-1-[Translation]
Note: This document has been translated from a part of the Japanese original for reference purposes only. In theevent of any discrepancy between this translated document and the Japanese original, the original shall prevail.
(Stock Exchange Code 8050)
June 7, 2024
(Start date for electronic provision measures) May 30, 2024
To Shareholders with Voting Rights:
Shuji Takahashi
President
SEIKO GROUP CORPORATION
5-11, Ginza 4-chome, Chuo-ku, TokyoNOTICE OF
THE 163RD ORDINARY GENERAL MEETING OF SHAREHOLDERS
We would like to express our appreciation for your continued support and patronage.
Please be informed that we will hold the 163rd Ordinary General Meeting of Shareholders of SEIKO GROUPCORPORATION (the “Company”). The meeting will be held for the purposes described below.
In convening this Meeting, the Company has adopted measures for the electronic provision of information containedin the Reference Documents for the General Meeting of Shareholders (electronic provision measures) and has posted
such information on the following websites on the Internet. Please access either website to view the documents.

The Company’s website

https://www.seiko.co.jp/en/ir/library/meeting.html
https://www2.jpx.co.jp/tseHpFront/JJK020010Action.do?Show=ShowTokyo Stock Exchange Website

Searched by entering “Seiko Group” or “8050” in the issue name (company(Listed Company Search)

name) or stock exchange code field, and selecting “Basic information,” then“Documents for public inspection/PR information.”

Convocation on the Internet

https://s.srdb.jp/8050/
Scheduled to be posted on Wednesday, June 5, 2024.

Please review the attached Reference Documents for the General Meeting of Shareholders (pages 5 through 26),
and exercise your voting rights in accordance with the “Notice regarding Exercise of Voting Rights” (page 4) by 6
p.m. on Wednesday, June 26, 2024, Japan time.

-2-

1. Date and Time:Thursday, June 27, 2024, at 10 a.m. Japan time
(The reception desk will open at 9 a.m. Japan time.)

2. Place:

Toranomon Hills Forum Hall B
Toranomon Hills Mori Tower 4F
23-3, Toranomon 1-chome, Minato-ku, Tokyo, Japan

3. Meeting Agenda:
Matters to be reported: The Business Report, Non-consolidated Financial Statements, Consolidated Financial
Statements and results of audits by the Accounting Auditor and the Board of Corporate
Auditors of the Consolidated Financial Statements, for the Company’s Fiscal Year
Ended on March 31, 2024 (from April 1, 2023 to March 31, 2024)
Proposals to be resolved: Proposal 1: Distribution of Surplus
Proposal 2: Election of Ten (10) Directors
Proposal 3: Election of Three (3) Corporate Auditors
4. Decisions Concerning Convocation(1) Should you choose to exercise your voting rights via a proxy, you may designate one (1) shareholder otherthan yourself, who is entitled to vote with respect to the Company, as your proxy. In such case, please havethe proxy submit a proof of representation document (power of attorney, etc.) together with your Voting Rights
Exercise Form as well as the proxy’s Voting Rights Exercise Form to the reception desk.
(2) Should you diversely exercise your voting rights, please notify the Company in writing or via anelectromagnetic method to this effect, together with the reason thereof, at least three (3) days prior to the dateof the General Meeting of Shareholders.
◎Among the matters related to electronic provision measures, the following matters are not included in the paper
copy delivered to shareholders who have requested, but are posted on each of the aforementioned websites on theInternet, pursuant to the provisions of laws and regulations and the Articles of Incorporation of the Company.
(i) “Overview of the system to ensure proper operations and the implementation status thereof” for theBusiness Report(ii) “Consolidated Statements of Changes in Equity” and “Notes to Consolidated Financial Statements” forConsolidated Financial Statements(iii)“Non-Consolidated Statements of Changes in Equity” and “Notes to Non-Consolidated Financial Statements”
for Non-Consolidated Financial Statements
The Accounting Auditor and Corporate Auditors have audited each document subject to auditing, including (i) to(iii) above.
◎ Corrections, if any, to the matters related to electronic provision measures, will be posted on each of theaforementioned websites on the Internet, indicating the matters both before and after correction.

-3Notice regarding the distribution of the Business Report video
Prior to the meeting, a video regarding the Business Report will be distributed.
Distribution period (scheduled): Friday, June 21, 2024 to Monday, September 30, 2024
Distribution URL: https://v.srdb.jp/8050/2024soukai_visual/
Notice of Live Streaming of the General Meeting of Shareholders
The proceedings of the General Meeting of Shareholders will be streamed live via the Internet.
1. Please access the following website designated by the Company.
Distribution
Thursday, June 27, 2024, from 10 a.m. Japan time to the end of the meeting
date and time
* The website can be accessed from 9 a.m. Japan time.
Distribution
https://v.srdb.jp/8050/2024soukai/
URL
2. When the screen for entering your ID and password appears, please enter your ID and password asshown below.
ID

Notified to shareholders on written Notice of the General Meeting of Shareholders

Password

Notified to shareholders on written Notice of the General Meeting of Shareholders

Notes:










Please note that you may not be able to view the live streaming, depending on your computer orother devices, your Internet connection environment, or your connection conditions.
Shareholders will be responsible for communication charges and other costs associated withviewing the live streaming.
Shareholders who view the live streaming will not be able to participate in the resolutions on the
day of the General Meeting of Shareholders. Please exercise your voting rights in advance, using
any of the methods described on page 4 below, prior to viewing the live streaming.
We will not be able to accept questions or comments from shareholders who are viewing the live
streaming.
In consideration of the privacy of the shareholders who attend the meeting, the live streaming will
be limited to the vicinity of the Chairman’s and officers’ seats. However, please note that there
may be cases where shareholders are unavoidably visible.
The live streaming may be unavoidably interrupted or cancelled due to the Internet environment,
equipment trouble, or other circumstances.
Please refrain from recording, photographing, or saving the live streaming. Please do not disclose
your ID or password to the public.
For inquiries on how to view the live streaming and network on the day of the meeting:Contact phone number:Contact time:
TAKARA PRINTING CO., LTD.
Notified to shareholders on Thursday, June 27, 2024,(Live streaming support company)
written Notice of the General from 9 a.m. to 12 p.m.
Meeting of Shareholders
Japan time-4Notice regarding Exercise of Voting Rights
Voting rights may be exercised by any of the means described below. Shareholders are requested toreview the Reference Documents for the General Meeting of Shareholders before exercising voting
rights.
Shareholders attending the meeting in person
Date and time of the meeting: Thursday, June 27, 2024, at 10 a.m., Japan time
When attending the meeting, please submit the enclosed Voting Rights Exercise Form at the reception
desk.
Shareholders not attending the meeting in person
Exercise of voting rights in writing
Deadline: Must reach the Company by 6 p.m. on Wednesday, June 26, 2024, Japan time
Please indicate your votes for or against the proposals on the enclosed Voting Rights Exercise Formand return the same so that it is received by the deadline for exercising voting rights.
Any proposals which have not been voted for or against will be construed to have been voted for.
Exercise of voting rights via “Smart Exercise”
Deadline: By 6 p.m. on Wednesday, June 26, 2024, Japan time
1. Scan the “Smart Exercise” QR code on the bottom right of the enclosed Voting Rights Exercise
Form using a smartphone or tablet device.
* An application or function that can scan QR codes is required. (QR code is a registered trademarkof DENSO WAVE INCORPORATED.)
2. Enter your votes for or against the proposals in accordance with the screen instructions.
! If you wish to change your exercise content after exercising your voting rights, you will need toscan the QR code again, and enter your “voting rights exercise code” and “password” displayedon the Voting Rights Exercise Form.
Exercise of voting rights via the Internet
Deadline: By 6 p.m. on Wednesday, June 26, 2024, Japan time
Please access the voting website (https://soukai.mizuho-tb.co.jp/), and exercise your voting rights inaccordance with the screen instructions.
＜Contact information regarding “Smart Exercise” and exercise via the Internet＞
Stock Transfer Agent Department, Mizuho Trust & Banking Co., Ltd.
Phone number: 0120-768-524 (toll free, accessible only in Japan)(Usage time: 9 a.m. to 9 p.m. (excluding the year end and New Year holidays))（For reference）
Institutional investors may use the electronic proxy voting platform operated by ICJ, Inc.
If duplicate votes are exercised* If you exercise a voting right both in writing and via the Internet (including “Smart Exercise”), thevote exercised via the Internet will be taken as the valid vote.
* If you exercise a voting right multiple times via the Internet (including “Smart Exercise”), the votelast exercised will be taken as the valid vote.

-5[Translation]
Reference Documents for the General Meeting of Shareholders
Agenda of the Ordinary General Meeting of Shareholders

Proposal 1: Distribution of Surplus
The Company has a basic policy that focuses on enriching internal reserves to strengthen ourmanagement foundation and providing consistent dividend payments. The Company aims to return
profits with a consolidated payout ratio of 30% or higher.
Based on this policy, with regard to the year-end dividend for the fiscal year under review, we
hereby propose to distribute the surplus as described below.
Matters related to the year-end dividend(1) Type of dividend assets
Cash(2) Allotment of dividend property to shareholders and its total amountAmount per common share: 42.5 yen
Total amount of dividends: 1,757,057,653 yen
Note: As the Company has already paid an interim dividend of 37.5 yen per share, the annual
dividend for the 163rd fiscal year will be 80 yen per share.
(3) Effective date of distribution of surplus
June 28, 2024
[For reference]<Cash dividends per share (full year)>
FY2019Cash dividends
per share(full year)
Consolidated
payout ratio

FY2020

FY2021

FY2022

FY202375 yen37.5 yen

50 yen75 yen80 yen

91.1%

44.5%

32.1%

61.5%

32.7%

-6Proposal 2: Election of Ten (10) Directors
The Company proposes the election of ten (10) Directors, increasing the number of Outside Director
by one (1) with the aim of ensuring the transparency of management and further strengthening thecorporate governance, as the terms of office of all nine (9) Directors will expire at the closing of this
General Meeting of Shareholders.
The candidates for Director are as follows.
Candidate
No.

Name

GenderPositions and responsibilities
at the Company

Attendanceat the Boardof Directors
meetings

1

Reappointed

Shinji
Hattori

MaleChairman, Group CEO,and Group CCO

13 out of 13
meetings(100%)

2

Reappointed

Shuji
Takahashi

Male

President

13 out of 13
meetings(100%)

Director, Senior
Executive Vice President
in charge of Emotional
Value Solutions Domain,
Legal and Intellectual
Property
Director, Senior
Executive Vice President
in charge of Systems
Solutions Domain and
IT・DX Planning
Director, Executive Vice
President, General
Manager of Corporate
Management Division,and in charge ofCorporate Strategy
Planning and Accounting

13 out of 13
meetings(100%)

3

Reappointed

Akio Naito

Male

4

Reappointed

Jun Sekine

Male

5

Reappointed

Taku
Yoneyama

Male

6

Newly
Appointed

Yoichi
Endo

Male

Executive Vice President
in charge of Devices
Solutions Domain

7

Reappointed

Noboru
Saito

Outside Director
Independent Director

Male

Outside Director

8

Reappointed

Hideki
Kobori

Outside Director
Independent Director

Male

Outside Director

9

Newly
Appointed

Masahiko
Uotani

Outside Director
Independent Director

Male

―

―

10

Newly
Appointed

ShihokoUrushi

Outside Director
Independent Director

Female――13 out of 13
meetings(100%)

10 out of 10
meetings(100%)―
13 out of 13
meetings(100%)
10 out of 10
meetings(100%)

-7-

1.

Shinji Hattori (Date of Birth: January 1, 1953) (Reappointed)(1)

Number of shares of the Company held: 2,279,289(2)Length of service as a Director: 17 years(3)

Attendance at the Board of Directors meetings during the fiscal
year ended March 31, 2024: 13 out of 13 meetings (100%)(4)Career, positions, and responsibilities(5)

April 1975

Joined Mitsubishi Corporation

July 1984

Joined Seikosha Co., Ltd.

January 1996

Director of Seiko Precision Inc.

June 2001

President of Seiko Precision Inc.

June 2003

President of SEIKO WATCH CORPORATION

June 2007

Director of the Company

June 2009

Executive Vice President of the Company

April 2010

President of the Company

October 2012

Chairman & Group CEO of the Company

June 2015

President & CEO of SEIKO WATCH CORPORATION

April 2017

Chairman & CEO of SEIKO WATCH CORPORATION

June 2020

Chairman of WAKO Co., Ltd. (to present)

June 2020

Chairman, Group CEO, and Group CCO of the Company (topresent)

April 2021

Chairman of SEIKO WATCH CORPORATION (to present)

Significant concurrent positions:
Chairman of SEIKO WATCH CORPORATION
Chairman of WAKO Co., Ltd.

(6)

Reasons for nomination as candidate for director:
The Company nominates Mr. Shinji Hattori as a candidate for Director, expecting him
to perform full functions as a Board member in the decision-making to execute
important business and supervise the other Directors’ execution of their duties byutilizing his wealth of experience and achievement, including the following: (i) having
served as President of the Company and its group companies; and (ii) currently being
engaged in strategic planning and management direction for the entire Company Group
from a medium- to long-term, and global perspective as Chairman, Group CEO, andGroup CCO of the Company.

(7)

Special relationship of interest between the Company and the candidate for Director:
There is no special relationship of interest between the Company and Mr. Shinji Hattori.

-82.

Shuji Takahashi (Date of Birth: August 29, 1957) (Reappointed)(1)

Number of shares of the Company held: 12,500(2)Length of service as a Director: 11 years(3)

Attendance at the Board of Directors meetings during the fiscal
year ended March 31, 2024: 13 out of 13 meetings (100%)(4)Career, positions, and responsibilities
April 1980
February 2011

Senior Vice President of SEIKO WATCH CORPORATION

June 2012

Director, Senior Vice President of SEIKO WATCHCORPORATION

June 2013

Director of the Company

April 2014

Director, Executive Vice President of SEIKO WATCHCORPORATION

June 2015

Director, Senior Executive Vice President of SEIKO WATCHCORPORATION

June 2016(5)

Joined the Company

April 2017

Executive Director of the Company
Director of the Company

April 2017

President & COO & CMO of SEIKO WATCH CORPORATION

June 2021

President of the Company (to present)

Significant concurrent positions:―(6)

Reasons for nomination as candidate for director:
The Company nominates Mr. Shuji Takahashi as a candidate for Director, expecting
him to perform full functions as a Board member in the decision-making to execute
important business and supervise the other Directors’ execution of their duties byutilizing his wealth of experience and achievement, including the following: (i) having
promoted the Global Brand strategy for the Watches Business as President of SEIKO
WATCH CORPORATION; and (ii) currently being engaged in management direction
for the Company Group as President of the Company.

(7)

Special relationship of interest between the Company and the candidate for Director:
There is no special relationship of interest between the Company and Mr. Shuji
Takahashi.

-93.

Akio Naito (Date of Birth: November 9, 1960) (Reappointed)(1)

Number of shares of the Company held: 10,300(2)Length of service as a Director: 2 years(3)

Attendance at the Board of Directors meetings during the fiscal
year ended March 31, 2024: 13 out of 13 meetings (100%)(4)Career, positions, and responsibilities
April 1984

Joined the Company

January 2002

Managing Director of SEIKO Australia Pty. Ltd.

April 2006

General Manager, Legal & Intellectual Property Department of theCompany

June 2011

Director of the Company

June 2013

Executive Director of the Company

June 2016

Director of the Company

June 2016

Director, Senior Executive Vice President of SEIKO WATCHCORPORATION

October 2018

Chairman & CEO of Grand Seiko Corporation of America

December 2019

Director, Deputy Chief Operating Officer of SEIKO WATCHCORPORATION

April 2021

President of SEIKO WATCH CORPORATION (to present)

June 2022

Director, Senior Executive Vice President of the Company (topresent)<Responsibilities>
Emotional Value Solutions Domain, Legal and Intellectual Property(5)Significant concurrent positions:
President of SEIKO WATCH CORPORATION(6)

Reasons for nomination as candidate for director:
The Company nominates Mr. Akio Naito as a candidate for Director, expecting him to
perform full functions as a Board member in the decision-making to execute importantbusiness and supervise the other Directors’ execution of their duties by utilizing his
wealth of experience and achievement, including the following: (i) having been
engaged mainly in legal affairs, and overseas marketing for the Watches Business as amember of the Company Group since joining the Company; and (ii) currently being
engaged in management direction as President of SEIKO WATCH CORPORATION
and being in charge of the Emotional Value Solutions Domain, legal and intellectual
property as Director and Senior Executive Vice President of the Company.

(7)

Special relationship of interest between the Company and the candidate for Director:
There is no special relationship of interest between the Company and Mr. Akio Naito.

- 10 -

4.

Jun Sekine (Date of Birth: October 1, 1959) (Reappointed)(1)

Number of shares of the Company held: 2,200(2)Length of service as a Director: 3 years(3)

Attendance at the Board of Directors meetings during the fiscal
year ended March 31, 2024: 13 out of 13 meetings (100%)(4)Career, positions, and responsibilities
April 1984

Joined IBM Japan, Ltd.

April 1998

Sales Manager, Insurance of IBM Japan, Ltd.

June 2002

General Manager, Insurance of IBM Japan, Ltd.

January 2006

Managing Director of IBM Japan, Ltd.

July 2012

President and Director of ESCCO JAPAN K.K.

January 2013

Vice President and General Manager, Strategic Business Divisionof SAP Japan Co., Ltd.

July 2015

Vice President and Chief Customer Officer of SAP Japan Co., Ltd.

December 2015

Director and Executive Vice President of SEIKO Solutions Inc.

April 2017

President of SEIKO Solutions Inc. (to present)

June 2021

Director of the Company
Director, Senior Executive Vice President of the Company (topresent)

June 2022<Responsibilities>
Systems Solutions Domain, IT・DX Planning(5)

Significant concurrent positions:
President of SEIKO Solutions Inc.

(6)

Reasons for nomination as candidate for director:
The Company nominates Mr. Jun Sekine as a candidate for Director, expecting him to
perform full functions as a Board member in the decision-making to execute importantbusiness and supervise the other Directors’ execution of their duties by utilizing his
wealth of experience and achievement, including the following: (i) having extensive
knowledge and a wide-ranging network in the IT industry from having served as amanagement member of foreign-affiliated IT corporations; and (ii) currently being
engaged in management direction as President of SEIKO Solutions Inc. and being incharge of the Systems Solutions Domain and IT・DX Planning as Director and Senior
Executive Vice President of the Company.

(7)

Special relationship of interest between the Company and the candidate for Director:
There is no special relationship of interest between the Company and Mr. Jun Sekine.

- 11 5.

Taku Yoneyama (Date of Birth: November 15, 1962) (Reappointed)(1)

Number of shares of the Company held: 8,500(2)Length of service as a Director: 1 year

(3)

Attendance at the Board of Directors meetings during the fiscal
year ended March 31, 2024: 10 out of 10 meetings (100%)(4)Career, positions, and responsibilities
April 1986

Joined the Company

May 2011

General Manager, Corporate Strategy Planning Department of
the Company

February 2015

Senior Vice President of SEIKO WATCH CORPORATION

June 2015

Director, Senior Vice President of SEIKO WATCHCORPORATION

April 2017

Director, Executive Vice President of SEIKO WATCHCORPORATION

April 2020

Director, Senior Executive Vice President of SEIKO WATCHCORPORATION

April 2023

Executive Vice President of the Company

April 2023

General Manager of Corporate Management Division of theCompany (to present)

June 2023

Director, Executive Vice President of the Company (to present)

January 2024

Audit & Supervisory Board Member (Outside) of OHARA INC.
(to present)<Responsibilities>
General Manager of Corporate Management Division, Corporate Strategy Planningand Accounting(5)

Significant concurrent positions:Audit & Supervisory Board Member (Outside) of OHARA INC.

(6)

Reasons for nomination as candidate for director:
The Company nominates Mr. Taku Yoneyama as a candidate for Director, expecting
him to perform full functions as a Board member in the decision-making to execute
important business and supervise the other Directors’ execution of their duties byutilizing his wealth of experience and achievement, including the following: (i) having
been engaged mainly in corporate strategy planning and corporate management for the
Watches Business as a member of the Company Group since joining the Company;and (ii) currently being in charge of business management in general, including
corporate strategy planning, accounting, and human resources as General Manager ofCorporate Management Division of the Company.

(7)

Special relationship of interest between the Company and the candidate for Director:
There is no special relationship of interest between the Company and Mr. Taku
Yoneyama.

- 12 -

6.

Yoichi Endo (Date of Birth: December 2, 1961) (Newly Appointed)(1)

Number of shares of the Company held: 800(2)Length of service as a Director: ―(3)

Attendance at the Board of Directors meetings during the fiscal
year ended March 31, 2024: ―(4)

Career, positions, and responsibilities
April 1984

Joined Sanwa Kouki K.K.

January 1986

Joined Seiko Instruments & Electronics Ltd. (currently Seiko
Instruments Inc.)

October 2004

General Manager of Network Components Business Unit
Semiconductor Design 1st Department of Seiko Instruments Inc.

March 2007

Senior General Manager of Network Components Business Unit
Semiconductor Design Department of Seiko Instruments Inc.

February 2020

Director of SEIKO NPC CORPORATION

April 2020

Director and Executive Vice President of SEIKO NPCCORPORATION

June 2020

President of SEIKO NPC CORPORATION (to present)

April 2024

Executive Vice President of the Company (to present)

April 2024

President of Seiko Instruments Inc. (to present)<Responsibilities>
Devices Solutions Domain(5)Significant concurrent positions:
President of Seiko Instruments Inc.
President of SEIKO NPC CORPORATION(6)

Reasons for nomination as candidate for director:
The Company nominates Mr. Yoichi Endo as a candidate for Director, expecting him
to perform full functions as a Board member in the decision-making to execute
important business and supervise the other Directors’ execution of their duties byutilizing his wealth of experience and achievement, including the following: (i) having
a wide-ranging knowledge and experience from having been engaged mainly indesigning, technical development, and sales of the Devices Solutions Business as amember of the Company Group since joining the Company; and (ii) currently being
engaged in management direction as President of Seiko Instruments Inc.

