SMC : Notice of Convocation Annual General Meeting 2022

To our shareholders

As a comprehensive manufacturer of automatic control equipment to support automated, labor-saving operations in industry, we are working on BCP to fulfill our responsibility to supply products.

We would like to express our sincere gratitude to all our shareholders for your exceptional support.

In the fiscal year ended March 31, 2022, the spread of COVID-19 showed signs of slowing, and demand for capital investments across all industrial sectors increased sharply.

Due in part to the tailwind provided by the intensified conflict between the U.S. and China, which caused countries to begin onshoring their semiconductor production, semiconductor-related demand grew significantly. On the other hand, shortages of materials, particularly semiconductors and electronic components, soaring prices for raw materials, and logistics disruption became increasingly serious.

Furthermore, the Russian invasion of Ukraine in February 2022 has left the world facing a major crisis of conflict and division.

As a comprehensive manufacturer of automatic control equipment that supports automated, labor-saving operations in industry, as well as contributing to reductions in CO2 emissions, SMC intends to fulfill its responsibility to supply products under any circumstances, anywhere in the world.

To that end, SMC will further refine its strengths, which include a global network across more than 80 countries, 21,000 employees, an extensive product lineup of more than 700,000 items and abundant inventory, product development capabilities to respond to customer requests, and a solid financial base. We are also making capital investments to expand production capacity and create multi-location production centers and boosting security measures to protect customer information from the threat of cyberattacks.

We would like to ask our shareholders for your continued support and guidance.

June 2022

Yoshiki Takada, President

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(Security Code: 6273)

June 6, 2022

Yoshiki Takada

President

SMC Corporation

4-14-1,Soto-Kanda,Chiyoda-ku, Tokyo

Notice of the 63rd Annual General Meeting of Shareholders

We would like to inform you that we will hold the 63rd Annual General Meeting of Shareholders as follows. To avoid the risk of infection with the COVID-19,all the shareholders are kindly requested to refrain from attending the meeting in person. Instead, we would encourage you to exercise your voting right in writing or via the Internet by 5:00 p.m., on June 28, 2022 (Tuesday) after studying the attached"Reference Documents for the General Meeting of Shareholders".

Sincerely,

Notes

• Date and Time June 29, 2022 (Wednesday) 10:00 a.m. (Reception starts at 9:00 a.m.)

	2	Venue	Akihabara UDX Building (15F), 4-14-1,Soto-Kanda,Chiyoda-ku, Tokyo
			Conference Room, SMC Corporation
			There are no souvenirs available for shareholders attending the shareholders' meeting.
	3	Agenda	Matters to be reported
			Business Report, Consolidated and Non-consolidated Financial Statements,
			and Audit Report for Consolidated Financial Statements by the Accounting
			Auditor and the Board of Corporate Auditors, for the 63rd fiscal year (April 1,
			2021 to March 31, 2022)
			Matters to be resolved
			Proposal 1	Dividend of Surplus
			Proposal 2	Partial Amendments to the Articles of Incorporation
			Proposal 3	Election of 12 Directors

Regarding Reference Documents for the General Meeting of Shareholders and Appendix Attached to this Notice

▪In accordance with laws and regulations, and the Articles of Incorporation of the Company, the Consolidated Statement of Changes in Equity, Non-Consolidated Statement of Changes in Equity, Notes to Consolidated Financial Statements and Notes to Non-Consolidated Financial Statements are made available on the Company's website, and are not attached in written form to this Notice.

▪The above-mentioned documents that have been disclosed on the internet have been audited by the Accounting Auditors and the Corporate Auditors.

▪Should it become necessary to revise the Appendix or Reference Documents for the General Meeting of Shareholders attached to this Notice, those revisions will be shown on the Company's website.

The Company's website address ▶ https://www.smcworld.com/ir/en/

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Reference Documents for the General Meeting of Shareholders

Proposals and References

第Proposal1号議案1 Dividend of Surplus

[Basic capital policy]

The Company considers that its highest priority issue is to maximize shareholder value through corporate value improvement accompanied by mid- to long-term profit growth.

The Company will also strive to further increase shareholders' equity, aiming to maintain a solid financial base that will not be affected by financial and economic turmoil and rapid fluctuations in foreign exchange rates.

In addition, the Company will continue to maintain its competitive advantage, positively make necessary investments in production facilities, research and development systems, IT infrastructure, sales force resources, etc., for sustained operations, and keep adequate cash on hand to meet relevant capital requirements.

