Labor Practices

Human Resource Data (As of December 2022)

HUMAN RESOURCE DATA

	Scorp	Unit	2020			2021			2022			Coverage rate
	Scorp	Unit	Male	Female	Total	Male	Female	Total	Male	Female	Total	Coverage rate
Number of employees	Japan	Persons	84	61	145	87	98	185	105	109	214	-
	Overseas		260	298	558	449	267	716	450	219	669	-
	Group		344	359	703	536	365	901	555	328	883	100%

Ratio of female employees	Japan	%	42.1			53.0			50.9			-
	Overseas		53.4			37.3			32.7			-
	Group		51.1			40.5			37.1			100%
Average number of years of service Average age	Japan	Years	10.6	9.0	9.9	10.1	5.5	7.7	9.2	5.8	7.4	-
	Overseas		8.4	7.9	8.6	7.6	8.8	8.2	7.3	9.4	8.3	-
	Group		8.9	8.1	8.9	8.0	7.9	8.1	7.7	8.2	8.1	100%
	Japan	Age	41.3	38.7	40.2	41.3	42.1	41.8	40.9	41.9	41.4	-
	Overseas		30.5	29.4	29.5	28.2	29.8	29.0	28.1	31.1	29.2	-
	Group		33.1	31.0	31.7	30.3	33.1	31.6	30.5	34.7	32.2	100%
Number of individuals in managerial positions	Japan	Persons	25	1	26	26	1	27	24	1	25	-
	Overseas		35	7	42	22	6	28	30	8	38	-
	Group		60	8	68	48	7	55	54	9	63	100%
Ratio of females in managerial positions	Japan	%	3.8			3.7			4.0			-
	Overseas		16.7			21.4			21.1			-
	Group		11.8			12.7			14.3			100%
Number of new graduates hired	Japan	Persons	5	5	10	1	2	3	2	0	2	24%
Number of mid-career hires	Japan	Person	1	0	1	1	5	6	11	3	14	24%
Turnover rates	Japan	Persons	5.9	4.9	5.5	1.3	8.2	4.3	1.9	5.5	3.7	24%

DIVERSITY

Promotion of Diversity

Basic Concept

DMC aims to promote diversity by developing a corporate climate that respects and accepts the individuality of each employee. We place importance on mutual understanding in order to be a company where all employees can play an active role, regardless of age, gender, nationality, disability, religion, or culture. We also believe that such a corporate climate allows us to produce new and fl exible ideas that meet diverse customer needs and secure excellent human resources.

Promotion of Women's Empowerment

DMC promotes women's empowerment and proactively recruits female employees. We recruit based on standards that apply regardless of gender, and provide support for career formation through our human resource development programs regardless of gender through the assignment of the right person to the right place. In accordance with the Act on Promotion of Women's Participation and Advancement in the Workplace, we set a target in FY2021 to increase the ratio of female employees in executive positions from the current 40% to 60%, the same as male employees. To achieve our target, in FY2022 we created a training plan for female managers and candidates, held training sessions and exchange meetings, and conducted surveys to promote women's active participation and advancement in the workplace. As of the end of December 2022, the ratio of those in executive positions* was 47.9% male and 37.1% female.

* Positions above leadership roles (including managerial positions)

Employment Continuation System (Reemployment System)

Reemployment Rate (%)

	2020	2021	2022
Male	100	100	100
Female	100	100	100

DMC has a reemployment system that allows employees with accumulated experience and knowledge to exert their abilities after retirement. Retiring employees who satisfy the requirements and express a desire to do so are eligible to continue working up to the age of 65. The reemployment rate in FY2022 was 100% (coverage rate 24%). Losing senior employees with accumulated knowledge and experience due to retirement is a significant loss for DMC, a company whose business requires advanced skill to maintain its competitiveness. DMC fully utilizes senior employees as important human resources capable of educating and training younger generations to improve the company's capability in the engineering business.