(7)

Special relationship of interest between the Company and the candidate for Director:
There is no special relationship of interest between the Company and Mr. Yoichi Endo.

- 13 7.

Noboru Saito (Date of Birth: August 8, 1961)(Reappointed) (Outside Director) (Independent Director)(1)

Number of shares of the Company held: 0(2)

Length of service as a Director: 2 years(3)

Attendance at the Board of Directors meetings during the fiscal
year ended March 31, 2024: 13 out of 13 meetings (100%)(4)Career, positions, and responsibilities
April 1986

Joined Burroughs Corporation (currently BIPROGY Inc.)

April 2004

General Manager, Industry & Commerce 2 of Nihon Unisys, Ltd.
(currently BIPROGY Inc.)

April 2009

General Manager, Industry & Commerce of Nihon Unisys, Ltd.
(currently BIPROGY Inc.)

April 2010

General Manager, Industry & Commerce 2 of Nihon Unisys, Ltd.
(currently BIPROGY Inc.)

April 2012

General Manager, Business Services of Nihon Unisys, Ltd.
(currently BIPROGY Inc.)

April 2013

Corporate Officer of Nihon Unisys, Ltd. (currently BIPROGY
Inc.)

April 2016
June 2016
April 2020

(5)

Senior Corporate Officer of Nihon Unisys, Ltd. (currently
BIPROGY Inc.)
Director, Senior Corporate Officer of Nihon Unisys, Ltd.
(currently BIPROGY Inc.)
Representative Director, Executive Corporate Officer of Nihon
Unisys, Ltd. (currently BIPROGY Inc.)

June 2022

Outside Director of the Company (to present)

April 2024

Representative Director, President of BIPROGY Inc. (to present)

Significant concurrent positions:Representative Director, President of BIPROGY Inc.

(6)

Reasons for nomination as candidate for Outside Director and the overview of
expected roles:
The Company nominates Mr. Noboru Saito as a candidate for Outside Director,
expecting him to contribute to strengthening supervisory functions over the executionof business and provide advice from a wide-ranging management perspective based on
his extensive experience and high insight cultivated in his career as a management
member of corporations over many years.

(7)

Special relationship of interest between the Company and the candidate for Outside
Director and the candidate’s independence from the Company:
There is no special relationship of interest between the Company and Mr. Noboru
Saito.
Mr. Noboru Saito is currently serving as Representative Director, President of
BIPROGY Inc. The BIPROGY Group and the Company Group have transactions in

- 14 the Systems Solutions Business. However, these transactions constitute less than one
percent of BIPROGY Inc. and the Company’s consolidated net sales, and is thus
insignificant.
Mr. Noboru Saito satisfies the requirements of an independent director under the rulesof the Tokyo Stock Exchange, and has been reported thereto as an independent
director. If his appointment is approved at this Ordinary General Meeting of
Shareholders, he will continue to serve as an independent director.

- 15 8.

Hideki Kobori (Date of Birth: February 2, 1955)(Reappointed) (Outside Director) (Independent Director)(1)

Number of shares of the Company held: 0(2)

Length of service as a Director: 1 year

(3)

Attendance at the Board of Directors meetings during the fiscal
year ended March 31, 2024: 10 out of 10 meetings (100%)(4)Career, positions, and responsibilities
April 1978

Joined Asahi Chemical Industry Co., Ltd. (currently Asahi Kasei
Corp.)

July 2004

General Manager, Corporate Strategy and Planning Department of
Asahi Kasei EMD Corp.

April 2007

General Manager, Electronics Devices Marketing & Sales Centerof Asahi Kasei EMD Corp.

April 2008

Director and Senior Executive Officer of Asahi Kasei EMD Corp.

April 2009

Director and Primary Executive Officer of Asahi Kasei
Microdevices Corp.

April 2010

President & Representative Director, Presidential Executive
Officer of Asahi Kasei Microdevices Corp.

June 2012

Director and Senior Executive Officer of Asahi Kasei Corp.

April 2014
April 2016

(5)

Representative Director, Primary Executive Officer of Asahi Kasei
Corp.
President & Representative Director, Presidential Executive
Officer of Asahi Kasei Corp.

April 2022

Chairman & Representative Director of Asahi Kasei Corp.

June 2022

Vice Chair of KEIDANREN (Japan Business Federation) (topresent)

April 2023

Chairman & Director of Asahi Kasei Corp. (to present)

June 2023

Outside Director of Nomura Research Institute, Ltd. (to present)

June 2023

Outside Director of the Company (to present)

Significant concurrent positions:
Chairman & Director of Asahi Kasei Corp.
Outside Director of Nomura Research Institute, Ltd.
Vice Chair of KEIDANREN (Japan Business Federation)(6)

Reasons for nomination as candidate for Outside Director and the overview of
expected roles:
The Company nominates Mr. Hideki Kobori as a candidate for Outside Director,
expecting him to contribute to strengthening supervisory functions over the executionof business and provide advice from a wide-ranging management perspective based on
his extensive experience and high insight cultivated in his career as a management
member of corporations over many years.

- 16 -

(7)

Special relationship of interest between the Company and the candidate for Outside
Director and the candidate’s independence from the Company:
There is no special relationship of interest between the Company and Mr. Hideki
Kobori.
Mr. Hideki Kobori satisfies the requirements of an independent director under therules of the Tokyo Stock Exchange, and has been reported thereto as an independent
director. If his appointment is approved at this Ordinary General Meeting of
Shareholders, he will continue to serve as an independent director.

- 17 9.

Masahiko Uotani (Date of Birth: June 2, 1954)(Newly Appointed) (Outside Director) (Independent Director)(1)

Number of shares of the Company held: 0(2)

Length of service as a Director: ―(3)

Attendance at the Board of Directors meetings during the fiscal
year ended March 31, 2024: ―(4)

Career, positions, and responsibilities
April 1977

Joined Lion Dentifrice Co., Ltd. (currently Lion Corporation)

January 1988

Manager of Citibank, N.A.

April 1991

Representative Director, Vice President of Kraft Japan Limited(currently Mondelēz Japan Limited)

May 1994

Director, Executive Vice President and Chief Officer ofMarketing of Coca-Cola (Japan) Company, Limited

October 2001

Representative Director, President (Global Officer) of Coca-Cola(Japan) Company, Limited

August 2006

Representative Director, Chair of Coca-Cola (Japan) Company,
LimitedJune 2007
April 2013
April 2014
June 2014
January 2020
January 2021
January 2023
March 2024
(5)

Representative Director, Chief Executive Partner of BrandVisionInc.
Outside Chief Marketing Advisor of Shiseido Company, Limited
President and CEO of Shiseido Company, Limited
Representative Director, President and CEO of Shiseido
Company, Limited
Representative Director, President and CEO, Japan Region CEO
of Shiseido Company, Limited
Representative Director, Executive Officer, President and CEO,Japan Region CEO of Shiseido Company, Limited
Representative Director, Executive Officer, Chairman and CEOof Shiseido Company, Limited
Director, Representative Corporate Executive Officer, Executive
Officer, Chairman and CEO of Shiseido Company, Limited (topresent)

Significant concurrent positions:
Director, Representative Corporate Executive Officer, Executive Officer, Chairman
and CEO of Shiseido Company, Limited(6)

Reasons for nomination as candidate for Outside Director and the overview of
expected roles:
The Company nominates Mr. Masahiko Uotani as a candidate for Outside Director,
expecting him to contribute to strengthen supervisory function over the execution ofbusiness and provide advice from a wide-ranging management perspective based on
his extensive experience and high insight cultivated in his career as a management
member of corporations over many years.

- 18 (7)Special relationship of interest between the Company and the candidate for Outside
Director and the candidate’s independence from the Company:
There is no special relationship of interest between the Company and Mr. Masahiko
Uotani.
Mr. Masahiko Uotani satisfies the requirements of an independent director under therules of the Tokyo Stock Exchange, and will be reported thereto as an independent
director, if his appointment is approved at this Ordinary General Meeting of
Shareholders.

- 19 10.

Shihoko Urushi (Date of Birth: April 4, 1961)(Name on the Family Register: Shihoko Abe)
(Newly Appointed) (Outside Director) (Independent Director)(1)

Number of shares of the Company held: 0(2)

Length of service as a Director: ―(3)

Attendance at the Board of Directors meetings during the fiscal
year ended March 31, 2024: ―(4)

Career, positions, and responsibilities
April 1986

Worked at a private integrated school for girls in Tokyo

April 1989

Worked at SHINAGAWA JOSHI GAKUIN

April 2006

Principal of SHINAGAWA JOSHI GAKUIN

April 2017

Director of SHINAGAWA JOSHI GAKUIN (to present)

April 2017

Principal of SHINAGAWA JOSHI GAKUIN Junior High School

April 2018

Outside Director of Culture Convenience Club Co., Ltd. (topresent)

June 2021
June 2021(5)

Outside Audit & Supervisory Board Memberof Tokio Marine &Nichido Fire Insurance Co., Ltd. (to present)
Member of the Administrative Reform Promotion Council (topresent)

Significant concurrent positions:
Director of SHINAGAWA JOSHI GAKUIN
Outside Director of Culture Convenience Club Co., Ltd.
Outside Audit & Supervisory Board Member of Tokio Marine & Nichido Fire
Insurance Co., Ltd.

(6)

Reasons for nomination as candidate for Outside Director and the overview of
expected roles:
The Company nominates Ms. Shihoko Urushi as a candidate for Outside Director,
expecting her to contribute to strengthening supervisory functions over the executionof business and provide advice from a wide-ranging management perspective based onher extensive experience and high insight cultivated in her career as a management
member of an educational corporation over many years.

(7)

Special relationship of interest between the Company and the candidate for Outside
Director and the candidate’s independence from the Company:
There is no special relationship of interest between the Company and Ms. Shihoko
Urushi.
Ms. Shihoko Urushi satisfies the requirements of an independent director under therules of the Tokyo Stock Exchange, and will be reported thereto as an independent
director, if her appointment is approved at this Ordinary General Meeting of
Shareholders.

- 20 -

Note 1: Tokio Marine & Nichido Fire Insurance Co., Ltd., where Ms. Shihoko Urushi
concurrently serves as an Outside Audit & Supervisory Board Member, received abusiness improvement order pursuant to the Insurance Business Act from the Financial
Services Agency on December 26, 2023. The order was issued with respect to alleged
violations of the Antimonopoly Act, improper actions within the scope of said Act, andunderlying structural issues associated with these actions. Ms. Shihoko Urushi was notaware of such fact in advance. However, she has offered recommendations from theperspective of enhancing internal controls and ensuring compliance with laws andregulations at the Board of Directors meetings, etc. on a regular basis. After becoming
aware of such fact, she has fulfilled her responsibilities by conducting a thoroughexamination and analysis of real causes and directing the formulation of preventive
measures to avoid recurrence.
Note 2: The Company entered into an agreement with Mr. Noboru Saito and Mr. Hideki
Kobori to limit liability for damages set forth in Article 423, paragraph 1 of theCompanies Act, pursuant to Article 427, paragraph 1 thereof. The limit on the liability
for damages under the said agreement will be the minimum limit of liability
prescribed in Article 425, paragraph 1 of the Companies Act. If their appointment isapproved, the Company will continue the aforementioned liability limitationagreement with them. If the appointment of Mr. Masahiko Uotani and Ms. Shihoko
Urushi is approved, the Company plans to enter into a similar agreement with them.
Note 3: The Company has entered into a directors and officers liability insurance (D&O
insurance) policy with an insurance company, with all Directors of the Company as
the insured, as prescribed in Article 430-3, paragraph 1 of the Companies Act. The
details of the insurance policy are as described in the Business Report, “4. Matter
related to officers, (3) Overview of directors and officers liability insurance.” If theappointment of the candidates is approved, each candidate will be included as aninsured under the insurance policy. The Company plans to renew the insurance policy
with the same conditions during the term of office of each candidate.

- 21 Proposal 3: Election of Three (3) Corporate Auditors
The Company proposes the election of three (3) Corporate Auditors, as the terms of office of
three (3) Corporate Auditors, Mr. Haruhiko Takagi, Mr. Takashi Nishimoto and Mr. Kenji
Sakurai, will expire at the closing of this General Meeting of Shareholders.
The Company has obtained consent from the Board of Corporate Auditors with regard to this
proposal.
The candidates for Corporate Auditors are as follows.
1.

Takashi Nishimoto (Date of Birth: September 9, 1962) (Reappointed)(1)

Number of shares of the Company held: 2,800(2)Length of service as a Corporate Auditor: 4 years(3)

Attendance at the Board of Directors meetings during the fiscal
year ended March 31, 2024: 13 out of 13 meetings (100%)
Attendance at the Board of Corporate Auditors meetings during
the fiscal year ended March 31, 2024: 10 out of 10 meetings(100%)(4)

Career and positions(5)

April 1985

Joined the Company

June 2009

General Manager, General Affairs Department of the Company

October 2012

General Manager, Legal & Intellectual Property Department of
the Company

January 2015

Senior Vice President of SEIKO Solutions Inc.

June 2015

Director and Senior Vice President of SEIKO Solutions Inc.

April 2019

Director and Executive Vice President of SEIKO Solutions Inc.

June 2020

Standing Corporate Auditor of the Company (to present)

Significant concurrent positions:―(6)

Reasons for nomination as candidate for Corporate Auditor:
Mr. Takashi Nishimoto has been engaged mainly in legal affairs, general affairs,
finance and accounting as a member of the Company Group since joining theCompany. He has experience in corporate management, serving as Director andExecutive Vice President of SEIKO Solutions Inc., and is serving as Standing
Corporate Auditor of the Company since June 2020. The Company nominates Mr.
Takashi Nishimoto as a candidate for Corporate Auditor, expecting him to perform
appropriate audit functions by utilizing his wealth of experience and knowledge,
including his thorough knowledge of the Company Group’s business, as well as his
reasonable-degrees of knowledge about legal affairs, finance, and accounting acquired
through the performance of these duties.

- 22 (7)Special relationship of interest between the Company and the candidate for Corporate
Auditor:There is no special relationship of interest between the Company and Mr. Takashi
Nishimoto.

- 23 2.

Minoru Nakao (Date of Birth: January 21, 1962) (Newly Appointed)(1)

Number of shares of the Company held: 300(2)

Length of service as a Corporate Auditor: ―(3)

Attendance at the Board of Directors meetings during the fiscal
year ended March 31, 2024: ―Attendance at the Board of Corporate Auditors meetings during
the fiscal year ended March 31, 2024: ―(4)

Career and positions(5)

April 1986

Joined the Company

October 2010

General Manager, Accounting and Finance Department,
Administration Division of SEIKO WATCH CORPORATION

June 2013

General Manager, Business Management Department, Corporate
Strategy & Planning Division of SEIKO WATCHCORPORATION

July 2015

Seconded to SEIKO Hong Kong Ltd.

April 2019

General Manager, Internal Audit Department of the Company

June 2022

Standing Corporate Auditor of SEIKO Solutions Inc.

June 2023

Senior Vice President of Seiko Instruments Inc. (to present)

Significant concurrent positions:
Senior Vice President of Seiko Instruments Inc. (scheduled to retire on June 26, 2024)(6)

Reasons for nomination as candidate for Corporate Auditor:
Mr. Minoru Nakao has been engaged in finance and accounting and business
management as a member of the Company Group since joining the Company. He has
experience of serving as General Manager of the Internal Audit Department of theCompany and Standing Corporate Auditor and Senior Vice President of groupcompanies. The Company nominates Mr. Minoru Nakao as a candidate for Corporate
Auditor, expecting him to perform appropriate audit functions by utilizing his wealthof experience and knowledge, including his thorough knowledge of the Company
Group’s business, as well as his reasonable-degrees of knowledge about finance andaccounting acquired through the performance of these duties.

(7)

Special relationship of interest between the Company and the candidate for Corporate
Auditor:There is no special relationship of interest between the Company and Mr. Minoru
Nakao.

- 24 3.

Kenji Sakurai (Date of Birth: August 17, 1959)(Reappointed) (Outside Corporate Auditor) (Independent Auditor)(1)

Number of shares of the Company held: 0(2)

Length of service as a Corporate Auditor: 2 years(3)

Attendance at the Board of Directors meetings during the fiscal
year ended March 31, 2024: 13 out of 13 meetings (100%)
Attendance at the Board of Corporate Auditors meetings during the
fiscal year ended March 31, 2024: 10 out of 10 meetings (100%)(4)Career and positions
April 1982

Joined The Dai-ichi Mutual Life Insurance Company

April 2008

Executive Officer of The Dai-ichi Mutual Life Insurance Company

April 2011

Managing Executive Officer of The Dai-ichi Life Insurance
Company, Limited

June 2014

Director, Managing Executive Officer of The Dai-ichi Life
Insurance Company, Limited

April 2015

Director, Senior Managing Executive Officer of The Dai-ichi Life
Insurance Company, Limited

October 2016

Senior Managing Executive Officer of Dai-ichi Life Holdings, Inc.

October 2016
April 2017
April 2017

Representative Director, Vice President of The Dai-ichi Life
Insurance Company, Limited (retired in March 2020)

April 2021

Director of Dai-ichi Life Holdings, Inc. (retired in June 2021)

June 2021
June 2022(5)

Representative Director, Senior Managing Executive Officer of
The Dai-ichi Life Insurance Company, Limited
Vice President of Dai-ichi Life Holdings, Inc.

Representative Director, President of THE DAI-ICHI BUILDING
CO., LTD. (to present)
Outside Corporate Auditor of the Company (to present)

Significant concurrent positions:Representative Director, President of THE DAI-ICHI BUILDING CO., LTD.

(6)

Reasons for nomination as candidate for Outside Corporate Auditor:
The Company nominates Mr. Kenji Sakurai as a candidate for Outside Corporate
Auditor, expecting him to perform appropriate audit functions based on his extensive
experience and high insight cultivated in his career as a management member ofcorporations over many years.

(7)

Special relationship of interest between the Company and the candidate for Outside
Corporate Auditor and the candidate’s independence from the Company:
There is no special relationship of interest between the Company and Mr. Kenji Sakurai.
Mr. Kenji Sakurai is currently serving as Representative Director, President of THE
DAI-ICHI BUILDING CO., LTD. THE DAI-ICHI BUILDING CO., LTD. and theCompany Group have transactions related to real estate leases. However, these- 25 transactions constitute less than one percent of the net sales of THE DAI-ICHI
BUILDING CO., LTD. and the Company’s consolidated net sales, and is thus
insignificant. Mr. Kenji Sakurai previously worked at Dai-ichi Life Holdings, Inc.
However, Mr. Kenji Sakurai has not been involved in execution of operations at Daiichi Life Holdings, Inc. since he retired from office of Director of the said company inJune 2021. The Dai-ichi Life Group and the Company have transactions related toinsurance contracts. However, these transactions constitute less than one percent ofconsolidated ordinary revenues (equivalent to consolidated net sales) of Dai-ichi Life
Holdings, Inc. and the Company’s consolidated net sales, and is thus insignificant. In
addition, the Company Group has borrowed funds from the Dai-ichi Life Group.
However, the amount of such borrowings constitutes less than two percent ofconsolidated total assets of Dai-ichi Life Holdings, Inc. and the Company, and is thus
insignificant.
Mr. Kenji Sakurai satisfies the requirements of an independent auditor under the rulesof the Tokyo Stock Exchange, and has been reported thereto as an independent auditor.
If his appointment is approved at this Ordinary General Meeting of Shareholders, hewill continue to serve as an independent auditor.
Note 1: From October 2020 to October 2021, it was discovered that a former employee of The
Dai-ichi Life Insurance Company, Limited, where Mr. Kenji Sakurai was serving as
Representative Director, Vice President, was involved in the improper acquisition ofmoney from customers. Although the aforementioned misconduct occurred in businessactivities during his time in office, Mr. Kenji Sakurai was not directly involved in anyof the facts discovered. Mr. Kenji Sakurai had already retired from his position as
Representative Director, Vice President of the said company at the time he becameaware of these facts. However, as a Director of Dai-ichi Life Holdings, Inc., the parent
company of the said company, he has fulfilled his responsibilities, including efforts tofurther strengthen legal compliance initiatives and to prevent any recurrence.
Note 2: The Company entered into an agreement with Mr. Kenji Sakurai to limit liability fordamages set forth in Article 423, paragraph 1 of the Companies Act, pursuant to
Article 427, paragraph 1 thereof. The limit on the liability for damages under the said
agreement will be the minimum limit of liability prescribed in Article 425, paragraph 1of the Companies Act. If his appointment is approved, the Company will continue theaforementioned liability limitation agreement with him.
Note 3: The Company has entered into a directors and officers liability insurance (D&O
insurance) policy with an insurance company, with all Corporate Auditors of theCompany as the insured, as prescribed in Article 430-3, paragraph 1 of the Companies
Act. The details of the insurance policy are as described in the Business Report, “4.
Matter related to officers, (3) Overview of directors and officers liability insurance.” If
the appointment of the candidates is approved, each candidate will be included as aninsured under the insurance policy. The Company plans to renew the insurance policy
with the same conditions during the term of office of each candidate.
[For reference]<Decision process of the nomination of the Director and Corporate Auditor candidates>
In order to procure the objectivity and transparency of the process to nominate officer candidates
and to determine compensation for officers, the Company established the Corporate GovernanceCommittee, a majority of the members of which are independent outside officers, as an advisory
body for the Board of Directors.
The nomination of the Director candidates listed in Proposal 2 and the Corporate Auditor candidates
listed in Proposal 3 were determined by the Board of Directors after being deliberated on by thatcommittee.

