Compliance

Human Rights Policy

[ Basic Concept ]
SMC stipulates in its SMC Group Ethical and Corporate Principles; “SMC Group will endeavor to become broadly useful to society by acting ethically”, we recognize that respect for human rights of the people who make up society is essential for fulfilling our social responsibilities and for expanding SMC's business on a global scale. Also, we support international norms adopted by the United Nations such as the Guiding Principles on Business and Human Rights, the International Bill of Human Rights and the ILO Declaration on Fundamental Principles and Rights at Work, and will implement its commitment to respect for human rights by ensuring compliance with international human rights obligations and relevant legislation in the countries and regions in which we do business.

1. Scope of application
This policy outlines our basic stance regarding respect for human rights, and applies to all officers and employees of SMC (including temporary and dispatched employees). We also request our suppliers (including subcontractors) to respect the aim of this policy.

2. Human rights due diligence
SMC will establish and operate a human rights due diligence framework to fulfill the responsibility to respect human rights.

3. Rectification and Remediation
SMC will exercise the utmost care to prevent human rights violations in our business activities. If any negative impacts on human rights occur in our business activities or those of our suppliers, we will fulfill our responsibility to respect human rights by taking appropriate actions to rectify the situation.

4. Education
SMC will regularly educate and inform employees so that this policy permeates all of our business activities, so that employees can perform the business activities in accordance with high ethical standards. In particular, harassments such as sexual harassment and power harassment can result in unjust harm to an individual's dignity and character. For this reason, we will implement company-wide efforts to prevent harassment by providing job level-specific group training and mandatory e-learning for all employees, with the aim of maintaining a safe and comfortable working environment where all employees are motivated and can fully demonstrate their abilities.

5. Information disclosure and dialogue with stakeholders
SMC will appropriately disclose this policy and the initiatives based on this policy on website and through disclosure materials. We will work with stakeholders including customers, business partners, shareholders, and investors to gain their understanding and support of our Human Rights Policy through information disclosure, dialogue and other forms of communication.

Basic Anti-Corruption Policy

[ Basic Concept ]
In compliance with SMC Group Code of Conduct and the laws and regulations of each countries concerning the prevention of corrupt practices, SMC has established the following Basic Anti-Corruption Policy to maintain sound and transparent relationships with stakeholders.

1. Prohibition of corrupt practices
SMC will not offer bribes or engage in any other corruption or corruption-related activities (including facilitation payments), whether directly or indirectly, to public officials or persons equivalent to public officials to obtain business benefits. In addition, we will not provide any benefits, such as improper entertainment or gifts, that exceed the scope of socially acceptable norms. In some countries, even for those who do not fall under the category of public officials, we will not provide entertainment, gifts, money, or other benefits for the purpose of preferential treatment or that could be perceived as such, because such benefits may fall under the prohibited items for the purpose of obtaining improper business benefits.

2. Reporting system
SMC will establish a system to receive from officers and employees reports and whistleblower complaints regarding violations or potential violations of anti-corruption laws, regulations, and company rules concerning the prevention of corrupt practices. In addition, we will ensure that whistleblowers are protected to prevent any disadvantage to any officers or employees who makes a report or whistleblower.

3. Education
SMC will regularly conduct education and training for officers and employees on laws, regulations, and company rules for the prevention of corrupt practices.

4. Appropriate accounting procedures
SMC will practice transparent and fair accounting in accordance with accounting standards, and will fully and accurately record and retain all transactions and disposals of assets in order to ensure accountability for compliance with this policy and anti-corruption laws and regulations.

5. Disposition of violators
In the event that any officer or employee violates laws, regulations, or company rules concerning the prevention of corrupt practices, SMC will take strict disciplinary action in accordance with company rules and will take measures to prevent recurrence of such violations.

Whistleblowing System

Outline of whistleblowing system
SMC has a whistleblower system in which officers and employees (including full-time employees, temporary employees, temporary employees, temporary workers, as well as employees who have been retired for less than a year) can make reports directly to the company or an external law firm in the event if they become aware of wrongdoing in breach of the laws, regulations or company rules but are unable to make such a report to their superiors. As for harassment and other trouble in the workplace, a Labor Affairs Consultation Desk has been set up separately in order to make it easier for employees to reach out.

Whistleblower protection
Individuals who receive whistleblower reports and those who investigate whistleblowing cases are obliged to keep confidential the fact that a report has been made, the name of the whistleblower and other information that could lead to the identification of the whistleblower, as well as the content of the report. In addition, company rules prohibit any prejudicial treatment or harassment of the informant in terms of personnel matters, and any breach of these obligations is subject to penalties under the laws, regulations or company rules.

Track record of whistleblower reports
In FY2022, 10 reports were made to the internal contact point and 2 were made to the external contact point. As identical reports were made to both contact points, there were 10 unique whistleblower reports in total 9 of these whistleblower reports were cases claiming acts of harassment, and so they were addressed by the Labor Affairs Consultation Desk. As for the 1 remaining case, the result of the investigation was that the allegation of wrongdoing was not held up.

Tax Policy

[ Basic Concept ]
SMC recognizes that corporations, as members of society, have a social responsibility to contribute to the stability of people's lives and the sound development of the economy, alongside the pursuit of corporate profits. We will fulfill our social responsibility by continuing to pay taxes, especially tax payments, in compliance with the tax laws and regulations of each country and region.

Legal compliance (Tax compliance)
SMC will comply with the tax-related laws and regulations of each country and region with an appropriate understanding of the purpose of such laws and regulations. We will strive to stay up-to-date on ammendments to laws and regulations and to understand them appropriately. If there is any unclear matter, we will contact outside experts for clarification.

Governance
The governance of SMC's Tax Policy is properly structured as part of our internal control. This ensures the objectives of effective and efficient tax-related operations, reliable reporting, and compliance with related laws and regulations are achieved.

Balancing the enhancement of corporate value and appropriate tax payment
SMC will strive to increase its corporate value by further developing relationships of trust with their customers and other parties. Therefore, while we strive to reduce taxes as much as possible, we will keep within reasonable scope in light of the aims of the relevant laws and regulations, and will not engage in excessive tax avoidance.

Relationship with tax authorities
SMC will strive to build and maintain a solid relationship of trust with the tax authorities in each country and region by treating them faithfully and sincerely, and by providing requested information in a timely and appropriate manner.