Promoting the Employment of Individuals with Disabilities

Employment Rate of Individuals with Disabilities (%)

2020	2021	2022
0.68	1.08	0.93

DMC respects the right of individuals with disabilities to work, and actively recruits from this valuable pool of human resources. As of the end of December 2022, the employment rate for people with disabilities was 0.93% (coverage rate 24%) We will continue our efforts to improve this employment rate.

Policy on Minimum Wage and Living Wage

DMC's basic policy is to comply with minimum wage regulations in each country and pay wages in excess of the minimum wage.

WORK-LIFE BALANCE

Promotion of work-life balance

Basic Concept

DMC improves in-house systems to allow all employees to choose their own way of working in an environment that ensures a good work-life balance according to family situation. DMC also works to increase the productivity and satisfaction of employees through work-style reform.

Approaches to Appropriate Working Hours

DMC ensures appropriate working hours for employees and prevents overwork in accordance with the Rules of Employment specifying appropriate working hours, overtime and holiday work, and the Labor-Management Agreement.

With regard to overtime and holiday work, an online attendance management system has been used since July 2022 to enable efficient understanding of working hours and to ensure employees' monthly working hours are monitored. We notify individual employees whose actual working hours are close to exceeding the limit to prevent excessive overtime work.

And regarding overtime work, we ensure fair and proper payment in accordance with the Salary Regulations.

Japan

Average monthly overtime working hours per employee in FY2022 was 8.16 hours, which achieved the FY2022 target of a domestic average of 10 hours or less per month.

Overseas

In consideration of the health of employees, the Indonesia Factory has set a daily overtime limit of no more than 3 hours with data managed by division on a daily basis. At the end of each workday, the head of each division checks to ensure that the overtime limit has not been exceeded.

Rate of Annual Paid Holiday Use(%)

		FY2020	FY2021	FY2022
Japan	Male	48.4	48.0	70.1
	Female	57.6	62.2	98.6
	Total	52.2	53	85.0
Overseas	Male	75.6	86.2	83.3
	Female	77.8	81.5	91.8
	Total	76.9	89.2	87.6

Average Monthly Overtime Hours (per person)

		FY2021	FY2022
Japan	Male	10.3	11.2
	Female	5.0	6.0
	Total	7.0	8.16
Overseas	Male	16	8,8
	Female	12	20.2
	Total	14	13.4

Implementation of a Remote Working System

USCO Group flexibly responds to workstyles for the purpose of preventing COVID-19 infection and ensuring safety. Where possible, DMC offices continue implementing flex-time and remote work. Such systems are, however, impossible at factories, where the physical presence of employees is essential for operations.

　In addition, regarding the implementation of diverse workstyles after COVID-19, we will fully examine identified issues and points to be improved, and discuss the rules, scope, application and approval methods as well as the appropriateness of full-scale implementation.

Support for Child Rearing and Nursing Care

The DMC Group has childcare/nursing care leave, and hourly childcare leave systems in place at Group companies in Japan to ensure that employees caring for children and family members requiring care can continue to work during different life stages. In response to the revision of the Child and Family Care Leaves Act, we have started implementing systems within the company, including the availability to take hourly leave to care for children, paid leave, or family care leave, as well as a postpartum paternity leave (childcare leave at time of birth) system.

We believe that helping employees to continue working leads to increased corporate value through the retention of competent individuals with valuable experience. Therefore, division managers have meetings with employees who are taking care of children or family members requiring nursing care to better understand the employees' situations and promote the use of support systems. In FY2022, one female employee took childcare leave.

Employee Satisfaction Surveys

The Indonesia Factory conducts an annual employee satisfaction survey in an effort to improve the working environment. All employees, including temporary employees, are asked to respond to the survey in the form of a questionnaire in five categories: functions of the general affairs and human resource divisions, management policies and strategies of the company's management team, the state and operation of the company organization, leadership, and the work environment. The results are fed back to all employees, and KPIs are established for items that receive poor evaluations in order to make improvements while implementing the PDCA cycle.