- 26 -

<Skills of Directors and Corporate Auditors after this Ordinary General Meeting of Shareholders>
Skills and experience
Name

Positions

Corporate
management

Brand
culture○Marketing Technology

Shinji
Hattori

Chairman,Group CEO,andGroup CCO○

Shuji
Takahashi

President

○

○

○

○

○

○

○

○

○

○

○

○

○

○

○

Director,
SeniorAkio Naito
Executive Vice
President
Director,
SeniorJun Sekine
Executive Vice
President
Director,
Taku
Executive Vice
Yoneyama
President
Director,
Yoichi Endo Executive Vice
President
NoboruOutsideSaito
Director
Hideki
OutsideKobori
Director
Masahiko
OutsideUotani
Director
ShihokoOutsideUrushi
DirectorStanding
TakashiCorporate
Nishimoto
AuditorStanding
MinoruCorporate
Nakao
AuditorOutsideHideki
Corporate
Amano
AuditorOutsideMasatoshi
Corporate
Yano
AuditorOutsideKenji
Corporate
Sakurai
Auditor

○

○

○

○

○

Finance &Accounting

Legal & Risk
management

Human resource
Organizational
development
D&I promotion

○

○
○

○
○

○

○

○

○

○

○
○

○
○

○
○

○

○
○
○

○

○

○
○

○

Global○○○- 27 -

[Translation][Attached Documents]
Business Report for the Fiscal Year Ended March 2024 (From April 1, 2023 To March 31, 2024)
1.

Matters related to current status of the Corporate Group(1)

Business developments and results

In the world economy during the fiscal year ended March 31, 2024, despite concerns regarding a potential
slowdown in the U.S. due to continuation of monetary tightening caused by continuous high inflation, the U.S.
economy continued to perform steadily, mainly in terms of consumption. However, in Europe, since consumption
was weak as prices continued to soar, the economic recovery came to a standstill. In China, although retail andproduction gradually recovered, a recovery following the abolishment of the government’s “zero-COVID” policy
slowed, mainly due to adjustments in the real estate market.
The Japanese economy is on an overall recovery trend, despite concerns regarding personal consumption amid
inflation, and demand from inbound tourists has recovered to pre-pandemic levels.

Amid these circumstances, the Company launched the five-year Eighth Mid-Term Management Plan, “Seiko
Milestone 145 = SMILE145,” which began in the fiscal year ended March 31, 2023, and the first two years havepassed at the end of the current fiscal year. The business results for the fiscal year ended March 31, 2024, thesecond fiscal year of the plan, are as indicated below. In addition, the initiatives that will be carried out in the latter
three years of the plan, beginning in the fiscal year ending March 31, 2025, are described in “(2) Issues that need
to be addressed by the Corporate Group.”
In the “Emotional Value Solutions Business (EVS Business),” the Watches Business and WAKO Business for theJapanese market recorded significant sales growth against the backdrop of demand from inbound tourists. The
Watches Business for overseas markets also grew, mainly in Europe and Asia, and net sales were higher year on
year. In the “Devices Solutions Business (DS Business),” although net sales were significantly lower year on year
amid an ongoing slump in the business environment due to factors such as prolonged stagnation of the Chinese
economy and inventory adjustments in the device field as a whole, there were signs of a recovery in demand forsome products. In the “Systems Solutions Business (SS Business),” net sales were higher year on year, thanks toongoing successful efforts to diversify business and expand the stock business. As a result, for the fiscal year
ended March 31, 2024, the Company Group reported consolidated net sales of 276.8 billion yen, a year-on-yearincrease of 6.3%.
On an overall consolidated basis, domestic net sales came to 147.4 billion yen (a year-on-year increase of 11.2%),and overseas net sales were 129.3 billion yen (a year-on-year increase of 1.1%). Overseas net sales comprised
46.7% of net sales overall.

- 28 -

Advertising and promotion expenses for the fiscal year ended March 31, 2024 increased by approximately 10%
from the previous fiscal year, resulting in a year-on-year increase of 7.3 billion yen in selling, general andadministrative expenses. Operating profit improved by 3.5 billion yen year on year to 14.7 billion yen (a year-onyear increase of 31.2%), driven by the Emotional Value Solutions Business. Non-operating income and expenses
improved by 1.2 billion yen year on year due to factors including increases in interest income and dividend
income, and ordinary profit increased by 4.7 billion yen year on year to 15.8 billion yen (a year-on-year increaseof 42.3%). A gain on sale of non-current assets of 1.5 billion yen was posted as extraordinary income, whilebusiness restructuring expenses, impairment loss, and information security expenses were posted as extraordinary
losses totaling 2.3 billion yen. Profit attributable to owners of parent was 10.0 billion yen (a year-on-year increaseof 99.9%), mainly due to a decrease in income taxes - deferred in conjunction with the improvement of revenue indomestic operating companies.
The average exchange rates for the current fiscal year were 144.7 yen to 1 US dollar and 156.8 yen to 1 euro.

Results for each segment are as follows.

a. Emotional Value Solutions Business (EVS Business)
Net sales in the EVS Business came to 188.3 billion yen, a year-on-year increase of 17.5 billion yen, or 10.3%.
Net sales of completed watches in Japan grew significantly year on year, especially for Grand Seiko and Seiko
Prospex, due to the economic recovery following a post-pandemic recovery and strong sales from inboundtourists. Overseas, net sales also increased year on year as Seiko Presage, Seiko 5 Sports, etc. grew. In the watch
movements business, net sales remained roughly the same as those of the previous year, despite the impact of thesluggish Chinese economy, partly due to the effects of exchange rates.
Sales in the WAKO Business grew significantly year on year against the backdrop of favorable demand frominbound tourists. While overseas sales in the Clocks Business declined due to factors such as the sluggish Chinese
economy, the Time Systems Business grew.
Operating profit increased by 5.6 billion yen year on year, resulting in operating profit of 17.2 billion yen (a yearon-year increase of 49.1%), mainly due to an increase in net sales and an improvement in the gross profit margin.
b. Devices Solutions Business (DS Business)
Net sales in the DS Business came to 58.3 billion yen, a year-on-year decrease of 9.5%. Operating profit was 2.1
billion yen, a year-on-year decrease of 58.1%.

- 29 -Net sales and operating profit decreased significantly year on year due to the prolonged stagnation of the Chinese
economy and continued inventory adjustments in the electronic devices market, resulting in weak performance forthermal printers, high-performance metals for semiconductor production equipment, and precision components.
However, the DS Business is shifting from an adjustment phase to a recovery trend in some businesses, such as
silver oxide batteries and quartz crystals.
c. Systems Solutions Business (SS Business)
Net sales in the SS Business came to 40.4 billion yen, a year-on-year increase of 3.8 billion yen, or 10.5%.
Operating profit was 4.7 billion yen, a year-on-year increase of 0.3 billion yen, or 8.0%.
Businesses supporting digital infrastructure, such as performance management and businesses including thoserelated to security, together with solutions for digital transformation of business processes, such as digital
contracts, drove business growth, aided by the ongoing growth in digital demand. This trend resulted in continued
year-on-year growth in both net sales and operating profit for 32 consecutive quarters.

- 30 -

(2)

Issues that need to be addressed by the Corporate GroupIn 2021, when the Company celebrated the 140th Anniversary of its foundation, the Company has clarified its
purpose: “As a company trusted by society, we will constantly pursue innovation, inspiring people everywhere,
and creating a future full of smiles.” This purpose is the starting point for all of the Company’s activities, which
are based on its corporate philosophy of being “A Company that is Trusted by Society.”
The Company has also defined the following Group 10-year vision leading up to the 150th Anniversary in 2031.
Leveraging analog & digital synergies to offer products and services
that contribute to the creation of sustainable societies,
connecting people, things, and time throughout the world
In order to realize the Group 10-year vision, the Company has formulated the Eighth Mid-Term Management Plan
(Seiko Milestone 145 = SMILE145), which concludes in FY2026, and will promote its businesses.
1.

Positioning of SMILE145
The Eighth Mid-Term Management Plan, SMILE145, is a five-year plan formulated bybackcasting from the Group 10-year vision and aimed at FY2026, the 145th Anniversary of our
founding and the midpoint of the vision, in order to realize the Group 10-year vision, which
represents what we aim to be for the 150th Anniversary.

2.

Ideals of SMILE145
By 2026, we aim to become “A solutions company that offers high-added-value products andservices that create excitement and generate substantial profits.” The basic principle through which
we will achieve this is the “MVP Strategy = Moving, Valuable, Profitable,” in which we will focus
on high-added-value, highly profitable products that move people.

3.

Our value creation story for the years leading up to 2031
Based on an analysis of the environment surrounding the Company Group, from the perspectivesof both opportunity and risk, the Company is engaging in business activities that help solve social
issues, with the Group purpose as the starting point, and contributing to the Group’s steady
growth and the development of a sustainable society. As the Group’s growth strategy, theCompany has promoted the Group core strategies (SDGs, human resource, branding, DX, and
R&D). In addition, the Company has established three strategic domains (Emotional Value
Solutions, Devices Solutions, and Systems Solutions), in which the Company Group’s strengths
lie, and will implement strategies in these domains to capture business opportunities in four areas(Emotional Consumption, Society 5.0, Wellness, and Society/Environment). Furthermore, bystriving to generate Group synergies, the Company will aim to create social value and achieve theCompany Group’s growth.

- 31 -To accomplish this, the Company will promote the “MVP Strategy” for achieving what we aim to
be in 2026, which was defined by backcasting from the Group 10-year vision.
4.

Group core strategies
The Company Group has defined five strategies across the Group as Group core strategies, andwill promote its growth strategy.

(i)

SDGs strategy
Starting with its Statement of Purpose, the Seiko Group will strive to use its business activities,
which aim to create WITH, to realize the Group’s steady growth and contribute to thedevelopment of a sustainable society.
(“WITH” = Well-being: A Better Life, Inclusion: For All People, Trust: Certainty and Trust, andHarmony: Harmony with the Earth)(ii)

Human resource strategy
The Company Group will build an organizational culture and systems that turn failure into value,with human-resource development as a pillar of its growth strategy, by improving engagement
and promoting diversity.

(iii)

DX strategy
The Company Group will make full use of digital technology and data to create high-added-value
business that is customer-centric and that places an emphasis on the customer experience.

(iv)

R&D strategy
The Company Group will further evolve its technology and create new value by combining its
long-cultivated technological philosophy of “Craftsmanship, Miniaturization and Efficiency” withdigital technology.

(v)

Branding strategy
Seiko will face social issues with the aim of enriching the hearts of people around the world, andcreate a future full of smiles through its social, technical, and emotional value.

5.

Domain-specific ideals(i)

Emotional Value Solutions (EVS) Domain- Create products and services with high functional, emotional, and social value, with a sense of
beauty and meticulous attention to detail that excite customers

- 32 -- Improve our brand and corporate value by selling products that are partners for life, and can beenjoyed together in times of joy, through a superior customer experience(ii)

Devices Solutions (DS) Domain- Offer the high functionality and quality demanded by society, with devices solutions that are
created through technical innovation- Realize Society 5.0 (resolution of social issues by integrating cyberspace and physical space)(iii)

Systems Solutions (SS) Domain- Achieve sustainable growth by offering social innovation through one-stop ICT solutions- Increase the value of customers, society, and the Company Group by continuously offeringvalue in line with customer needs

6.

Financial policy and cash allocation
Under SMILE145, the Company Group will increase its growth investment capabilities byimproving the gross profit margin and make investments to establish sustainability, with the aimof improving the financial constitution based on capital costs and reliably providing returns toshareholders. The investment policy aimed at establishing sustainability will consist of threeelements: active investment based on sales growth potential and an ROIC, the establishment of astable revenue base, and taking on the challenges of new business domains. Led by this policy, theCompany will engage in investments in branding, R&D, manufacturing facilities, M&As, DX,
human resources, etc., in order to achieve the Company Group’s growth.

7.

Group-wide management targets
SMILE145 focuses on medium- and long-term profitability and growth. Its objective is to ensure
the ongoing sustainability of the Company Group. Financial targets for FY2026 are to achieve
consolidated operating profit of 18.0 to 20.0 billion yen, an increase in consolidated gross profit
margin of 5.0 percentage points (compared to FY2021), and a consolidated ROIC of over 6.5%.
We will strive to improve profitability and growth potential, achieve an ROE of 8% or above, andimprove our capital efficiency.
Regarding ESG indicators, the Company aims to reduce CO2 emissions under SCOPE 1 and 2 by
25% (compared to FY2020) in FY2026. In addition, the Company uses employee engagement
surveys that are carried out from FY2022 to clearly prioritize issues, and strives to improveengagement scores by working to address these issues.

- 33 -

8.

The environment surrounding our business and initiatives for solving issues(i)Group core strategies
In our SDGs strategy, the Company Group has implemented decarbonization and climate change
response initiatives, including obtaining the Science Based Targets (SBT) certification, which
certified that Group-wide greenhouse gas emissions reduction targets for FY2030 are in line withthe 1.5°C levels defined in the Paris Agreement. We will continue to promote initiatives for
reducing greenhouse gas emissions as we work to switch to using renewable energy for 100% of
the electricity used at all of our business sites in Japan in FY2024. In addition, we will enhance
our engagement with suppliers as part of our initiatives for engaging in responsible procurement,
and strive to reduce risks throughout the Group’s supply chain. Together with this, we will also
actively carry out initiatives aimed at reducing human rights risks and initiatives related to water
resources.
In our human resources strategy, we have established our priority themes: developing humanresources who can navigate complex social issues to create new value; promoting diversity andinclusion to build an organization adapts to change; and building our organizational climate andculture needed for driving new innovation. Through these themes, we will promote initiatives for
improving engagement. In addition, we have positioned health management and respect forhuman rights, areas that we have been actively addressing in our activities so far, as theframework for our human resource strategy, and will further reinforce these activities in the
future.
In our DX strategy, we aim to improve customer experience and promote CRM by utilizing
marketing DX in our customer contact points. In our manufacturing and logistics operations, wewill actively implement DX to improve productivity.
In our R&D strategy, we will promote the enhancement of Group-wide R&D strategy anddevelopment of new technology, led by Seiko Future Creation Inc., which is responsible for the
Seiko Group’s R&D and production technologies. Through these activities, we will strive tocreate new business domains throughout the Group.
In our branding strategy, we will face social issues and carry out branding activities with the aimof enriching the hearts of people around the world and creating a future full of smiles through oursocial, technical, and emotional value. In the EVS Business, we will strengthen our initiatives forconveying emotional value, which will lead to the promotion of Japanese culture. In the SS
Business, we will carry out activities that communicate the social and technical value produced bysolutions to social issues.

- 34 -

(ii)

Business strategies by strategic domain
We have completed the first two years of SMILE145, and in the fiscal year ending March 31, 2025,
we will begin the latter three-year plan. During the latter three years, we position the Watches
Business and the SS Business as the core of the Group’s growth, and will strengthen investments
for further growth. In the DS Business, we will assess the growth potential of each product andengage in balanced investments. In addition, we will create a synergy within the Company Groupand explore new businesses.

Regarding our business strategies by strategic domain, for the EVS Business, our highest priority
is accelerating overseas sales growth in the Watches Business through expansion of high-end
business, centering on GS. With respect to mid-grade business, we will aim to further increase
profitability by expanding sales of premium lines such as Seiko Prospex and Seiko Presage. In thewatch movements business, we will review and revise our global manufacturing structure toincrease production efficiency and improve revenue. In the Clocks Business, we will focus on
high-end clocks with high added value, marionette clocks, and the like. In the Time Systems
Business, we will grow by providing new services, centering on large display boards and signage
products. In the WAKO Business, we will strive to expand sales of our core products, watches,
and also jewelry. At the same time, we will review our external and in-store sales systems andcarry out initiatives for attracting new, wealthy customers.
In the DS Business, we will aim to expand our market share of micro batteries for medical
equipment, which have growth potential, and quartz crystals, where we excel at miniaturization.
We will also grow our encoder business (sensors used to detect locations and movement
distances), where we have some of the most advanced technologies in the industry.
In the SS Business, we will steadily expand our services and customers through M&As, etc., andstrive to grow the business by providing IoT and AI solutions that combine hardware and software
to solve social issues and platform solutions that support customer companies realize DX.
The progress we have made for our main KPI under SMILE145 is indicated below.
Consolidated Management Indicators (KPI)
FY2021Results
Consolidated
operating profit
Consolidated grossprofit margin

FY2022
Results(Billions of yen)
FY2023Results

FY2024
Forecasts

FY2026
SMILE145

8.7

11.2

14.7

17.0

18.0 to 20.0

41.8%

42.9%

44.3%

45.3%

46.8%

- 35 -

Management Indicators by Domain (KPI)
FY2021Results
Operating profit
EVS
DS
SS
(3)

(Billions of yen)

FY2022
Results

FY2023Results

FY2024
Forecasts

8.2

11.5

17.2

19.0

5.6
3.9

5.0
4.3

2.1
4.7

3.0
5.8

Financing
There are no matters of special note.

(4)

Capital expenditures
The Company invested 3,470 million yen in the Emotional Value Solutions Business and 4,960 million
yen in the Devices Solutions Business primarily to reinforce and renew manufacturing and other facilities,
and 2,206 million yen in the Systems Solutions Business primarily to acquire software for marketing
purposes, respectively.

- 36 -

(5)

Trends in assets and profit/loss
The operating results and assets in the fiscal year ended March 31, 2024 and the past three years are as
follows.
(i) Consolidated
Item(Millions of yen)
FY2020

FY2021

FY2022

FY2023

202,671

237,382

260,504

276,807

Ordinary income

633

9,939

11,167

15,894

Net income
attributable toowners of parent

3,475

6,415

5,028

10,051

Net income pershare (Yen)

84

156

122

244

Total assets

319,671327,533

355,915376,262

Net assets

113,082

121,624

131,748

151,334

Net assets per
share (Yen)

2,709

2,911

3,145

3,658

Net sales(ii) Non-consolidated
Item
Operatingrevenue
Ordinary
income(Millions of yen)
FY2020

FY2021

FY2022

FY2023

11,301

12,043

15,312

15,220

809

-473

1,560

1,477

Net income

1,560

3,257

2,562

3,601

Net income pershare (Yen)

38

79

62

88

Total assets

192,853

187,644

201,299

202,287

Net assets

55,495

57,12057,53463,068

Net assets per
share (Yen)

1,345

1,384

1,393

1,546

Note 1 Net income per share is calculated on the basis of the average number of shares during the fiscal
year.
Note 2 Treasury shares are indicated as a deduction item on net assets, and the values of net income pershare and of net assets are calculated by deducting the number of treasury shares from theaverage number of shares during the fiscal year and the total number of issued shares,
respectively.

- 37 -

Note 3 The Company has applied “Accounting Standard for Revenue Recognition” (AccountingStandards Board of Japan (ASBJ) Statement No. 29, March 31, 2020) and relevant guidancefrom the beginning of FY2021.

(6)

Status of major parent companies and subsidiaries(i) Relationship with parent companies
Not applicable.

- 38 -

(ii) Status of major subsidiaries
Company NameSEIKO WATCHCORPORATIONCRONOS INC.
Morioka Seiko Instruments
Inc.
Grand Seiko Corporation ofAmerica
Seiko Watch of America
LLC
SEIKO Hong Kong Ltd.
SEIKO Manufacturing(H.K.) Ltd.
SEIKO Manufacturing(Singapore) Pte. Ltd.

Paid-in Capital

CapitalDetails of Major BusinessContribution Ratio

Activities

5,000 million yen

100.0%

200 million yen

100.0%(*)

2,000 million yen

100.0%(*)

Manufacturing watches

US$2,000

100.0%(*)

Sales of watches

US$112,000

100.0%(*)

Sales of watches

HK$266,808,000

100.0%(*)

HK$128,700,000

100.0%(*)

S$32,288,000

100.0%(*)

Sales of watches
Sales of watches and otherproducts

Sales of watches and otherproducts
Manufacturing and sales ofwatches
Manufacturing watches
Manufacturing and sales of

SEIKO Time Creation Inc.

500 million yen

100.0%

clocks, systems clocks andother products
Sales of high-end jewelry,

WAKO Co., Ltd.

2,500 million yen

100.0%

apparel, and fashion
accessories
Manufacturing and sales of

Seiko Instruments Inc.

9,756 million yen

100.0%

electronic devices and otherproducts

Seiko Future Creation Inc.

100 million yen

100.0%(*)

Group research anddevelopment, etc.
Development, sales, etc. of

SEIKO Solutions Inc.

Note:

500 million yen

100.0%

information andtelecommunication systems,

etc.
Asterisked ratios in the “Capital Contribution Ratio” column include indirect holdings.

- 39 -

(7)

Major business segments of the Corporate GroupThe Company is a holding company.

The details of business activities, main merchandise and finishedgoods of each business are as follows:Business Segment
Emotional Value Solutions
Business

Details of Business Activities

Main merchandise and products
Watches, watch movements, clocks,

Manufacturing and sales

high-end jewelry, apparel, fashion
accessories, systems clocks
Micro batteries and materials, quartz

Devices Solutions Business

Manufacturing and sales

crystals, precision turned parts, printers,
quartz oscillator ICs
Digital trust solutions, network solutions,
IT management solutions, IoT solutions,

Systems Solutions Business

Development and sales

wireless network solutions, customer
experience (CX) solutions, cashlesssolutions

Others(8)―

Shared services, real estate leasing,othersMajor business locations of the Corporate GroupThe Company has its headquarters in Chuo-ku, Tokyo, and the major location of each business is asfollows:
Business Segment(9)

Location

Emotional Value Solutions Business

Chuo-ku, Tokyo

Devices Solutions Business

Mihama-ku, Chiba-shi, Chiba

Systems Solutions Business

Mihama-ku, Chiba-shi, Chiba

OthersChuo-ku, Tokyo

Status of employees of the Corporate GroupThe number of employees of the Company and its consolidated subsidiaries is 11,740 (a decrease of 103
from the previous fiscal year-end).

(10)

Major lenders and amounts borrowed
Lenders

Outstanding Balance of Loans(Millions of yen)Mizuho Bank, Ltd.

39,719Sumitomo Mitsui Banking Corporation

20,652

Aozora Bank, Ltd.

12,337

- 40 -

2.

Matters related to the Company shares (as of March 31, 2024)(1)

Total number of shares authorized to be issued

149,200,000 shares(2)

Total number of shares issued and outstanding

41,404,261 shares(including 61,728 treasury shares)(3)

Number of shareholders at the end of the fiscal year ended March 31, 2024

(4)

Major shareholders (top 10)
Name

13,664

Number of shares

Percentage ofheldshares held
(shares)(%)

Sanko Kigyo K.K.

