(External)

Other Committees

Operating Officer
Planning and Executionof Management Policy

Business
Departments

Inspectors■ Board of Directors
The Board of Director consists of 5 directors, 1 corporate auditor,and 1 inspector. It follows relevant laws and regulations as well as
the Articles of Incorporation to appoint or dismiss executive officers and make resolutions on the agenda from the Management
Committee, as the final decision-making body of SMIC business
management. We have established ethical regulations and information disclosure regulations, which are defined separately as indicators for deliberations and decisions by the Board of Directors.

Audit Supervision System

Status of Compliance Activities
Quality Audit Office*2

Business Audit Office *2
Security Export Control OfficeDirectDirectSubmission and Reporting of Important Matters

Senju Sprinkler Co., Ltd.

Senju Electronic Corp.

North America

China

Senju Giken Co., Ltd.

Southeast Asia

Senju System
Technology Co., Ltd.

Other Asian Regions

We conduct various types of training (CSR training, environmental training, procurement policy for supplier training, safety assurance export management training), as well as internal
audits, and audits of suppliers, in order to comply with various
laws relating to business activities.
In our internal audits, the Business Audit Department conducts
several different audits of sites both in Japan and overseas, forthe purpose of maintaining sound corporate compliance. This
includes safety assurance export audits based on the Foreign
Exchange and Foreign Trade Act, CSR audits based on the
RBA code of conduct, and information security audits of thehandling of confidential information both inside and outside thecompany. Each business unit quickly takes measures for corrective actions recommended in each audit, in order to makecontinuous improvements to our management system.

■ FY2019 Audits
Audit Target
Senju Metal Industry
Group Companies (in Japan)
Group Companies (Overseas)
Committees, etc.
Total

(Unit: Number of Audits)Business
AuditsSafety Assurance
ExportSpecified
Shippers

61
30
4
14
109

30
5
0
0
35

18
4
0
0
22

■ Established an Internal Reporting Hotline System(Smile Mail)
We have established a dedicated internal reporting hotline (Smile
Mail) to discover wrongdoing and make corrections early on,
which enables employees to anonymously report and consult
about problems involving human rights (harassment, etc.), problems involving compliance (violations of laws and internal regulations, problems with corporate ethics and social mores, etc.).
SMIC CSR REPORT 2020

30

MANAGEMENT

Governance
Safety Assurance Export Management

Risk Management
PRINCIPLE AND RISK MANAGEMENT SYSTEM

SMIC Group, as a matter of responsibility for a company located upstream on its supply chain, has assumed all manner ofrisks, including natural disasters such as earthquakes and typhoons, infectious diseases such as the novel coronavirus,
information security matters such as information leaks and unauthorized access, export management relating to safetyassurance, and risks concerning intellectual property. In response to this, we have established dedicated business units
and committees to respond to various risks, and are taking measures to prevent risks and minimize losses.

Initiatives Toward Business Continuity
We conduct evaluations, analysis, and countermeasures ofvarious risks to keep damage to a minimum, build up our risk
management in order to enhance the potential for continuityof business, implement a system to promote rapid recovery ofimportant business, and formulate various plans such as ourPlan For Recovery of Equipment After Disasters. We are also
augmenting our backup system, so that when there is a siteexperiencing extreme difficulty with production due to a disaster or other emergency, we can continue production in collaboration with other sites in Japan and overseas.
■ Regular Emergency Drills
We conduct evacuation drills, firefighting drills, and first aid
courses (AED courses) with guidance from fire departments
and security companies, in order to protect the life and limb of
employees from disasters such as earthquakes and fires.
We also participate in comprehensive fire drills conducted byfire departments with jurisdiction, in an effort to strengthen collaboration with local communities.

■ Production backup system to ensure stable supply

We have established Corporate Secret Management Regulations and Personal Information Management Regulations, and is
working to prevent leaks of confidential information by managing
personal information held by the company, as well as the information of customers and suppliers.
Also, we act appropriately to laws and regulations including the
EU GDPR (European Union General Data Protection Regulation).

31

SMIC CSR REPORT 2020

we have appointed the president of the company as the person
in charge of safety assurance export management, and established the Safety Assurance Export Management Office under
the president's purview, and thus developed and enriched ourexport management system. In the future, we are examining
systematic automation in order to avoid human error.

CLASSIFICATIONTRADE INSPECTIONSSHIPMENT MANAGEMENT

Development Department classifies bychecking against a cargo list (export
regulation list) regulated by the Foreign
Exchange and Foreign Trade Act

The Sales Department checks applications and end users of exported
cargo

When shipping using logistics, wecheck that classification and tradeinspections are complete, and leavedocumentation

CustomerBy making notifications on regulations and training, and conducting internal audits once pear year, we maintain regulatorycompliance, and have achieved recognition from METI (Ministryof Economy, Trade and Industry) as a company that has developed a voluntary management system for safety assurance
trade management.
Product Supply

Product Supply

Certification

Certification

SMIC Group
Domestic Manufacturing Sites

Company Secret Management /Personal Information Protection

We acknowledge problems such as the proliferation of weapons of mass destruction, preventing excess accumulation of
normal weapons, and trade wars between countries. In response, we have placed restrictions on exports to maintain order in states of tension, and comply with laws for maintaining
international peace and safety, as well as Foreign Exchange andForeign Trade Act. In order to implement export management,

Overseas Manufacturing Sites

Information Security
In light of damages suffered due to cyber attacks in recent
years, we are further augmenting management and operationof information security. Our Information Security Department
formulates basic action plans, and we are improving our capability to detect threats and take adequate backups to ensurethat we can contain damages that do occur and recover quickly. Methods of cyber attacks change on a daily basis, so we
conduct regular training about rules and threats for employees,
and raise awareness of the importance of information security.

