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 areable to use the lines of communication as a “dojo” for the mastery of
oneself. It is our strongest desire that company growth is directly interwoven with employee happiness – materially and spiritually. In theface of modern society, as the foundation of a company’s existence, weare 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 the three 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 embrace it as our belief, and build abridge of peace and friendship across the entire corporate landscapewhile progressing into joyful, healthy lives.

Published in 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

LOOK
AT THEWORLD
Photot: Chubu Segment, Seto Factory

CONTENTSEDITORIAL POLICYManagement Philosophy /Table of Contents / Editorial Policy

01

Message from the President / Materiality

03

SMIC Group: Our Vision and CSR

05

SMIC Group Lifestyle Support Products

07

ENVIRONMENT
Efforts to achieve a Zero-Emission society throughOur Environmental Vision 2050

17

ENVIRONMENT

18

SMIC’s Responsible
Mineral Procurement
PART 1PART 2

1

09

Working with Customers

22

Working with Suppliers

23

Working with Employees

24

Activities of Social Contribution

28

Special Meeting with Suppliers
Tin Supply Chain

SMIC CSR REPORT 2022

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 ana-

SOCIETY
Special Feature

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

MANAGEMENT

Period Covered

April 1, 2021 - March 31, 2022 (Includes some information from
April 2022 onwards)

Report Scope

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

Key Changes

No change to number of consolidated subsidiaries

Membership

RBA, JWES, JIEP, JAPIA, TEA, Tokyo CCI, Moka CCI

Publication History

Current Issue: October 2022 (Previous Issue: October 2021)

Governance31

Next Issue

April, 2023

Introduction of New Sites

36

Reference Guidelines

GRI Standards, Environmental Reporting Guidelines, ISO26000

Company Profile / Network

37

lyzed 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
are any discrepancies between the Japanese version
and the English or Chinese versions, the Japaneseversion shall supersede the other versions. Please beaware that SMIC assumes no responsibility whatsoever
for any and all damages occurring from misunderstandings caused by translated versions of this report.

*The GRI standards comparison table will be posted on our CSR website.

SMIC CSR REPORT 2022

2

Message from the President
Our Materiality
ESG

Materiality

Respond to
Climate Change

Resilience

Overcome Any
Challenging Situation
with Suppleness andIntegrity

Ｅ

Practice Resource Recycling

Material Topics

SDGs• Energy conservation and the use of renewable energy in business activities• Development of environmentally friendly products to help customers achieve carbon neutrality• Use of renewable resources for secondary raw materials• Promote the collection and recycling of used solder products sold by us• Reuse of solder materials in our manufacturing process

Promote the CSR
Procurement (Responsible
Procurement of Minerals)• Prohibit transactions with individuals or organizations engaging in conflict,terrorism, child labor, or other human rights abuses

Human Resource
Development• Develop human resources that strive to acquire new knowledge andmake rational decisions from a broad perspective• Use minerals in accordance with the RMI standards• Diversity and Inclusion (Create a comfortable work environment that
accommodates diverse lifestyles and human resources)Ｓ

Creating Comfortable
Workplace Environments• Respect for human rights (Show respect and understanding for all cultures andreligions when conducting global business)• Promote Digital Transformation (DX) internally• Occupational health and safety

Contribute to the Realizationof Society 5.0 and DX

President• Develop highly reliable products enabling the application of thelatest technologies such as 5G, IoT, and autonomous driving• Keep up with and supporting our customers' advanced technologies andpromoting partnerships and the co-creation activities with them
• Enhance our readiness for large-scale pandemics and natural disasters such as
earthquakes and typhoons

Realize Stable Supply• Strengthen our business continuity plan (BCP) and relevant systems• Enhance our multi-channel procurement system• Introducing automation and IoT to production plants

Ryoichi Suzuki

3Ｇ

Enhance our own business foundation andsupply chain and overcome challenges with
supplenesstelework in manufacturing, sales, R&D, and administrative depart-We are pleased to present the SMIC Group's CSR Report for FY2022.

Intellectual Property
Protection, Personal
Information Management,
and Other Risk Management• Strengthen control measures for intellectual property-related risks such as
patent infringement and technology leakage• Enhance information security• Protect the personal information of our company, customers, and business partners

This is unclear, materiality related to SMIC
Group in what way?

new technologies and materials. Therefore, it is important to put inquakes and typhoons.

In recent years, business activities from the perspective of SDGs

and co-creation.

To strengthen our supply chain, we will promote BCP from the sup-(Sustainable Development Goals) and ESG (Environmental, Social and

Next, as a corporation it's important that we raise our ethical stan-

Recently, unprecedented events such as the global outbreak of CO-

ply chain perspective by establishing a flexible procurement system

Governance) have become increasingly important as we aim to realize

dards. We must always remain faithful to our stakeholders: suppliers,

VID-19 and international conflicts have had a major impact on the so-based on multiple purchase channels and a system enabling us toa sustainable society. Our stakeholders have also been expecting andemployees, local communities, the global environment, and our cus-

cial economy. SMIC Group is determined to overcome these challeng-

respond internally in the event of supply issues on the supplier side.

demanding the realization of this society. Therefore, from this year, wetomers. Therefore, it is very important to communicate closely withes with suppleness and integrity. Integrity means having a conscience

In addition, we will continue to procure minerals from suppliers com-have ascertained our material issues (materiality) by identifying risks

our stakeholders, identify issues based on their opinions and evalua-and the right mind as a human being, as stated in our management

plying with the Responsible Minerals Initiative (RMI) to ensure respon-and opportunities for SMIC Group.

tions, and reflect them in our business activities.

philosophy of Ability, Integrity and Fighting Spirit. Therefore, we havesible procurement. We will also work on responsible procurement of

The first and most important materiality for SMIC Group is develop-

SMIC Group will continue to respond to the needs of our stakeholders

set the theme of this year's CSR Report as Resilience - Overcome any

all primary and auxiliary materials other than minerals.

ing new products that help realize a sustainable society through ourand engage in business activities to realize a sustainable society. We

challenging situation with suppleness and integrity.

novel technologies and new materials. We have already developed

look forward to your continued support and encouragement!

To achieve this, we are determined to enhance our business founda-

low-temperature solder achieving carbon neutrality and highly reliabletion and supply chain.

solder to realize Society 5.0. However, in order to pass the baton of

To strengthen our business foundation, we will promote the BCP

the realization of a sustainable society in the future to the next gen-(Business Continuity Plan) through office dispersion, flextime, anderation, we believe it is essential to develop more new products using

SMIC CSR REPORT 2022

ments to ensure uninterrupted business activities even in the eventof pandemics such as COVID-19 or natural disasters such as earth-more efforts to keep up with our suppliers and customers in developing advanced technologies and supporting them through partnership

SMIC CSR REPORT 2022

4

SMIC Group: Our Vision and CSR

Contribute to Building a Better Society
SMIC engages in CSR and corporate activities aimed at being an outstanding company that helps to realize asustainable environment, society, and governance, based on our Management Philosophy, by maintaining
sincere relationships with our stakeholders. We value the 5 aspects defined in the code of conduct of the RBA(Responsible Business Alliance), and the following four-step process was recommended by the GRI (Global
Reporting Initiative) for identifying critical issues.

PROGRESSION OF
OUR ENTIRE
SOCIETY

Environmental, Social,
and Corporate Governanceto Achieve Sustainable
Development

SMIC Group’s focused SDGs items
As a company that provides metal for products andservices that form the infrastructure of society, we SMIC
aims to contribute to the achievement of the SDGs by
positioning the following six SDGs as our focus that are
deeply interwoven with our business activities.

CUSTOMERS
Provide safe, secure, and stableproducts and services
Provide proper eco-friendly
products/services andinformation

LOCAL
COMMUNITIESProtect intellectual property rights
Promote high-reliability products

Prevent accidents/disasters at
business sites and provide disasterrecovery support in surroundingareas
Respect local cultures/customs andcontribute to local communities
Establish BCP

1

step

Environmental
Vision 2050

• GRI aspects and important RBA self-audit items

GLOBALENVIRONMENT

SUPPLIERS
Fairly select and conducttransactions with suppliers

Prevent global warming andreduce waste

Maintain corporate value andsupport socially responsible
investment
Responsible procurement ofminerals

Identification of
key issues and events

Discontinue use of conflictminerals and control chemical
emissionsManagement Strategy
Materiality

Achieve carbon neutrality• Identification of the scope of impact

2

step

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

3

Business &Strengths

step• Assessment of the scope, impact and period of GRI items

SolderFrom materials toprocessing methods• Approval and disclosure by the management team

EMPLOYEES
Fairly evaluate, treat, train, andfulfill talent allocation

Soldering
Equipment

Consider occupational safety andboth mental and physical health
Recruit and develop talent basedon the promotion of diversity

Management
Philosophy

Validation

Plain
Bearings

4

step

Review• Distribution and disclosure of documents in hard andsoft copy (Japanese, English, and Chinese versions)• Analysis and summary of opinions in
the monthly CSR meeting for utilizing in future meetings

SMIC CSR REPORT 2022

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 future of bonding through total solutions, and thus contribute to society.

BALL SOLDER, PASTE SOLDERSOLDERING EQUIPMENT

MATERIAL ANALYSIS INSPECTIONSSMIC soldering equipment is

Industrial Analysis Service does

used for the soldering mounting

analysis inspections of harmfulprocess of printed circuit boards

substances contained in various

and electronic components inmaterials and products.