4,436,500

10.7

The Master Trust Bank of Japan, Ltd. (Trust Account)

3,814,600

9.2

Etsuko Hattori

3,613,908

8.7

Shinji Hattori

2,279,289

5.5

The Dai-ichi Life Insurance Company, Limited

1,800,000

4.4

Hideo Hattori

1,622,455

3.9

Custody Bank of Japan, Ltd. (Trust Account)

1,203,540

2.9

GOLDMAN SACHS INTERNATIONAL

836,436

2.0

SHIMIZU CORPORATION

744,200

1.8

FUJI BUILDING Co., Ltd.

671,400

1.6

Note: Percentages of shares held have been calculated with treasury shares excluded and rounded to
one decimal place.
(5)

Shares issued to the Company’s officers during the fiscal year under review as compensation for the
execution of their duties
Type and number of shares
Directors (excluding
Outside Directors)

3.

Number of share recipients

The Company’s common shares
31,400 shares

Matters related to stock acquisition rights issued by the Company
Not applicable.

6- 41 -

4.

Matters related to officers(1)

Name, etc. of Directors and Corporate Auditors (as of March 31, 2024)
Name
Shinji Hattori
Shuji Takahashi

Position and responsibility
at the Company

Significant concurrent positions at other entities

Chairman, Group CEO, andChairman of SEIKO WATCH CORPORATIONGroup CCO

Chairman of WAKO Co., Ltd.

President
Director, Senior Executive

President of SEIKO WATCH CORPORATION

Vice President in charge of
Akio Naito

Emotional Value Solutions
Domain, Legal and Intellectual
Property
Director, Senior Executive

Takahiro Naito

President of Seiko Instruments Inc.

Vice President in charge ofDevices Solutions Domain
Director, Senior Executive

President of SEIKO Solutions Inc.

Vice President in charge of
Jun Sekine

Systems Solutions Domain, IT
Planning and DX Business
Promotion
Director, Executive Vice
President

Taku Yoneyama

General Manager of Corporate
Management Division

Audit & Supervisory Board Member (Outside) of
OHARA INC.

In charge of Accounting
Partner Attorney of Endeavour Law Office
Yasuko Teraura

Outside Director

Outside Director (Audit and Supervisory Committee
Member) of Ryosan Company, Limited

Noboru Saito

Outside Director

Representative Director, Executive Corporate Officerof BIPROGY Inc.
Chairman & Director of Asahi Kasei Corp.

Hideki Kobori

Outside Director

Outside Director of Nomura Research Institute, Ltd.
Vice Chair of KEIDANREN (Japan Business
Federation)

Haruhiko Takagi
Takashi
NishimotoStanding Corporate Auditor
Standing Corporate Auditor

- 42 -

Certified public accountant
Hideki Amano

Outside Corporate Auditor

Outside Audit & Supervisory Board Member of Kao
Corporation
Outside Auditor of Mizuho Leasing Company, Limited

Masatoshi Yano

Outside Corporate Auditor

Kenji Sakurai

Outside Corporate Auditor

Outside Audit & Supervisory Board Member of
FURUKAWA CO., LTD.
Representative Director, President of THE DAI-ICHI
BUILDING CO., LTD.

Note 1: The Company has reported to the Tokyo Stock Exchange Ms. Yasuko Teraura, Mr. Noboru Saito,
and Mr. Hideki Kobori, Outside Directors, and Mr. Hideki Amano, Mr. Masatoshi Yano, and Mr.
Kenji Sakurai, Outside Corporate Auditors, as independent directors/auditors.
Note 2: Mr. Haruhiko Takagi and Mr. Takashi Nishimoto, Standing Corporate Auditors, have experiencein accounting and have reasonable-degrees of knowledge about finance and accounting. Mr.
Hideki Amano, Outside Corporate Auditor, is a certified public accountant, and has reasonabledegree of knowledge about finance and accounting.
Note 3: Changes in Directors and Corporate Auditors of the Company during this fiscal year are as
follows:(1)
Mr. Taku Yoneyama was newly appointed as Director, and Mr. Hideki Kobori wasnewly appointed as Outside Director and assumed office at the 162nd Ordinary General
Meeting of Shareholders held on June 29, 2023.
(2)

Mr. Shimesu Takizawa, Director, Executive Vice President, and Mr. Tsuyoshi Nagano,Outside Director, retired from office due to the expiry of their terms of office at theclose of the 162nd Ordinary General Meeting of Shareholders held on June 29, 2023.

Note 4: Changes in significant concurrent positions at other entities of Directors and Corporate Auditorsof the Company during and after this fiscal year are as follows:(1)
Mr. Takahiro Naito, Director, Senior Executive Vice President, assumed office ofChairman of Seiko Instruments Inc. as of April 1, 2024.
(2)

Mr. Taku Yoneyama, Director, Executive Vice President, assumed office of Audit &Supervisory Board Member (Outside) of OHARA INC. as of January 25, 2024.

(3)

Ms. Yasuko Teraura, Outside Director, retired from office of Outside Director (Audit
and Supervisory Committee Member) of Ryosan Company, Limited as of April 1, 2024.

(4)

Mr. Noboru Saito, Outside Director, assumed office of Representative Director,
President of BIPROGY Inc. as of April 1, 2024.

(5)

Mr. Haruhiko Takagi, Standing Corporate Auditor, retired from office of Audit &Supervisory Board Member (Outside) of OHARA INC. as of January 25, 2024.

(6)

Mr. Masatoshi Yano, Outside Corporate Auditor, assumed office of Outside Audit &Supervisory Board Member of FURUKAWA CO., LTD. as of June 29, 2023. Mr. Yano
retired from office of President of Seiwa Sogo Tatemono Co., Ltd. as of June 30, 2023.

- 43 -

Note 5: The BIPROGY Group, at which Mr. Noboru Saito, Outside Director, has a concurrent position,and the Company Group have transactions in the Systems Solutions Business. However, thesetransactions constitute less than one percent of BIPROGY Inc. and the Company’s consolidated
net sales, and are thus insignificant.
Note 6: Seiwa Sogo Tatemono Co., Ltd., at which Mr. Masatoshi Yano, Outside Corporate Auditor, has aconcurrent position, and the Company Group have transactions related to real estate management.
However, these transactions constitute less than one percent of net sales of Seiwa Sogo Tatemono
Co., Ltd. and the Company’s consolidated net sales, and are thus insignificant.
Note 7: THE DAI-ICHI BUILDING CO., LTD., at which Mr. Kenji Sakurai, Outside Corporate Auditor,
has a concurrent position, and the Company Group have real estate leasing transactions. However,these transactions constitute less than one percent of net sales of THE DAI-ICHI BUILDING CO.,LTD. and the Company’s consolidated net sales, and are thus insignificant.
Note 8: There is no other special relationship of interest between the Company and the entities at which
Outside Directors or Outside Corporate Auditors hold concurrent positions.
Note 9: The positions and responsibilities of Directors changed as follows as of April 1, 2024.
Position
Name
Responsibility―

Director

Takahiro Naito

Director, Senior
Executive Vice
President

Jun Sekine

In charge of Systems Solutions Domain and IT・
DX Planning

Taku Yoneyama

General Manager of Corporate Management
Division
In charge of Corporate Strategy Planning andAccounting

Director, Executive
Vice President

Note 10: As of April 1, 2024, the Executive Officers (Senior Vice Presidents) without concurrent positions
as Directors are as follows.
Position
Name
Responsibility
Executive Vice
Makoto Ichimura
In charge of Secretaries and General Affairs
President
Executive Vice
In charge of ESG・SDGs Promoting, Corporate
Hiromi Kanagawa
President
Branding, and Public Relations
Executive Vice
Yoichi Endo
In charge of Devices Solutions Domain
President
Deputy General Manager of Corporate
Senior Vice
Management Division
Hiromi Nakagawa
President
In charge of Financial Planning, Human
Resources, and Group HR Strategy Planning- 44 -

(2)

Overview of agreements limiting liability

The Company entered into an agreement with each of Ms. Yasuko Teraura, Mr. Noboru Saito, and Mr. Hideki
Kobori, Outside Directors, and Mr. Hideki Amano, Mr. Masatoshi Yano, and Mr. Kenji Sakurai, Outside
Corporate Auditors, to limit liability for damages set forth in Article 423, paragraph 1 of the Companies Act,
pursuant to Article 427, paragraph 1 thereof. The upper limit of liability for damages under the agreement shallbe the minimum limit of liability prescribed in Article 425, paragraph 1 of the Companies Act. The limitation on
liability is permitted only when such Outside Directors or Outside Corporate Auditors have acted in good faith andwithout gross negligence in performing their duties that caused the liability.
(3)

Overview of directors and officers liability insurance

The Company has entered into a directors and officers liability insurance (D&O insurance) policy stipulated in
Article 430-3, paragraph 1 of the Companies Act with an insurance company. The insured parties under the
insurance policy are the Company, its subsidiary Seiko Instruments Inc., its Directors, Corporate Auditors, SeniorVice Presidents, managerial personnel, and officers dispatched outside the Company. The Company and Seiko
Instruments Inc. bear the insurance premium. The insurance policy covers the insured against claims for damages
and costs of litigation arising out of the execution of business by the insured. However, we have taken measures toensure that the appropriateness of the execution of duties by directors and officers is not compromised by
excluding from coverage damage caused by criminal or intentionally illegal acts.

- 45 -

(4)Aggregate amount of compensation, etc. for Directors and Corporate Auditors
Aggregate amount by type of compensation, etc.
(Millions of yen)
Aggregate amount
Officerof compensation,

classification

etc.

Fixed

Performance-based

compensationcompensation, etc.

(Millions of yen)Stockof eligible

Bonusescompensation

officers(Monetary(Non-monetarycompensation)compensation,

Basiccompensation

Numberetc.)
Director(excluding

356

203

82

70

7

Outside Directors

36

36

-

-

4

Total

392

239

82

70

11

38

38

-

-

2

36

36

-

-

3

74

74

-

-

5

Outside Directors)

Corporate Auditor(excluding
Outside Corporate
Auditors)
Outside Corporate
Auditors
Total

Note 1: The forgoing includes two Directors who retired from office at the close of the 162nd Ordinary
General Meeting of Shareholders held on June 29, 2023.
Note 2: “Bonuses” and “stock compensation” are paid to Executive Directors as performance-based
compensation, etc. The number of eligible recipients for the current fiscal year is 6. The amountof performance-based compensation, etc. shown in the above table is the amount of expense
recognized and the amount paid for the current fiscal year.
Note 3: Target values and actual results of indicators related to performance-based compensation, etc. forthe current fiscal year are as follows:(Bonuses)
Consolidated

Consolidated grossoperating profit

profit margin

Target values

12.0 billion yen

43.9%

Actual results

14.8 billion yen

44.3%

123.33%100.91%

Performanceachievement ratios

- 46 -

(Stock compensation)
Consolidated

Consolidated gross

Consolidated

operating profit

profit margin

ROIC

Target values

12.7 billion yen

43.9%

4.2%

Non-financial(ESG) evaluation(compared to
FY2022)-5.25%

Actual results

14.8 billion yen

44.3%

-

-

116.54%100.91%--

Performanceachievement ratios* The actual results for consolidated ROIC and non-financial (ESG) evaluation have not been
finalized as of May 14, 2024. The amount of expense recognized for the above performance-based
compensation, etc. is calculated based on consolidated ROIC and non-financial (ESG) evaluation
performance achievement ratios of 100.00%.
Note 4: The compensation, etc. for Directors that has already been received during the fiscal year
under review, or whose amounts to be received are already determined, excluding the above
compensation and compensation which was reported during the previous fiscal year inrespective locations, is as follows.
Expense recognized for stock compensation: 6 Executive Directors: 2 million yen(5)

Matters related to the resolution of the General Meeting of Shareholders regarding compensation, etc. for
Directors and Corporate Auditors
Aggregate amounts of basic compensation and bonuses for Directors were resolved to be up to 420
million yen annually at the 155th Ordinary General Meeting of Shareholders held on June 29, 2016. At theclose of this Ordinary General Meeting of Shareholders, the number of Directors eligible to receive basic
compensation is 13 (including 2 Outside Directors), and the number of Executive Directors eligible toreceive bonuses is 6.
Basic compensation for Corporate Auditors was resolved to be up to 8 million yen monthly at the 155th
Ordinary General Meeting of Shareholders held on June 29, 2016. At the close of this Ordinary General
Meeting of Shareholders, the number of Corporate Auditors eligible to receive basic compensation is 5.
Stock compensation was resolved at the 155th Ordinary General Meeting of Shareholders held on June29, 2016 that for every three fiscal years consistent with the Mid-Term Management Plan, money paid by
the Company is up to 240 million yen and the maximum number of points granted to Executive Directors
eligible under this plan is up to 540,000 points (180,000 points per fiscal year). At the close of thisOrdinary General Meeting of Shareholders, the number of Executive Directors eligible to receive stockcompensation is 6. The Company conducted a share consolidation by which five common shares havebeen consolidated into one share as of October 1, 2017. The number of shares after the share consolidation
is up to 108,000 points (36,000 points per fiscal year). At the 162nd Ordinary General Meeting of
Shareholders held on June 29, 2023, these figures were revised. The money paid by the Company shall be
up to 540 million yen (of which 390 million yen is paid to Executive Directors of the Company), and the- 47 -

maximum number of points granted to Executive Directors and Executive Officers (Senior Vice
Presidents) eligible under this plan shall be up to 186,000 points (of which 135,000 points are granted to
Executive Directors of the Company). At the close of this Ordinary General Meeting of Shareholders, thenumber of Executive Directors eligible to receive stock compensation is 6.
(6)

Policy for determining the content of compensation, etc. for Directors and Corporate Auditors[Policy for determining compensation for Directors and Executive Officers (Senior Vice Presidents)]
The Company resolved at the Board of Directors on a policy for determining the content of compensation,etc. for individual Directors and Executive Officers (Senior Vice Presidents), as a) to f) below. After being
deliberated on by the Corporate Governance Committee, a majority of the members of which are
independent outside officers, as an advisory body for the Board of Directors, the said policy wasdetermined at the Board of Directors based on the deliberations.
a) Basic policy for compensation for Directors and Executive Officers (Senior Vice Presidents)
In determining compensation for Directors and Corporate Auditors of the Company, the basic policy is
as follows:- The Company shall secure the transparency and objectivity of the compensation and maintain theappropriated level of compensation corresponding to their roles and responsibilities.
- Aiming for sustainable growth and mid- to long-term enhancement of the corporate value of theCompany and the Company Group, the Company shall promote the execution of duties in line withthe corporate philosophy and management strategy, and motivate them to achieve corporate targets.
The level of compensation shall be determined based on results of surveys on compensation for
Directors and Corporate Auditors conducted by a third party that target peer companies similar interms of business activity and scale.
b) Compensation system for Directors and Executive Officers (Senior Vice Presidents)
Compensation for Executive Directors and Executive Officers (Senior Vice Presidents) comprises of“basic compensation” as fixed compensation, “bonuses” that are linked to performance (short-term
incentive compensation), and “stock compensation” (mid- to long-term incentive compensation).
Compensation for non-executive Directors such as Outside Directors comprises only of “basic
compensation.”c) Policy for determining the amount of compensation, etc. for individual Directors regarding basic
compensation (monetary compensation) (including the policy for the timing to provide compensation,etc. or the determination of conditions)
Basic compensation for Directors and Executive Officers (Senior Vice Presidents) of the Company
shall be monthly fixed compensation. The amount shall be determined by taking into account- 48 -

comprehensive factors, while considering the level of peer companies and the length of service, etc.,
according to their roles and responsibilities.
d) Policy for determining performance-based compensation, etc. and the content and amount of nonmonetary compensation, etc., or the calculation method for the number (including the policy for thetiming to provide compensation or the determination of conditions)
Performance-based compensation, etc. shall comprise of “bonuses” as monetary compensation and“stock compensation” as non-monetary compensation, etc.
(Bonuses)
For bonuses, a standard payment shall be the amount obtained by multiplying the basic compensation
by a coefficient determined for each position. The individual payments for Chairman and President
shall be determined by multiplying the standard payment by the payment ratio according to theperformance achievement ratio. The individual payments for Executive Directors other than Chairman
and President and Executive Officers (Senior Vice Presidents) shall be determined by adding theamounts obtained by multiplying the standard payments by the payment ratio according to theperformance achievement ratio, to the amounts obtained by multiplying the standard payments by thepayment ratio based on qualitative evaluations. Bonuses shall fluctuate in the range of 0 to 200%
depending on the degree of achievement of the target values.
(Stock compensation)
For stock compensation, points obtained by converting the individual benefits into the number ofshares shall be granted each fiscal year. The individual benefits shall be the amounts determined byadding the standard benefits (fixed portion) obtained by multiplying the basic compensation by acoefficient determined for each position, to the amount obtained by multiplying the standard benefits
by the payment ratio based on financial and non-financial (ESG) evaluations (performance-based
portion). The performance-based portion of the stock compensation shall fluctuate in the range of 0 to
200% depending on the degree of achievement of the target values. The guideline for the ratio of the
fixed portion and the performance-based portion shall be 50%, respectively (when the performanceachievement ratio is 100%).
Performance indicators related to the above performance-based compensation shall consist of thesignificant management indicators set forth in the Eighth Mid-Term Management Plan (SMILE145)
for the five (5) years from FY2022 to FY2026.
Bonuses(i) Consolidated operating
Performanceindicators

profit(ii) Consolidated gross profit
marginStock compensation(i) Consolidated operating profit(ii) Consolidated gross profit margin(iii) Consolidated ROIC
(iv) ESG evaluation: CO2 emissions reduction

- 49 -

(iii) Personal evaluations(i) and (ii) Earnings forecast

rate (SCOPE 1 and 2), etc.
(i) to (iii)

values announced at- Externally published values for the first andthe beginning of thelast fiscal years of the Eighth Mid-Termfiscal year

Management Plan
- Second through fourth fiscal years of the Plan:“Previous fiscal year’s results” + “Difference(ratio) between the current fiscal year’s planvalues and the previous fiscal year’s planvalues”(iv) CO2 emissions reduction rate (SCOPE 1

Target values

and 2)
Target values for respective fiscal years
based on the policy under the Eighth MidTerm Management Plan
(Exceptions)
If an unpredictable situation (an event that significantly affects consolidated
business results or corporate value) occurs during the evaluation period, the target
value shall be revised within a reasonable range by resolution of the Board of
Directors after consulting with the Corporate Governance Committee.
The points for the current fiscal year shall be
Timing of

The portion for the current fiscal

granted at the end of June in the following year.

payment andyear shall be paid at the end of

At the time of retirement, one point shall beJune in the following year.

converted to one stock, and the Company’s

deliverystocks shall be delivered.
If Executive Director or
Executive Officer (Senior Vice
President) is dismissed or if

If the prospective recipient is dismissed or if the

Executive Director or Executive

prospective recipient commits an act that causes

Officer (Senior Vice President)

serious damage to the Company or the

Clauses forcommits an act that causes

Company Group or any other non-conformity

return ofserious damage to the Company

similar to such act before his/her retirement, allor any other non-conformity

or part of the stocks to be delivered and money

similar to such act before his/herto be paid may be reduced by resolution of theretirement, all or part of theBoard of Directors of the Company or thebonus to be paid may be reduced

Company Group.

compensation

by resolution of the Board of
Directors.

- 50 -e) Policy for determining the ratio of the amount of monetary compensation, the amount of performancebased compensation, etc., or the amount of non-monetary compensation, etc. to the amount ofcompensation, etc. for individual Directors and Executive Officers (Senior Vice Presidents)
With regard to the compensation ratio of each type for Executive Directors and Executive Officers(Senior Vice Presidents), the level of peer companies shall be considered so that it will be an
appropriate ratio as an incentive to contribute to the enhancement of the corporate value of theCompany. After being deliberated on by the Corporate Governance Committee, a majority of themembers of which are independent outside officers, as an advisory body for the Board of Directors, thesaid policy shall be determined at the Board of Directors based on the deliberations. The guideline forthe compensation ratio of each type shall be as follows (when the performance achievement ratio andthe payment ratio based on qualitative evaluations are 100%):
Fixed compensation

Performance-based compensation, etc.

Basic compensation

Bonuses

Stock compensation

Chairman and President

1.0
(60%)

0.33
(20%)

0.33
(20%)

Executive Directors otherthan Chairman andPresident and Executive
Officers (Senior Vice
Presidents)

1.0
(70%)

0.21
(15%)

0.21
(15%)

f) Matters for determining the content of compensation, etc. for individual Directors and Executive
Officers (Senior Vice Presidents)
With regard to part of compensation for individuals, Chairman and President shall be delegated thespecific contents based on the resolution of the Board of Directors. The content of such authority shallbe the amount of basic compensation for each Director and Executive Officer (Senior Vice President)
and the qualitative evaluations of bonuses for each Executive Director and Executive Officer (SeniorVice President).
The Corporate Governance Committee shall deliberate annually on the level of compensation for eachposition of Directors and Executive Officers (Senior Vice Presidents), so that the authority may beproperly exercised by Chairman and President. Chairman and President who have received the saiddelegation shall be required to make decisions based on the content of the deliberations.
Performance-based compensation, etc. of individual Executive Directors and Executive Officers(Senior Vice Presidents) (excluding the above-mentioned delegation) shall be determined inaccordance with the rules (the rules which stipulate the calculating method of performance-based
compensation, etc. and non-monetary compensation, etc. in accordance with the policy d) above)
established by resolution of the Board of Directors.

