[English Translation of Convocation Notice Originally Issued in the Japanese Language]【Note】This document has been translated from the Japanese original for reference purposes only. In the event of any
discrepancy between this translated document and the Japanese original, the original shall prevail.
The Company assumes no responsibility for this translation or for direct, indirect or any other forms ofdamages arising from the translation.

Securities Code: 6460
May 26, 2016
Hajime Satomi
Chairman of the Board and Chief Executive Officer
SEGA SAMMY HOLDINGS INC.
Shiodome Sumitomo Building,
1-9-2 Higashi Shimbashi, Minato-ku, Tokyo, Japan
Dear Shareholders:

Notice of the 12th Ordinary General Meeting of
Shareholders to be held on June 17, 2016
You are cordially invited to attend the 12th Ordinary General Meeting of Shareholders of SEGA SAMMYHOLDINGS INC. (the “Company”) to be held at Convention Hall, B2F, The Prince Park Tower Tokyo, 4-8-1
Shiba-koen, Minato-ku, Tokyo, 105-8563, Japan on Friday, June 17, 2016 at 10:00 a.m. for the purposes listed
below.
If you are unable to attend the meeting in person, you may exercise your voting rights by either mail (inwriting) or via the Internet. Therefore, please review the attached Reference Documents for General Meetingof Shareholders, and kindly exercise your voting rights before 6:00 p.m., Japan Standard Time, on Thursday,June 16, 2016.
Details of the Meeting
1. Date and time:

Friday, June 17, 2016 at 10:00 a.m.

2. Venue:

Convention Hall, B2F, The Prince Park Tower Tokyo
4-8-1 Shiba-koen, Minato-ku, Tokyo, 105-8563, Japan

3. Agenda:
Matters to be reported:

1. The Business Report and the Consolidated Financial Statements for the 12th

fiscal year (from April 1, 2015 to March 31, 2016) and results of audits by
the Independent Auditor and the Audit & Supervisory Board on theConsolidated Financial Statements
2. Non-Consolidated Financial Statements for the 12th fiscal year (from April
1, 2015 to March 31, 2016)
Matters to be resolved:
Proposal 1: To amend certain parts of the Articles of Incorporation
Proposal 2: To elect eight (8) Directors
Proposal 3: To elect one (1) Audit & Supervisory Board Member
Proposal 4: To elect one (1) Substitute Audit & Supervisory Board Member
Proposal 5: To issue share subscription rights as share options to Directors* If you attend the meeting in person, please submit the enclosed voting form at the reception desk at the meeting location on
the day of the meeting.
* Please note that persons other than shareholders of the Company such as a proxy and an accompanying person cannot attend
the meeting.
* Should any change need to be made to the Reference Documents for General Meeting of Shareholders, Business Report or
Consolidated/Non-Consolidated Financial Statements, such changes shall be posted on the website of the Company.
* For voting results, an extraordinary report shall be posted on the website of the Company in place of Notice of Resolutions.
Information in English will be posted on our English website (http://www.segasammy.co.jp/english/ir/event/meeting.html).
From this year onward, we will no longer distribute gifts or hold a convivial party to attending shareholders. We thank you foryour understanding.

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[English Translation of Convocation Notice Originally Issued in the Japanese Language]

Information on Disclosure on the Internet
Pursuant to the provisions of laws and regulations and the Articles of Incorporation, Notes to Consolidated
Financial Statements and Notes to Non-consolidated Financial Statements are posted on the website(http://www.segasammy.co.jp/english/ir/event/meeting.html) of the Company and not attached to thisdocument.
* The Consolidated/Non-Consolidated Financial Statements audited by the Independent Auditor and the Audit & Supervisory
Board include Notes to Consolidated Financial Statements and Notes to Non-consolidated Financial Statements respectively,
which are posted on the website of the Company.

Information on the Method of Receiving Convocation Notice
You may request the receipt of convocation notice, shareholder information and other documents for future
General Meetings of Shareholders by email if your email address is registered with the Company. (Please notethat mobile phone email addresses are not accepted.)
If you wish to receive the above documents by email, please access the voting website designated by theCompany (http://www.evote.jp/) from a PC or smartphone, log on using the “logon ID” and “temporary
password” printed on the enclosed voting form and follow the on-screen instructions from the “Receipt byemail” screen.
The statutory convocation notice and other documents to be sent by email to the registered addresses(including the notice that such documents have been posted on the website designated by the Company) are asshown below. Convocation notice will be sent by e-mail by the Shareholder Registry Administrator.
(1) Convocation Notice of Ordinary General Meeting of Shareholders: Date and time, venue, agenda,
attached documents (including Business Report) and Reference Documents for General Meeting of
Shareholders(2) Convocation Notice of Extraordinary Meeting of Shareholders: Date and time, venue, agenda andReference Documents for General Meeting of Shareholders* Please note that, if you take the procedure after a certain period from the record date of General Meeting of Shareholders (thefiscal year end in case of Ordinary General Meeting of Shareholders and a date separately determined by the Board of
Directors in case of Extraordinary Meeting of Shareholders), your email address may not be reflected for sending a
convocation notice.

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[English Translation of Convocation Notice Originally Issued in the Japanese Language]

Information on Exercise of Voting Rights
Exercise of voting rights by mail (in writing)
Indicate “for” or “against” the proposals on the voting form enclosed and return the said form to theCompany so that it is received no later than the deadline for exercising your voting rights, indicated above.
Exercise of voting rights via the Internet(1) Exercise of voting rights(i) Access the voting website designated by the Company (http://www.evote.jp/), log on using the“voting rights exercise code” and “temporary password” printed on the enclosed voting form, andfollow the on-screen instructions (Japanese language only) to enter “for” or “against” the proposals
before the deadline for exercising your voting rights, indicated above.
(ii) In order to prevent unauthorized access by persons other than shareholders (spoofing) andfalsification of entries, you are kindly requested to change the “temporary password” once you log
on to the voting website.
(2) Voting website(i) You may exercise your voting rights by accessing the voting website
designated by the Company (http://www.evote.jp/) from a PC, smartphone ormobile phone (i-mode, EZweb or Yahoo! Keitai). (Please note that the website
cannot be accessed between 2:00 a.m. and 5:00 a.m. daily, Japan Standard
Time.) (“i-mode”, “EZweb” and “Yahoo!” are trademarks or registeredtrademarks of NTT DOCOMO, Inc., KDDI Corporation and U.S. Yahoo! Inc.,
respectively.)
You may also access the voting website by using a smartphone or mobile
phone equipped with a QR code reader to read the QR code on the right:
Please check the usage instructions for your smartphone or mobile phone forfurther details regarding the use of the QR code reader.
(“QR code” is a registered trademark of DENSO WAVE INCORPORATED.)(ii) You may be unable to use the voting website depending on your Internet configuration, firewall,anti-virus software and proxy server settings.
(iii) You must have access to either i-mode, EZweb or Yahoo! Keitai services to exercise your voting
rights via mobile phone. Please note that the voting website is only accessible from a mobile
handset capable of communicating encrypted data (i.e. TLS) and mobile phone data for security
purposes.
(iv) Please note that any costs incurred in accessing the designated voting website (e.g. internet
connection fees, etc.) shall be borne by the shareholder. Please note that any costs incurred invoting via mobile phone, including packet charges, shall also be borne by the shareholder.
Treatment of votes cast more than once(i) When any shareholder exercises voting rights both by voting form and via the Internet, only theInternet vote will be deemed as valid.
(ii) When any shareholder exercises voting rights more than once via the Internet, only the last votewill be deemed as valid. Similarly, when any shareholder exercises voting rights more than once
via PC, smartphone and / or mobile phone, only the last vote will be deemed as valid.
Electronic proxy voting platform for institutional investors
Institutional investors can use the electronic proxy voting platform that is operated by Investor
Communications Japan, Inc., which is designed for institutional investors to exercise their voting rights
electronically.

3

[English Translation of Convocation Notice Originally Issued in the Japanese Language]For inquiries concerning the online voting system:[Helpdesk]
Shareholder registry administrator: Transfer Agent Department,
Mitsubishi UFJ Trust and Banking Corporation
Direct line:
0120-173-027 (Domestic [Japan] call only)(Weekdays 9:00 a.m. - 9:00 p.m.)* Please note that the above contact number is not for inquiries concerning shares.