SMIC ball solder and paste solder are used inelectronics and appliances such as smartphones
and PCs, as well as insolar panels, LED lights,
and wind turbines.

manufacturer factories.

PLAIN BEARINGSBAR SOLDER

SMIC plain bearings are

SMIC bar solder is used for theused in the shock absorbers

circuit board mounting process,of automobiles, as well as

which uses soldering equipment.

the undercarriages of construction machines.

ENVIRONMENTAL
ANALYSIS
INSPECTIONS

7

PREFORMED SOLDERSPRINKLERS

SPECIAL ALLOYSSMIC preformed solder are used for

Senju Sprinkler's fire sprinklers

SMIC zinc/tin/magnesium al-in-vehicle mounting in automobiles.

are used in firefighting equipment

loy is used for anti-corrosion

Industrial Analysis Service does anal-around the world, including hous-surface treatment of cast ironysis inspections of contaminants ining, buildings, underground park-

water pipes.

water, air, and soil.

ing lots, and public facilities.

SMIC CSR REPORT 2022

SMIC CSR REPORT 20228

Special Features

In the last few years, we have seen uncertainties such as soaring metal prices, conflicts, and trade friction between nations, along with the risingdemand for electronic components toward the realization of Society 5.0. as a manufacturer processing metals, these challenges have made us
keenly aware of the importance of the stable procurement of raw materials. Therefore, the theme of this year's CSR report Resilience - Overcoming
any challenging situation with suppleness and integrity. One of the topics that this special feature focuses on our mineral procurement.

How Our Business Began
Fujiwara : I joined the procurement team 12 years ago, and what I havelearned from this work is that tin, which is an important material for our

I was very impressed by Minsur’s focus on security and safetycompany, is the material with an inherent risk, and as Mr. Goto mentioned

measures for visitors during my visit to their Pisco Smelter. On

earlier, it’s unevenly distributed.

PART 1

Special Meeting with Suppliers

Goto : Tin (Sn) is the important raw material for SMIC and it is an unevenly

SMIC Group purchases minerals from all over the world and uses them as raw materials to produce other products. In order to ensure a reliable raw material
procurement process and to guarantee the integrity of our products, we must cooperate with all of our suppliers. Multiple suppliers are involved in the processof supplying the minerals from mining sites all the way to our plants. In this regard, we held a meeting with our Peruvian suppliers Minsur (tin smelter) and Toyota
Tsusho Corporation (trading company) on responsible sourcing and supply.

Episodes fromthe SMIC members’ trip to Peru

distributed resource, we have always been seeking ways for consistent

the other hand, Minsur members were very friendly and

COLUMNSMIC’s Responsible
Mineral Procurement

easygoing. We enjoyed our conversations so much that our
meeting went way over the scheduled time. In Peru, people eat
fish on a daily basis just like Japanese people. I also remember

procurement. While the demand for low-lead tin in China has continued tothat I was a little confused by the strong flavor of the local drink

expand since 2000, we have consulted with SMIC many times to determine

called pisco sour. On the other hand, the golden Inca cola

what we can do for them to ensure a stable supply.

tasted delicious. (Fujiwara, SMIC)

Fujiwara : At that time, the problem of conflict minerals had just begun toemerge. We started to think about the high risks of utilizing base materials
only from Southeast Asia, and considered mitigating our risk by purchasingbase metals from South America, which is a major tin-producing region.
Okuno : Back then, I was stationed at Senju Comtek, an affiliated company
in the U.S. In 2010, I visited several tin smelters in South America for

Pisco Sour

Peruvian fish dish “Ceviche”

research and inspection with a purchasing manager at the time. During thattrip we visited Minsur and had a conversation about conflict minerals, which
is how we started our relationship.
Fujiwara : Through our research and discussions, we gained confidence

The Importance ofCreating Meaningful Relationshipsthat South American products were worth procuring from a variety ofdifferent perspectives, so we asked several trading companies including

Goto : Toyota Tsusho's basic principles of action are based on

Toyota Tsusho to purchase Minsur products. Toyota Tsusho understood our

On Site, Hands on and In touch. From the perspective of

passion and they went all the way to Lima, Peru, for further negotiations withrelationships between companies, I, personally, place value on

Minsur, which was successful and this is how we started the business. We

building win-win relationships, with each company having thestarted with spot-based transactions, and in October 2013 in London, during

integrity to fulfill their social responsibilities and the sincerity

LME Week*1 we met Minsur’s CEO, Mr. Juan Luis Kruger, and proceeded

to respond to social issues and needs from a medium- towith signing our formal, long-term contract.

long-term perspective.

*1 Annual industry meeting sponsored by LME (London Metal Exchange)

Fujiwara : On an individual level, I think itʼs essential to treat other

Discussion Participants
Minsur S.A.

Toyota Tsusho Corporation

Senju Metal Industry Co., Ltd.

stakeholders with respect along with the intention to understandCorporate Affairs Director

Gonzalo Quijandria（bottom right）

them. Since 2013 when we signed a long-term contract with

Sales Manager

Pio Davila（left）

Minsur, we traveled to meet them twice and they visited us threetimes. Considering the physical distance between Japan and Peru,

General Manager,
Non-Ferrous Metals Division, Metals GroupI think we had a good amount of face-to-face communication

Akio Goto（top right）

Director, Executive Officer
General Manager of Production Department, Tochigi Segment

Tetsuya Okuno（left end）

which I feel has led to a deepened evel of mutual understanding.
Importantly, Minsur has a high level of intelligence and robust

Deputy Divisional General Manager,
Purchasing Division

governance as a company, for example, we didnʼt have to go

Shinichi Fujiwara（right end）
During our visit to Minsur

9

SMIC CSR REPORT 2022

through the ISO terminology with them at all.

SMIC CSR REPORT 2022

10

Goto : I agree, as Toyota Tsusho, that we are good partners as

Management, (2)Battery, (3)Hydrogen and Alternative Fuels,

smelter, we implement responsible mineral supply policies andwe take this journey to create a better world together through tin.

(4)Resource Circulation and 3Rs, and (5)Economy of Life. In

due diligence processes to achieve a sustainable society. We

Fujiwara : It is very reassuring to know that we are on the same

particular, our Metals Division, which serves as a liaison withconcentrate ore only from our mines and supply responsibly to ourship, facing the same challenges in this business situation.

SMIC, contributes to the transition to a carbon neutral society

two smelters (Pisco in Peru and Pirapora in Brazil). In addition, thePio : In fact, until 2013, we had outsource agents and suppliers

by reducing CO2 emissions from automotive, manufacturing

two smelters regularly undergo third-party audits by RMAP*3and energy plant construction through the use of clean energy

conducted by RMI*4 to obtain certification.

and innovative technologies. We also contribute to the*3 RMAP : Responsible Minerals Assurance Process*4 RMI : Responsible Minerals Initiativein the European and the US markets, for a long time there was

Minsur S.A.
Mr. Piono business elsewhere. We had those agents manage ourbusiness, so we didnʼt really know how our materials weredevelopment of a recycling-based society by transforming

Engaging Social Responsibility

being used. Kruger became our CEO in 2013, and then wereally stepped up our business and started doing business in

Global Warming Countermeasuresother areas of the world. In Japan, Toyota Tsusho introduced

Okuno : Since joining the EICC (now the RBA) in 2011, we have

Okuno : Two years ago, we established Environmental Vision

been actively encouraging smelters to participate in the RMAP

2050, and we are working to reduce CO2 emissions in Scope 1

and obtain the third-party certification as a member of the RMI

us to SMIC, and since then, we built strong relationships with

Gonzalo : Minsur, along with other ICMM*2 participants haveand 2 on the company level in order to realize a low-carbon

since 2014. And in 2015, we announced that all of our partner

SMIC, our important customer. When I visited their Tochigi

committed to achieving net-zero greenhouse gas emissions

society. In 2021, we began examining the use of clean energy

smelters gained RMAP certification.

Segment Matsuyama Factory, I was very impressed by how(Scope 1 and 2) by 2050. Minsur is in the process of preparing

and renewable energy at our business sites, including affiliatedwell the manufacturing site was organized, and how naturally

a road map targeting 2030, and we are working to introduce

companies, promoting efforts toward carbon neutrality.

the rules were followed by employees. I learned a lot.

clean vehicles and improve the eco-efficiency of the mining

While solder is a material that requires a lot of electricity to be

Establishing trust takes time. I believe it is essential to build

process as a whole. We are also working on an energy

melted, we succeeded in commercializing low-temperature

good relationships through sharing values and meeting eachconversion program focusing on renewable energy, and havesolder that can be melted at a lower temperature (melting

other in person. So it's very important for us to know what our

begun research into alternative energy sources such as solar,

C). This is expected to dramatically reduce power
point -80 °customers do and how they manufacture things.

hydrogen gas, and wind energy.

consumption at both soldering factories and at soldering sites.

*2 ICMM : The International Council on Mining and Metals. An international organization
focusing on creating a safe, just and sustainable environment for producing
minerals and metals.