- 51 -

After being deliberated on by the Corporate Governance Committee, a majority of the members ofwhich are independent outside officers, as an advisory body for the Board of Directors, the said
contents of the compensation, etc. shall be determined by the Board of Directors based on the
deliberations.
[Policy for determining compensation for Corporate Auditors]
Basic compensation for Corporate Auditors shall be determined by deliberations of Corporate
Auditors, in the range of aggregate amount of compensation for Corporate Auditors approved at theGeneral Meeting of Shareholders.
(7)

Matters related to delegation of determining compensation, etc. for individual Directors and Executive
Officers (Senior Vice Presidents)
With regard to part of compensation for individual Directors and Executive Officers (Senior Vice
Presidents), the Board of Directors delegates Mr. Shinji Hattori, Chairman and Mr. Shuji Takahashi,
President to determine the specific contents. The position and responsibility at the Company on the daythat such details were determined are the same as “Name, etc. of Directors and Corporate Auditors” under“Matters related to officers.” The delegated authority and the measures to ensure that the authority isproperly exercised are stated in (6), f) above.
The reason that the authority is delegated to Chairman and President is that the Board of Directors judgedthat Chairman and President are the most suitable for evaluating the duties of each Director and Executive
Officer (Senior Vice President) while taking a bird’s-eye view of the entire Company’s business results,
etc.

(8)

Reasons that the Board of Directors judged that the content of compensation, etc. for individual Directors
and Executive Officers (Senior Vice Presidents) for the current fiscal year was in line with the policy
In determining the content of compensation, etc. for individual Directors and Executive Officers (SeniorVice Presidents) for the current fiscal year, the Corporate Governance Committee reviewed thecompensation level for each position from various perspectives, including consistency with the policy.
Accordingly, the Board of Directors basically respected the report and judged that it is in line with thepolicy.

- 52 -

(9)

Matters related to outside officers
Main activities of outside officers
Classification

Name

Main activities

Director

Yasuko Teraura

Ms. Yasuko Teraura is expected to provide valuable commentsfrom an objective perspective based on her insight as an attorney,
and to perform appropriate supervisory functions. She fully
demonstrated the supervisory functions for execution of business,
as she attended all of the 13 Board of Directors meetings held
during the current fiscal year, and made necessary remarks on
discussion items and deliberation items, from an objective
perspective. In addition, she attended the Corporate GovernanceCommittee that deliberates on the nomination of the Director andCorporate Auditor candidates and the compensation, etc. for
Directors and Corporate Auditors as a member, and actively
expressed her opinions from an objective and fair perspective.

Director

Noboru Saito

Mr. Noboru Saito is expected to provide valuable comments froman objective perspective based on his experience and knowledge
cultivated through managing companies, and to perform
appropriate supervisory functions. He fully demonstrated thesupervisory functions for execution of business, as he attended allof the 13 Board of Directors meetings held during the current
fiscal year, and made necessary remarks on discussion items anddeliberation items, from an objective perspective. In addition, he
attended the Corporate Governance Committee that deliberates on
the nomination of the Director and Corporate Auditor candidates
and the compensation, etc. for Directors and Corporate Auditors
as a member, and actively expressed his opinions from an
objective and fair perspective.

Director

Hideki Kobori

Mr. Hideki Kobori is expected to provide valuable commentsfrom an objective perspective based on his experience andknowledge cultivated through managing companies, and to
perform appropriate supervisory functions. He fully demonstrated
the supervisory functions for execution of business, as he attended
all of the 10 Board of Directors meetings held after assuming
office of Director in June 2023, and made necessary remarks on
discussion items and deliberation items, from an objective
perspective. In addition, he attended the Corporate GovernanceCommittee that deliberates on the nomination of the Director andCorporate Auditor candidates and the compensation, etc. for

- 53 -

Directors and Corporate Auditors as a member, and actively
expressed his opinions from an objective and fair perspective.
Corporate Auditor

Hideki Amano

Mr. Hideki Amano is expected to perform appropriate audit
functions based on his insight as a certified public accountant. He
fully demonstrated the audit functions, as he attended all of the 13
Board of Directors meetings and all of the 10 Board of Corporate
Auditors meetings held during the current fiscal year, and madenecessary remarks on discussion items and deliberation items,
from an objective perspective. In addition, he attended the
Corporate Governance Committee that deliberates on thenomination of the Director and Corporate Auditor candidates andthe compensation, etc. for Directors and Corporate Auditors as amember, and actively expressed his opinions from an objective
and fair perspective.

Corporate Auditor

Masatoshi Yano

Mr. Masatoshi Yano is expected to perform appropriate audit
functions based on his experience and knowledge cultivatedthrough managing companies. He fully demonstrated the audit
functions, as he attended 12 of the 13 Board of Directors meetingsand 9 of the 10 Board of Corporate Auditors meetings held during
the current fiscal year, and made necessary remarks on discussion
items and deliberation items, from an objective perspective. In
addition, he attended the Corporate Governance Committee that
deliberates on the nomination of the Director and Corporate
Auditor candidates and the compensation, etc. for Directors andCorporate Auditors as a member, and actively expressed his
opinions from an objective and fair perspective.

Corporate Auditor

Kenji Sakurai

Mr. Kenji Sakurai is expected to perform appropriate audit
functions based on his experience and knowledge cultivatedthrough managing companies. He fully demonstrated the audit
functions, as he attended all of the 13 Board of Directors meetings
and all of the 10 Board of Corporate Auditors meetings held
during the current fiscal year, and made necessary remarks on
discussion items and deliberation items, from an objective
perspective. In addition, he attended the Corporate GovernanceCommittee that deliberates on the nomination of the Director andCorporate Auditor candidates and the compensation, etc. for
Directors and Corporate Auditors as a member, and actively
expressed his opinions from an objective and fair perspective.

- 54 -

5.

Matters related to the Accounting Auditor(1)

Name of the accounting auditor
KPMG AZSA LLC(2)Amount of compensation, etc. for the accounting auditor for the current fiscal year
Compensation for the same network as that

Compensation for the accounting auditor

Classificationof the accounting auditor

Compensation forCompensation forthe services set

the services set

forth in Article 2,paragraph 1 of theCertified Public

Other compensation(Millions of yen)forth in Article 2,

Accountants Act(Millions of yen)

(Millions of yen)

Consolidated
subsidiaries
Total(Millions of yen)

Certified Public

Accountants Act
The Company

Other compensation

paragraph 1 of the

85

-

-

-

145

0

193

54

231

0

193

54

Note 1: Under the audit contract with the accounting auditor, the amount of compensation, etc. for audits
under the Companies Act and that for audits under the Financial Instruments and Exchange Act
are not clearly separated, and those amounts cannot practically be separated; as such, theaggregate of those amounts is shown as the amount of compensation, etc. for the services.
Note 2: Among the Company’s major subsidiaries listed in “1. Matters related to current status of the
Corporate Group, (6) Status of major parent companies and subsidiaries”, Grand Seiko
Corporation of America, Seiko Watch of America LLC, SEIKO Hong Kong Ltd., SEIKO
Manufacturing (H.K.) Ltd., and SEIKO Manufacturing (Singapore) Pte. Ltd. were audited bycertified public accountants (or audit corporations) other than the Company’s accounting
auditor.
(3)

Reasons for the Board of Corporate Auditors’ agreement to the amount of compensation, etc. for theaccounting auditor
The Board of Corporate Auditors evaluated audit records during the fiscal year ended March 31, 2023,
and confirmed the content of the audit plan, the performance status of the auditing auditor, and rationaleof the estimate compensation during the fiscal year ended March 31, 2024; as a result, the Board of

- 55 -

Corporate Auditors agreed to the amount of compensation, etc. for the accounting auditor as set forth in
Article 399, paragraphs 1 and 2 of the Companies Act.

(4)

Non-audit operations
The Company and its subsidiaries entrusted to the accounting auditor, and paid compensation for, theagreed procedural service that was outside of the services set forth in Article 2, paragraph 1 of theCertified Public Accountants Act.

(5)

Policy for determining dismissal or non-reappointment of the accounting auditor
Pursuant to laws and regulations, if any reasonable event occurs to the accounting auditor, the Board of
Corporate Auditors shall dismiss the accounting auditor with unanimous consent of the Corporate
Auditors; if it is deemed difficult for the accounting auditor to properly perform audits, the Company shallpropose a resolution for dismissal or non-reappointment of the accounting auditor to the General Meetingof Shareholders.

- 56 [Translation]
Consolidated Balance Sheet
As of March 31, 2024
Item
(Assets)
Current assets:
Cash and deposits
Notes receivable - trade
Accounts receivable - trade
Contract assets
Merchandise and finished goods
Work in process
Raw materials and supplies
Accounts receivable - other
Other
Allowance for doubtful accounts

Non-current assets:
Property, plant and equipment
Buildings and structures
Machinery, equipment and vehicles
Tools, furniture and fixtures
Other
Accumulated depreciation
Land
Construction in progress
Intangible assets
Goodwill
Other
Investments and other assets
Investment securities
Retirement benefit asset
Deferred tax assets
Other
Allowance for doubtful accounts

Total assets

AmountItem

Millions of yen
Amount(Liabilities)(174,694) Current liabilities:
32,683
Notes and accounts payable - trade
Electronically recorded obligations 3,479
operating
41,136
Short-term borrowings
880
Current portion of long-term
49,683borrowings
18,716
Accounts payable - other
15,983
Income taxes payable
4,377
Contract liabilities
9,173
Provision for bonuses-1,419Provision for goods warranties
Provision for loss on lease contracts
Provision for business restructuring
Other provisions
Asset retirement obligations(201,568)
Other(116,037) Non-current liabilities:
82,230Long-term borrowings
91,948
Lease liabilities
42,617
Deferred tax liabilities
Deferred tax liabilities for land
15,609revaluation-172,067
Provision for stock benefits
Provision for long-term goods
54,144
warranties
Provision for retirement benefits for
1,553
directors (and other officers)
Other provisions(18,189)
Retirement benefit liability
8,029
Asset retirement obligations
10,159
Other
Total liabilities(67,341) (Net assets)
56,374 Shareholders' equity:
1,884
Share capital
1,984
Capital surplus
7,247
Retained earnings-148
Treasury shares
Accumulated other comprehensive income:
Valuation difference on available-forsale securities
Deferred gains or losses on hedges
Revaluation reserve for land
Foreign currency translation adjustment
Remeasurements of defined benefit
plans
Non-controlling interests
Total net assets
376,262 Total liabilities and net assets(165,460)
21,5008,085
64,35021,727
15,291
4,678
8,760
5,097
552
87
24
366
647
14,289(59,467)
31,674
7,676
6,912
3,614
582
121
4
23
6,135
494
2,227
224,927(104,126)
10,0007,245
88,465-1,584(44,974)
17,820-74
8,190
18,290746(2,234)
151,334
376,262

- 57 [Translation]
Consolidated Statements of Income
From April 1, 2023
to March 31, 2024
Item
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit
Non-operating income
Interest income
Dividend income
Share of profit of entities accounted for using equity method
Other
Non-operating expenses
Interest expenses
Other
Ordinary profit
Extraordinary income
Gain on sale of non-current assets
Gain on sale of investment securities
Reversal of provision for business restructuring
Insurance claim income
Extraordinary losses
Business restructuring expenses
Impairment losses
Information security expenses
Profit before income taxes
Income taxes - current
Income taxes - deferred
ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent

Millions of yen
Amount276,807
154,120
122,686
107,948
14,737(4,264)
392
961
1,389
1,521
(3,107)1,350
1,757
15,894(1,575)
1,230
139
106
100
(2,346)
1,089
806
450
15,1234,890-104
10,338286
10,051

- 58 [Translation]
Non-Consolidated Balance Sheet
As of March 31, 2024
Item
(Assets)
Current assets:
Cash and deposits
Prepaid expenses
Short-term loans receivable
Accounts receivable - other
Other

Non-current assets:
Property, plant and equipment
Buildings
Tools, furniture and fixtures
Land
Leased assets
Intangible assets
Leasehold right
Trademark right
Software
Other
Investments and other assets
Investment securities
Shares of subsidiaries andassociates
Investments in capital
Long-term loans receivable fromsubsidiaries and associates
Claims provable in bankruptcy,
claims provable inrehabilitation and other
Long-term prepaid expenses
Guarantee deposits
Other
Allowance for doubtful accounts

Total assets

AmountItem

Millions of yen
Amount(Liabilities)
73,466 Current liabilities:
10,331
Short-term borrowings
632
Current portion of long-term
55,440borrowings
6,118
Lease obligations (current)
943
Accounts payable - otherAccrued expenses
Income taxes payable
Deposits received
128,821
Unearned revenue
31,544
Provision for bonuses
6,224
Asset retirement obligations (current)
1,231 Non-current liabilities:
24,039Long-term borrowings
48
Lease obligations (non-current)
Deferred tax liabilities
2,542
Deferred tax liabilities for land
1,952
revaluation0
Provision for stock benefits
569
Asset retirement obligations (non20
current)
Guarantee deposits
Other
94,733 Total liabilities
32,095 (Net assets)
Shareholders' equity:
59,956
Share capital
0
Capital surplus
Legal capital surplus
4,500
Other capital surplus
Retained earnings
28
Legal retained earnings
Other retained earnings
28
Retained earnings brought
1,699
forward502
Treasury shares-4,077 Valuation and translation adjustments:
Valuation difference on available-forsale securities
Revaluation reserve for land
Total net assets
202,287 Total liabilities and net assets

92,56155,54921,727
10
4,661
313
29
9,820
259
172
17
46,657
31,674
28
7,355
3,614
574
103
3,245
61
139,218
38,046
10,000
6,625
2,378
4,246
22,979121
22,857-1,55825,022
16,832
8,190
63,068202,287

- 59 [Translation]
Non-Consolidated Statements of Income
From April 1, 2023
to March 31, 2024
Item
Operating revenue
Dividend from subsidiaries and associates
Management fee income
Royalty income
Operating expenses
Operating profit
Non-operating income
Interest income
Dividend income
Other
Non-operating expenses
Interest expenses
Rental expenses on real estate
Other
Ordinary profit
Extraordinary income
Reversal of allowance for doubtful accounts for subsidiaries andaffiliates
Insurance claim income
Extraordinary losses
Information security expenses
Profit before income taxes
Income taxes - current
Income taxes - deferred
ProfitMillions of yen
Amount15,220
8,922
2,945
3,352
14,495
724
2,031
813
937
280
1,278
890
110
277
1,477
422
322
100
294
294
1,605
-2,141146
3,601

- 60 [Translation]
Certified copy of audit report on the consolidated financial statements by the Accounting Auditor

Independent Auditor’s Report

May 13, 2024
KPMG AZSA LLC
Tokyo Office
Akihiro Ohtani
Designated Limited Partner
Engagement Partner
Certified Public Accountant
Toshiyuki Nishida
Designated Limited Partner
Engagement Partner
Certified Public Accountant
Kenji Ueda
Designated Limited Partner
Engagement Partner
Certified Public Accountant
The Board of Directors
SEIKO GROUP CORPORATION

OpinionPursuant to Article 444, Paragraph 4 of the Companies Act, we have audited the accompanying
consolidated financial statements, which comprise the consolidated balance sheet, the consolidated
statements of income, the consolidated statements of changes in equity and the notes to consolidated
financial statements of SEIKO GROUP CORPORATION (the “Company”) for the fiscal year from
April 1, 2023 through March 31, 2024.
In our opinion, the consolidated financial statements referred to above present fairly, in all material
respects, the financial position and results of operations of SEIKO GROUP CORPORATION, which
consists of the Company and its consolidated subsidiaries, for the period covered by the consolidated
financial statements in conformity with accounting principles generally accepted in Japan.
Basis for the Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our
responsibility under the auditing standards is stated in “Auditor’s Responsibility for the Audit of theConsolidated Financial Statements.” We are independent of the Company and its consolidated
subsidiaries in accordance with the provisions related to professional ethics in Japan, and are fulfillingother ethical responsibilities as an auditor. We believe that we have obtained sufficient and appropriate
audit evidence to provide a basis for our audit opinion.

- 61 Other Statements
Other statements are the business report and the supplementary schedules. Management is responsible
for the preparation and disclosure of other statements. The Corporate Auditors and the Board of
Corporate Auditors are responsible for monitoring the execution of the duties of Directors related todesigning and operating the process of reporting other statements.
Other statements are not included in the scope of our audit opinion regarding the consolidated
financial statements, and we do not express our opinion on the other statements.
Our responsibility with regard to the audit of the consolidated financial statements is to read throughother statements and consider whether there are any material differences between the other statements
and the consolidated financial statements or the knowledge we have obtained through our audit.
Furthermore, it is our responsibility to pay attention to whether or not there are signs of material errors
in other statements, in addition to such material differences.
When we determine that there are material errors in other statements through our audit work, we are
required to report such fact.
We have found no matters to report regarding other statements.
Responsibilities of Management, Corporate Auditors, and the Board of Corporate Auditors for theConsolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial
statements in accordance with accounting principles generally accepted in Japan, and for designingand operating such internal control as management determines is necessary to enable the presentationand fair presentation of the consolidated financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing whether it
is appropriate to prepare the consolidated financial statements in accordance with the premise of agoing concern, and for disclosing matters relating to going concern when it is required to do so inaccordance with accounting principles generally accepted in Japan.
The Corporate Auditors and the Board of Corporate Auditors are responsible for monitoring theexecution of the duties of Directors related to designing and operating the financial reporting process.
Auditor’s Responsibility for the Audit of the Consolidated Financial Statements
Our responsibility is to obtain reasonable assurance about whether the consolidated financial
statements as a whole are free from material misstatement, whether due to fraud or error, and to
express an opinion on the consolidated financial statements from an independent standpoint in an audit
report, based on our audit. Misstatements can occur as a result of fraud or error, and are deemedmaterial if they can be reasonably expected to, either individually or collectively, influence thedecisions of users taken on the basis of the consolidated financial statements.
We make professional judgment in the audit process in accordance with auditing standards generally
accepted in Japan, and perform the following while maintaining professional skepticism.
・Identify and assess the risks of material misstatement, whether due to fraud or error. Design andimplement audit procedures to address the risks of material misstatement. The audit procedures
shall be selected and applied as determined by the auditor. In addition, sufficient and appropriate
audit evidence shall be obtained to provide a basis for the audit opinion.
・In making those risk assessments, the auditor considers internal control relevant to the entity’s audit
in order to design audit procedures that are appropriate in the circumstances, although the purposeof the audit of the consolidated financial statements is not to express an opinion on the effectivenessof the entity’s internal control.
・Assess the appropriateness of accounting policies adopted by management and the method of theirapplication, as well as the reasonableness of accounting estimates made by management and theadequacy of related notes.

- 62 ・Determine whether it is appropriate for management to prepare the consolidated financial
statements on the premise of a going concern and, based on the audit evidence obtained, determine
whether there is a significant uncertainty in regard to events or conditions that may cast significant
doubt on the entity’s ability to continue as a going concern. If there is a significant uncertainty
concerning the premise of a going concern, the auditor is required to call attention to the notes to theconsolidated financial statements in the audit report, or if the notes to the consolidated financial
statements pertaining to the significant uncertainty are inappropriate, issue a modified opinion on
the consolidated financial statements. While the conclusions of the auditor are based on the audit
evidence obtained up to the date of the audit report, depending on future events or conditions, anentity may be unable to continue as a going concern.
・Besides assessing whether the presentation of and notes to the consolidated financial statements arein accordance with accounting principles generally accepted in Japan, assess the presentation,
structure, and content of the consolidated financial statements including related notes, and whether
the consolidated financial statements fairly present the transactions and accounting events on which
they are based.
・Obtain sufficient and appropriate audit evidence regarding the financial information of theCompany and its consolidated subsidiaries in order to express an opinion on the consolidated
financial statements. The auditor is responsible for instructing, supervising, and implementing theaudit of the consolidated financial statements, and is solely responsible for the audit opinion.
The auditor reports to the Corporate Auditors and the Board of Corporate Auditors regarding the scope
and timing of implementation of the planned audit, material audit findings including material
weaknesses in internal control identified in the course of the audit, and other matters required under
the auditing standards.
The auditor reports to the Corporate Auditors and the Board of Corporate Auditors regarding theobservance of provisions related to professional ethics in Japan as well as matters that are reasonably
considered to have an impact on the auditor’s independence and any measures that have been taken toeliminate obstacles or safeguards that have been put in place to reduce these obstacles to an acceptablelevel.
Interest
Our firm and engagement partners have no interests in the Company or its consolidated subsidiaries
requiring disclosure under the provisions of the Certified Public Accountants Act of Japan.

- 63 [Translation]
Certified copy of audit report (on the non-consolidated financial statements) by the Accounting
AuditorIndependent Auditor’s Report

May 13, 2024
KPMG AZSA LLC
Tokyo Office
Akihiro Ohtani
Designated Limited Partner
Engagement Partner
Certified Public Accountant
Toshiyuki Nishida
Designated Limited Partner
Engagement Partner
Certified Public Accountant
Kenji Ueda
Designated Limited Partner
Engagement Partner
Certified Public Accountant
The Board of Directors
SEIKO GROUP CORPORATION

OpinionPursuant to Article 436, Paragraph 2, Item 1 of the Companies Act, we have audited the accompanying
financial statements, which comprise the non-consolidated balance sheet, the non-consolidated
statements of income, the non-consolidated statements of changes in equity and the related notes, andthe accompanying supplementary schedules of SEIKO GROUP CORPORATION (the “Company”)
for the 163rd fiscal year from April 1, 2023 through March 31, 2024.
In our opinion, the financial statements and the accompanying supplementary schedules referred toabove present fairly, in all material respects, the financial position of the Company as of March 31,
2024, and the results of its operations for the year then ended in conformity with accounting principles
generally accepted in Japan.
Basis for the Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our
responsibility under the auditing standards is stated in “Auditor’s Responsibility for the Audit of the
Financial Statements and the Accompanying Supplementary Schedules.” We are independent of theCompany in accordance with the provisions related to professional ethics in Japan, and are fulfillingother ethical responsibilities as an auditor. We believe that we have obtained sufficient and appropriate
audit evidence to provide a basis for our audit opinion.