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[English Translation of Convocation Notice Originally Issued in the Japanese Language]

Business Report(From April 1, 2015 To March 31, 2016)
I Outline of the Group’s Business
Effective from the fiscal year ended March 31, 2016, accounting policies were changed and comparison
with the previous fiscal year is based on figures in which the changes are retroactively reflected.
1. The Current Business Development and Results of Operations
During the fiscal year ended March 31, 2016, the gradual recovery of the overall Japanese economy
continued despite a lackluster performance in certain respects, as evidenced by such developments asimprovement of both corporate earnings and the labor market due to the effects monetary and fiscal
policies. With regard to individual consumption, in general, consumption levels have not fallen owing tosteady improvements in both the employment environment and personal incomes. However, attention
should be paid to the risk of downward pressure on the Japanese economy, caused by factors such as adownswing in China’s economy and other overseas economies, and fluctuations in financial and capital
markets. Thus, a full recovery of the economy will require more time.
In this climate, with regard to the pachislot and pachinko industry, machine utilization of titles
compliant with the standards before the change in the application of the model test procedure by the
Security Communications Association, which conducts model tests for pachislot and pachinko machines,
remains firm in the pachislot machine market. On the other hand, titles with outstanding performance
are arising mainly in some series with successful track records even for the pachislot machinescorresponding to the change in the application. With the exception of some major titles, replacement
demand for new pachinko machines was also weak in line with the application of the voluntaryagreement on measures to prevent players from becoming too immersed in playing (hereinafter the“agreement”), which were decided by Nikkoso, an association of pachinko machine manufacturers. In
order to revitalize the market going ahead, it is essential to develop and supply machines that arecompliant with various voluntary regulations and capable of appealing to a wide range of players.
Regarding the environment of the Entertainment Contents Business, a slowdown in the spread ofsmartphones in Japan and the predominance of top titles are increasing in the market for digital games
for smart devices market, and fall of medium to lower titles can be expected in the future. Therefore,
provision of higher-quality content is expected, resulting in a trend of longer development lead times
and higher operating costs. With regard to the packaged game software market, expectations are risingfor future expansion of the market in line with the penetration of next generation hardware of home
video game console. As for the market for amusement centers and amusement machines, which isshrinking, initiatives to expand the player base are being carried out.
In the resort industry, thanks to a continuous increase in the number of foreign visitors to Japan, an
upward trend in the hotel occupancy rate is still evident and revenues of amusement parks and themeparks continue to exceed the previous year’s level. With a view to establishing Japan as a popular tourist
destination, a bill concerning the promotion of the establishment of specified integrated resort areas(Integrated Resort Promotion Bill) was submitted to the Diet.
In this business environment, net sales for the fiscal year ended March 31, 2016 amounted to ¥347,981
million (a decrease of 5.1% from the previous fiscal year). The Group posted an operating income of¥17,617 million (an increase of 0.7% from the previous fiscal year), ordinary income of ¥16,409 million(a decrease of 2.8% from the previous fiscal year) and profit attributable to owners of parent of ¥5,369
million (loss attributable to owners of parent of ¥11,375 million for the previous fiscal year).
In order to review the Group’s earnings structure from a medium- to long-term perspective, as well as
to address the issues of each business, the Company implemented an organizational restructuring within
the Group (*) on April 1, 2015. Effective from the fiscal year ended March 31, 2016, the Group’sbusinesses were reorganized into three businesses: (i) the Pachislot and Pachinko Machines Business,(ii) the Entertainment Contents Business, and (iii) the Resort Business. In line with this reorganization,
the former Amusement Machine Sales Business, Amusement Center Operations Business and Consumer
Business have been integrated into the Entertainment Contents Business. Operations of theme parks,
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[English Translation of Convocation Notice Originally Issued in the Japanese Language]
previously included in the Amusement Center Operations Business, and operations of resort facilities,
previously included in Other Businesses, have been integrated into the Resort Business.
(*) As of April 1, 2015, SEGA CORPORATION was divided and SEGA Holdings Co., Ltd., SEGAInteractive Co., Ltd., and SEGA LIVE CREATION Inc. were established through anincorporation-type demerger. In addition, SEGA CORPORATION merged with SEGA Networks
Co., Ltd. and changed its trade name to SEGA Games Co., Ltd.
Result of each segment is as follows《Pachislot and Pachinko Machines》
In the pachislot machine business, although sales were strong for series with proven titles, such as“Pachislot Hokuto No Ken Tomo,” the latest title in the “Hokuto No Ken” series which has produced thegreatest hit machine in history, or “Pachislot Onimusha3 Jikuu Tenshou,” the legitimate successor of the
big hit “Onimusha” series, performance of other titles was sluggish, leading to an overall sales ofpachislot machines of 142 thousand units. (Overall sales of pachislot machines were 207 thousand units
for the previous fiscal year).
In the pachinko machines business, while sales of some titles were strong, such as the latest title“Pachinko CR Shin-Juoh 2” in our original IP “Juoh” series, and “Pachinko CR Shin Hokuto Muso,”
which comes installed with new productions, gimmicks and new frame “Toshin”, pioneering unseen
territory in the existing “Hokuto No Ken” series, due to the temporary impact of structural reforms in the
Pachislot and Pachinko Machines Business, as well as the reactionary decline of “CR Hokuto No Ken 6
series” launched in the fiscal year ended March 31, 2015, overall sales of pachinko machines were 199
thousand units. (Overall sales of pachinko machines were 241 thousand units for the previous fiscal
year).
Furthermore, we carried out measures to improve costs such as through reuse of components frompachislot and pachinko machines launched in the previous fiscal year or earlier.
As a result, net sales in this segment were ¥133,407 million (a decrease of 12.7% from the previous
fiscal year) and operating income was ¥21,548 million (a decrease of 16.4% from the previous fiscal
year).
《Entertainment Contents》
With regard to the Entertainment Contents Business, in the field of digital game software, sales
remained robust for major titles including “PHANTASY STAR ONLINE 2,” launched over three years
ago, as well as titles for smart devices such as the updated “CHAIN CHRONICLE – Kizuna no
Shintairiku,” “Puyopuyo!! Quest,” and “Hortensia SAGA.” However, with regard to certain titles for
smart devices and the South Korea expansion of “Football Manager Online,” a new online game for the
Asian market, costs including advertising expenses increased due to a review of the value of assets
relating to the titles that were less well-received than expected in the initial plan, as well as an increased
number of new titles. The number of titles distributed domestically in the field of digital game software(free-to-play types) was 49 as of the end of March 2016.
In the packaged game software field, sales amounted to 9,220 thousand copies, which was lower thanthe level in the previous fiscal year, despite the launch of “Football Manager 2016,” the latest addition to
the “Football Manager” series, which has continued to attract diehard fans for over 10 years, mainly inEurope. On the other hand, profitability was improved as a result of focusing on the sales of major titles
by narrowing down the number of titles.
In the amusement machine field, sales were strong for the new medal pusher machine “THE MEDALTOWER OF BABEL,” as well as “CHUNITHM,” a new music game in which users can enjoy a newsense of play, which was developed by the development team of “maimai,” a popular music game
operating in game centers across Japan.
In the amusement center operations field, like-for-like sales were robust at 103.1% compared with theprevious fiscal year owing to reinforced management of prizes etc. at the existing game center
operations. In the animated film and toy field, program sales were strong for “LUPIN THE 3rd,” the firstnew title for the TV series in 30 years, and the highest-ever box-office revenue for the series wererecorded for the theater film “Detective Conan Sunflowers of inferno.” In addition, the Group
implemented the sale of toy products particularly “Anpanman” series and “Disney Character Magical
Pod.”
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[English Translation of Convocation Notice Originally Issued in the Japanese Language]
As a result, while net sales in this segment were ¥199,720 million (a decrease of 0.5% from theprevious fiscal year), operating income was ¥3,653 million (operating income of ¥63 million for theprevious fiscal year) because of an improved profitability for the packaged games field, amusement
machines field and animated film and toy field due to the effects of structural reform measures
implemented in the fiscal year ended March 31, 2015.