*From "Official Announcement of Companies Producing Export Management Internal
Regulations"
https://www.meti.go.jp/policy/anpo/compliance_programs_pdf/kigyoukouhyou.pdf■ Safety Assurance Export Management Training
We conduct classification and trade inspections, as well as
training on safety assurance export management for employees in charge of shipment management. (FY2019: Conducted
a total of 57 times by department and manager)
We also conduct training by outside instructors for top management, produce training materials that easily explain related laws,
and provide training to various business units.

Intellectual Property
We protect valuable information, including technology, knowledge, and knowhow created as a product of R&D and improvement activities on the factory floor, by having the Intellectual
Property Department conduct management for securing rights
to this information (obtaining patents, registering trademarks)
and concealing information (managing confidential know-how).
By promoting initiatives to protect our products and avoid infringing upon the rights of third parties and make effective useof our intellectual property system, we have aided business activities aimed at sustainable growth of the company, and areaiming to contribute to the creation of value that will be useful
to society.

■ Patents Held
With the goal of protecting our products and the SMIC brand,
we obtain patents, trademarks, and designs.
(As of June 2020)

PATENTSTRADEMARKSDESIGNSIn Japan

Overseas

In Japan

Overseas

In Japan

Overseas

484

1,435

102

370

14

7

■ Intellectual Property Education
We regularly host study sessions for the Development Technology Department, take practical initiatives focused on the patent
system, know-how management, and patent searches, and areworking to improve management of product development andmanufacturing risks.

SMIC CSR REPORT 2020

32

COMPANY PROFILE / NETWORKEUROPE

4

JA PA Nlocations23

Of which are manufacturing
sites: 1 location

locations
Of which are manufacturing
sites: 9 locations

SE N JU ME TAL■ Segments in JapanI N DUSTRY Co. , L t d .

Tohoku District Sales Office (Sendai)
Kitakami Sales Office / Koriyama Sales Office /Niigata Sales Office

Souka Segment

Chubu District Sales Office (Nagoya)Matsumoto Sales Office / Toyama Sales Office

ASIA

21

7

■ Domestic Sales Locations

Tochigi Segment
Matsuyama Factory /Kinugaoka Factory

Kansai Segment
Naka Factory /Nishiwaki Factory

AMERICA
locations

Of which are manufacturing
sites: 3 locations

Kansai District Sales Office (Osaka)
Kansai Special Sales Development Dept /Kyoto Sales Office / Himeji Sales Office
Kyushu District Sales Office (Fukuoka)

locations
Of which are manufacturing
sites: 11 locations

COMPANY PROFILE

LIST OF MAJOR COMPANIESSENJU METAL INDUSTRY CO., LTD. / SMIC GROUP
DUNS# 690663091

ESTABLISHED

JAPAN■ BUSINESS PORTFOLIO
April 15, 1938

• Smelting, alloying, casting, and expansion of metals, manufac-

ture and sale of processed goods
HEADQUARTERS
ADDRESSPRESIDENT

23 Senjuhashidocho, Adachi-ku, Tokyo
120-8555
Ryoichi Suzuki• Manufacture and sale of metal powders and bearings• Manufacture and sale of solvents and adhesives for soldering• Manufacture and sale of soldering equipment• Manufacture and sale of fire extinguishing equipment (affiliatedcompany business)■ BUSINESS SCALE• Manufacture and sale of machinery related to the above

Industrial Analysis Service Ltd.

Senju (Malaysia) Sdn. Bhd.

Senju Sprinkler Co., Ltd.

Senju Trading (M) Sdn. Bhd.

Senju System Technology Co., Ltd.

ST Automatic Machinery Sdn. Bhd.

Senju Electronic Corp.

Senju (Thailand) Co., Ltd.

Senju Giken Co., Ltd.

Senju Solder (Phils.) Inc.
Beijing Senju Electronic Materials Co., Ltd.

AMERICA

33¥73,152 million(April 1, 2019 - March 31, 2020)

Senju Metal (Tianjin) Co., Ltd.

Senju Comtek Corp.

Shanghai Senju Business Management Consulting Co., Ltd.

Senju Fire Protection Corp.

Senju Metal (Shanghai) Co., Ltd.
Senju Metal (Huizhou) Co., Ltd.

EUROPE (GERMANY, CZECHIA)
Senju Metal Europe GmbH
Senju Manufacturing Europe s.r.o.

CAPITAL(SIMPLE)¥400,000,000

EMPLOYEES(CONSOLIDATED)

2,378(As of March 31, 2020)

SMIC CSR REPORT 2020

• Internal dispatch business

Beijing Senju Fire Fighting Equipment Co., Ltd.

Senju America Inc.

businesses
REVENUE(CONSOLIDATED)

ASIA

Senju Metal (Hong Kong) Limited
Senju Electronic Materials (Hong Kong) Co., Ltd.
Senju Electronic (Taiwan) Co., Ltd.
Senju Metal Industry Co., Ltd. Kaohsiung Branch
Senju Metal Korea Co., Ltd.
Senju Metal Industry Co., Ltd. Korea Branch

SMIC CSR REPORT 202034