HR

Human Resource Development

Basic Concept

DMC believes in individual potential and works on the improvement of in-house education systems aiming to help employees exercise their abilities and improve themselves.

Management System & Operation

USCO Group sets the goal of contributing to society through the persistent growth of companies keeping in mind the hopes, dreams and happiness of our employees and their families. To cultivate the spirit required to realize this goal and improve the capabilities and careers of employees, DMC continues its development of a wide range of systems and tools to cultivate human resources that support its business activities.

In addition to our annual education and training plans for individual employees, we have also established a framework that allows individual managers to monitor the actual state of education and training as well as the effectiveness of their employees. The eligibility of fulltime employees for promotions and pay raises is evaluated on an annual basis by both the Human Resource Division and their respective division managers.

In addition, we also conduct company information sessions and school visits to secure human resources specialized in engineering that will play important roles in the future of the DMC Group. At our Indonesia Factory, we have also formulated our own annual plan and are focusing on human resource development based on business and regional characteristics.

Support to Help Employees Acquire Specialized Knowledge

The production of DMC touchscreens requires advanced knowledge and skills. To continue providing high-quality products, we ensure support that helps employees to acquire certifications specified by laws and regulations.

From FY2018 to FY2020, DMC created manuals for all divisions to standardize and exchange business activities that tend to depend upon individual knowledge and skills. Following on from FY2021, DMC continued to implement business improvements and revised manuals as and when needed. We will continue to update and make improvements to our manuals.

Training for Groups at Different Levels

Training Results

Scope	Average Training Hours per Person
Japan	6.6
Overseas	2
Overseas	3.1

The Group regularly conducts group training by level with the same content as the USCO Group, either jointly or separately. Training includes Seminar for Executives, Seminar for Mangers, Seminar for Evaluators, Basic Seminar for Managers, and Global Human Resource Cultivation Seminar for New Employees. In FY2022, the following training was conducted at DMC (non-consolidated) and the Indonesia Factory.

Breakdown of Main Training

DRAG TO LEFT

Breakdown of Main Training	Name of the Training	Scope		Training Topics
Level-based	Global Human Resource Cultivation Seminar for New Employees	Japan	New employees	Training for new graduates and new employees, focusing on the mindset and manners as working members of society
	New Employee Followup Training		New employees	Follow-up training for new employees after joining, conducted in summer and winter
	Kick-off Training for Younger Employees		Young employees up to fifth year after joining company as new graduate hire	Kick-off training before young person training below, sharing purpose and goals of training
	Young Person Training		Young employees up to fifth year after joining company as new graduate hire	Teamwork and leadership that give both individuals and teams a sense of accomplishment
	Exchange Meeting for Women's Empowerment		All candidates for executive positions and above	Exchange views based on questionnaire regarding women's empowerment to get ideas for solving future issues
	Next Generation Training		All candidates for managerial positions and above	Fundamentals of leadership, accounting, management, and strategy frameworks based on THE TEAM
Management training	Time Management	Overseas	Section Head, Unit Head, Worker	How to make the most of your time by prioritizing work
	Seven Habits		Section Head, Unit Head, Worker	Understanding the seven habits of highly-effective people (an approach to increasing effectiveness based on the principles of human growth from a state of dependence to independence, and finally to interdependence
	Effective Communication		Section Head, Unit Head	Understanding effective communication
	Coaching & Counselling		Section Head, Unit Head	Understanding what coaching and counselling is
	Leadership		Section Head, Unit Head	Acquiring leadership skills

Human Resource Development for Global Business

Language Training Overview

Location	Description
Indonesia Factory	For those planning to do technical intern training in Japan, 8 months of Japanese language training is provided before the intern training, followed by a minimum of 2 hours of Japanese language training per week after arriving in Japan

DMC enhances human resources through a system that allows employees to experience business outside Japan, a practical skills training system at a factory in Japan for Indonesia Factory employees, and a system that dispatches Japanese engineers to provide training to employees at the Indonesia Factory. DMC also holds events at the Indonesia Factory to promote cross-cultural communication. These approaches are designed to develop a corporate climate that allows all employees to exchange opinions about quality improvement, etc. with the goal of manufacturing products with consistent quality based on the same standards in both Japan and Indonesia.