《Resort》
In the Resort Business, sales were strong in the leading resorts in Japan, “Phoenix Seagaia Resort,”
whose amenities include hotels, golf courses and international conference venues, due to the effects oflarge-scale renovation of “Sheraton Grande Ocean Resort” guest rooms. In addition, “Orbi Osaka” wasopened as the first domestic licensing out facility in January 2016, and “Shanghai JOYPOLIS” wasopened as the first licensing out facility in China in February 2016. The Group operates existing casino
facilities in Incheon, South Korea, through PARADISE SEGASAMMY Co., Ltd. (associate accounted
for using the equity method), a joint venture between Paradise Co., Ltd., a major tourism enterprise inSouth Korea, and the Company.
As a result, net sales in this segment were ¥16,450 million (an increase of 9.3% from the previous fiscal
year) and operating loss was ¥1,825 million (operating loss of ¥2,336 million for the previous fiscal
year).
2. Issues to be Addressed
Pachinko parlor operators continue to face increasingly harsh business conditions due to widespreadpractice of lowering ball rental fees and a decline in the number of players amidst the significant
reforms in the market environment and regulation environment. In the Pachislot and Pachinko Machines
Business, under these circumstances, developing and supplying products with innovative gameplay thatmeet market needs to maintain and expand market share are considered as management issues.
With regard to Entertainment Contents Business, the predominance of top titles in the Japanese digital
game software market is increasing, and as fall of medium and lower titles can be expected in the future,
the Group is expected to maximize product quality focused on existing mainstay titles and to develop
and supply new titles that will enter top sales rankings. Moreover, achieving entry into the overseas
digital game software market focused on the rapidly growing Asian region is considered as amanagement issue.
In the packaged game software field, amusement machine field, amusement center operations field andanimated film and toy fields, in addition to maintaining the effect of revenue recovery by structuralreform initiatives, further improvements in profitability is considered as a management issue.
With regard to Resort Business, through the development and operation of resort facilities in Japan aswell as integrated resorts overseas, while preparing for a full-fledged integrated resort business in the
future by distributing management resources at an optimal level and conducting prior investments, it is
an important management issue of the Group to accumulate expertise.
In the Group structural reform, which began since the fiscal year ended March 31, 2015, the Group isadvancing improvement of profitability by revising business portfolios, and it is an importantmanagement issue of the Group to return to a growth track by aggressively investing in growth areas.
3. Fund Procurement, etc.
(1) Fund Procurement
The Company concluded commitment line contract with financial institutions covering ¥20,000
million aimed at securing medium- to long-term capital liquidity and otherwise providing a Groupwide safety net.
Regarding fund procurement for the fiscal year ended March 31, 2016, the Company procured¥40,000 million including borrowings from financial institutions and public offering of straightbonds, for the purpose of securing medium- to long-term working capital.
For effective use of the Group funds, the Group is operating the Cash Management System(“CMS”) involving fifteen Group companies including the Company, Sammy Corporation and
SEGA Holdings Co., Ltd. etc.

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[English Translation of Convocation Notice Originally Issued in the Japanese Language](2) Capital Expenditures
The Group’s capital expenditures totaled ¥28,046 million, including ¥5,014 million in the pachislot
and pachinko machines business, ¥17,867 million in the entertainment contents business and¥5,045 million in the resort business.
(3) Business Transfers, Absorption-type Demergers, and Incorporation-type Demergers
As of April 1, 2015, SEGA CORPORATION was divided and SEGA Holdings Co., Ltd., SEGAInteractive Co., Ltd., and SEGA LIVE CREATION Inc. were established through anincorporation-type demerger.
(4) Business Transfer from Other Companies
There is no applicable material information for the fiscal year ended March 31, 2016.
(5) Succession of Rights and Obligations Related to Businesses of Other Corporations, etc., throughAbsorption-type Mergers or Demergers
As of April 1, 2015, SEGA CORPORATION merged with SEGA Networks Co., Ltd. and changed
its trade name to SEGA Games Co., Ltd.
(6) Acquisition or Disposition of Stocks and Other Interests or Share Subscription Rights, etc., of
Other Companies
There is no applicable material information for the fiscal year ended March 31, 2016.
4. Assets and Profits and Losses for the Previous Three Fiscal Years
Fiscal YearItem
Net sales(¥ million)
Ordinary income (¥ million)
Profit (loss)
attributable to(¥ million)
owners of parent
Net income (loss)(¥)
per share
Total assets(¥ million)
Net assets(¥ million)

FY2013
FY2014FY2015
From April 1, 2012 From April 1, 2013 From April 1, 2014
To March 31, 2013 To March 31 2014 To March 31 2015

FY2016
From April 1, 2015
To March 31 2016

321,407
20,914

378,01140,531

366,813
16,879347,981
16,40933,46030,721(11,375)

5,369

137.14126.42(46.70)22.90

528,504
320,034

542,936
348,270

528,659
322,452

532,957
299,950

Notes: 1. Figures shown in millions of yen have been rounded down to the nearest million.
2. Net income (loss) per share is calculated based on the average number of shares outstanding
during the period.
3. In accordance with the “Accounting Standard for Business Combinations” (AccountingStandards Board of Japan, “ASBJ” Statement No. 21 issued on September 13, 2013) andother standards, “net income” is changed to “profit attributable to owners of parent” fromthe current fiscal year.
4. From the current fiscal year, some of the consolidated subsidiaries of the Company havechanged revenue recognition methods for sales of merchandise and finished goods, etc. andrevenue presentation for the digital game software field. Accordingly, the relevant key
management indices for the fiscal year ended March 31, 2015 are restated after reflecting
retroactive treatments.

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[English Translation of Convocation Notice Originally Issued in the Japanese Language]
5. Major Business Segments
The business segments of the SEGA SAMMY Group are Pachislot and Pachinko Machines Business,
Entertainment Contents Business and Resort Business. The primary business activities are as follows.
Segment
Pachislot and Pachinko
Machines Business

Main Business
Development, manufacture and sales of pachislot and pachinko machines

Entertainment Contents
Business

Development and sales of digital game software serving as the main axisof segments, development and sales of packaged game software andamusement machines, development and operation of amusement centers,planning, production and sales of animated films, development,
manufacture and sales of toys

Resort Business

Development and operation of hotels and theme parks in the integrated
resorts business and other facilities businesses.

6. Major Business Locations of the Group(1) The Company: SEGA SAMMY HOLDINGS INC.
Head Office (Minato-ward, Tokyo)(2) Office of the main subsidiaries① Sammy Corporation
Head Office (Toshima-ward, Tokyo)
Kawagoe Factory (Kawagoe, Saitama)
Branches (8 Branches)② SEGA Holdings Co., Ltd.
Head Office (Shinagawa-ward, Tokyo)③ SEGA Games Co., Ltd.
Head Office (Shinagawa-ward, Tokyo)
Roppongi Office (Minato-ward, Tokyo)④ SEGA ENTERTAINMENT Co., Ltd.
Amusement Center Operating Locations: (194 locations)(3) Employees of the Group
Number of employees (change from end of previous year) 7,606 (282 down)
Note: The number of employees includes full-time staff and staff on loan, but not temporary
employees.
7.

Material Parent Company and Subsidiaries(1) Relationships with parent company
There is no pertinent matter.
(2) Relationships with subsidiaries

CapitalPercentage
ratio ofissuedsharesSammy Corporation¥18,221 million

100.0%SEGA Holdings Co., Ltd.

¥44,092 million

Company

RODEO Co., Ltd.