During the Minsur members’ visit to SMIC

origins of purchased goods and strives to procure such goods

Goto : The Toyota Tsusho Group has been taking actions to

the Procurement Department is concerned with the Scope 3

and work with related departments to buy conflict-free and safe

promote carbon neutrality a top priority since 2021. In April(emissions from other companies related to business activities),

materials. In addition, we make constant announcements and2022, we set up Carbon Neutrality Promotion Department tosince 2021 we have been monitoring the current level of CO2

ensure the safety of our partner smelters so that there are noaccelerate decarbonization efforts. We are driving a roadmap

emissions from procured products. We then look for materials

omissions in audits.

2030 for achievement of carbon neutrality, focusing on our fivewith low CO2 emissions among the same parts and materials to

Gonzalo : We have policies for sustainability and human rights

business areas of strength, (1)Renewable Energy and Energy

see if they are compliant with our standard. For example, we

and apply them to all our smelters and supply chains. In 2021,

are verifying whether plastic materials derived from biomass

we signed the United Nations Global Compact, the world's

resin can be used in solder containers and spools we use. We

largest sustainability initiative, and enhanced our commitment toare also experimenting with the possibility of replacing steel

the 10 principles in areas such as human rights protection, laborused in bearings with electric furnace materials that emit lessrights, environmental efforts, and anti-corruption. We also

CO2 than conventional blast furnace materials.

protect human rights in accordance with the UNʼs Guiding

technologies. Japan has a very rich culture, and I was impressed by the values of punctuality, discipline,
and diligence shared by Japanese people, as well as the compassion, politeness, and respect for others.
The Shibuya Scramble Crossing in Tokyo, known as the world's busiest pedestrian crossing, was indeed
a spectacular scene. In Japanese cuisine, there are a great variety of sushi which were very delicious. I also
remember how excited I was to see real people wearing kimonos on the streets. (Minsur representatives)

COLUMN

Fujiwara : To date, we keep the list of RMI-certified smelters

When I visited SMIC's Tochigi Segment, I experienced a neatly organized, clean factory possessing high

SMIC CSR REPORT 2022

Senju Metal Industry Co., Ltd.
Okuno

Fujiwara : The Procurement Department carefully examines thethat conform to the concept of carbon neutrality. Specifically,

Memories of the Japan visit by Minsur member

11

waste into resources for manufacturing.

Principles on Business and Human Rights and the OECD Due

Responsible Mineral Supply and Procurement

Diligence Guidance for Responsible Business Conduct. Between
2021 and 2022, we conducted a human rights assessment of all

Gonzalo : At Minsur, we recognize our social responsibility of the

our Peruvian and Brazilian operations in our company.

mine and all of our operations in providing raw materials. As a

Goto : We, Toyota Tsusho, have constructed a globally diverse

SMIC CSR REPORT 202212

value chain, and we believe that sustainability and CSR thattransportation, we are reducing working hours and enabling

Gonzalo : COVID-19 has made us rethink the way we work andand many manufacturers had to shut down their operations.

take into consideration human rights, labor environments andemployees to enjoy more time with their families and leisure time.

we have transformed our company by investing in prioritize

Natural disasters can occur anytime, anywhere, thoroughthe natural environment must be promoted throughout theGoto : Our activities are based on The Toyota Tsusho Group's

people's health and well-being. However this transformation

preparation is necessary to respond to such an event. In

entire supply chain in each region. We formulated the Supply

Policies on Safety and Health. Industrial accidents that occur at

didn't start from scratch and it was largely because we alreadyaddition to preparing multiple options for suppliers for particular

Chain Sustainability Behavioral Guidelines to foster a common

Group workplaces are reported without delay according to the

had the right amount of knowledge to deal with the pandemic.

raw materials, we require the supplier has multiple production

understanding of CSR by suppliers and the Toyota Tsusho

Toyota Tsusho Group Industrial Accident Reporting Standards.

I think that we have been able to respond to this challengesites. Establishing a BCP is a critical requirement for a company,

Group with the aim of contributing to the development ofRoot-cause analysis and reoccurrence prevention measures arebecause we have worked very hard on creating a culture of

and we also place importance on this aspect as a procurer. In

sustainable societies through understanding and supporting

disseminated across all departments, with the aim of preventing

safety over the past seven years.

this regard, the fact that Minsur has two mines and smelters

the Guidelines and putting them into practice.

similar accidents.

Fujiwara : When it comes to resource depletion, it is important

provides us with peace of mind and a sense of stability.

In the case of tin, which is traded with SMIC, we areto really understand that everything is finite, not just metal

Goto : In terms of compliance and crisis management, Toyota

participating in RMI's survey of conflict minerals every year as aresources. And regardless of the one-time use, I think it is also

Tsusho Group prepares a collaborative system beyond eachmember of the supply chain for being a responsible supplier

important to always keep recycling and reusing in mind whenheadquarter, which enables us to communicate and constantly

and procurer.

producing and manufacturing. From this perspective, we aremonitor whatʼs happening in the world while working with

Okuno : From the perspective of responsible mineral supply, letactively using recycled products to meet the needs of the times

external parties. Focusing on the development of talent and DX

me ask a question as one of the stakeholders in this area. I thinkand protect the global environment.

is one of our priority measures, in order to further enhance

working in a mine is physically challenging, and when I actually
visited, I felt that there are various efforts being made in Minsur.
Please tell us about your views and attempts to improve labor

corporate resilience. We continue to work with our customers

Toyota Tsusho Corporation
Mr. Gotoand suppliers to improve our internal infrastructure, including
education, and reexamine current operations.

Transending the VUCA*5 Era

Okuno : After sharing and discussing each other's stories, I

safety.
Gonzalo : Our company uses a system called MINSEGUR to

Okuno : As a manufacturer, our mission is to fulfill our supply

learned that both Minsur and Toyota Tsusho have a lot ofprotect the health and safety of our employees, contractors andresponsibility even if we face challenges, so our customers'

proactive groundwork in place to resiliently overcome an

communities. All operations in Peru have acquired ISO 45001

production is not hindered. Therefore, procurement of raw

unprecedented situation. I believe that facing challenges with faithSenju Metal Industry Co., Ltd.
Fujiwara

certification, the international standard for occupational healthmaterials is extremely important. And unexpected events haveand safety management systems. Based on MINSEGUR, we

occurred every month since the beginning of 2020.

worked on risk management, culture, health and wellness andFujiwara : If something happens anywhere on earth, such as theGoto : As a manufacturing trading company, Toyota Tsusho will

grateful to be able to team up with a business partner who canin 2021 reported the lowest recordable injury frequency rate

outbreak of the COVID-19 or the Russo-Ukrainian War which is a

actively engage in business investment, management andshare an identity beyond countries and cultures. I want to continue(RIFR) in the history of the mining sector at 1.50 per 1 million

prolonged quagmire, the logistics (physical distribution andrecycling, particularly in the field of commercial materials suchour relationship by supporting each other and to be able to faceworking hours. With these results we were ranked in the top 5

transportation) will be cut off, and it may not be possible to deliver

as Lithium and rare earth resources, which contain pricethings with faith and resilience. Thank you for the memorable

among companies of ICMM.

even if there are goods. In terms of trade friction, regarding the salevolatility and the risk of resource depletion.

experience today.

We are also working to improve the working environment andof products to a specific country, it is often the case that the use of

Fujiwara : In 2021 a cold wave hit the North American continent,

safety. For example, by replacing ground transportation with air

products originating from the other country is avoided oron a daily basis and seeing things through with integrity areexactly what we need to do as a company. Once again, I am

All : Thank you.

prohibited, and quite often restrictions are imposed on the
manufacture of the product. We have to keep the connections so

Minsur S.A.

Toyota Tsusho Corporationthat we donʼt stop production, no matter what happens. This is

Minsur S.A. is a Peruvian mining company owned by Breca Business Group since 1977,

Toyota Tsusho Corporation was founded in 1948 as the trading company for the Toyota

which conducts mining, smelting and refining of tin and gold. Headquartered in Lima,

Group. Today, Toyota Tsusho, with approximately 65,000 group employees in about 130

Peru, the company owns the San Rafael mining facility located in the Antauta region ofcountries, strives to contribute to the creation of prosperous societies. Toyota Tsusho

Melgar, Puno, which accounts for 12% of the world's tin production. The company's

continues to expand as a global leader in vehicle exports and automobile production

other assets include the Pucamarca gold mining facility, located in the municipality of

support. The company has seven operating divisions (Metals/ Global Parts & Logistics/

Palca, Tacna, and a tin smelter in the district of Pisco, Ica.

Automotive/ Machinery, Energy & Project/ Chemicals & Electronics/ Food & Consumer

Minsur's purpose is to improve life by transforming minerals into wellness and supply

Services/ Africa) focused three business fields - the Mobility field contributing to the future

metal materials to customers around the world, including Europe, South America, Asia

convenient society, the Resources & Environment field ensuring the sustainable society,and North America.

and the Life & Community field supporting comfortable and healthy lifestyles.

why we are always paying attention to procurement.
Goto : As Mr. Fujiｗara has just explained, while we enter the era of

VUCA, each sales department of Toyota Tsusho strives to provide
optimal procurement proposals to our customers by updating and
Minsur S.A.
Mr. Gonzalo

sharing information taking advantage of our global network.
*5 VUCA: Volatility, Uncertainty, Complexity, Ambiguity

13

SMIC CSR REPORT 2022

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14

Special Features

Our products are manufactured through various processes around the world, including raw material mining, smelting,and transportation. As part of the supply chain involving the three participants in the discussion introduced in PART 1.,
Minsur (smelter), Toyota Tsusho Corporation (trading company), and SMIC Group, we are presenting you with a rare
glimpse into the Peruvian tin mines in South America and how the smelted minerals arrive at our warehouses.