DMC also established a language training system that provides Japanese lessons in Indonesia to promote smooth communication between the Head Office and the Indonesia Factory.

ENSURING A SAFE WORKING ENV.

Work Environment Safety

Basic Concept

Based on the idea that human resources are treasures for the company, DMC strives to ensure a work climate that prioritizes the safety and health of employees to create a work environment in which all the employees can fulfi ll their potential and find satisfaction.

Management System & Operation

To establish a health and safety management system at our domestic bases in accordance with the Industrial Safety and Health Act, DMC facilitates the assignment of Health and Safety Managers, improvement of the health and safety promotion system, the submission of proposals for improving health and safety, education for health and safety, and measures to improve health status. DMC holds monthly Health and Safety Committee meetings to discuss basic measures to prevent risk and health impairment. The company's industrial physician attends Health and Safety Committee meetings to provide advice and instruction on improvement of the working environment and employee health, and conducts inspections at each office. In the event that the state of operations and sanitation presents a risk to health, the industrial physician has the authority to immediately take the necessary measures to correct insufficiencies. The Indonesia Factory has established a Safety Management Committee to ensure safety and hygiene for all employees working at the plant. Operations personnel also prepare safety technical reports and report to their superiors every three months.

Approaches to the Prevention of Labor Accidents

The DMC Group health and safety management system strives to prevent labor accidents. We have also started new programs: Gathering slogans for health and safety from employees to increase their awareness of health and sanitation management both at work and home, and to prevent industrial accidents; Holding safety seminars for newly hired employees; Sharing minor incident cases among Health and Safety Committee members; and Holding seminars for risk assessment at work. Risk assessment allows us to identify potential danger or toxicity at work and it helps prevent and reduce those risks. As a part of the 5S safety patrol, we carry out periodical inspections to check dangerous or unsafe sections, and the areas where minor incidents have occurred, and issue a Request for Improvement aiming to address such problems immediately.

In addition, the President and managers conduct regular patrols of manufacturing sites in the Shirakawa Factory and in the Indonesia Factory to raise the safety awareness of employees working on site. There were no labor accidents in FY2022 (consolidated).

Labor Accident Frequency & Severity Rate

	Scope	FY2020	FY2021	FY2022	Coverage rate
Labor Accident Frequency Rate*1	Group	0.0	0.0	2.27	100%
Labor Accident Severity Rate*2	Group	0	0	0.01	100%

*1 Labor Accident Frequency Rate: Number of deaths and injuries in labor accidents per 1 million actual working hours. It shows the frequency of labor accidents.
*2 Labor Accident Severity Rate: Number of workdays lost per 1,000 actual working hours. It shows the severity of accidents

Employee Health Promotion

DMC places a priority on creating a work environment that allows individual employees to maintain physical and psychological health to ensure the ability to continue working with vigor and satisfaction. We conduct annual health checks once a year (twice a year for factory employees) and have a consultation system for the employees diagnosed with health problems as well as the face-to-face checks and advice given by our industrial physicians. The health check rate in FY2022 was 100% throughout the DMC Group.

Mental Health

DMC provides employee stress checks specified by the Industrial Safety and Health Act. We assess the stress level of individual employees, a physician provides guidance, and DMC takes measures for better employment to ensure the mental health of all employees. Since FY2021, the Human Resource Division has taken the lead in conducting interviews with all employees twice a year as a measure to prevent any mental health problems. Interviews are conducted in a free and open manner, covering topics such as what you are having trouble with and what you would like to see improved, future career path, and about your direct supervisor. The results of the interviews are grouped into the five categories of company, work, supervisors, systems, and organization, and are used to enhance management and leadership training.