¥100 million

9100.0％(Note 2)65.0%
(Note 1)Main business
Development/manufacture/sales ofpachislot and pachinko machines
Management of SEGA Group and allbusinesses appertaining thereto
Development/manufacture/sales ofpachislot machines

[English Translation of Convocation Notice Originally Issued in the Japanese Language]
Percentage
ratio ofCompany
CapitalMain businessissuedsharesDevelopment/manufacture/sales of
100.0%TAIYO ELEC Co., Ltd.
¥100 million(Note 1)
pachislot and pachinko machines
Planning/development/sales ofgame-related content for mobiles, PCs,
100.0％SEGA Games Co., Ltd.
¥100 million(Note 1,2,3) smart devices and home video gameplatforms
Development/manufacture/sales of
100.0％SEGA Interactive Co., Ltd.
¥100 million(Note 1,2) amusement machine
Maintenance service, transportation and
100.0%
Sega Logistics Service Co., Ltd.
¥200 million(Note 1)
warehouse business
SEGA ENTERTAINMENT
100.0%¥100 million
Operation of amusement centers
Co., Ltd.
(Note 1)
Planning/development/sales of game
100.0%DARTSLIVE Co., Ltd.
¥10 million(Note 1)equipment and game software
Import/manufacture/sales of amusement
Sega Amusements International￡26,485
100.0%
Ltd.
thousand (Note 1,5) equipment
Development/management/sales of home
US$110,000
100.0%
Sega of America, Inc.
thousand(Note 1)
video game software￡10,000
100.0%
Sega Europe Ltd.
Sales of home video game software
thousand(Note 1)￡0
100.0%
Sega Publishing Europe Ltd.
Sales of home video game software
thousand(Note 1)Development of home video game
100.0%
ATLUS CO., LTD.
¥10 million(Note 1)
softwarePlanning/production/sales of game and100.0%Sammy Networks Co., Ltd.
¥100 million
music contents through mobile phones(Note 1)and Internet, etc.
100.0%SEGA TOYS CO., LTD.
¥100 million
Development/manufacture/sales of toys
(Note 1)
Planning/production/sales and otherTMS ENTERTAINMENT CO.,100.0%¥8,816 million
LTD.
(Note 1)
activities involving animated movies
Production of computer graphics
MARZA ANIMATION
100.0%¥100 million
animations, planning/production of
PLANET INC.
(Note 1)animated movies, licensing businessInformation providing service, call center
Japan Multimedia Services¥100 million
100.0%
Corporation
service and temporary staffing service
Planning/development/operation of
100.0％SEGA LIVE CREATION Inc.
¥100 million
entertainment theme park in Resort(Note 2)Business
Operation of resort facilities, including
hotels, spas, golf courses,
PHOENIX RESORT CO., LTD.
¥93 million
100.0%
restaurants and international conference
halls
Development and operation of a complex
KR₩124,000
100.0%SEGA SAMMY BUSAN INC.
comprised of hotel, entertainment
million(Note 1)
facilities, commercial facilities, etc.
Development/production/sales of casino
SEGA SAMMY CREATION¥10 million
100.0%
INC.
gaming machines
Notes: 1. Percentage of ratio of issued shares includes rights of indirectly owned shares.
2. As of April 1, 2015, SEGA CORPORATION, subsidiary of the Company, was divided and
SEGA Holdings Co., Ltd., SEGA Interactive Co., Ltd., and SEGA LIVE CREATION Inc. were
established through an incorporation-type demerger.
3. As of April 1, 2015, SEGA CORPORATION merged with SEGA Networks Co., Ltd. andchanged its trade name to SEGA Games Co., Ltd.
4. Index Corporation, which was the consolidated subsidiary of the Company in the previous fiscal

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[English Translation of Convocation Notice Originally Issued in the Japanese Language]
year, has been excluded from the scope of consolidation due to sale of all its shares.
5. The Company’s subsidiary, Sega Amusements Europe Ltd., changed its trade name to Sega
Amusements International Ltd. on July 1, 2015.

(3) The status of the specified wholly owned subsidiaries
Name of specified wholly owned
subsidiary
Sammy Corporation
SEGA Holdings Co., Ltd.

Address of specified wholly owned
subsidiary3-1-1, Higashi-Ikebukuro, Toshima-ward,Tokyo
1-39-9, Higashi-Shinagawa,Shinagawa-ward, Tokyo

Book value of shares ofwholly owned subsidiary¥153,163 million¥126,945 million

Note: Amount of total assets of the Company: ¥437,432 million

8.

Main Banks and Borrowings
Lenders
Balance of loans payable
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
¥14,925 million
Resona Bank, Limited.
¥7,850 million
Aozora Bank, Ltd.
¥7,723 million
Mizuho Bank, Ltd.
¥5,636 million
Sumitomo Mitsui Banking Corporation¥5,140 million
The Bank of Yokohama, Ltd.
¥4,163 million
Mitsubishi UFJ Trust and Banking Corporation¥3,830 million
Sumitomo Mitsui Trust Bank, Limited¥2,850 million
Shinsei Bank, Limited¥2,850 million
The Hokuriku Bank, Ltd.
¥2,800 million
Others¥5,129 million
Total¥62,898 million
Note: In addition to the above, the Company has ¥33,000 million and ¥3,200 million of privately placed bonds
underwritten by Sumitomo Mitsui Banking Corporation and the Bank of Tokyo-Mitsubishi UFJ, Ltd.
respectively.

9.

Where the Articles of Incorporation Provide for the Board of Directors to Determine
Distributions, etc., of Retained Earnings, Policy Regarding Exercise of Such Authority
SEGA SAMMY HOLDINGS INC. gives priority to returning profits to shareholders. The Company’s
basic policy is to pay an appropriate dividend that is commensurate with earnings.
For the distribution of surplus, the Company paid dividends of ¥20 per share for the second quarter andplans to pay dividends of ¥20 per share for year-end dividends. This reflects the Group’s policy of
paying dividends stable to shareholders.
Furthermore, the Company’s policy is to effectively use retained earnings to bolster its financial
position and operation structure as well as for investments in line with business expansion.

10. Other Significant Events of the Group
There is no applicable material information for the fiscal year ended March 31, 2016.

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II Shares Outstanding and Shareholders
1.

Number of shares authorized for issue

800,000,000 shares

2.

Total shares issued and outstanding

266,229,476 shares

3.

Number of shareholders

90,7684.

Principal shareholders (Top 10)
Investment in
SEGA SAMMY HOLDINGS

Name of shareholder

Shares held

Shareholding ratio(%)

Hajime Satomi

31,869,338

13.59

FSC Co., Ltd.

12,972,840

5.53

HS Company

11,750,000

5.01Japan Trustee Services Bank, Ltd. (Trust account)
The Master Trust Bank of Japan, Ltd. (Trustaccount)
BNYM TREATY DTT 15

6,904,000

2.94

5,603,300

2.39

4,422,581

1.88

GOLDMAN, SACHS & CO. REG

3,659,884

1.56

CBNY-ORBIS SICAV

3,574,159

1.52

JP MORGAN CHASE BANK 385174

3,167,000

1.35Japan Trustee Services Bank, Ltd. (Trust account 9)3,155,600
Note: Shareholding ratio was calculated excluding treasury stock (31,834,807 shares)

12

1.34

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III Company’s Share Subscription Rights
1.

Outline of Share Subscription Rights Issued to the Company’s Directors and Audit &Supervisory Board Members as Remuneration for Their Services as of the End of the Fiscal Year
Ended March 31, 2016
Date of Resolutions of the Ordinary
General Meeting of Shareholders
Number of individuals with rights
Company Directors
Number of share subscription rights (Note 1)
Class of shares for share subscription rights
Number of shares for share subscription rights

July 31, 2012
6

Payment on exercise of share subscription rights

1,755
Common stock
175,500
There is no need of delivering payment toexchange with the share subscription rights.

Capital contribution upon exercise of share¥1,686
subscription rights (per share)
Period for exercise of share subscription rights
September 2, 2014 – September 1, 2016
Terms and conditions for exercise of share(Note 2)
subscription rights
When transferring share subscription rights,
Matters concerning the transfer of shareapproval must be obtained from the Board ofsubscription rights
Directors
Notes: 1. Number of shares of share subscription rights is 100 per the right. Numbers above include
Share Subscription Rights given before taking office as a Director.
2. Terms and conditions for exercise of share subscription rights are as follows:
The grantee shall be Director, Audit & Supervisory Board Member, Executive Officer,
Consultant, Counsel, or employee of the Company or any of its subsidiaries when he or
she exercises the rights. However, the following cases are treated as exceptions.
a. Where the loss of such position is due to expiration of the term of office or amendmentof law or Articles of Incorporation of the Company or any of its subsidiaries;
b. Where the loss of such position is due to company regulations, including mandatory
retirement or termination on account of business contraction;c. Where, immediately after the loss of such position due to the reasons held by theCompany, the grantee becomes Director, Audit & Supervisory Board Member,
Executive Officer, Consultant, Counsel, or employee of the Company, any of its
Group companies, any of its business partners or any other company sanctioned by theCompany.
2.