- 64 Other Statements
Other statements are the business report and the supplementary schedules. Management is responsible
for the preparation and disclosure of other statements. The Corporate Auditors and the Board of
Corporate Auditors are responsible for monitoring the execution of the duties of Directors related todesigning and operating the process of reporting other statements.
Other statements are not included in the scope of our audit opinion regarding the financial statements
and the accompanying supplementary schedules, and we do not express our opinion on the otherstatements.
Our responsibility with regard to the audit of the financial statements and the accompanying
supplementary schedules is to read through other statements and consider whether there are any
material differences between the other statements and the financial statements and the accompanying
supplementary schedules or the knowledge we have obtained through our audit. Furthermore, it is our
responsibility to pay attention to whether or not there are signs of material errors in other statements,
in addition to such material differences.
When we determine that there are material errors in other statements through our audit work, we are
required to report such fact.
We have found no matters to report regarding other statements.
Responsibilities of Management, Corporate Auditors, and the Board of Corporate Auditors for the
Financial Statements and the Accompanying Supplementary Schedules
Management is responsible for the preparation and fair presentation of the financial statements and theaccompanying supplementary schedules in accordance with accounting principles generally acceptedin Japan, and for designing and operating such internal control as management determines is necessary
to enable the preparation and fair presentation of the financial statements and the accompanying
supplementary schedules that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements and the accompanying supplementary schedules, management is
responsible for assessing whether it is appropriate to prepare the financial statements and theaccompanying supplementary schedules in accordance with the premise of a going concern, and fordisclosing matters relating to going concern when it is required to do so in accordance with accounting
principles generally accepted in Japan.
The Corporate Auditors and the Board of Corporate Auditors are responsible for monitoring theexecution of the duties of Directors related to designing and operating the financial reporting process.
Auditor’s Responsibility for the Audit of the Financial Statements and the Accompanying
Supplementary Schedules
Our responsibility is to obtain reasonable assurance about whether the financial statements and theaccompanying supplementary schedules as a whole are free from material misstatement, whether due
to fraud or error, and to express an opinion on the financial statements and the accompanying
supplementary schedules from an independent standpoint in an audit report, based on our audit.
Misstatements can occur as a result of fraud or error, and are deemed material if they can bereasonably expected to, either individually or collectively, influence the decisions of users taken on thebasis of the financial statements and the accompanying supplementary schedules.
We make professional judgment in the audit process in accordance with auditing standards generally
accepted in Japan, and perform the following while maintaining professional skepticism.
・Identify and assess the risks of material misstatement, whether due to fraud or error. Design andimplement audit procedures to address the risks of material misstatement. The audit procedures
shall be selected and applied as determined by the auditor. In addition, sufficient and appropriate
audit evidence shall be obtained to provide a basis for the audit opinion.
・In making those risk assessments, the auditor considers internal control relevant to the entity’s audit
in order to design audit procedures that are appropriate in the circumstances, although the purposeof the audit of the financial statements and the accompanying supplementary schedules is not to
express an opinion on the effectiveness of the entity’s internal control.

- 65 ・Assess the appropriateness of accounting policies adopted by management and the method of theirapplication, as well as the reasonableness of accounting estimates made by management and theadequacy of related notes.
・Determine whether it is appropriate for management to prepare the financial statements and theaccompanying supplementary schedules on the premise of a going concern and, based on the audit
evidence obtained, determine whether there is a significant uncertainty in regard to events orconditions that may cast significant doubt on the entity’s ability to continue as a going concern. If
there is a significant uncertainty concerning the premise of a going concern, the auditor is required
to call attention to the notes to the financial statements and the accompanying supplementaryschedules in the audit report, or if the notes to the financial statements and the accompanying
supplementary schedules pertaining to the significant uncertainty are inappropriate, issue a modified
opinion on the financial statements and the accompanying supplementary schedules. While theconclusions of the auditor are based on the audit evidence obtained up to the date of the audit report,
depending on future events or conditions, an entity may be unable to continue as a going concern.
・Besides assessing whether the presentation of and notes to the financial statements and theaccompanying supplementary schedules are in accordance with accounting principles generally
accepted in Japan, assess the presentation, structure, and content of the financial statements and theaccompanying supplementary schedules including related notes, and whether the financial
statements and the accompanying supplementary schedules fairly present the transactions andaccounting events on which they are based.
The auditor reports to the Corporate Auditors and the Board of Corporate Auditors regarding the scope
and timing of implementation of the planned audit, material audit findings including material
weaknesses in internal control identified in the course of the audit, and other matters required under
the auditing standards.
The auditor reports to the Corporate Auditors and the Board of Corporate Auditors regarding theobservance of provisions related to professional ethics in Japan as well as matters that are reasonably
considered to have an impact on the auditor’s independence and any measures that have been taken toeliminate obstacles or safeguards that have been put in place to reduce these obstacles to an acceptablelevel.
Interest
Our firm and engagement partners have no interests in the Company requiring disclosure under theprovisions of the Certified Public Accountants Act of Japan.

- 66 [Translation]
Certified copy of audit report by the Board of Corporate Auditors
Audit Report
The Board of Corporate Auditors has deliberated on, prepared and submitted this Audit Report as
below, based on the audit reports made by the Corporate Auditors concerning the execution of duties
by Directors for the fiscal year ended March 31, 2024 (from April 1, 2023 to March 31, 2024).
1.

Methods and contents of the audit by Corporate Auditors and Board of Corporate Auditors(1)

The Board of Corporate Auditors established the audit policies and division of duties, received
reports regarding the implementation of the audit and results thereof from the respective
Corporate Auditors, as well as reports regarding the execution of duties from Directors,
Executive Officers (Senior Vice Presidents) and the Accounting Auditor, and requested
explanations as necessary.

(2)

In accordance with the audit policies and division of duties determined by the Board of
Corporate Auditors, each Corporate Auditor made efforts to collect information and establish
proper circumstances for the audit by communicating with the Directors, Executive Officers(Senior Vice Presidents), the internal audit department and other employees, and performed an
audit using the following methods:(i)

Attending Board of Directors meetings and other important meetings to receive
reports regarding the execution of duties from Directors, Executive Officers (SeniorVice Presidents) and employees, and requested explanations as necessary. Each
Corporate Auditor also inspected important decision-making documents and othermaterials, and examined the status of operations and the condition of the assets of theCompany. With regard to subsidiaries, the Corporate Auditors communicated andexchanged information with directors, corporate auditors and employees thereof, andreceived reports on business from those subsidiaries as necessary.

(ii)With regard to the resolutions by the Board of Directors, described in the business
report, regarding the establishment of systems to ensure that the Directors’ duties are
performed in conformity of laws, regulations and the Articles of Incorporation of theCompany and those other systems which are provided for in Article 100, Paragraphs 1
and 3 of the Ordinance for Enforcement of the Companies Act of Japan as systems
necessary to ensure proper business operations of a corporate group comprised of astock company and its subsidiaries, as well as the systems (internal control system)
established in accordance with the aforementioned resolutions of the Board of
Directors, the Corporate Auditors also periodically received reports from Directors,
Executive Officers (Senior Vice Presidents) and employees regarding the development
and operation thereof, requested explanations as necessary, and expressed opinions.

(iii)

The Corporate Auditors monitored and examined whether the Accounting Auditor wasmaintaining an independent position and conducting audits appropriately, obtained
reports on the execution of duties from the Accounting Auditor, and requested
explanations as necessary. In addition, the Corporate Auditors were informed by the
Accounting Auditor that a “system to ensure the duties are performed properly” (thematters stipulated in the respective items of Article 131 of Corporate Accounting
Rules) had been implemented in accordance with the “quality management standards
concerning audits” (Business Accounting Deliberation Council), and requested
explanations as necessary.

- 67 -In accordance with the aforementioned procedures, the Corporate Auditors reviewed thebusiness report and accompanying schedules thereto, and the financial statements (nonconsolidated balance sheets, non-consolidated statements of income, non-consolidated
statements of changes in shareholders’ equity, and notes to non-consolidated financial
statements) and accompanying schedules thereto, and consolidated financial statements(consolidated balance sheets, consolidated statements of income, consolidated statements ofchanges in shareholders’ equity, and notes to consolidated financial statements) for the fiscal
year ended March 31, 2024.
2.

Results of audits(1)

Results of the audit on business reports and related materials
(i)

(ii)

(iii)

(2)

The business report and accompanying schedules thereto fairly present the conditionof the Company in accordance with the laws, regulations and the Articles ofIncorporation of the Company.
Regarding the execution of duties by Directors, there were no instances of misconduct
or material matters in violation of laws, regulations, or the Articles of Incorporation of
the Company.
The contents of resolutions by the Board of Directors with regard to the internal
control system are reasonable. Additionally, regarding the descriptions of the relevantinternal control system in the business report and the execution of duties by Directors
under the relevant internal control system, there are no matters to be pointed out.

Results of the audit of the non-consolidated financial statements and accompanying schedules
theretoThe methods and results of the audit by KPMG AZSA LLC, Accounting Auditor, are fair andreasonable.

(3)

Results of the audit of the consolidated financial statements
The methods and results of the audit by KPMG AZSA LLC, Accounting Auditor, are fair andreasonable.
May 13, 2024
Board of Corporate Auditors
Seiko Group Corporation
Haruhiko TakagiStanding Corporate Auditor
Takashi Nishimoto
Standing Corporate Auditor
Hideki Amano
Outside Corporate Auditor
Masatoshi Yano
Outside Corporate Auditor
Kenji Sakurai
Outside Corporate Auditor

[Translation]
Start date for electronic provision measures: May 30, 2024

To Shareholders with Voting Rights:

Documents for the 163rd Ordinary
General Meeting of Shareholders
Matters not included in the paper copy delivered upon request, among
paper copy of matters related to electronic provision measures,
pursuant to laws and regulations and the Articles of Incorporation■ Business Report
Overview of the system to ensure proper operations andthe implementation status thereof■ Consolidated Financial Statements
Consolidated Statements of Changes in Equity
Notes to Consolidated Financial Statements■ Non-Consolidated Financial Statements
Non-Consolidated Statements of Changes in Equity
Notes to Non-Consolidated Financial Statements
Fiscal year 2023 (April 1, 2023 to March 31, 2024)
SEIKO GROUP CORPORATION

The above-mentioned documents are omitted from the paper copy delivered toshareholders who have requested it (paper copy of matters related to electronic
provision measures) pursuant to the provisions of laws and regulations and the
Articles of Incorporation of the Company.

-1-

Systems and policies of the Company
I.

Overview of a resolution to establish systems to ensure the proper operations of the Company(1)

System to ensure that the duties of Directors, Executive Officers (Senior Vice Presidents), and employees
are executed in compliance with laws and regulations and the Articles of Incorporation
In order for Directors, Executive Officers (Senior Vice Presidents), and employees (hereinafter, the“Officer(s) and Employee(s)” or “Officer(s) or Employee(s)”) to comply with corporate ethics, laws andregulations, and internal rules, the Company shall establish the “Basic Principles of Corporate Ethics” andthe “Action Guidelines for Corporate Ethics” to thoroughly ensure their compliance with corporate ethics
and laws and regulations, as follows:
1)

The President shall repeatedly convey the spirit of the “Basic Principles of Corporate Ethics” to
all Officers and Employees to ensure that compliance with corporate ethics and the laws andregulations are the basis for every corporate activity.

2)

The “Corporate Ethics Committee” chaired by the President shall discuss corporate ethical issues
that might significantly affect the Company and its subsidiaries (the “Company Group”) andmatters related to revisions of the system to comply with corporate ethics, and report the results ofdiscussion to the Board of Directors.

3)

The Company shall develop a system where any Officer or Employee who finds any actionsuspected of violating the laws and regulations can promptly report such findings to the“Corporate Ethics Committee”, and establish a “Corporate Ethics Helpline” as a means forreporting information.

4)

The Company shall continuously provide training sessions on corporate ethics to Officers andEmployees to foster and enhance their awareness of compliance with corporate ethics and laws
and regulations.

(2)

System to store and manage information regarding execution of the duties of Directors and Executive
Officers (Senior Vice Presidents)(i)

Pursuant to the “Internal Document Management Rules”, the Company shall record information
regarding execution of the duties of Directors and Executive Officers (Senior Vice Presidents) in adocument or in an electromagnetic medium, and store and manage it properly.

-2-

(ii)

Directors, Executive Officers (Senior Vice Presidents), and Corporate Auditors may inspect such
document or medium at any time pursuant to the “Internal Document Management Rules”.

(3)

Regulations and systems for loss risk management of the Company and its subsidiaries(i)

Pursuant to the “Risk Management Rules”, the Company shall set forth the basic policy for risk
management of the Company Group and develop a risk management system.

(ii)

The Company shall establish the “Risk Management Committee” chaired by the President inorder to build, develop and monitor risk management processes, including understanding businessrisks that might affect the activities of the Company Group, and identifying, analyzing, evaluating
and monitoring risks.

(iii)

The Risk Management Committee shall report the status of each risk to the Board of Directors,
regularly or as necessary, pursuant to the “Risk Management Rules”.

(4)

System to ensure that the duties of Directors and Executive Officers (Senior Vice Presidents) of theCompany and its subsidiaries are efficiently executed(i)

The Company shall develop a Mid-Term Management Plan as the target to be shared by Officers
and Employees of the Company Group. It shall also review the progress of annual budgets
consisting of the said plan on a quarterly basis using the management accounting method, andpromote the efficiency of operation by considering and implementing remedial measures for the
progress of annual budget.

(ii)

In order to respect autonomous and independent management of its subsidiaries while
contributing to the proper and efficient operation of the Group management, the Company shalldevelop basic management rules therefor. It shall also establish Management Conferencecomprising standing Directors and Executive Officers (Senior Vice Presidents) of the Company
and respective President of major subsidiaries of the Company, in order to share the management
policy and management information of the Company Group, and to discuss medium- to long-termbusiness strategies.

(iii)

The Company shall clarify the assignment of duties of Directors and Executive Officers (SeniorVice Presidents), and the responsibility and authority of each division/department, and secure theefficient execution of the duties of Directors and Executive Officers (Senior Vice Presidents).

-3-

(5)

System to ensure the proper operations of the Corporate Group comprising the Company and its
subsidiaries(i)

The Company shall assist its subsidiaries to develop a system to comply with corporate ethics,
and laws and regulations, and other systems to ensure their proper operations.

(ii)

Each subsidiary of the Company shall share the “Basic Principles of Corporate Ethics” and the“Action Guidelines for Corporate Ethics” established by the Company, and manage its operations
pursuant to them. The Company shall set forth the rules for reporting any violation of laws andregulations by any subsidiary, and assist its subsidiaries to develop their internal reporting
systems.

(iii)

Pursuant to the “Consolidated Business Management Rules”, the Company shall request that eachsubsidiary consult in advance with, and report to, the Company regarding significant
management-related matters, and whenever necessary, shall dispatch its Officers or Employees as
Directors or Corporate Auditors of the subsidiary so as to properly supervise and audit theoperation of subsidiary.

(iv)

Pursuant to the “Consolidated Business Management Rules”, each subsidiary shall report its
business results, financial position and other important matters to the Company, and whenevernecessary, the President of the relevant subsidiary shall report the execution status of theoperations to the Board of Directors of the Company.

(v)

The Company’s Internal Audit Department shall conduct internal audits on each subsidiary
regarding the execution status of the operations, compliance with laws and regulations, theArticles of Incorporation, and risk management.

(6)

Matters related to employees to assist the duties of Corporate Auditors(i)Internal Audit Department shall be responsible for assisting the duties of Corporate Auditors.

(ii)

Employees who are assigned to the Internal Audit Department shall not concurrently hold duties
related to the execution of operations.

(iii)

Regarding any transfer of the General Manager of the Internal Audit Department, the President
shall discuss with the Board of Corporate Auditors in advance, and shall respect the Board of
Corporate Auditors’ opinions.

-4-

(7)

System for reporting to Corporate Auditors(i)Each Officer and Employee of the Company shall regularly report to Corporate Auditors thestatus of finance, compliance with corporate ethics, risk management, and internal audits. If any
Director/employee finds any fact likely to significantly damage the Company or its subsidiaries,
any violation of laws and regulations or internal rules, he/she shall immediately report suchfindings to the Corporate Auditors of the Company.

(ii)

The Company shall develop a reporting system where if any Director, Executive Officer (SeniorVice President), Corporate Auditor or employee of a subsidiary finds any material violation oflaws and regulations or internal rules regarding the execution of operations of the Company or thesubsidiary, or any fact which is likely to significantly damage the Company, he/she or the person
who was reported by him/her shall report it to the Corporate Auditors of the Company.

(iii)

The Company shall develop necessary systems to ensure that the person who makes the report inaccordance with the preceding two (2) paragraphs might not be treated disadvantageously on the
grounds of having made such report.

(iv)

In conducting internal audits, the General Manager of the Internal Audit Department shallcooperate with Standing Corporate Auditors in advance, and make efforts to report importantmatters to Standing Corporate Auditors in a timely manner.

In addition, the General Manager of

the Internal Audit Department shall report the results of internal audits to Standing Corporate
Auditors without delay, and regularly report such results to the Board of Corporate Auditors of theCompany.
(8)

Other systems to ensure that audits by Corporate Auditors are effectively conducted(i)

The Company shall ensure a system where, besides the Internal Audit Department, the department
in charge of general affairs and the department in charge of finance and accounting shall assist
audits by Corporate Auditors from time to time based on respective instructions from Corporate
Auditors.

(ii)

The Company shall ensure that Corporate Auditors attend important meetings and committees
which are established and held by the Board of Directors in a timely manner to ensure proper
operations of the Company.

(iii)

The President shall meet and consult with the Board of Corporate Auditors, as necessary, andexchange opinions regarding important management issues.

-5-

(iv)

If a Corporate Auditor requests that the Company pay expenses incurred in connection withexecuting his/her duties, the Company shall promptly reimburse such expenses unless theCompany proves that such expenses are not necessary for the Corporate Auditor to execute his/herduties.

II.

Overview of the implementation status of the system to ensure proper operations(1)

System for compliance with corporate ethics and laws and regulations(i)

The Company has established a “Corporate Ethics Committee” chaired by the President to discuss
corporate ethical issues and the system for compliance with corporate ethics, including thoserelating to its subsidiaries, and reports the result of discussions to the Board of Directors.

(ii)

The Company has established a “Corporate Ethics Helpline” internally and appointed a law firm
as a reception to receive consultations or reports from employees regarding violations of laws andregulations within the Company. The Company has made sure all employees and retirees arewell informed about how to use these helplines by posting them on its intranet and the Company’s
website.

(iii)

The Company regularly provides training sessions on corporate ethics to enhance awareness ofcompliance with corporate ethics and laws and regulations. During the fiscal year ended March
31, 2024, the Company provided training sessions on “Preventing Power Harassment” forstanding officers, Executive Officers (Senior Vice Presidents), and employees.

(2)

Risk management system(i)

The Company has established the “Risk Management Committee” chaired by the President todiscuss the Company Group’s responses to important risk issues and matters relating to foreseeing
and prevention of risks during normal times. The Committee also reports to the Board of
Directors the matters discussed thereat and important risks which require the Company Group to
take comprehensive measure.
Further, the Company has established the “Group Risk Management Committee” consisting ofrespective standing Directors and Executive Officers (Senior Vice Presidents) of the Company
and Presidents of its subsidiaries, and confirms and shares the risks and the counter-measuresagainst them experienced by each group company.

-6-

(ii)

Regarding responses when risks occur, the “Crisis Management Manual” sets out for theCompany’s basic policy therefor and measures to respond to respective risks, such as natural
disasters.

(3)

System to ensure that the duties of Directors and Executive Officers (Senior Vice Presidents) are
efficiently executed(i)

The Company has determined the assignment of duties for each Director and Executive Officer(Senior Vice President) upon a resolution of the Board of Directors, and the responsibility andauthority of each division/department in accordance with the “Duty Assignment Rules”.

(ii)

The Company has established a council called the “Strategic Conference for Management” where
the President, Executive Directors, and Executive Officers (Senior Vice Presidents) exchange
opinions and share information with other Directors, Executive Officers (Senior Vice Presidents),
Corporate Auditors, or General Managers of divisions/departments when they decide on andexecute important matters relating to execution of their duties.

(iii)

The Company has provided the “Consolidated Business Management Rules” for the execution of
the operations of its subsidiaries in order to perform its management and support functions fromthe viewpoint of consolidated management.

(4)

System to ensure the proper operations of the Company Group(i)

Pursuant to the “Consolidated Business Management Rules”, the Company properly discusses
with its subsidiaries in advance regarding their business plan, annual budgets, and measures to
respond to important corporate ethical issues, receives reports on material business matters fromthem, and dispatches its Officers or Employees to subsidiaries, as necessary, to supervise andaudit them.
Furthermore, the President of each subsidiary reports the execution status of its operations to theBoard of Directors of the Company as necessary. During the fiscal year ended March 31, 2024,
six (6) subsidiaries made such reports.

(ii)

Each unit of the Company assists its subsidiaries to develop a system to comply with corporate
ethics and laws and regulations, and a system to comply with business operation laws.

Duringthe fiscal year ended March 31, 2024, training sessions and briefings were held for officers andemployees of the Company’s subsidiaries to discuss topics such as “Preventing Power
Harassment”.

-7-

(5)

System to ensure that audits by Corporate Auditors are effectively conducted(i)

The Internal Audit Department holds a regular meeting once a month with Standing Corporate
Auditors and reports the performance status of internal audits.

(ii)Standing Corporate Auditors attend important meetings such as the “Strategic Conference forManagement”, “the Risk Management Committee”, and the “Corporate Ethics Committee”, etc.

(iii)

The President attends the Board of Corporate Auditors’ meetings to exchange opinions and gather
information relating to material business issues.