PART 2

Processing

Product
MakingTin Supply Chain

Based on our production plan, tin ingots aretaken out of the automated warehouse and sent
to the melting furnace together with otherblending metal ingots following the recipes toform solder alloy. The alloy are then processed
into various shapes of solder.

MiningOre mining operationin the mine

Delivery andCarrying in
A glimpse of the mine

Minsur mines tin ores in a wilderness surrounded by
mountains in the center of the South American continent.

Photo: provided by Minsur S.A.

Smelter

Tin is transported by truck
from the arriving port to
SMIC's Tochigi Segment.
After receiving inspection, it
is stored in a dedicatedautomated warehouse.

Smelting

Logistics

Extracting metal from tin ores

TradingCompany

Refining
Ship-out, Ship loading,shipping

Removing impurities from metal
A glimpse of the ore dressing plant andsmelting plant

Tin ingots are shipped fromthe port in Peru, SouthAmerica to Japan.

The tin ores mined at this facility are brought to the company's
smelter, refined to remove impurities, and shipped out to theworld as tin ingots.

Photo: provided by Minsur S.A.

15

SMIC CSR REPORT 2022

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16

Efforts to achieve a
Zero-Emission society throughOur Environmental Vision 2050
It is important for us that we address global environmental
issues (such as global warming, acid rain, soil pollution, andwater contamination) as critical issues deeply connected to
the very existence of humanity, and a common mission for
all of us. We will realize a zero-emission society andcontribute toward building a sustainable society through ourbusiness activities.

Environment
Environmental Policy

Environmental
Vision 2050

ENVIRONMENTAL
PHILOSOPHY

We believe conservation of the global environment is the shared mission of all humanity. Based on our mission and with the 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.

THE THREE GOALS IN SOCIETY

1 Attain A LOW CARBON SOCIETY
Taking on the challenge of building a zero-greenhouse gas society
Promoting energy saving in our corporate activities

2 Attain A CYCLICAL SOCIETY

Environmental Administration Structure

Environmental Organizational Chart

We established the Environment Committee as an organization to take measuresnecessary for reducing our burden on the global environment. The committee deliberates on the formulation and implementation 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.

President
Management Committee

Proposals
Emergency
Reports

OrdersConserving global resources through recycling

CSR Promotion Headquarters

Environmental Management System

3 Attain a society that lives in
HARMONY WITH NATURE

Conserving biodiversity and endeavoring to realize
a society with zero-use of harmful chemicals thatpose a risk to the environment

SecondEnvironmental Plan
(FY2020 – FY2030)

Efforts towards
a carbon neutral business
Reduce CO2 emissions from level measured
in FY2013 (17,328 t-CO2) by 25% by FY2030

Promote product recycling
Develop products using 100% 3R* materials

Cut use of harmful chemical
substances to zero
Zero usage of chemical substances that impact
the human body or the environment

Conserve biodiversity
Conserve biodiversity through environmental
conservation activities
17

SMIC CSR REPORT 2022

*3R = Reduce, Reuse,Recycle

We defined our environmental philosophy and environmental policy, which serves as
the guiding principles for environmental activities. A total of 17 sites in Japan andoverseas have obtained ISO14001. They have formulated their own environmental
management systems and have been conducting PDCA accordingly.
With regard to our four priority themes relating to the environment (reducing greenhouse gases, reducing waste, reducing harmful chemicals, and nature conservation
activities), each site and business unit both in Japan and abroad set annual goals
and action plans, and conduct activities aimed at reducing our environmental footprint.

Operating Officer

Environmental Measures Department
Reports

Requests

Requests

Domestic Sites

Overseas Sites
Committee at Each Site

Environment Committee

Health & Safety Committee

Disaster Prevention Committee

Environmental Risk
We determine various environmental risks such as climate change problems andpollution caused by waste, sets strict voluntary administrative standards for preventing environmental accidents and pollution accidents, and takes various measures toaddress these in conducting business. In order to minimize damage expected in theevent of an emergency, we conduct emergency response drills once per year.
In FY2021, 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 Footprint Material Balance
INPUT

OUTPUT

Raw Materials

14,735 t

Water Supply

459,955 m 3(All domestic bases)

EnergyEnvironmental Training
Electricity
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) toraise 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 been taken. They
also conduct internal audits once a year to confirm the effectiveness of ISO14001.

City Gas

GHG

38,404 MWh
1,334 km

17,482 t-CO 2

Scope 1

3,357 t-CO 2

Scope 2

14,125 t-CO 2

Drainage

455,355 m 3

3

LPG

16 t

A Fuel Oil

16 kl

Kerosene

18 kl

Gasoline

76 kl

Light Oil

27 kl

ChemicalSubstances

793.6 t

BOD

3t

COD

3t

ChemicalSubstances

15.2 t*PRTR Notification Targets

Final Amount ofWaste Disposed

1.2 t

Amount Recycled

1,126 t*PRTR Notification Targets

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

SMIC CSR REPORT 2022

18

Environment
Greenhouse Gas Reduction
Scope 3 Emissions

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.

CORE PRINCIPLE

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 FY2021. our emissions in Scope 3, Category 9 (downstream transport) of the CDP were 1289.4 t-CO2.
This was higher than FY 2019-2020 when the COVID-19 pandemic was spreading
globally, due to the return of manufacturing volume, as well as the expansion of the
Kinugaoka factory at the Tochigi Segment and the Nishiwaki factory at the Kansai
Segment. Despite this, unit emissions decreased due to the dramatic increase insales. We also monitor CO2 emissions from employees’ commuting trips. In addition,by optimizing truck emissions deliveries used for product shipping, we are reducing
CO2 emissions from our transportation sector as well.

Reduction of Greenhouse Gas Emissions (Scope 1, Scope 2)
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 FY2021, we reduced our greenhousegas emissions by 291.82 t-CO2.
Compared to FY 2019-2020 when COVID-19 pandemic was
spreading globally, energy consumption increased to 7,046 kl in
FY 2021 due to the return of manufacturing volume, as well as
expansion of the Kinugaoka Factory at the Tochigi Segment andthe Nishiwaki Factory at the Kansai Segment. Despite this, unit
consumption decreased due to the dramatic increase in sales.

IMPROVEMENTS (Tochigi Segment)

PREDICTED ANNUAL POWER SAVINGS (kWh/year)
22,057

Upgrading compressors
Application of a thermal barrier coating tobearing sintering furnace

47,199Conversion to LED lighting

59,431

Upgrading air conditioners

38,884

Installing blower motor capacitors

27,909Domestic Sites: CO2 Emissions and Revenue Output Rate
（t-CO2）CO2 Emissions

Output Rate (t-CO2/¥100,000,000)

1,400
1,221.9

1,200
1,000

1,110.9

4

1,289.4

3

958.3
2.28

800
600

1,189.7

1.93

2.06
2

1.53

1.63

400

1

200
0

2017

2018

2019

2020

2021

（FY）

0

Waste Reduction / Recycling
IMPROVEMENTS (Tochigi Segment)

ANNUAL REDUCTION OF GREENHOUSE GAS（m /year）
3

11,477

Review the operation of gas boilers

CORE PRINCIPLE

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

*Figures in F Y2021

Domestic Sites: Reducing Greenhouse Gas Emitting Activities

Domestic Sites: Energy Usage and Revenue Output Rate

（t-CO2）（kl）

350.007,300
304.94300.00250.00236.49270.3

245.26291.82

7,200

7,000

150.006,900

100.00

6,800

50.00

6,700
2017

2018

2019

2020

2021

（FY）

0

Output Rate (kl/¥10,000,000)

1.40

7,243
1.235

1.233

1.275

1.30
1.155

7,093

7,100

200.000Energy usage

1.20

7,046

1.10
1.00
0.90

6,830

0.80

0.836
6,665

2017

2018

2019

2020

0.70
2021

Senju Giken Co., Ltd. Receives "Kyushu Regional Power Usage Efficiency Council President's Award"

（FY）

0

SMIC Group’s Solder Recycling System
In cooperation with TAK-G, our affiliate company, we have been recycling solder for
about 40 years. With the emergence of lead-free solder in the 2000s, an old era withtwo elements, tin and lead, into a new era with three elements, tin, silver, and copper.
Today, we use more elements. Because of this development, it was required to install
facilities to deal with multiple elements for recycling solder. As a result, we developed
special technology that limited the emergence of hazardous materials to the absolute
minimum and a solder recycling system that could reproduce high-purity solder inour own refining method. The importance of recycling solder is increasing nowadays,
and the amount of recycling has doubled in the last few years, and this is expected
to continue.
We assumed responsibility as manufacturer to meet stakeholders’ expectation as
material manufacturers when recycling minerals was not popular. We will continue toactively promote investment in human resources and technological innovation towardfurther development of a system in which we collect the used solder products ofour company and recycle them and the realization of recycling solder with multiple
elements in order to achieve a sustainable society with effective utilization of limited
mineral resources and the control of air pollution.