Concerning the return of profit to our shareholders, we are adopting a basic policy of maintaining stable dividend payment. At the same time, we will strive to enhance the profit return even further by combining this with the flexible acquisition of treasury shares depending on the situation.

[Matters related to year-end dividend]

This is to propose that the dividend of surplus for the fiscal year to be made as described below, based on the above-mentioned basic capital policy and in consideration of the latest operating results and financial positions.

Allocation of divisible assets payable

1 to shareholders and total amount

450 yen per share on the Company's common shares

Total amount: 29,404,325,700 yen

• Effective date of the dividends from surplus
  June 30, 2022

Should the aforementioned proposal for the year-end dividend be approved, the annual dividend per share including the interim dividend will be 750 yen, a 250 yen increase compared to the same period as the previous year.

[Reference]

Changes in dividend per share (yen) Consolidated payout ratio (%)

			750
			500
400	400	400	27.3
		24.1	25.7
	20.6
19.6

Year ended	Year ended	Year ended	Year ended	Year ended
March 31, 2018	March 31, 2019	March 31, 2020	March 31, 2021	March 31, 2022
				(Current fiscal year)

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Proposal 2 Partial Amendments to the Articles of Incorporation

1. Reason for amendments

Because the revised provisions set forth in the proviso to Article 1 of the Supplementary Provisions of the Act Partially Amending the Companies Act (Act No. 70 of 2019) are to be enforced on September 1, 2022, the Company proposes to make the following changes to its Articles of Incorporation in preparation for the introduction of the system for providing informational materials for the General Meeting of Shareholders in electronic format.

1. Stipulating that information that constitutes the content of Reference Documents for the General Meeting of Shareholders, etc. shall be provided in electronic format. (Proposed amendment to Article 16, paragraph 1)
2. Limiting the scope of items to be stated in paper-based documents to be delivered to shareholders who requested the delivery of paper-based documents. (Proposed amendment to Article 16, paragraph 2)
3. Deleting provisions related to internet disclosure and deemed provision of Reference Documents for the General Meeting of Shareholders, etc. (Article 16 of the current Articles of Incorporation), which will no longer be necessary.
4. Establishing of supplementary provisions regarding the effective date, etc. of the above-mentioned amendments.

2. Details of amendments

The details of the amendments are as follows.

Current Articles of Incorporation	Proposed Amendments
(Internet Disclosure and Deemed Distribution of
Supplementary Information for the General Meeting of
Shareholders Etc.)
Article 16
For convocation of the General Meeting of
Shareholders, the Company may deem to have
disclosed to shareholders, information concerning
matters to be stated or expressed in supplementary
information for the General Meeting of Shareholders,
business reports, accounting statement and
consolidated accounting statements, by disclosing those
by way of using the Internet in such manner as set forth
in the ministerial ordinance of Ministry of Justice.
	(Measures, etc. for Providing Information in Electronic
	Format)
Article 16
	For convocation of the General Meeting of
	Shareholders, information that constitutes the content
	of supplementary information for the General Meeting
	of Shareholders, etc. shall be provided in electronic
	format.

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Reference Documents for the General Meeting of Shareholders

Current Articles of Incorporation	Proposed Amendments
	(2) Among items for which the measures for providing
	information in electronic format will be taken, the
	Company may exclude all or some of those items
	designated by the Ministry of Justice Order from
	being stated in the paper-based documents to be
	delivered to shareholders who requested the
	delivery of paper-based documents by the record
	date of voting rights.
	(Supplementary Provisions)
	1. The amendments to Article 16 shall come into effect
	on September 1, 2022, which is the date of
	enforcement of the revised provisions provided for
	in the proviso to Article 1 of the Supplementary
	Provisions of the Act Partially Amending the
	Companies Act (Act No. 70 of 2019) (hereinafter
	referred to as the"Date of Enforcement").
	2. Notwithstanding the provision of the preceding
	paragraph, Article 16 (Internet Disclosure and
	Deemed Distribution of Supplementary Information
	for the General Meeting of Shareholders Etc.) of the
	pre-amended Articles of Incorporation shall remain
	effective in regard to any General Meeting of
	Shareholders held on a date within six months from
	the Date of Enforcement.
	3. These Supplementary Provisions shall be deleted on
	the date when six months have elapsed from the
	Date of Enforcement or three months have elapsed
	f r o m t h e d a t e o f t h e G e n e r a l M e e t i n g o f
	Shareholders in the preceding paragraph, whichever
	is later.

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