-8[Translation]
Consolidated Statements of Changes in Equity(From April 1, 2023 to March 31, 2024)
Millions of yen
Shareholders' equity
Share capital

Balance at beginning of period
Changes during period
Dividends of surplus
Profit attributable to owners of parent
Purchase of treasury shares
Treasury stock possession of stock
ownership plan trust
Disposal of treasury stock byownership plan trust
Change in scope of consolidation
Other
Net changes in items other thanshareholders' equity
Total changes during period
Balance at end of period

Retainedearnings

Capital surplus

10,000

7,245

Total
shareholders'equityTreasury shares

81,520-248

98,517-2-3,10010,051-2-1,418-1,418

84

84

-4
-0

0

-4
-0

6,945
88,465-1,336-1,584

5,608
104,126-3,10010,051

10,0007,245Millions of yen
Accumulated other comprehensive income
Valuationdifference on
available-forsale securities

Balance at beginningof period
Changes during period
Dividends ofsurplusProfit attributableto owners of parent
Purchase oftreasury shares
Treasury stockpossession of stock
ownership plantrust
Disposal oftreasury stock byownership plantrust
Change in scope of
consolidation
Other
Net changes in
items other thanshareholders' equity
Total changes during
periodBalance at end of
period11,464

Deferred
gains orlosses onhedges-9

Revaluation
reserve for
land

8,190

Foreigncurrencytranslation
adjustment

10,638

Total
NonRemeasurements accumulated
controllingof defined
otherinterests
benefit plans comprehensive
income992

31,275

Total net
assets1,956 131,748-3,10010,051-2-1,418

84

-4
-0
6,356

-64

-

7,652

-245

13,698278

13,977

6,356

-64

-

7,652

-245

13,698278

19,586

17,820-74

8,190

18,290746

44,974

2,234 151,334(Note 1) The -0 million yen of “Other” under retained earnings represents a decrease due to disposal of sharesof the Company’s affiliates accounted for using equity method.
(Note 2) The 0 million yen of “Other” under treasury shares represents changes due to a change in the ratio of
equity interests of the Company’s affiliates accounted for using equity method.

-9[Translation]
Notes to Consolidated Financial Statements
1.

Notes to Important Matters that are the Basis for Preparation of Consolidated Financial
Statements(1)

Matters relating to scope of consolidation
Number of consolidated subsidiaries: 61
SEIKO WATCH CORPORATION, Morioka Seiko Instruments Inc., Seiko Instruments Inc.,SEIKO Solutions Inc., SEIKO Time Creation Inc., WAKO Co., Ltd., Grand Seiko Corporationof America, Seiko Watch of America LLC, Grand Seiko Europe S.A.S., Seiko Watch Europe
S.A.S., SEIKO Hong Kong Ltd., SEIKO Manufacturing (H.K.) Ltd., SEIKO Manufacturing(Singapore) Pte. Ltd., Dalian Seiko Instruments Inc., Seiko Instruments Trading (H.K.) Ltd.,
Seiko Instruments (Thailand) Ltd., SEIKO Precision (Thailand) Co., Ltd., and others.
Computer Science Corporation was included in the scope of consolidation from the 4th
quarterly consolidated accounting period due to the acquisition of its shares.
SEIKO RUS Limited Liability Company was excluded from the scope of consolidation fromthe 1st quarterly consolidated accounting period because it became immaterial.
Non-consolidated subsidiaries:
AOBA WATCH SERVICE Co. Ltd. and others are of a small scale in terms of net sales, total
assets, profit and loss, and retained earnings, and none of them have any material impact on
the consolidated financial statements. Therefore, they were excluded from the scope of
consolidation.

(2)

Matters relating to the application of the equity method
Number of affiliates accounted for by the equity method:
5
SEIKO OPTICAL PRODUCTS CO., LTD., OHARA INC., and others.
Non-consolidated subsidiaries and affiliates not accounted for by the equity method:
AOBA WATCH SERVICE Co. Ltd. and others have a minimal impact on the consolidated net
income and loss and retained earnings, and are of little significance. Therefore, the equity
method has not been applied to these companies.

(3)

Standards and methods for evaluating significant assets(i) Inventories
Basically stated at cost using the movingaverage method (for values stated on the balance
sheet, writing down the book values in response
to decreased profitability)(ii) Securities
Available-for-sale securities
Securities other than shares, etc.
Market value method based on the market pricethat do not have a market priceas of the consolidated closing date (differencesin valuation are included directly in net assets
and the costs of securities sold are calculatedusing the moving-average method)
Shares, etc. that do not have aStated at cost using the moving-average methodmarket priceInvestment Limited PartnershipStated on a net basis equivalent to equity
interests, based on the most recent financial

- 10 -

(iii) Derivatives(4)

Depreciation methods for significant depreciable assets(i) Property, plant and equipment
As for domestic consolidated companies, basically(excluding leased assets and rightthe straight-line method is used for buildings
of-use assets)(excluding equipment attached to buildings), andthe declining-balance method for those other thanbuildings (except that the straight-line method isused for the equipment attached to buildings, andstructures that were acquired on or after April 1,
2016); as for consolidated subsidiaries outside
Japan, basically the straight-line method is used.
The estimated economic life reflecting the usable
period, the actual period of use, and other factors
for each asset is used for a useful life.
(ii) Intangible assets (excluding
The straight-line method is used. As for software
leased assets)
for in-house use, the straight-line method is usedwith a usable period of 5 years.
(iii) Leased assets
Leased assets relating to finance The same depreciation method as applied to thelease with transfer of ownershipproperty, etc. owned by the Company is used.
Lease assets relating to financelease without transfer of ownership(iv) Right-of-use assets(5)statements available according to the financial
reporting date stipulated in the partnershipagreement
Market value method

The straight-line method is used with a useful lifeof the lease period and with a residual value ofzero.
The straight-line method is used with a useful lifeof the lease period and with a residual value ofzero.

Accounting standards for significant allowances and provisions(i) Allowance for doubtful accounts
In order to prepare for possible losses on
uncollectible receivables held, estimateduncollectible amounts are posted: for general
receivables, according to the historical percentage
of uncollectibles, and for doubtful receivables,
considering the probability of collection.
(ii) Allowance for investment loss of In order to prepare for possible losses oninvestments to subsidiaries and affiliates, an
subsidiaries and affiliates
amount deemed necessary is provided after
considering the financial position of each company
and based on a respective review. The allowance
for investment loss of subsidiaries and affiliates of
4 million yen is directly reduced from the amountof investment securities.
(iii) Provision for bonuses
In order to prepare for payment of bonuses to
employees, a provision is made based on theestimated bonus payments, which are attributable
to the consolidated fiscal year under review.

- 11 (iv) Provision for goods warranties(v) Provision for loss on lease
contracts(vi) Provision for businessrestructuring(vii) Provision for stock benefits(viii) Provision for retirement
benefits for directors (and otherofficers)

To provide for warranties of the goods sold at someof the consolidated subsidiaries outside Japan,
respective estimated amount based on the pastexperience is posted.
To provide for the loss expected to incur during thenon-cancellable periods, an amount equivalent to
the portion of rents for the real estate deemed likely
to be non-performing up to the expiry of leaseagreements is posted.
The Company has posted an estimated amount oflosses expected to be incurred in the future as aresult of business restructuring.
The Company has posted an estimated amount, asof the end of the consolidated fiscal year underreview, for the obligation to deliver shares, as aprovision for the delivery of its shares to the
Executive Directors of the Company and its
subsidiaries, in accordance with the Rules for
Delivery of Shares to Officers.
Some of the domestic consolidated companies
passed a resolution to discontinue their respective
directors’ retirement benefit systems during the
fiscal year ended March 2005. Accordingly, theamount of retirement benefits for incumbent
officers is posted corresponding to the terms ofoffice till the end of the Ordinary General Meetingof Shareholders during the relevant consolidated
fiscal year.

- 12 (6)

Accounting standards for significant income and expenses(i) Emotional Value Solutions
Business

The Company Group manufactures, sells, andprovides repair services for its own products as thewholesale of watches, and provides retail services,
including other companies’ products, as the retailof watches.
With regard to the time of satisfaction of
performance obligations for the wholesale ofwatches, the Company Group applies thealternative treatment prescribed in Paragraph 98 of
the “Implementation Guidance on AccountingStandard for Revenue Recognition” (hereinafter,
the “Revenue Recognition Implementation
Guidance”), and recognizes revenue at the time of
shipment, if the period between the shipment andthe transfer of control of products to customers is
primarily a normal period of time for domestic
sales. For other transactions, including export sales,
revenue is recognized when risks are transferred tocustomers based on terms of contracts with eachcustomer. For the retail of watches, revenue isrecognized when products are delivered tocustomers.
For transactions in which returns are expected at
the time of sale, such amounts are not recognized
as revenue, but are estimated based on historicalexperience and recognized as a liability for returns.
For transactions in which the Company Group acts
as an agent, revenue is recognized at a net amount.
For transactions in which the Company Group acts
as the principal, revenue is recognized at a grossamount.
The Company Group generally receives
consideration for transactions in the Emotional
Value Solutions Business within one to threemonths from the time when performanceobligations are satisfied, and the receivables arisingfrom contracts with such customers are notadjusted for significant financial components.

- 13 (ii) Devices Solutions Business(iii) Systems Solutions Business

The Company Group manufactures and sells
products related to electronic devices, precision
devices, and printing devices.
The Company Group applies the alternative
treatment prescribed in Paragraph 98 of the
Revenue Recognition Implementation Guidance,and recognizes revenue at the time of shipment, if
the period between the shipment and the transfer ofcontrol of products to customers is primarily anormal period of time for domestic sales. For othertransactions, including export sales, revenue isrecognized when risks are transferred to customers
based on terms of contracts with each customer.
The Company Group generally receives
consideration for transactions in the Devices
Solutions Business within one to three months fromthe time when performance obligations are
satisfied, and the receivables arising from contracts
with such customers are not adjusted for significant
financial components.
The Company Group develops and sells products
for businesses related to system, IoT, andsettlement, and provides maintenance services for
products sold and made-to-order software services.
With regard to the time of satisfaction of
performance obligations for the sale of products,
revenue is recognized when products are delivered
to customers or when customers inspect the
products. For maintenance services, revenue isrecognized over the period the services areprovided, as performance obligations are deemed tobe satisfied over time, since the Company Group
provides uniform services over the contract period.
For the provision of made-to-order software
services, revenue is recognized based on the degreeof progress toward satisfying performanceobligations, as performance obligations are deemed
to be satisfied over a certain period of time. The
degree of progress is measured based on thepercentage of costs incurred to the end of eachfiscal year of the total expected costs.
The Company Group generally receives
consideration for transactions in the Systems
Solutions Business within one to six months fromthe time when performance obligations are satisfied(in some cases, advance payments are received
based on contracts), and the receivables arisingfrom contracts with such customers are notadjusted for significant financial components.

- 14 (7)Standards for translation of significant foreign currency-denominated assets or liabilities into
Japanese yen
Foreign currency receivables/payables are translated into yen using the spot foreign exchange
rate on the consolidated closing date, and translation differences are treated as income or loss.
The assets and liabilities of subsidiaries outside Japan are translated into yen using the spot
foreign exchange rate on the consolidated closing date; income and expenses are translated
into yen using an average market rate during the period, and translation differences areincluded in “Foreign currency translation adjustment” and “Non-controlling interests” of the“Net assets”.

(8)Significant hedge accounting methods(i) Hedge accounting method(ii) Means of hedging and hedged
items(iii) Hedging policy(iv) Assessment of hedge effectiveness(9)

Deferred hedge accounting is employed.
However, regarding domestic consolidated
companies, basically deferral hedge accounting(“furiate-shori”) is employed for foreign
currency receivables/payables with forward
exchange contracts or the like, and with regard
to interest-rate swaps that meet the requirements
for exceptional accounting (“tokurei-shori”),
exceptional accounting is employed.
Forward exchange contracts and foreign
currency deposits to hedge foreign exchangerate fluctuation risks regarding foreign currencydenominated trade payables and receivables; andinterest-rate swaps to avoid fluctuation risks
regarding borrowings on floating interest rates.
Forward exchange contracts, foreign currency
deposits and interest-rate swaps are hedged to
avoid exchange- and interest-rate fluctuation
risks present in hedged items in accordance with
the internal rules of the respective companies,
and no speculative transactions are conducted.
For interest-rate swaps, hedge effectiveness is
assessed by analysis of the percentage between
the accumulated cash flow changes of hedged
items and the accumulated cash flow changes bymeans of hedging. However, the assessment ofhedge effectiveness is omitted if the material
conditions of the means of hedging and thehedged items are the same.

Accounting for employees’ retirement benefits
In order to prepare to pay retirement benefits to employees, the net defined benefit liability isposted based on the estimated amount of retirement benefit obligations minus the amount ofplan assets as of the end of the consolidated fiscal year under review. To calculate retirement
benefit obligations, the benefit formula method is adopted as a method to attribute theestimated retirement benefits to the periods up to the end of the consolidated fiscal year underreview. The actuarial differences that resulted are recognized in the following consolidated
fiscal year by the straight-line method over various periods (5 to 9 years) that are not morethan the average remaining service period of employees at the time of the accrual of adifference. Prior service costs are basically recognized by the straight-line method overvarious periods that are not more than the average remaining service period of employees at
the time of the accrual thereof. Unrecognized actuarial differences and unrecognized prior- 15 service costs after tax effect adjustment are posted in “Remeasurements of defined benefit
plans”, “Accumulated other comprehensive income” in “Net assets”.
(10)

Application of group tax sharing system
Group tax sharing system is applied.

(11)

Method and period of amortization of goodwill
Goodwill is equally amortized for 5 to 20 years; minor goodwill is entirely amortized upon
accrual.

- 16 2.

Notes to Accounting Estimates(1)

Valuation of inventories(i)Amounts posted in the consolidated financial statements for the fiscal year underreview
Emotional Value Solutions
Business
Devices Solutions Business
Systems Solutions Business
Adjustment
Consolidated total(ii)

59,530 million yen
18,470 million yen
6,923 million yen-541 million yen
84,382 million yen

Information useful for understanding the content of accounting estimates

The Company Group evaluates inventories by writing down book values based on a decreasein profitability.
For products, etc. of each business company exceeding a given holding period and volume thatare no longer part of the normal operating cycle, a decrease in profitability is reflected througha systematic write-down method, which has been determined mainly based on past sales anddisposal results.
However, products, etc. that are considered to be still in the process of the normal operating
cycle in light of recent sales results and future sales estimates, despite exceeding a given
holding period and volume, are exempted from systematic write-downs, in whole or in part.
The Emotional Value Solutions Business primarily handles products, etc. directly related topersonal consumption. Consequently, the business results and profitability of products, etc. arestrongly affected by economic trends in Japan and overseas, especially personal consumption.
The business results and profitability of products, etc. of the Devices Solutions Business areaffected by trends of demand for electronic devices, etc. in Japan and overseas. Economic
trends and personal consumption may fluctuate considerably due to factors that are out of theCompany Group’s control, and thus are difficult to predict. Accordingly, in determining asystematic write-down method to reflect a decrease in profitability, significant judgments andassumptions are incorporated. Furthermore, determining whether products, etc. that are
exempted from systematic write-downs are no longer in the process of the normal operating
cycle also entails significant judgments.
These estimates entailing judgments and assumptions may be affected by future trends inpersonal consumption and may significantly affect the amount of inventories in the
consolidated financial statements for the following consolidated fiscal year.
(2)

Impairment of non-current assets(i)Amount posted in the consolidated financial statements for the fiscal year underreview
Property, plant andequipment
Intangible assets
Impairment losses

116,037 million yen
18,189 million yen
806 million yen

- 17 (ii)Information useful for understanding the content of accounting estimates

In principle, the Company Group’s assets are classified into groups by business unit for
management accounting, and real estate for rent, idle real estate, real estate to be sold, etc. areclassified into groups by individual property.
For asset groups that show signs of impairment and require recognition of an impairment loss,
their carrying amounts are reduced to the recoverable value, and this reduced amount isrecorded as an impairment loss.
The recoverable value of the asset groups is the higher of the net selling price and the value in
use. In recognizing and measuring impairment losses, the Company Group uses estimates of
future cash flows based on available information. However, if assumptions underlying such
estimates change due to uncertain future changes in market environment, etc., it may
significantly affect the occurrence of impairment losses in the consolidated financial
statements for the following consolidated fiscal year.

- 18 3.

Notes to Consolidated Balance Sheet(1)

Assets provided as security and secured obligations
Assets provided as security
Cash and deposits
Deposits (Investments andother assets)
Total

39 million yen
370 million yen
409 million yen

Secured obligations
Accounts payable - other
Gift certificates (Contract
liabilities)
Total
(2)

1 million yen
283 million yen
284 million yen

Guarantee obligation
The Company has guaranteed borrowings extended to its employees from financial
institutions, as follows.
Employee (housing fund)1 million yen(3)

Amount of discount on negotiable instruments receivable(4)

Land for business use was revaluated pursuant to the “Act on Revaluation of Land” (Act No.
34 promulgated on March 31, 1998), and valuation differences which correspond to taxes areposted as “Deferred tax liabilities for land revaluation” of “Liabilities” and the balance thereofis posted as “Revaluation reserve for land” of “Net assets”.
(i)

500 million yen

Method of revaluation

Land for business use was evaluated based on the main-street land price set forth in Article 2,
item 4 of the “Order for Enforcement of the Act on Revaluation of Land (Cabinet Order No.
119 promulgated on March 31, 1998), and that land without a main-street land price was
evaluated based on the assessed value of fixed assets as set forth in item 3 thereof, withreasonable adjustment.
(ii)

Date of revaluation:

March 31, 2001

(5)

Out of investment securities, 477 million yen is for lending stock.

(6)

Loan commitment agreement
The Company has concluded loan commitment agreements with two banks in order to carryout efficient funding of working capital. The balance of unused line of credit, etc. under theloan commitment agreements at the end of the consolidated fiscal year under review is asfollows.
Total amount of loan commitment
Borrowing balance
Balance

36,500 million yen
11,800 million yen
24,700 million yen

- 19 4.

Notes to Consolidated Statements of Changes in Equity(1)

Matters relating to type and total number of issued shares, and type and number of treasury
shares(Thousands of shares)
Number of
Number ofshares decreased shares at the end
during theof theconsolidated
consolidated
fiscal year under fiscal year underreview
review

Number ofshares at the
beginning of theconsolidated
fiscal year underreview

Number ofshares increased
during theconsolidated
fiscal year underreview

Issued shares
CommonsharesTotal

41,404――

41,404

41,404――

41,404

Treasury shares
Commonshares (Note)
Total

132

553

45

639

132

553

45

639

(Note) The number of common shares held as treasury shares at the end of the consolidated fiscal year
under review includes 557 thousand shares of the Company held in the Board Benefit Trust (BBT).
553 thousand shares of increase in common shares held as treasury shares is due to the acquisition of
the Company shares through the Board Benefit Trust (BBT) and the purchase of fractional shares.
45 thousand shares of decrease in common shares held as treasury shares is due to the disposal of the Company
shares through the Board Benefit Trust (BBT) and a change in the ratio of equity interests of affiliates accounted
for using equity method.

- 20 (2)Matters relating to dividend(i)Amount of dividend paid

Resolution
Ordinary
GeneralMeeting of
Shareholders on
June 29, 2023
Board ofDirectors
meeting on
November 14,
2023

Type ofsharesTotal dividend(million yen)

Dividend pershare (yen)Common
share

1,550

37.50

March 31,2023

June 30, 2023

Common
share

1,550

37.50

September 30,
2023

December 5,
2023

Record date

Effective date

(Note 1) The total amount of dividend approved by a resolution of the Ordinary General Meeting of
Shareholders on June 29, 2023 includes a dividend of 1 million yen payable for the Company shares
held in the Board Benefit Trust (BBT).
(Note 2) The total amount of dividend approved by a resolution of the Board of Directors meeting on
November 14, 2023 includes a dividend of 0 million yen payable for the Company shares held in the
Board Benefit Trust (BBT).
(ii)

Dividend for which the record date falls in the consolidated fiscal year under review
but the effective date comes after the end of that consolidated fiscal year
Total
SourceDividend
Type ofdividend
Effective
Resolutionforper share
Record dateshares(million
date
dividend(yen)
yen)
Ordinary
GeneralCommonRetained
March 31,
June 28,
Meeting of
1,757
42.50
Share
earnings
2024
2024
Shareholders on
June 27, 2024
(Note) The total amount of dividend proposed for approval by a resolution of the Ordinary General
Meeting of Shareholders on June 27, 2024 includes a dividend of 23 million yen payable for theCompany shares held in the Board Benefit Trust (BBT).
5.

Notes to Financial Instruments(1)

Matters relating to status of financial instruments
The Company Group raises funds (mainly borrowing from banks) necessary in light ofrespective business plans of business companies. Temporary surplus funds are invested in
more safe financial assets.
Notes and accounts receivable - trade (which are operating receivables) are exposed tocustomers’ credit risks; as such, the Company controls each customer’s due date and balance,
and understands major customers’ credit status. Exchange-rate fluctuation risks for foreign
currency operating receivables due to the Company’s global development are almost set off by
the risks resulting from foreign currency operating payables, some of which are hedged using

- 21 forward exchange contracts. Investment securities are mainly shares of customers, andexposed to market price fluctuation risks.
Most of the notes and accounts payable - trade (which are operating payables) are due within
one year. Borrowings and bonds payable are mainly to raise funds for operating transactions,and interest-rate swaps are used to hedge part of exchange-rate fluctuation risks of borrowings.
Derivatives include forward exchange contracts to hedge exchange-rate fluctuation riskspresent in foreign currency receivables/payables, and interest-rate swaps to hedge fluctuation
risks of interest rates payable on borrowings.
(2)

Matters relating to market value, etc. of financial instruments
Amounts posted on the Consolidated Balance Sheet, market values, and the corresponding
differences between the two as of March 31, 2024, are as follows. Shares, etc. that do not havea market price are not included in the table below. Notes to cash are omitted. Deposits, notes
receivable - trade, accounts receivable - trade, accounts receivable - other, notes and accounts
payable - trade, electronically recorded obligations - operating, short-term borrowings, andaccounts payable - other are omitted, as these are settled within a short time frame andtherefore have a market value approximate to their book value.
(Millions of yen)Amounts posted on
the Consolidated
Balance Sheet (*)

Market value(*)

19,85032,507

14,44632,507-5,403-(2) Current portion of long-termborrowings(21,727)(21,712)-14(3) Long-term borrowings(31,674)(31,601)

-72

(201)

-

(1) Investment securities(i) Shares of subsidiaries andassociates(ii) Available-for-sale securities(4) Derivatives(*) Items posted as liabilities are enclosed in brackets.