In February 2022, Senju Giken received the "Kyushu Regional Power Usage Efficiency Council President's Award" inrecognition of its proactive efforts to optimize energy usage.
The company’s efforts to reduce electricity consumption ona daily basis, such as suspending air conditioner operation
after hours, replacing outdoor lighting with LED lights, andadjusting fan operation according to the amount of exhaust
heat, resulted in an annual energy savings of approximately
15 to 18 kl. This achievement was highly valued.

19

SMIC CSR REPORT 2022

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20

Environment

Working with Customers
Securing the Quality and Safety of Our Products

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 Recycling Rates

99.9

96.5

1,400

99.9

Recycling Rate

99.9

99.9

99.9

99.4

（%）

1,200

600 992.9
400

0FY2021:

Metal Scraps

57%（643.09 t）

Total Waste Emissions

Waste Oil

16%（180.27 t）

Waste Plastic

6 % （61.92 t）

Paper

4% （45.41 t）

20

Sludge4% （46.27 t）

0

Others13%（149.94 t）

80

800

200

Quality and Safety Policy

100

73.7

1,000

1,028
23.7

967.3

1,071.8

1,260.9 1,297.2

1,149.7

940.6

1,126.9
1,125.7

1,259.7 1,296.3
757.5

933.1

1,070.7

1,148.9

935.4

235.1
2013

2014

2015

2016

2017

2018

2019

2020

2021 （FY）

60

1,126.9 t

40

We conduct environmental activities at its overseas sites and domestic sites alikebased on four priority themes related to the 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 holdmeetings 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.

Total Waste Emissions
（ｔ）
400.0

343.1

300.0

367.2
66.7

79.3
322.0
66.2

Recycling Rate

76.0
326.0

Obtained Quality Management System Certification
80
60

263.0

53.3

200.0
100.0

20

2017

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

2018

2019

2020

2021

（FY）

0

Soil and Groundwater Pollution Countermeasures
We are taking the following initiatives as soil and groundwater pollution countermeasures. We also work to prevent pollution by conducting emergency response drills, aswell as risk training to prevent leaks of polluted water.

Emissions and Movement of PRTR Law-Specified Chemicals
Chemical Emissions

Chemical Transportation（kg）

14,846

14,841

15,15014,0009,474

10,910

Soil
Water quality andgroundwater

8,000

Rainwater

6,000
4,000
2,000
0

21

0
2017

SMIC CSR REPORT 2022

0
2018

0
2019

0
2020

0
2021 （FY）

We have obtained the international standard ISO9001 at 21 manufacturing sites bothin Japan and abroad. Additionally, we have obtained the automotive industry quality
management system certification IATF16949 at 17 sites in Japan and abroad.

40

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.

Emissions and Movement of PRTR Law-Specified Chemicals

10,000❸ 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.

Voluntary component analysis (once per year)
Final drain and groundwater inspections (chlorine residue,
pH, etc. conducted daily)
Component analysis and measurement of drain water andgroundwater (conducted monthly)
Voluntary component analysis (twice per year)

Preventing Quality Defects（％）

Reduction of Harmful Chemicals

12,000❷ 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.

❹ We shall evaluate the necessity of changes to our quality management system, and if changes are necessary, we shall review our system to maintain its adequacy in light of our management philosophy.

0

16,000❶ We shall comply with related laws and regulations as well as customer demands, and improve customer satisfaction by supplying products andservices with consideration for quality and safety.

Overseas Sites: Total Waste Emissions and Recycling Rate

Overseas Site Data and Initiatives

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 toimprove the quality of our products throughout the product lifecycle.

Domestic Sites: Breakdown of Waste Emissions

Recycling Output

Total Waste Emissions（t）

CORE PRINCIPLE

Initiatives to Improve Quality
To eliminate defects in our deliveries, processes, and acceptances, SMIC has formulated annual quality activity plans and requires each business unit to set its own
goals to work towards reducing defects. In case of a defect, we compile recurrence
countermeasures, incorporate analysis results into our improvement plans for thefollowing year, and make quality improvements continuously according to the PDCA
cycle. We also give quality excellence awards to overseas factories that have madeexcellent achievements in order to elevate the level of quality of the entire group.

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

Initiatives to Improve CS
We are striving to drive CS (Customer Satisfaction) through working to improve oursales 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
FY2021 we won the awards shown on the below.

Product Chemical Management
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 the environment.
We have laid out a dedicated team system and are complying with chemical inspections of our products.
Per REACH rules, we have completed full registration of the chemicals we handle andacquired SDS from our suppliers, in order to relay information to customers basedon Articles 31 and 32. We supply customers with SDS & GHS labels, compliant with
GHS (Globally Harmonized System of Classification and Labelling of Chemicals).

Intel EPIC Outstanding
Supplier Award

Hitachi Construction Machinery Co., Ltd.
Class A Factory Certification

Nissan Motor Co., Ltd.
Certificate of Appreciation
for Excellent Quality

Quality Audits
We conduct internal quality audits twice per year in order to maintain IATF16949
certification, in both our solder division and bearings division at our Japanese manufacturing sites and sales locations including group companies. We also conduct
regular quality audits once per year at all of our manufacturing sites both in Japanand abroad. In addition, we conducted remote audits using dedicated web cameras
in response to the COVID-19 pandemic.

SMIC CSR REPORT 2022

22

Working with SuppliersWorking with Employees

Procurement Activities

CORE PRINCIPLE

Our Principle on Human Resources

We comply with laws relating to procurement and automotive industry fair trade guidelines set forth by METI (the Japanese Ministryof Economy, Trade and Industry) in order to define the basic stance of our purchasing policy (practice fair and faithful procurementwith an 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 IATF16949, ISO9001 and ISO14001, as well as
item 14 of the supply chain assessment guidelines defined by the RBA such as observation of law and social norms and the promotion of a business continuity and recovery plan in case of emergency.
We will continue to observe procurement compliance and work towards establishing a safe and secure supply chain in order tocontribute to society through procurement and build good relationships with our suppliers.

CSR Sourcing Policy
1

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

2

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

3

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

4

Senju Metal Industry Co., Ltd. “Basic Stance Toward our Suppliers”

5

IATF 16949 requirements that must be considered for deliverables

6

Environmental management requirements that must be considered fordeliverables

CSR Procurement Initiatives
Our procurement departments and the related development and manufacturing departments conduct audits of suppliers both in Japan and abroad, according to yearlyplans. In FY2021, as in previous years, our suppliers in Japan and abroad cooperated
with our supply chain assessment, and no problems were found.
Even under the negative influence of COVID-19, we conduct online meetings with
suppliers and endeavour to maintain close communication with them.

CORE PRINCIPLE

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

Respect for Human Rights
Basic Policy on Human Rights and Labor

Fair Evaluation and Our Personal Statement System

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. Based on the belief thatharassment absolutely must not be tolerated, we conduct harassment prevention
training to better educate our employees.

We conduct human resource evaluations twice a year in order to apply the results toproper guidance for capacity development and human resource training. Through thisprocess, we fairly and justly evaluate the work performance abilities of employees,
and reflect our findings in promotions, raises, and bonuses. We have also establisheda personal statement system with the purpose of improving our workplace environments. Individual employees answer an annual questionnaire of what they think
about and what they want from their jobs and workplace environments. Throughthese initiatives, we are working to make improvements that will enable employees tobetter fulfill their potential.

Human Resource Training
We encourage all employees to constantly work to obtain new knowledge, with theaim of cultivating professionals who are capable of making rational decisions froma broad perspective. We conduct appropriate training at every level and separate

Basic Stance Toward Our Suppliers
1Compliance with laws and social norms

2

Consideration of human rights and labor3

Consideration of Health & Safety

4Prohibition of bribery and fair trade5

Healthy business management

6

Provide quality, timely delivery, and a steady supply

7

Preparation for emergency and business continuity

8

Consideration for the environment

9

Promotion of responsible mineral procurement

10

Emphasis on VE (Value Engineering) activities

11

Emphasis on provision of information

12

Information security

13

Eliminating relationship with antisocial forces

14

Social contribution

Education Support System

SMIC CSR REPORT 2022

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.

Initiatives in Responsible Mineral Procurement
In January 2011, we joined the RBA (Responsible Business Alliance), and have built
close relationships with customers in the electronics industry. Since 2014, we havebeen a member of the 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 toaddress a wider range of risks than the conflict minerals we have addressed so far,we will call on all of our supplier refineries to renew their RMAP certification, with theaim of sustaining a safe and secure supply chain for SMIC products.

Soldering Aptitude Tests

Rank-Based Training
Group Training

Distance Training

Upper
Management
Manager Training(Advanced)

MiddleManagement

Manager Training (Beginner)

Mid-Career
Employees

Evaluator
Training(New Appointees)

Mid-Career
Employee Training

New Hire Employee Follow-up Training

New Hire Employee Training

Role Based Training Drills

Theme-Based
Self Education

Fieldwork
Training

EnglishConversation

OJT

Capable Manager
Course(New Appointees)

Capable Manager Basic
Course(New Appointees)

Lower
Management

New Hire
Employees

23

training for all employees, having examined effective methods based on training implementation regulations.
Since FY2020, we have conducted soldering aptitude tests with the 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.