Outline of Share subscription rights Issued to Company Employees or Subsidiary Directors, Audit& Supervisory Board Members, or Employees as Remuneration for Their Services During the
Fiscal Year Ended March 31, 2016
Not applicable.

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IV Company Directors and Audit & Supervisory Board Members
1. Directors and Audit & Supervisory Board Members (As of March 31, 2016)
Title and Areas ofName
Responsibility
Chairman of the Board andChief Executive Officer
Hajime Satomi
General Manager of Group
Structure Reform Division
Senior Managing Director andRepresentative Director
in charge of New BusinessNaoya Tsurumi
Development Department,
Corporate Business Promotion
Department
Directorin charge of Group Executive
Office, Finance and Accounting
Division, General Affairs
Koichi Fukazawa
Division, Group Legal Head
OfficeDeputy General Manager ofGroup Structure Reform
Division
Director

Haruki Satomi

Director

Shigeru Aoki

Director

Hideki Okamura

Director

Hisao Oguchi

Director

Yuji Iwanaga

Important Concurrent Posts
Chairman and Representative Director, Sammy
Corporation
Chairman and Representative Director, SEGA
Holdings Co., Ltd.

Vice Chairman, SEGA Holdings Co., Ltd.

Executive Vice President and Representative
Director, Sammy Corporation
Executive Vice President and Representative
Director, SEGA Holdings Co., Ltd.
President and Representative Director, Sammy
Corporation
President and Representative Director, SEGA
Holdings Co., Ltd.
Attorney

DirectorTakeshi Natsuno
Standing Audit & Supervisory
Tomio Kazashi
Board Member
Standing Audit & Supervisory Board Member,
Audit & Supervisory Board
Toshio Hirakawa
Sammy Corporation
MemberStanding Audit & Supervisory Board Member,
Audit & Supervisory Board
Yukito Sakaue
SEGA Holdings Co., Ltd.
MemberAudit & Supervisory Board Member, SEGA
Audit & Supervisory Board
Mineo Enomoto
Holdings Co., Ltd., Attorney
MemberNotes:1. Yuji Iwanaga and Takeshi Natsuno are Outside Director as stipulated in Article 2, Clause 15of the Companies Act.
2. Tomio Kazashi, Toshio Hirakawa and Mineo Enomoto are Outside Audit & Supervisory
Board Member as stipulated in Article 2, Clause 16 of the Companies Act.
3. The Company has submitted an Independent Directors/Audit & Supervisory Board Members
Notification Form to register Directors Yuji Iwanaga and Takeshi Natsuno, Standing Audit &Supervisory Board Member Tomio Kazashi, and Audit & Supervisory Board Member Toshio
Hirakawa and Mineo Enomoto as Independent Directors/Audit & Supervisory Board
Members at Tokyo Stock Exchange, Inc.
4. The Company has adopted the executive officer system to speed up decision-making,strengthen oversight of business execution, and reinforce business execution functions. The
Company has eight executive officers: Toru Nakahara, General manager of Group Legal
Head Office; Hirofumi Matsunaga, Assistant to Senior Managing Director; Hiroshi Ishikura,
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[English Translation of Convocation Notice Originally Issued in the Japanese Language]
General Manager of the Group Internal Control Office, Group Corporate Social
Responsibility Promotion Office and Internal Audit Office; Seiichiro Kikuchi, Assistant toGroup Structure Reform Division and General manager of Group Executive Office; Koichi
Takahashi, General manager of General Affairs Division; Yoichi Owaki, General manager ofFinance and Accounting Division; Takatoshi Akiba and Koichiro Ueda, Assistant to General
Affairs Division.
5. Changes made in the title, area of responsibilities and important concurrent Posts outside theCompany of Directors on and after April 1, 2016 are as follows: Director Koichi Fukazawa
became in charge of Business Planning Department, Finance and Accounting Division,
General Affairs Division, Group Legal Head Office and Deputy General Manager of Group
Structure Reform Division on April 1, 2016. On the same date, Director Haruki Satomi
assumed the position of President and Representative Director of Sammy Corporation and
Director Shigeru Aoki assumed the position of Vice Chairman and Representative Directorof Sammy Corporation.
6. Since April 1, 2016, the Company has the following eight executive officers: Toru Nakahara,
General manager of Group Legal Head Office; Makoto Takahashi, General manager ofBusiness Planning Department and assistant to Group Structure Reform Division; Hiroshi
Ishikura, General Manager of the Group Internal Control Office, Group Corporate Social
Responsibility Promotion Office and Internal Audit Office; Yoichi Owaki, General manager
of Finance and Accounting Division; Takaharu Kato, General manager of General Affairs
Division; Takatoshi Akiba, Koichiro Ueda and Seiichiro Kikuchi, Assistant to General
Affairs Division.
2. Total Remuneration, etc., to Directors and Audit & Supervisory Board Members
Title
Number of individuals Remuneration, etc.
Directors
10¥535 million(of which Outside Directors)(2)(¥32 million)
Audit & Supervisory Board Members
2¥26 million(of which Outside Audit & Supervisory Board Members)(2)(¥26 million)
Total
12¥562 million
Notes: 1. Remuneration, etc. to Directors (excluding Outside Directors) includes bonuses of ¥123
million.
2. One Director who retired at the conclusion of the Ordinary General Meeting of
Shareholders held on June 17, 2015 is included in the number of individuals for Director
above.
3. The remuneration limit for Directors is ¥1,000 million, pursuant to the resolution at theOrdinary General Meeting of Shareholders on June 19, 2012.
4. The remuneration limit for Audit & Supervisory Board Members is ¥50 million, pursuant to
the resolution at the Ordinary General Meeting of Shareholders of Sammy Corporation on
June 25, 2004, and at the Ordinary General Meeting of Shareholders of SEGACORPORATION on June 29, 2004.
3. Liability Limitation Agreements
The Company amended its Articles of Incorporation at the 11th Ordinary General Meeting of
Shareholders on June 17, 2015 to change the entities eligible for liability limitation agreements to
Directors (excluding Executive Directors, etc.) and Audit & Supervisory Board Members.
The outline of the liability limitation agreement that the Company entered into with Directors(excluding Executive Directors, etc.) and Audit & Supervisory Board Members respectively inaccordance with the Articles of Incorporation is as follows:(Outline of Liability Limitation Agreement)
The liability to compensate for damages under Article 423, Section 1 of the Companies Act will belimited to the minimum liability set forth by law in the absence of malicious intent or material
negligence.

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4. Outside Directors and Audit & Supervisory Board Members(1) Main Activities of Outside Directors and Audit & Supervisory Board Members
Title

Name

Outside Director

Yuji Iwanaga

Outside Director

Takeshi Natsuno

Major Activities
He attended 15 Board of Directors meetings out of
the 15 meetings during the year (12 out of 12 regularmeetings) and expressed his opinion on professionaland managerial view points as an attorney. He also
made some proposals to secure the adequateness andfairness of decision making of the Board of Directors.
He attended 14 Board of Directors meetings out of
the 15 meetings during the year (12 out of 12 regularmeetings) and expressed his opinion on managerial
viewpoints. He also made some proposals to secure
the adequateness and fairness of decision making of
the Board of Directors.
He attended 15 Board of Directors meetings out of
the 15 meetings during the year (12 out of 12 regularmeetings) and expressed his opinion on managerial
viewpoints. He also made some proposals to secure
the adequateness and fairness of decision making of
the Board of Directors.
He also attended 14 Audit & Supervisory Board
meetings out of the 14 meetings during the year
exchanging the opinions on auditing results anddeliberating the significant issues related to audits.
He attended 15 Board of Directors meetings out of
the 15 meetings during the year (12 out of 12 regularmeetings) and expressed his opinion on managerial
viewpoints. He also made some proposals to secure
the adequateness and fairness of decision making of
the Board of Directors.
He also attended 14 Audit & Supervisory Board
meetings out of the 14 meetings during the year
exchanging the opinions on auditing results anddeliberating the significant issues related to audits.
He attended 15 Board of Directors meetings out of
the 15 meetings during the year (12 out of 12 regularmeetings) and expressed his opinion on professionaland managerial viewpoints as an attorney. He also
made some proposals to secure the adequateness andfairness of decision making of the Board of Directors.
He also attended 13 Audit & Supervisory Board
meetings out of the 14 meetings during the year
exchanging the opinions on auditing results anddeliberating the significant issues related to audits.