(201)

Difference(Note)
Unlisted shares (posted as 139 million yen on the Consolidated Balance Sheet), shares ofunlisted subsidiaries and associates (posted as 3,586 million yen on the Consolidated Balance
Sheet), and Investment Limited Partnership (posted as 291 million yen on the Consolidated
Balance Sheet) are shares, etc. that do not have a market price. As such, these items are notincluded in (1).
(3)

Matters relating to breakdown, etc. of market values of financial instruments by level
Market values of financial instruments are classified into the following three levels based on
the observability and materiality of inputs used to calculate market values.
Level 1 market value: Market value calculated using (unadjusted) quoted prices in active
markets for identical assets or liabilities
Level 2 market value: Market value calculated using directly or indirectly observable inputs
other than Level 1 inputs

- 22 -

Level 3 market value: Market value calculated using significant unobservable inputs
When multiple inputs that have a significant impact on the calculation of market value areused, market value is classified into the level with the lowest priority in the calculation ofmarket value among the levels to which those inputs belong.
(i)

Financial assets and financial liabilities that are recognized on the Consolidated
Balance Sheet at market value(Millions of yen)
Market value
Classification
Level 1
Level 2
Level 3Total
(1) Investment securities
Shares32,50732,507(4) Derivatives (*)
(201)
(201)
(*) Items posted as liabilities are enclosed in brackets.
(ii)

Financial assets and financial liabilities that are not recognized on the Consolidated
Balance Sheet at market value(Millions of yen)
Market value
Classification
Level 1
Level 2
Level 3Total
(1) Investment securities
Shares of subsidiaries and14,446
14,446
associates(2) Current portion of long-termborrowings(3) Long-term borrowings-

21,712-

21,712-

31,601-

31,601(Notes) Valuation methods used for the measurement of market value and a description of inputs(1) Investment securities:
Listed shares are valued using quoted prices. Since listed shares are traded in active
markets, their market value is classified as Level 1 market value.
(2) Current portion of long-term borrowings and (3) Long-term borrowings:
The market value of long-term borrowings is calculated by taking into account theremaining term of the bonds and discounting the total amount of principal and interest by
the assumed interest rate that would be applied when new borrowings are conducted. It isclassified as Level 2 market value. The market value of long-term borrowings that are
subject to exceptional accounting treatment for interest-rate swaps is calculated by taking
into account the remaining term of the bonds and discounting the total amount of principal
and interest, which is treated as one with the interest-rate swap in question, by a logicallyestimated interest rate that would be applied when similar borrowings are conducted.
(4) Derivatives:
The market values of interest-rate swaps and forward exchange contracts are calculatedusing observable inputs such as interest rates and foreign exchange rates. They areclassified as Level 2 market values.
Derivatives conducted through exceptional accounting treatment of interest-rate swaps aretreated as being one with the long-term borrowings under the relevant hedge. As such, themarket value of such transactions is presented as being included in the market value for the
long-term borrowings concerned.

- 23 -

6.

Notes to Leased Property
The Company and some of its consolidated subsidiaries own real property for lease and othersin Tokyo and other regions. During the fiscal year ended March 2024, income or expenses
from the leased property was 264 million yen (rent income was posted as non-operating
income and expenses are posted as non-operating expenses), and gain on sale of non-current
assets was 1,230 million yen (posted as extraordinary income).
The amount posted on the Consolidated Balance Sheet, major changes during the consolidated
fiscal year under review, market value on the consolidated closing date, and the calculation
method of such market value are as follows:(Millions of yen)Amounts posted on the Consolidated Balance Sheet
Amount ofBalance at theBalance at the end of Market value on theincreases/decreases
consolidated closing
beginning of thethe consolidated
during thedateconsolidated fiscal
fiscal year underconsolidated fiscal
year under review
review
year under review
16,187-1,225
14,962
18,942(Note 1)
(Note 2)

(Note 3)

Amounts posted on the Consolidated Balance Sheet were the acquisition costs
minus accumulated depreciation and accumulated impairment loss.
Of the change during the consolidated fiscal year under review, the amount of
increases mainly consists of the reclassification from real property forbusiness use to real property for lease (1,228 million yen), while the amountof decreases mainly consists of a decrease in the rate of rent (1,985 million
yen) and the sale of real property for lease and others (379 million yen).
Calculation method of market value
Basically, the amount based on a real-estate appraisal report prepared by areal-estate appraiser.

- 24 7.

Notes to Per-Share Information
Net assets per share
Net income per share(Calculation basis) Profit attributable to owners ofparentProfit attributable to owners ofparent, available to common shares
Average number of shares during
the fiscal year under review

3,657.61 yen
244.33 yen
10,051 million yen
10,051 million yen
41,136 thousand
shares(Note) For the purpose of calculating the net income per share, the treasury shares remaining
in trust posted as treasury shares in the “Shareholders' equity” section are included in
the treasury shares deducted in the calculation of the average number of shares during
the fiscal year under review. For the purpose of calculating the net assets per share,
the treasury shares so remaining in trust are included in the treasury shares deductedfrom the total number of shares issued and outstanding at the end of the fiscal year
under review.
For the purpose of calculating the net income per share, the average number oftreasury shares, so deducted, during the fiscal year under review was 185 thousand
shares, and for the purpose of calculating the net assets per share, the number oftreasury shares, so deducted, as at the end of the fiscal year under review was 557
thousand shares.
8.

Notes to Revenue Recognition(1)

Information regarding disaggregated revenue arising from contracts with customers
Information by type of goods or services(Millions of yen)
Reported segments
Emotional
Devices
Systems
Value
Solutions Solutions
Solutions
Business
Business
Business

Others(Note 2)Adjustment

Total

Wholesale of watches(Note 1)

127,409

-

-

-

-

127,409

Retail of watches(Note 1)

32,661----

32,661

Electronic devices(Quartz crystals,
micro batteries, etc.)-

21,668---21,668Precision devices(Precision turnedparts, etc.)-

12,801---

12,801Printing devices-

14,672---

14,672

System-related(Including IT
performance
management)--

23,088--23,088

- 25 IoT-related
Settlement-related
Other
Transactions withother segments
Revenue arising fromcontracts withcustomers
Revenues fromexternal customers

28,2809,253

11,318
6,047
-

1,206

464

11,3186,047
39,204-2,942-5,156-3,142-824--12,066

185,40953,23937,312381

464

276,807

185,40953,23937,312381

464

276,807

Information by region(Millions of yen)Japan
The Americas
EuropeAsia and others

Reported segments
Emotional
Devices
Systems
Value
Solutions Solutions
Solutions
Business
Business
Business
94,191
15,81537,02823,583
8,295
215
22,6937,961
1744,94021,167
49

Others(Note 2)Adjustment

381
-

60
15
359
29

147,477
32,11031,032
66,187

Total

Revenue arising fromcontracts withcustomers

185,40953,23937,312381

464

276,807

Revenues fromexternal customers

185,40953,23937,312381

464

276,807(Note 1)
(Note 2)

(2)

The wholesale of watches is classified as manufacturing, sales, and repair
services for the Company’s own products. The retail of watches is classified asretail services including other companies’ products.
Although portions of rental revenues from real estate are included, they areincluded in “Revenue arising from contracts with customers” due to its low
financial significance.

Useful information in understanding revenue
Useful information in understanding revenue is as described in “Notes to Important Mattersthat are the Basis for Preparation of Consolidated Financial Statements, (6) Accounting
standards for significant income and expenses”.

- 26 (3)Information in understanding the amounts of revenues in the fiscal year under review and thefollowing fiscal years(i)Balance, etc. of contract assets and contract liabilities(Millions of yen)
Fiscal year under review
Balance at theBalance at the
beginning of theend of the fiscal
fiscal year
year
Receivables fromcontracts with
38,25044,615
customers
Contract assets
Contract liabilities

397
7,916

880
8,760

Of the amount of revenue recognized in the fiscal year under review, the amount included in
the balance of contract liabilities at the beginning of the fiscal year was 5,078 million yen.
(ii)

Transaction prices allocated to remaining performance obligations

The Company has applied the practical expedient to notes on transaction prices allocated toremaining performance obligations. Contracts with an initially expected term of one year orless are not included in the notes. The performance obligations primarily relate to the Systems
Solutions Business. The total transaction prices allocated to remaining performanceobligations and the period in which the Company expects to recognize the amounts as revenue
are as follows.

One year or lessOver one year, two years or lessOver two years, three years or lessOver three years
Total
9.

(Millions of yen)
Fiscal year under review
1,450
984
692
731
3,857

Presentation of Amounts
In the Consolidated Balance Sheet, Consolidated Statement of Income, Consolidated
Statements of Changes in Equity, and Notes to Consolidated Financial Statements, any amountless than one million yen is discarded.

- 27 [Translation]
Non-Consolidated Statements of Changes in Equity(From April 1, 2023 to March 31, 2024)
Millions of yen
Shareholders' equity
Capital surplus
Retained earnings

Balance at beginning of
periodChanges during period
Dividends of surplus
ProfitPurchase of treasury
sharesTreasury stockpossession of stock
ownership plan trust
Disposal of treasury
stock by ownershipplan trust
Net changes of items
other than shareholders'equityTotal changes during
periodBalance at end of period

Other
Total
retained
Treasury sharehol
earnings
Legal
Total
ders'
retained Retained retained shares
equityearnings earnings earnings
brought
forwardSharecapitalLegalcapitalsurplus

OthercapitalsurplusTotal
capitalsurplus10,000

2,378

4,246

6,625

121

22,35722,478-3,1003,601-3,1003,601-221

38,882-3,100
3,601

-2

-2

-1,418-1,418

84

84

−

−

−

−

−

500

500

-1,336-836

10,000

2,378

4,246

6,625

121

22,85722,979-1,55838,046

Millions of yen
Valuation and translation adjustments

Balance at beginning of period
Changes during period
Dividends of surplus
ProfitPurchase of treasury shares
Treasury stock possession ofstock ownership plan trust
Disposal of treasury stock byownership plan trust
Net changes of items otherthan shareholders' equity
Total changes during period
Balance at end of period

Valuation
Deferred gains
Total valuation Total net assets
difference on
Revaluation
or losses on
and translation
available-forreserve for land
hedgesadjustments
sale securities
10,467-5
8,190
18,65257,534-3,1003,601-2-1,418
84
6,364

5

−

6,369

6,369

6,364
16,832

5
−

−
8,190

6,369
25,022

5,533
63,068

- 28 [Translation]
Notes to Non-Consolidated Financial Statements
1.

Notes to Significant Accounting Policies(1)Standards and methods for evaluating securities(i)

Shares in subsidiaries and affiliates:
Stated at cost using the moving-average method(ii)

Available-for-sale securities:
Securities other than shares, etc. that do not have a market price:
Market value method
Shares, etc. that do not have a market price:
Mainly stated at cost using the moving-average method

(iii)

(2)

Standards and methods for evaluating derivatives
(i)

(3)

(4)

Investment Limited Partnership:
Stated on a net basis equivalent to equity interests, based on the most recent financial
statements available according to the financial reporting date stipulated in thepartnership agreement

Derivatives:
Market value method

Depreciation methods for non-current assets(i)

Property, plant and equipment (excluding leased assets):
The straight-line method is used for buildings (excluding equipment attached tobuildings), and equipment attached to buildings, and structures acquired on or after
April 1, 2016, and the declining-balance method for other property, plant andequipment. For a useful life, the estimated economic life is used, which reflects theusable period, actual period of use, and other factors for each asset.

(ii)

Intangible assets (excluding leased assets)
The straight-line method is used. As for software for in-house use, the straight-line
method is used with a usable period of 5 years.

(iii)

Leased assets
Lease assets relating to finance lease with transfer of ownership:
The same depreciation method as applied to the property, etc. owned by the Company
is used.
Lease assets relating to finance lease without transfer of ownership:
The straight-line method is used with a useful life of the lease period and with aresidue value of zero.

Accounting standards for significant allowances and provisions(i)

Allowance for doubtful accounts:
In order to prepare for possible losses on uncollectible receivables held, estimateduncollectible amounts are posted: for general receivables, according to the historicalpercentage of uncollectibles, and for doubtful receivables, considering the probabilityof collection.

- 29 -

(5)

(ii)

Provision for bonuses:
In order to prepare for payment of bonuses to employees, a provision is made based on
the estimated bonus payments, which are attributable to the fiscal year under review.

(iii)

Allowance for investment loss of subsidiaries and associates:
In order to prepare for possible losses on investments to subsidiaries and associates, anamount deemed necessary is provided after considering the financial position of eachcompany and based on a respective review. The allowance for investment loss of
subsidiaries and associates of 4 million yen is directly reduced from the amount ofshares of subsidiaries and associates.

(iv)

Provision for stock benefits:
The Company has posted an estimated amount, as of the end of the fiscal year underreview, for the obligation to deliver shares, as a provision for the delivery of its sharesto the Executive Directors of the Company and its subsidiaries, in accordance with theRules for Delivery of Shares to Officers.

Accounting standards for income and expenses
The Company’s revenues consist of dividend from subsidiaries and associates, management
fee income, and royalty income. Among these, management fee income represents theCompany’s obligations to perform services related to consolidated management andmanagement of each associate based on contracts with each associate. Royalty income
represents the Company’s obligations to license the use of trademarks based on contracts withassociates.
The performance obligations for such management fee income and royalty income arerecognized as revenue according to the contract period.

(6)

Hedge accounting method(i)

Hedge accounting method
Deferred hedge accounting is employed. However, with regard to forward exchange
contracts and the like that meet the requirements for deferral hedge accounting(“furiate-shori”), deferral hedge accounting is employed; with regard to interest-rate
swaps that meet the requirements for exceptional accounting (“tokurei-shori”),
exceptional accounting is employed.

(ii)

Means of hedging and hedged items:
Forward exchange contracts and foreign currency deposits to hedge foreign exchangerate fluctuation risks regarding foreign currency-denominated trade payables andreceivables and the like; and interest-rate swaps to avoid fluctuation risks regarding
borrowings on floating interest rate.

(iii)

Hedging policy
Forward exchange contracts, foreign currency deposits and interest-rate swaps arehedged to avoid exchange- and interest-rate fluctuation risks present in hedged items
in accordance with the Company’s internal rules, and no speculative transactions are
conducted.

- 30 (iv)

(7)

Assessment of hedge effectivenessHedge effectiveness is assessed by analysis of the percentage between theaccumulated cash flow changes of hedged items and the accumulated cash flowchanges by means of hedging. However, the assessment of hedge effectiveness isomitted if the material conditions of the means of hedging and the hedged items are
the same.

Application of group tax sharing system
Group tax sharing system is applied.

2.

Notes to Accounting Estimates
Evaluation of deferred tax assets(1)

Amount posted in the financial statements for the fiscal year under review
Deferred tax liabilities

7,355 million yen

As stated in “4. Notes to Tax Effect Accounting” of the Notes to Non-Consolidated Financial
Statements, deferred tax assets of 100 million yen and deferred tax liabilities of 7,455 million
yen are presented after offsetting.
(2)

Information useful for understanding the content of accounting estimates
Deferred tax assets are posted if they are judged to be recoverable by making reasonableestimates of when future taxable income will occur and its amount based on business plans,
etc. Such estimates may be affected by changes in uncertain economic conditions, etc. in the
future. If the actual timing of when the taxable income occurs and its amount differ from theestimates, it may significantly affect the amount of deferred tax assets in the financial
statements for the following fiscal year.
As stated in “1. Notes to Significant Accounting Policies (7),” the Company has applied thegroup tax sharing system. Accordingly, estimates for the income tax portion have been madefor the entire tax sharing group.

3.

Notes to Non-Consolidated Balance Sheet, Statements of Income, and Statements of Changes
in Equity(1)

Accumulated depreciation of Property, plant and equipment(2)

Monetary claims, monetary debts and transactions with subsidiaries and associates(i)
Short-term receivables
61,367 million yen(ii)
Short-term payables
12,588 million yen(iii)
Long-term receivables
4,847 million yen(iv)Long-term payables
1,705 million yen(v)
Operating revenue
14,816 million yen(vi)Operating expenses
5,823 million yen(vii)
Transactions other than operating transactions
5,057 million yen

10,641 million yen

- 31 (3)

Revaluation of land for business use
Land for business use was revaluated pursuant to the “Act on Revaluation of Land” (Act No.
34 promulgated on March 31, 1998), and valuation differences which correspond to taxes areposted as “Deferred tax liabilities for land revaluation” of “Liabilities” and the balance thereofis posted as “Revaluation reserve for land” of “Net assets”.

(4)

(i)

Method of revaluation:
Land for business use was evaluated based on the main-street land price set forth in
Article 2, item 4 of the “Order for Enforcement of the Act on Revaluation of Land
(Cabinet Order No. 119 promulgated on March 31, 1998), and that land without amain-street land price was evaluated based on the assessed value of fixed assets as set
forth in item 3 thereof, with reasonable adjustment.

(ii)

Date of revaluation:

March 31, 2001

Notes to lending stock
Out of shares of subsidiaries and associates, 46 million yen is for lending stock.

(5)

Loan commitment agreement
The Company has concluded loan commitment agreements with two banks in order to carryout efficient funding of working capital. The balance of unused line of credit, etc. under theloan commitment agreements at the end of the fiscal year under review is as follows.
Total amount of loan commitment
Borrowing balance
Balance(6)36,500 million yen
11,800 million yen
24,700 million yen

Notes to Statements of Changes in Equity
Type and number of treasury shares at the end of the fiscal year under review
Common shares
618,828 shares
The number of shares above includes 557,100 shares of the Company held in the Board
Benefit Trust (BBT) as a result of the introduction of the BBT plan.

- 32 4.

Notes to Tax Effect Accounting
Breakdown by major reason for incurring deferred tax assets and deferred tax liabilities
Deferred tax assets
Provision for bonuses
Allowance for doubtful accounts
Loss on valuation of shares insubsidiaries
Allowance for investment loss of
subsidiaries and associates
Impaired loss on non-current assets
Assets for adjustment of profit and loss
due to transfer
Long-term accounts payable - other
Loss carried forward
Other
Deferred tax assets - subtotal
Valuation-related reserves concerning loss
carried forward
Valuation-related reserves concerning thesum of deductible temporary differences
Valuation-related reserves-subtotal
Deferred tax assets - total
Deferred tax liabilities
Assets for adjustment of profit and loss
due to transfer
Valuation difference on available-for-salesecurities
Other
Deferred tax liabilities - total
Net deferred tax assets (liabilities)

52 million yen
1,248 million yen
5,406 million yen
1 million yen
713 million yen
1,187 million yen
4 million yen
3,349 million yen
134 million yen
12,098 million yen-3,349 million yen-8,649 million yen-11,998 million yen
100 million yen
20 million yen
7,428 million yen
6 million yen
7,455 million yen-7,355 million yen

Other than the above items, “deferred tax liabilities” concerning “revaluation reserve for land”
was 3,614 million yen.

- 33 5.

Notes to Transactions with Related Parties(1)

Parent company and major corporate shareholders

Attributes Name of company

Ratio of voting
rights held (%)

Relationshipwith related
partyContent oftransaction(Direct)
Major
10.8
shareholder
Property
Property
Sanko Kigyo K.K. (Closer parties or(company,lease-in, etc. lease-inagreed parties)
etc.)
6.0

(2)

Item

Term-endbalance(millionyen)

Accounts
663 payable other61

Transaction
amount(million yen)

Subsidiaries and associates, etc.

Ratio of holding Relationship
Attributes Name of company of voting rights, with related
etc. (%)
party

SEIKO WATCHCORPORATION

Subsidiary(direct) 100.0

Interlocking
directorate

Content oftransaction
Royalty
incomeManagement
fee income

WAKO Co., Ltd.

(direct) 100.0

Interlocking
directorate

Property
lease-out

Shirakawa EstateCo., Ltd.

(direct) 100.0

Interlocking
directorate

Property
lease-in

Seiko Instruments(direct) 100.0
Inc.

SEIKO Solutions
Inc.

(direct) 100.0

Interlocking
directorate

Interlocking
directorate

Property
lease-in
Property
lease-out
Property
lease-out
Information
security
expenses

Transaction
amount(million yen)

Item

Term-endbalance(millionyen)

Accounts
2,544 receivable otherAccounts
1,598 receivable other829

AccruedincomeAccounts
200 payable otherAccounts
502 payable other246

AccruedincomeAccruedincomeAccounts
231 payable other728(Notes) Transaction terms and policies to determine them
1)
The terms for property lease-in are determined based on the same standards as forgeneral transaction terms after considering market price. In the Statements ofIncome, the property rents payable is offset with property rents receivable.
2)
Royalty income is determined based on the same standards as for general transaction
terms.
3)
Management fee income is determined by mutual consultation between the Company
and a directly consolidated subsidiary, taking into consideration the nature of its
business.
4)
Regarding property rents receivable, those of owned property leased out for businessuse are determined linked to relevant income, and those leased out as office or the likeare determined based on a professional valuation. In the Statements of Income,property rents receivable is offset with property rents payable.

1,339
172
153
21
127
143
27
−

- 34 5)

6.

Information security expenses are determined based on the same standards as forgeneral transaction terms.

Notes to Per-Share Information
Net assets per share
Net income per share(Calculation basis) Profit
Profit available to common shares
Average number of shares during the fiscal
year under review

1,546.34 yen
87.50 yen
3,601 million yen
3,601 million yen
41,158 thousand shares(Note) For the purpose of calculating the net income per share, the treasury shares remaining
in trust posted as treasury shares in the “Shareholders' equity” section are included in
the treasury shares deducted in the calculation of the average number of shares during
the fiscal year under review. For the purpose of calculating the net assets per share,
the treasury shares so remaining in trust are included in the treasury shares deductedfrom the total number of shares issued and outstanding at the end of the fiscal year
under review.
For the purpose of calculating the net income per share, the average number oftreasury shares, so deducted, during the fiscal year under review was 185 thousand
shares, and for the purpose of calculating the net assets per share, the number oftreasury shares, so deducted, as at the end of the fiscal year under review was 557
thousand shares.
7.

Notes to Companies subject to Restriction on Consolidated Dividend
The Company will become a company subject to restriction on consolidated dividend fromwhen the last day of the fiscal year under review is the last day of the last fiscal year.

8.

Presentation of Amounts
In the Non-Consolidated Balance Sheet, Non-Consolidated Statements of Income, NonConsolidated Statements of Changes in Equity, and Notes to Non-Consolidated Financial
Statements, any amount less than one million yen is discarded.