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

Salesperson
Training(Advanced)

Soldering
Aptitude Teste-learning

Salesperson
Training(Beginner)

Overseas
Site
Engineer
Training

Technical
Sales
Position
Training

Distance Training for New
Hire Employees

SMIC CSR REPORT 2022

24

Working with Employees
Health & Safety

Making Worker-Friendly Workplaces
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.

CORE PRINCIPLE

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.

Health & Safety Policy

Supporting Work / Life Balance❶ 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.

We have established childcare leave and family care leave systems based on theChild 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 prescribed working hours at the request of
employees. This system is in fact used by employees who have small children so thatthey can balance childcare with their career.

❷ The company shall establish a health and safety management system, and actively promote necessary measures though its organizations and managerial posts in order to prevent labor accidents.
❸ Employees shall comply with the law and rules established by the company, and work to prevent labor accidents and promote maintenance of health.

contributes to realizing safe, worker-friendly workplaces and the development of thecompany.

Welfare and Social Interaction for Employees
Labor Health & Safety Management

Safety Training

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 theseplans.

We regularly conduct the following training for employees, so that they can learnknowledge and skills relating to health and safety.

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 andensuring safety at work as the representative of employees. This committee actively

Hands-on event of hunting for bamboo
shoots organized by Senyukai in thepremises of Kinugaoka Factory

Activities held by the flower arrangement
group at Soka Segment• Training at the time of hiring• Education and training when responsibilities are changed

Incidence of Serious Labor Accidents• Special training for employees doing hazardous or harmful work

We have kept our rate of labor accidents (accident rate) below the industry averagefor the entire Japanese manufacturing industry.

• Foreman training (including refresher training for employees who havebeen in-training foreman for five years)

Accident Rate

FY2017FY2018FY2019FY2020

FY2021

0.47

0.49

0

0

0

* Frequency Rate of Labor Accidents: Number of labor accidents (accidents resulting in death,or injuries causing loss of work for one or more days or loss of partial bodily functions) /Total working hours × 1,000,000

Diversity• Other health and training for supervisors• Health and safety training to improve health and safety standards for
employees doing hazardous or harmful work

CORE PRINCIPLE• Training for qualified personnel (forklift drivers, etc.)

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 anddiversifying 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 of realizing workplaces where employees feel happy,
can stay longer, and do rewarding work with peace of mind.

Health MaintenanceWe 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 incancer insurance at the company's expense. We also have a system for the company
to bear part of medical expenses incurred at a medical institution for one month. This
helps to relieve the individual burdens for employees.

HealthManagement

Frequency / Period

Details

General Health Examinations

1 time / year

Lifestyle-related Disease Medical Examination

2 times / year

Implementing general health or lifestyle-related disease medical examinations for
employees.
Implementing guidance on lifestyle improvements for those who desire it.

Special Health Examination

2 times / year

We conduct health examinations with special items for employees engaged inhazardous work as stipulated by law.

Stress Checks

1 time / year

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

25 years old or older

The company pays the insurance premiums for employees 25 years of age orolder who enroll in cancer insurance, thereby reducing the burden of unexpectedcancer-related diseases on employees.

Medical Expense Reimbursement System

As needed

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

Consultation OfficeAnytimeWorkplace and job counseling with vocational counselors.

Welfare25

At our factories, we supply employees with salt-fortified foods as a preventive measure against heat stroke in summer, and also milk as a health measure, in order tomaintain their health and to support their ability to work safely.

Various Systems

Cancer Insurance System

Other

Support Suited to Each Workplace

SMIC CSR REPORT 2022

Promoting Advancement of Women
We have formulated a general entrepreneur action plan based on the Act on Promotion of Women's Participation and Advancement in the Workplace, and is working topromote the advancement of women.

Training & Seminars

In FY2021, we held a total of seven study sessions in which participants actively
exchanged ideas on a variety of topics, including the annual study session focusing
on new employee motivation. The topics included "How to do business globally andbe overseas-oriented" presented by members with experience with overseas assignments, and "The protocol for young development team members engaged in R&D
work" and "Life plans from the age of 50 onward”.

We regularly host training and seminars according to the needs and circumstances
to promote the ambition of our employees.

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 ofmind.

Hosting Diversity Study Groups
At diversity study groups, we set themes each time with a focus on differencesamong employees and have the participants speak with each other about theirexperiences 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.

SMIC CSR REPORT 2022

26

Working with Employees

Activities of Social Contribution
Culture / Education / Community Outreach

Employee Data
FY2017FY2018FY2019FY2020

FY2021

Providing solder materials for industrial arts lectures to public juniorhigh schools

Providing solder materials for the copper mirror casting and polishingexperience booth at Chiba Science Museum

In Japan

1,694

1,731

1,747

1,761

1,626

Headquarters | 2021

Headquarters | 2021-2022

Overseas

643

627

631

596

622

Cleanup of Okitama Shrine

Supporting victims of major fire disasters

Kansai Segment | 2021.5.21 / 2021.9.23 | 56 people

Senju Solder (Phils.) Inc. | 2022.3.14

Employees

Total

2,337

2,358

2,378

2,357

2,248

*Numbers in parentheses are the ratio of women(35.0%)(36.0%)(36.8%)(37.5%)(36.3%)

Male

-

1,233

1,242

1,201

1,271

Female

-

569

533

530

619

In Japan

-

518

488

468

312

Overseas

-

38

115

158

46

Total

-

Regular Employees

Contract Employees*Numbers in parentheses are the ratio of women

556

603

626

358

(50.2%)(56.6%)(56.4%)(54.7%)

Managers (In Japan)
Male

100

105

116

119

167

Female

5

6

7

9

17

4.76%

5.41%

5.69%

7％

8％

Male

-

-

74

47

55

Female

-

-

42

38

42

Ratio of Female Managers--

36.21%

44.7％

43.3％

Male

44

79

47

23

60

Female

16

23

18

19

25

Total

60

102

65

42

85

10.0%

15.6%

16.9%

17.59％

13.5％

7.4

9.8

8.5

9.08

11.1

Average Rate of Paid Leave Taken

59.41%

62.63%

62.49%

58.2％

56.85％

Employees Taking Child Care Leave

8

12

10

22

14

Return Rate After Child Care Leave

100%

91.70%

100%

100％

93％

Employees Taking Family Care Leave

3

1

0

1

1

Return Rate After Family Care Leave

33%

100%

100%

100％

100％

13.7

15.6

14.4

9.03

11.5

18

17

16

16

17

Ratio of Female Managers
Managers (Overseas)

Recruiting Situation

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

Labor Hours
Average Overtime Hours / Month (hours)
Employment of Disabled People
Number of Disabled Employees
Ratio of Disabled Employees

2.2%

2.2%

2.1%

2.02％

2.2％

* Numbers in parentheses are the legal employment ratios(2.0%)(2.2%)(2.2%)(2.3%)(2.3%)

Myoko Cafe
The Adachi-ku organization for people with disabilities Yu-Ai Kai* operates cafés and shops
at various facilities in Adachi-ku, Tokyo and provides people with disabilities with places towork every day.
Myoko Café located in a corner of the main office of SMIC is one of them accepting people
with intellectual disabilities using the Adachi-ku welfare facilities for people with disabilities.
We provide them with opportunities to connect with society through work. The Jobs at Myoko
Café increases their opportunities to move around on public transport for themselves. We
support them in fostering positive and independent characteristics by doing each and every
detailed operation such as exchanging messages over the telephone, café operations, andbread sales and to acquire more sophisticated social skills.
SMIC affirms the activities. Since 2005 when the former mail office building was rebuilt into
the current one, we have been supporting their activities by providing the café space, paying
for their utility costs, and ordering drinks when we have internal meetings.
* This is an organization established about 40 years ago. Its aims are for groups of families of those who have impaired
eyesight, hearing impairment, trouble in arms and legs, intellectual disabilities, and who became disabled in the
middle of their lives due to accidents or illnesses come together to understand each other’s disabilities, to promotesociability, and to provide places to work.

27

SMIC CSR REPORT 2022

SMIC CSR REPORT 2022

28

Activities of Social Contribution
Culture / Education / Community OutreachNatural Environment Protection

Donations to an organization for people with disabilities

Donations to needy families

Arakawa waterfront supporters

Moka environment partnership meeting

Senju (Malaysia) Sdn. Bhd. | 2022.4.1

Senju Metal (Huizhou) Co., Ltd. | 2022.1.20

Headquarters | 2021.11.6 | 7 people

Tochigi Segment | 4 times / per year | 40 people

Conservation of Satoyama [ an area where farmland meets the forest ] Volunteer

Release of landlocked salmon fry into the Sunatetsu River

Kansai Segment | 2021.7.4 / 2021.10.24 | 17 people

Senju Electronic Corp. | 2021.10.2 | 7 people

Guardrail cleaning

Yaetsu Beach Cleanup Activities

Senju Electronic Corp. | 2021.6.19 | 74 people

Senju System Technology Co., Ltd. | 2021.7.22 | 7 people

Beach Cleanup Activities

Cleanup activities in the forest reserve

Senju Electronic (Taiwan) Co., Ltd. | 2021.4.30 | 22 people

Senju Comtek Corp. / Senju America Inc. | 2021.9.18 | 8 people

Book donations for children in poor areas

Donation to organization supporting women

Senju Metal (Shanghai) Co., Ltd. | 2021.12.28

Senju Electronic (Taiwan) Co., Ltd. | 2021.10.26

Sekido Museum of Art
Sekido Museum of Art inside the SMIC headquarters building was established by the Sato
Artcraft Research & Scholarship Foundation in April 2006, with the purposes of promoting
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 the museum's name Sekido is in fact
the alias of Mr. Sato himself.
After a long closure due to the COVID-19 pandemic, the museum reopened in May 2022.
The first exhibition upon reopening was the "50th Anniversary of Traditional Japanese Metal
Crafts Exhibition", followed by the current "Korean Ceramics Exhibition" (until November 27,2022). The next planned exhibition is "Traditional Some-tsuke Exhibition (tentative title)" (January 15 - March 31, 2023).