Outside Audit &Tomio Kazashi
Supervisory Board Member

Outside Audit &Toshio Hirakawa
Supervisory Board Member

Outside Audit &Mineo Enomoto
Supervisory Board Member(2) Total Remuneration, etc., to Outside Directors and Audit & Supervisory Board Members

Total remuneration, etc., to outside
Directors and Audit & Supervisory
Board Members

Number ofindividuals

Remuneration, etc.

Of which Remuneration,etc., from subsidiary5¥81 million¥22 million

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V

Independent Auditors
1.

Name
KPMG AZSA LLC

2.

Liability Limitation Agreement with Independent Auditors
Although, the Company amended its articles of incorporation and established regulations regarding
liability limitation agreements with independent auditors at the Second Ordinary General Meeting of
Shareholders on June 20, 2006, the Company has not entered into the liability limitation agreement with
KPMG AZSA LLC.

3.

Remuneration, etc.
Remuneration, etc.
¥140 million

Remuneration, etc., related to the fiscal year ended March 31, 2016
Total of cash and other profits that should be paid to independent¥338 million
auditors by the Company and its subsidiaries
Notes: 1. The Company’s subsidiaries, Sega Europe Ltd., etc. are audited by auditors that differ fromthe Company’s.
2. As a result of checking and reviewing the independent auditor’s audit plan and record of
remuneration for the last year, the Audit & Supervisory Board of the Company gaveconsent to the remuneration etc. for the independent auditor pursuant to Article 399,
Paragraph 1 of the Companies Act.
4.

Policy Regarding Determination of Termination or Not Reappointing
The Company will include in objectives of the General Meeting of Shareholders the dismissal of the
independent auditor prescribed in any clause within Article 340, Section 1 of the Companies Act aswell as the dismissal or non-reappointment of the independent auditor if it is deemed difficult for the
independent auditor to perform its duty appropriately.

VI Outline of Resolutions Regarding Preparation of Internal Control System and so forth to Ensure
Appropriate Business Execution
Based on the Companies Act, the Company made the following resolutions regarding the “Basic Policy on
Preparation of Internal Controls System” and has worked to prepare this system.
(1) System to Ensure the Efficient Implementation of the Duties of the Company’s Directors andCompliance with Laws and the Articles of Incorporation
Establish a Group CSR Charter, Group Code of Conduct, Group Management Policies, andGuidelines (hereinafter, collectively referred to as “Group Philosophy and Code”) and
Representative Directors will repeatedly communicate the spirit of Group Philosophy and Code to
employees in administrative post, in order to thoroughly establish compliance with laws, etc., as acondition for all corporate activities. These efforts will reflect the Company’s fundamental policy offulfilling its social responsibility as a member of society and provide a basis for establishing acompliance system that comprises such policy. In addition, in the interest of further strengthening
corporate governance, the Board of Directors will make efforts to build an effective internal controls
system and to secure a system for compliance with laws for the Company as a whole, based on theGroup Management Policies stipulated for a unified management of the entire Group and the
Guidelines that show the standard for operation and management of the entire Group so that theCompany’s business execution is appropriate and sound.
Also, the Audit & Supervisory Board will audit the effectiveness and functionality of this internal
controls system, and make efforts to identify and correct issues early through regular inspection.
In order to prevent participation in management by anti-social forces, it will be specified that all
relations with anti-social forces are removed in the Group Code of Conduct. Moreover, the Groupwill contain so-called “Bo-hi jyoko” (terms and clauses concerning exclusion of organized crimegroups) in contracts, establish a system to check whether or not our business partners correspond toanti-social forces, and establish a system to address systematically in corporation with outside
17

[English Translation of Convocation Notice Originally Issued in the Japanese Language]organizations including the police and lawyers appropriately when anti-social forces approach theGroup.
(2) System Related to the Retention and Management of Information Related to the Implementation of
the Duties of the Company’s Directors
Representative Directors will appoint the Director in charge of the Administrative Division as the
person in charge of the entire Company with respect to preservation and management of information
related to execution of Directors’ duties. Information related to execution of Directors’ duties will berecorded in writing or electronic media based on the Company regulations etc., and preserved andmanaged so that the Directors and Audit & Supervisory Board Members are able to appropriately
view such information and also so that such information is easy to search.
In order to manage trade secrets and other information, etc., properly, policies concerning
information management and IT security, as well as guidelines for IT security will be established,
and it is planned that they will be fully informed of and complied with.
(3) Regulations and Other Systems Regarding Risk Management for Losses of the Company
With respect to risks related to the Company’s business, each relevant division and department will
analyze and identify anticipated risks and clarify the risk management system. The Internal Audit
Department will audit each division’s and department’s risk management and report the results
regularly to the management decision-making body and executive and supervisory management
organization.
In order to capture and manage properly important risks underlying inside and outside themanagement including emergency responses, policies concerning risk management and crisis
management guidelines will be established as one of the Group Management Policies andGuidelines, and in the event of a situation likely to have a severe impact on the Group, crisis
management teams of the Company and the Group companies shall cooperate to discuss aboutcountermeasures for prompt and effective actions.
(4) System to Ensure that the Duties of the Company’s Directors are Implemented Efficiently
Adopt an Audit & Supervisory Board Member system for efficient execution of Directors’ duties, aswell as for Company Directors and Audit & Supervisory Board Members to be well-informed about
the Group’s businesses and promptly and appropriately make decisions for the Group. The systemshould also enable appropriate and efficient execution of duties under rules related to authorities anddecision-making based on the Regulations of the Board of Directors, etc.
(5) System to Ensure Appropriate Compliance with Laws and the Articles of Incorporation Concerning
the Implementation of the Duties of the Company’s Employees
The Company will promote the group compliance measures for employees to act appropriately incompliance with laws, the Articles of Incorporation, Company regulations, and social norms. These
measures must be based on the Group Philosophy and Code as code of conduct.
Establish a “Hot Line” system that enables an employee to report as a whistle-blowing any violationof laws, the Articles of Incorporation, Company regulations, or conduct in violation of social norms
that they learn. Also establish a system that enables the person in charge promptly to report any
material matters to the Board of Directors and the Audit & Supervisory Board.
Such a whistle-blower will be kept in secret, and will not receive any disadvantageous treatments
due to the report. Establish an internal reporting contact offices comprised of outside counsel, etc. as
recipients of an informant’s report other than the ordinary reporting line, as part of a system thatmaintains transparency and accurately addresses relevant issues.
(6) System Shown Below and Other Systems to Ensure that the Businesses of the Group, Comprised of
the Company, its Parent, and its Subsidiaries, are Implemented Properly① System to report to the Company matters related to the execution of the duties by the directors,
the Statutory Executive Officers, officers executing the duties, and people who should executethe duties of Article 598, Section 1 of the Companies Act of the Company’s subsidiaries(referred to as “the directors, etc.” in ③ and ④ below)
By having the Company’s employees in administrative post concurrently serve as the directors or18