29

SMIC CSR REPORT 2022

SMIC CSR REPORT 202230

GovernanceCorporate GovernanceBASIC POLICY

Company Officers

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 to fulfill its explanation
responsibilities by disclosing information in a fair manner to all stakeholders.

President❶ Ryoichi Suzuki
Representative Director

⓫

❺

❽

➓

❷ Tomohide Hasegawa❾⓬

Executive Director❸ Yuji Kawamata

Corporate Governance System

Board of Director

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.

❹ Yuka Sato
❺ Tetsuya Okuno
Corporate Auditor (External)

Senju Holdings Co., Ltd.

❻ Shoju Sato
Inspector

General Meeting of
Shareholders
Appointment/Dismissal❼ Kazutoshi Sakaguchi*1: Includes operation of subsidiaries*2: Includes monitoring of subsidiaries

Disclosure of Information

Senju Metal Industry Co., Ltd.

Counselor❽ Motoyuki Ohtake❾ Yasuhiro Ishii➓ Setsuo Tanaka

Auditors
Audits

Inspectors

Board of Directors
Code of Ethics

Appointment

CSR Promotion Division

Proposal

DirectProposal

CSR Promotion Committee

Approval

Submission and Reportingof Important Matters

Audit Supervision System

Health and Safety
Committee

Board of Directors

Auditors and Inspectors

Disaster Prevention
Committee

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 toappoint or dismiss executive officers and make resolutions on the agenda from theManagement 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.

We have appointed one auditor and one inspector. These officers carry out audits ofdaily 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 of activities according to the law.

Environment
Committee

DirectTraining Committee

Submission and Reportingof Important Matters

Other Guidelines

Management Committee
Business
Departments

Industrial Machinery
Department

Solder Department

Bearings and Special
Products Department

AuditsDevelopment Technology
Department

Production Technology
Department

International Business
Department

AuditsGeneral Affairs Department

Audits

Quality Assurance
Department

Finance Department

Domestic Affiliates
Overseas Affiliates

31

SMIC CSR REPORT 2022

EuropeQuality Audit Office*2

DirectBusiness Audit Office *2
Safety Assurance Export Management OfficeDirectSubmission and Reporting of Important Matters

Direction/Supervision

Industrial Analysis
Service Ltd.

Senju Sprinkler Co., Ltd.

North America❷

Board of Directors and Business Execution System

Labor Committee

Execution of BusinessDirection/
Supervision

Tax Audit(External)

Other Committees

Operating Officer

Strategy Committee
Sales Committee

Information System
Division❻

ReportPlanning and Executionof Management Policy

Direct❶Challenge Proposals

Management Committee*1

Direction/
Supervision❸⓫ Toshimaru Sumiyashiki⓬ Satoru Akita❹❼
Decision Making in Management

Information Disclosure
Guidelines

CSR Division

Deputy Director

ReportPresident

Senju Electronic Corp.

China

Senju Giken Co., Ltd.

Southeast Asia

Senju System Technology
Co., Ltd.

Other Asian Regions

The Management Committee consists of directors and executive officers. It deliberates on legal matters and determines or approves important matters in the executionof business. It also submits matters related to business execution to the Board of
Directors that 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 for deliberations and decisions by the Management Committee.

Executive Officer System
We have introduced an executive officer system, and the executive officer generalmanagers appointed by the Board of Directors manage the division of duties among
departments they are in charge of. Based on the business plan of the company, they
formulate and execute 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 thedepartment they are in charge of.

Introduction to Directors, Auditors, and Executive Officers
Name

President

Ryoichi Suzuki

Representative Director

Tomohide Hasegawa

Executive Director

Yuji Kawamata

Board of Director

Yuka Sato

Board of Director

Tetsuya Okuno

Corporate Auditor (External)

Shoju Sato

Inspector

Kazutoshi SakaguchiCounselor

Motoyuki Ohtake

Counselor

Yasuhiro Ishii

Counselor

Setsuo Tanaka

Deputy Director

Toshimaru Sumiyashiki

Deputy Director

Satoru Akita

Operating
Officer

◦
◦
◦
◦

◦
◦
◦
◦

Board ofDirectors

Management
Committee

◦
◦
◦
◦
◦
◦
◦

◦
◦
◦
◦
◦
◦
◦
◦
◦
◦
◦

SMIC CSR REPORT 2022

32

GovernanceRisk Management
PRINCIPLE ANDRISK MANAGEMENTSYSTEM

Safety Assurance Export Management
As a matter of responsibility for a company located upstream on its supply chain, we have assumed all manner of risks listed
below. In response to this, we have established dedicated business units and committees to respond to each risk and are taking
measures to prevent risks and minimize losses.

Possible Risks
Natural disasters such as earthquakes and typhoons

Risks concerning human rights and labor rights such as harassment

Information security risks such as Information leaks andunauthorized access

Infectious diseases such as the novel influenza and COVID-19

Intellectual property risks such as patent infringement andtechnology leakage

Environmental risks such as climate change problems and waste
contamination, etc.

Export management risks including safety assurance trade

Production Backup System to Ensure Stable Supply

Customer

TRADE INSPECTIONSSHIPMENT MANAGEMENTThe Development Department classifies items bychecking against a cargo list (export regulation list)
regulated by export control-related laws including theForeign Exchange and Foreign Trade Act.

The Sales Department checks
applications and end users ofexported cargo

When shipping using logistics, we check thatclassification and trade inspections are complete,and confirm that cargo upon deliery matches theshipping cargo and leave documentation.

*From "Official Announcement of Companies Producing Export Management Internal Regulations"
https://www.meti.go.jp/policy/anpo/compliance_programs_pdf/20220810_kouhyougenkou.pdf(Latest version at the time of publication)

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.
(FY2021: Conducted at 46 business units.)
We also conduct trainings for top management, produce training materials that easily
explain relevant laws, and provide trainings to various business units.

Intellectual Property

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 thelife and limb of employees
from disasters such as earthquakes and fires.
We also participate in comprehensive fire drills conducted by fire departments withjurisdiction, in an effort tostrengthen collaboration withlocal communities.

the president of the company as the person in charge of export management from anational security perspective and established the Safety Assurance Export Management Office directly under his purview. As a response to the COVID-19 pandemic,
each business unit has been implementing self-check policy since FY2020 as anaudit measure.

CLASSIFICATION

By making notifications on regulations and training, and conducting internal audits
once pear year, we maintain regulatory compliance, and have achieved recognition
from METI (Ministry of Economy, Trade and Industry) as a company that has developed a voluntary management system for safety assurance trade management.

Initiatives Toward Business Continuity
We conduct evaluations, analysis, and countermeasures of various risks to keep
damage to a minimum, build up our risk management in order to enhance thepotential for continuity of business, implement a system to promote rapid recovery
of important business, and formulate various plans such as our Plan For Recovery
of Equipment After Disasters. We are also augmenting our backup system, so thatwhen there is a site experiencing extreme difficulty with production due to a disasteror other emergency, we can continue production in collaboration with other sites inJapan and overseas.

We acknowledge issues such as the proliferation of weapons of mass destruction,
preventing excess accumulation of conventional weapons, and trade wars between
countries. In response, we have placed restrictions on exports to maintain order instates of tension and comply with laws for maintaining international peace and safety, as well as upholding the Foreign Exchange and Foreign Trade Act by the Japanese
government. In order to properly implement export management, we have appointed

Certification

Product Supply

SMIC Group
Domestic Manufacturing Sites

Overseas Manufacturing Sites

We make effective use of our intellectual
property system for the products andtechnologies produced everyday by ourdevelopment and manufacturing divisions,ensuring appropriate security of rights andconfidentiality. While respecting others’ intellectual property rights, we are committed
to developing our original technologies.
Through these activities to support ourbusiness, we make further contributions toa sustainable environmental society.

Patents etc. Held
We secure, maintain, and control intellectual property rights for the purpose of protecting and increasing the value of the SMIC brand.

Number of Patent Applications Lodged and Patent Held

Corporate Secret Management / Personal Information Protection
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 theinformation of customers and suppliers.
Also, we act appropriately to laws and regulations including the EU GDPR (European
Union General Data Protection Regulation).

33

SMIC CSR REPORT 2022

Information Security
In light of damages suffered due to cyber attacks in recent years, we are further augmenting management and operation of information security. Our Information Security
Department formulates basic action plans, and we are improving our capability todetect threats and take adequate backups to ensure that 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 raiseawareness of the importance of information security.

2,000

1,705
1,419

1,500

1,117
295

70
0

2,500

2,013

280

140

Intellectual Property Education(case)

2,326

350

210

Evacuation Drills

Patent Held

Applications Lodged(case)

148
2017

1,000

272

207

500

116
2018

2019

2020

2021

（FY）

0

We regularly host study sessions primarily for the Technology Development Department, take practical initiatives focused on the patent system, know-how management, and patent searches, and are working to improve management of productdevelopment and manufacturing risks.

SMIC CSR REPORT 2022

34

GovernanceIntroduction of New Sites

Chubu Segment, Seto Factory

Compliance

CORE PRINCIPLEThe Seto Factory at Chubu Segment was opened in August2021 in Seto-shi, Aichi Prefecture, famous for its "Setomono" ceramic products. In order to expand the market
in the Chubu and Tokai regions, home to many in-vehicle
application customers, and to strengthen our technical support system for them, the Seto Factory is consists of botha sales arm (the Chubu District Sales Office) and an R&D
department (the Seto Research Laboratory). Also locatedhere is a bearing manufacturing department which produces bearings for shock absorbers. Together, they comprisea comprehensive base for sales, manufacturing, and R&D,
where the sales and research departments work together
to provide customers in the Chubu and Tokai regions withproduct performance evaluations, prototype sample submissions, and analysis support in a prompt manner.

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.

Status of Compliance Activities
We conduct various types of trainings (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 withvarious laws relating to our business activities.
In our internal audits, the Business Audit Department conducts several different
audits of sites both in Japan and overseas, for the purpose of maintaining soundcorporate compliance. This includes safety assurance export audits based on theForeign Exchange and Foreign Trade Act, CSR audits based on the RBA code of
conduct, and information security audits of the handling of confidential information at all sites both at home and abroad.
From FY2020, we introduced documentation-based remote audit at domestic
locations in Japan (including group companies) in response to the COVID-19 pandemic. In FY2021, face-to-face audits were conducted only in the headquarters

area (Headquarters and Soka Segment). Corrective actions required upon each
audit are promptly addressed by each department, leading to continuous improvement of the management system.

FY2021 Audits(Unit: number of cases)
Business
AuditsSafety Assurance
ExportSpecified
Shippers

Senju Metal Industry

78

35

18

Group Companies (in Japan)

28

3

3

Group Companies (overseas)

16

0

0

Committees, etc.

0

0

0

Total

122

38

21

Audit Target

Site Overview
Location50-1 Yamanota-cho, Seto-shi, Aichi
489-0975 JapanTel+81-561-89-3160

Fax+81-561-83-3162

Number of
Employees

29

Established an Internal Reporting Hotline System (Smile Mail)
We have established a dedicated internal reporting hotline (Smile Mail) to discover
misconducts and take corrective actions early on, which enables employees to anonymously report and consult about problems involving all employees’ human rights(harassment, etc.) and problems involving compliance (violations of laws and internal
regulations, problems with corporate ethics and social norms, etc.).

Proposals

Complaints

Members and Inquirers

Raising Issues

Issue Resolutions

Consultation Contact ／ E-mail Address

Duty of confidentiality and protection of
the inquirer as top priority
Members have a confidentiality obligation withrespect to information obtained.

35

Requests

Opinions

Consultation

Information

Bullying

Harassment

SMIC CSR REPORT 2022

Corresponding Department ／ Director in Charge

Utmost care shall be taken to ensure thatthe inquirer is not disadvantaged.

Third Party ／ CSR Promotion Committee

If we determine that disclosure to a third
party is necessary, we will respect the willof the inquirer and consult them first.

Kansai Segment, Nishiwaki Factory
To strengthen our manufacturing bases in the Kansai region, we
opened the Nishiwaki Factory in Nishiwaki-shi, Hyogo Prefecture, known as the "City of Textiles" of Japan in May 2019. Thiswas followed by the Nishiwaki No. 2 Factory opened in April
2022. The Nishiwaki Factory manufactures solder paste, solder
preform, and flux, and is responsible for enhancing SMIC's production capacity and BCP.

Site Overview
Location257-1 Wada-Cho, Nishiwaki-shi, Hyogo
677-0052 JapanTel+81-795-38-8888

Fax+81-795-38-8700

Number of
Employees

100 (including those based at the Naka
Factory of the Kansai Segment)

SMIC CSR REPORT 2022

36

COMPANY PROFILE / NETWORK
JAPAN

22

EUROPE5locationslocations
Of which are manufacturing
sites: 1 location

Of which are manufacturing
sites: 10 locations

SENJU METAL INDUSTRY CO., LTD.

ASIA

17

▎Segments in JapanAMERICA

Tochigi Segment (Moka-shi, Tochigi)
Matsuyama Factory / Kinugaoka Factory

Tohoku District Sales Office (Sendai-shi, Miyagi)
Kitakami Sales Office / Koriyama Sales OfficelocationsSoka Segment (Soka-shi, Saitama)

Of which are manufacturing
sites: 11 locations

Chubu Segment (Seto-shi, Aichi)
Seto Factory

Chubu District Sales Office (Seto-shi, Aichi)
Matsumoto Sales Office / Toyama Sales OfficeKansai Segment (Nishiwaki-shi,Hyogo / Taka-cho, Hyogo)
Nishiwaki Factory / Naka Factory

8▎Domestic Sales Locations

locations
Of which are manufacturing
sites: 3 locations

Kansai District Sales Office (Kusatsu-shi, Shiga)
Himeji Sales Office / Kansai Special Sales
Development Dept (within Naka Factory, Hyogo)
Kyushu District Sales Office (Onojo-shi, Fukuoka)

COMPANY PROFILE

LIST OF MAJOR AFFILIATED COMPANIESSENJU METAL INDUSTRY CO., LTD. / SMIC GROUPJAPAN

DUNS# 690663091■ BUSINESS PORTFOLIOESTABLISHEDHEADQUARTERS ADDRESS

April 15, 1938
23 Senjuhashidocho, Adachi-ku, Tokyo
120-8555
Ryoichi Suzuki

PRESIDENT■ BUSINESS SCALEREVENUE(CONSOLIDATED)CAPITAL (SIMPLE)EMPLOYEES (CONSOLIDATED)¥113,073 million(April 1, 2021 - March 31, 2022)¥400,000,000
2,248 (As of March 31, 2022)

Headquarters

Segments in Japan• Smelting, alloying, casting, and expansion of metals, manufacture and saleof processed goods• 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 (affiliated company
business)• Manufacture and sale of machinery related to the above businesses• Internal dispatch businessTochigi Segment Kinugaoka Factory

Soka Segment

Chubu Segment Seto Factory

Senju Giken Co., Ltd.

Senju System Technology Co., Ltd.

Affiliated Companies in Japan

37

SMIC CSR REPORT 2022

Senju Sprinkler Co., Ltd.

Senju Metal (Tianjin) Co., Ltd.

Industrial Analysis Service Ltd.

Senju Metal Europe GmbH

Shanghai Senju Business Management Consulting Co., Ltd.

Senju Sprinkler Co., Ltd.

Senju Manufacturing Europe s.r.o.

Senju Metal (Shanghai) Co., Ltd.

Senju Electronic Corp.
Senju Giken Co., Ltd.
Senju System Technology Co., Ltd.

Senju Metal (Huizhou) Co., Ltd.

ASIA

Senju Metal (Hong Kong) Limited

Senju (Malaysia) Sdn. Bhd.

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

Senju Trading (M) Sdn. Bhd.

Senju Electronic (Taiwan) Co., Ltd.

Senju (Thailand) Co., Ltd.

Senju Metal Industry Co., Ltd. Kaohsiung Branch

Senju America Inc.

Senju Solder (Phils.) Inc.

Senju Metal Korea Co., Ltd.

Senju Comtek Corp.

Beijing Senju Electronic Materials Co., Ltd.

Senju Fire Protection Corp.

Beijing Senju Fire Fighting Equipment Co., Ltd.

AMERICA

Editor's Postscript

Tochigi Segment Matsuyama Factory

Industrial Analysis Service Ltd.

EUROPE (GERMANY, CZECHIA)

Senju Electronic Corp.

Kansai Segment Nishiwaki FactoryThank you for reading the SMIC CSR REPORT 2022.
This report was first published in 2012 with the aim of providing stakeholders with a better understanding of SMIC Group's businesses and initiatives. This issue marks the10th anniversary of the publication of this report, which was made possible by your kind support. We would like to take this opportunity to thank you for your ongoing support
and patronage.
In the midst of the uncertainty over the last few years, such as soaring metal and energy prices and logistics delays caused by the COVID-19 pandemic and Ukraine crisis,
we are striving to continue to deliver trust and peace of mind to our customers by strengthening cooperation with our suppliers first and foremost. In this context, we are very
pleased that we were able to hold a special three-company meeting (see page 9) with Minsur, a mineral mining and smelting company that is at the origin of the supply chain,
and Toyota Tsusho Corporation acting as the intermediary for Minsur. We would like to thank both companies for their willingness to meet with us despite the time difference
and providing us with photographs and proofreading assistance.
In this issue, we have also endeavored to provide a systematic understanding of the SMIC Group by expressing "Materiality" (page 4) and "SMIC Group: Our Vision and CSR"
(page 5) more clearly. We will continue to contribute to a sustainable society through our environmental, social, and governance (ESG) initiatives, including the "Environmental
Vision 2050" formulated in 2020.
We look forward to your continued support for SMIC Group.
SMIC GroupCSR Division of Senju Metal Industry Co., Ltd.

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