[English Translation of Convocation Notice Originally Issued in the Japanese Language]
the Audit & Supervisory Board members of its Group companies, a system will be established toreport and share information of the Group companies to and with the Company through suchofficers.
At the same time, a system will be established to communicate important matters, report, share
information on matters of whistle-blowing, report and share information on matters ofaccounting wrongdoings and errors based on the vertical chain of the Regulations ofManagement of Related Companies between the Company and its Group companies. However,
the whistle-blower will be kept in secret, and will not receive any disadvantageous treatments
due to the report.
Hold meetings, etc. for the Group’s Compliance and the Group’s Audit & Supervisory Board
Members, where various problems in the Group or governance matters with material risks are
addressed. The Company’s department in charge of internal audit will conduct audits for the
benefit of the Group as a whole, and efforts will be made to ensure to the extent possible that
information is shared among members of the Group and businesses are properly executed.
② System regarding risk management for losses of the Company’s subsidiaries
Regarding common priority items and measures of the Group that the Company has stipulated,while they will be addressed by each of its Group companies, specific risks of each subsidiary
will be managed in consideration of scale, nature, business category, etc. of each of its Group
companies.
③ System to ensure that the duties of the directors, etc. of the Company’s subsidiaries are executed
efficiently
As with the Company, in its Group companies, adopt an Audit & Supervisory Board member
system for efficient execution of directors’ duties, as well as for Company Directors and Audit &Supervisory Board members to be well-informed about the Group’s businesses and promptly andappropriately make decisions for the Group. The system should also enable appropriate andefficient execution of duties under rules related to authorities and decision-making based on theRegulations of the Board of Directors, etc. However, the system will be established inconsideration of scale, nature, business category, etc. of each of its Group companies.
④ System to ensure appropriate compliance with laws and the Articles of Incorporation concerning
execution of the duties of the directors, etc. and employees of the Company’s subsidiaries
As with the Company, the Board of Directors of its Group companies will establish a compliancesystem in order to fulfill Group Philosophy and Code based on importance of compliance withlaws, etc. and of fundamental policy of fulfilling social responsibilities as a member of a society.
(7) Matters Regarding Employees whom Audit & Supervisory Board Members of the Company with
Audit & Supervisory Board Members Request to Assist Them in Their Duties, Matters Related to
the Independence of the Employees from the Directors of the Company with Audit & Supervisory
Board Members, and Matters Related to Ensuring Effectiveness of Instructions to the Employees by
Audit & Supervisory Board Members of the Company with Audit & Supervisory Board Members
Establish an Audit & Supervisory Board Member’s Office as an organization that reports directly to
the Audit & Supervisory Board and employees in such office will assist the Audit & Supervisory
Board Members’ duties under their direction and order.
Employees who assist the Audit & Supervisory Board Members in their duties will be dedicatedemployees in principle and will not be directed or supervised by the Directors. However, underunavoidable circumstances, employees who serve concurrently in a position of the executive side
will be assigned. Concerning such concurrent employees, independence will be especiallyconsidered. Appointment, dismissal, personnel transfer, evaluation, disciplinary action, revision ofwages, etc. of the employees will require a prior agreement of the Audit & Supervisory Board.
(8) System Shown Below and Other Systems Related to Reporting to Audit & Supervisory Board
Members of the Company with Audit & Supervisory Board Members① System to enable Directors, Accounting Advisors, and employees of the Company with Audit &Supervisory Board Members to report to Audit & Supervisory Board Members of the Company
with Audit & Supervisory Board Members
The Directors and employees of the Company must report promptly to the Audit & Supervisory
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[English Translation of Convocation Notice Originally Issued in the Japanese Language]
Board on material violations of laws and the Articles of Incorporation or a fact of illegal conduct
related to execution of the duties or a fact that might cause conspicuous harm to the Company
that they learn. Decisions that materially affect the Company’s business or organization andresults of internal audits will be treated in the same way.
② System to enable directors, Accounting Advisors, Audit & Supervisory Board members,
Statutory Executive Officers, officers executing the duties, people who should execute the duties
of Article 598, Section 1 of the Companies Act of subsidiaries of the Company with Audit &Supervisory Board members and other people equivalent to these people and employees or
people who received reports from these people to report to the Audit & Supervisory Board
Members of the Company with Audit & Supervisory Board Members
The directors, the Audit & Supervisory Board members, the Executive Officers, employees, etc.
of the Group companies or people who received reports from these people must report promptly
to the Audit & Supervisory Board of the Company on material violations of laws and the Articles
of Incorporation or a fact of illegal conduct related to execution of the duties or a fact that mightcause conspicuous harm to the Company that they learn. Decisions that materially affect theCompany’s business or organization and results of internal audits will be treated in the sameway.
The Audit & Supervisory Board Members of the Company will make efforts to maintain systems
from the perspective of focusing on so-called group management so that the Audit &Supervisory Board Members of the Group companies are able to become receivers of reportfrom the business execution side and to become mediators.
(9) System to Ensure that People Who Made the Report Described in the Previous Clause Will Not
Receive Disadvantageous Treatments Because of Making Such Report
The reporter described in the previous clause will not receive disadvantageous treatments because of
making such report. Such disadvantageous treatments will be subject to punitive action.
(10) Matters Concerning Policies Related to Procedures of Prepayment or Reimbursement of Expenses
Arising from Implementation of the Duties of the Audit & Supervisory Board Members of theCompany with Audit & Supervisory Board Members and Other Treatments of Expenses or
Liabilities Arising from Implementation of Such Duties
The Company will bear expenses arising from the execution of the duties of the Audit &Supervisory Board Members in accordance with the Company regulations, responding to requests
from the Audit & Supervisory Board or Standing Audit & Supervisory Board Members. This
includes expenses incurred in using outside advisors, etc., as prescribed in the clause (11).
(11) Systems Established to Ensure the Efficacious Performance of Auditing Responsibilities by Audit &Supervisory Board Members of the Company with Audit & Supervisory Board Members
Representative Directors regularly will meet with Audit & Supervisory Board Members, exchange
opinions related to Company management, in addition to business reports, and otherwise
communicate effectively with them.
The Board of Directors will ensure Audit & Supervisory Board Members’ participation in importantwork-related meetings to ensure that the Company’s business is executed properly.
The Audit & Supervisory Board will use attorneys, certified public accountants, and other outsideadvisors, as necessary for itself, and its opportunities to receive advice related to audit work will be
guaranteed.
(Outline of implementation status of internal control system to ensure appropriate business execution)
The implementation status of the foregoing Basic Policy of the Company is as outlined below:(1) Compliance① Compliance training is held every fiscal year for the officers of the Company and the Group,
divided into separate groups of new officers and existing officers. For Directors of the Company,
officer training is held (one session on corporate governance and another on compliance domain
were held during the current fiscal year).
② As a place to share important issues and relevant measures for internal controls such as
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[English Translation of Convocation Notice Originally Issued in the Japanese Language]
compliance and risk management, the Group compliance liaison meeting is in place and took
place twice during the current fiscal year. The main contents of the meeting are presented as
feedback to the board of directors, etc. of major Group companies.
③ In an effort to enhance the compliance system, Group-wide common priority compliance items
are selected from among societal requirements and intragroup issues each year, on which grouptraining is held (twice during the current fiscal year). The Company also engages in “compliancepromotion activities” on a continual basis for the purpose of boosting compliance awareness andknowledge among the Group employees.
④ As an initiative to eliminate anti-social forces, the Company has introduced a Group-widechecking system to detect if business partners apply as anti-social forces and supports its
implementation.
⑤ For the purpose of early detection and preventing misconduct such as violations of laws andregulations, the Company has established a whistle-blowing system (alias “Corporate Ethics Hot
Line”). While providing contact points internally and externally, the Company is actively
involved in informing employees of the system.
⑥ The Company’s internal audit department conducts internal audits of the Company and theGroup companies and strives to further enhance the internal audit system by sharing audit
information and strengthening mutual cooperation with the internal audit departments of theGroup companies.
(2) Risk management
By identifying significant risks underlying inside and outside management and clarifying issues tobe addressed, the Company and the Group companies are committed to business executions andmitigating loss of management resources and recurrence thereof.
(3) Effectiveness of audits by Audit & Supervisory Board Members① In order to complement enhanced information provision to Audit & Supervisory Board
Members for internal control purposes, the meetings of “Holdings Audit Liaison Committee”
consisting of Audit & Supervisory Board Members and the Independent Auditor, “Auditors andOffice of Corporate Auditors Liaison Committee” where Audit & Supervisory Board Members
and the internal audit department discuss progress in audits and exchange information, and“Group Audit Liaison Committee” consisting of all Standing Audit & Supervisory Board
Members of the Group are held (9 meetings, 12 meetings, and 3 meetings were held respectively
during the current fiscal year).
② The Company assigns employees concurrently serving as an assistant to Audit & Supervisory
Board Members to provide support for Audit & Supervisory Board Members in executing theirduties.

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[English Translation of Convocation Notice Originally Issued in the Japanese Language]

Consolidated Balance Sheet(As of March 31, 2016)
Item
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable-trade
Short-term investment securities
Merchandise and finished goods
Work in process
Raw materials and supplies
Income taxes receivable
Deferred tax assets
Other
Allowance for doubtful accounts
Noncurrent assets
Property, plant and equipment
Buildings and structures, net
Machinery, equipment and vehicles,net
Amusement machines and facilities,
net
Land
Construction in progress
Other, net
Intangible assets
Goodwill
Other
Investments and other assets
Investment securities
Long-term loans receivable
Lease and guarantee deposits
Deferred tax assets
Other
Allowance for doubtful accounts

Amount302,292
141,316
55,612
48,401
6,971
17,382
10,123
3,735
6,286
13,143(681)
230,664
101,080
35,216
6,229（Unit: millions of yen）
AmountItem
Liabilities
Current liabilities
Notes and accounts payable-trade
Short-term loans payable
Current portion of bonds
Income taxes payable
Accrued expenses
Provision for bonuses
Provision for directors' bonuses
Provision for business restructuring
Provision for dismantling of fixed
assetsAsset retirement obligations
Deferred tax liabilities
Other
Noncurrent liabilities
Bonds payable
Long-term loans payable

11,385Net defined benefit liability

38,742
1,977
7,529
24,817
12,201
12,616
104,765
76,504703
12,727674
14,705(549)

Deferred tax liabilities
Deferred tax liabilities for land
revaluation
Asset retirement obligations
Provision for dismantling of fixed
assets
Other
Total liabilities
Net assets
Shareholders' equity
Capital stock
Capital surplus
Retained earnings
Treasury stock
Accumulated other comprehensive
incomeValuation difference on
available-for-sale securities
Deferred gains or losses on hedges
Revaluation reserve for land
Foreign currency translation
adjustment
Remeasurements of defined benefit
plans
Subscription rights to shares
Non-controlling interests
Total net assets
Total assets
532,957
Total liabilities and net assets
Note: Figures shown in millions of yen have been rounded down to the nearest million.

22

105,990
33,011
14,002
14,2002,536
15,467
4,608
606
136
391
30
34
20,964
127,015
52,00048,895
3,906
3,258
640
3,952
2,368
11,993233,006
288,105
29,953
118,404
194,505(54,758)
6,628
11,494(40)(4,600)
(876)
651
801
4,415
299,950
532,957

[English Translation of Convocation Notice Originally Issued in the Japanese Language]

Consolidated Statement of Income(From April 1, 2015 To March 31, 2016)(Unit: millions of yen)Amount
347,981
220,609
127,372
109,754
17,617Item
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividends income
Gain on investments in partnership
Foreign exchange gains
Gain on bad debts recovered
Other
Non-operating expenses
Interest expenses
Equity in losses of affiliates
Sales discounts
Commission fee
Loss on investments in partnership

463
923
223
58
159
1,362

3,190

921
338
2
204
236

Penalty payment for cancellation of game center lease
Bond issuance cost
Loss on retirement of noncurrent assets
Settlement package
Loss on valuation of compound financial instruments
Other
Ordinary income

23

2
41
481
3
1,127
1,037

4,398
16,409

[English Translation of Convocation Notice Originally Issued in the Japanese Language](Unit: millions of yen)AmountItem

Extraordinary income
Gain on sales of noncurrent assets
68
Gain on sales of shares of subsidiaries and associates
16
Gain on sales of investment securities
123
Gain on liquidation of subsidiaries and affiliates
306
Gain on reversal of subscription rights to shares
14
Gain on reversal of provision for dismantling of fixed assets
523
Other
244
Extraordinary loss
Loss on sales of noncurrent assets
72
Impairment loss
1,329
Loss on valuation of investment securities
19
Loss on valuation of shares of subsidiaries and associates
568
Early extra retirement payments
1,956
Restructuring loss
1,220
Other
523
Income before income taxes
Income taxes-current
4,040
Income taxes-deferred
2,354
ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent
Note: Figures shown in millions of yen have been rounded down to the nearest million.

24

1,297

5,691
12,015
6,395
5,620
251
5,369

[English Translation of Convocation Notice Originally Issued in the Japanese Language]

Consolidated Statement of Changes in Net Assets(From April 1, 2015 To March 31, 2016)(Unit: millions of yen)
Shareholders’ equity

Balances as of April 1, 2015
Cumulative effects of changes inaccounting policies
Balances as of April 1, 2015 whichreflect changes in accounting policies
Changes of items during the period
Dividends from surplus
Profit attributable to owners of parent
Effect of changes in accounting periodof consolidated subsidiaries
Purchase of treasury stock
Disposal of treasury stock
Change of scope of consolidation
Change of scope of equity method
Purchase of shares of consolidated
subsidiaries
Total changes of items during the period
Balances as of March 31, 2016

Capitalstock

CapitalsurplusRetainedearnings

29,953

119,282

198,924

Treasurystock

Total shareholders’equity(49,335)(220)
29,953

119,282

198,704(220)(49,335)(9,436)
5,369

(129)

(129)
(5,549)
127

(1)
(0)
(892)

(5,549)
141
(1)
(0)
(892)

(877)
118,404─

298,604(9,436)5,369

1429,953298,824(4,198)
194,505(5,422)(54,758)(10,499)
288,105

Accumulated other comprehensive income
Valuation
Deferred gains Revaluationdifference on
reserve foror losses onavailable - for land
hedgessale securities
Balances as of April 1, 2015
Cumulative effects ofchanges in accounting
policies
Balances as of April 1, 2015
which reflect changes inaccounting policies
Changes of items during theperiodDividends from surplus
Profit attributable toowners of parent
Effect of changes inaccounting period of
consolidated subsidiaries
Purchase of treasury stock
Disposal of treasury stock
Change of scope of
consolidation
Change of scope of equity
methodPurchase of shares of
consolidated subsidiaries
Net changes of items otherthan shareholders’ equity
Total changes of items during
the period
Balances as of March 31,
2016

Total accumulated
Foreign
Remeasurements
othercurrencyof definedcomprehensive
translation
benefit plansincomeadjustment

17,79410(4,699)

3,414

2,206

18,726

17,79410(4,699)

3,414

2,206

18,726(6,300)(50)

99(4,290)(1,554)(12,097)(6,300)(50)

99(4,290)(1,554)(12,097)

11,494(40)(4,600)

(876)

651

6,628

25

[English Translation of Convocation Notice Originally Issued in the Japanese Language](Unit: millions of yen)
Subscription Non-controllingrights to sharesinterests
Balances as of April 1, 2015
Cumulative effects of changes inaccounting policies
Balances as of April 1, 2015 whichreflect changes in accounting policies
Changes of items during the period
Dividends from surplus
Profit attributable to owners ofparentEffect of changes in accounting
period of consolidated subsidiaries
Purchase of treasury stock
Disposal of treasury stock
Change of scope of consolidation
Change of scope of equity method
Purchase of shares of consolidated
subsidiaries
Net changes of items other thanshareholders’ equity
Total changes of items during theperiodBalances as of March 31, 2016

832

4,289

Total
net assets

322,673
(220)

832

4,289

322,452(9,436)5,369(129)(5,549)
141
(1)
(0)
(892)

(31)

126

(12,003)

(31)

126

(22,502)

801

4,415

299,950

Note: Figures shown in millions of yen have been rounded down to the nearest million.

26

[English Translation of Convocation Notice Originally Issued in the Japanese Language]

Independent Auditor’s Report
May 12, 2016
The Board of Directors
SEGA SAMMY HOLDIGNS INC.
KPMG AZSA LLC
Kiyoyuki Sakurai (Seal)
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
Naoya Miyaki (Seal)
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
Kentaro Maruta (Seal)
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
We have audited the consolidated financial statements, comprising the consolidated balance sheet, theconsolidated statement of income, the consolidated statement of changes in net assets and the related notesof SEGA SAMMY HOLDIGNS INC. as at March 31, 2016 and for the year from April 1, 2015 to March 31,
2016 in accordance with Article 444-4 of the Companies Act.
Management’s Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements inaccordance with accounting principles generally accepted in Japan, and for such internal control as
management determines is necessary to enable the preparation of consolidated financial statements that are
free from material misstatements, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on the consolidated financial statements based on our audit as
independent auditor. We conducted our audit in accordance with auditing standards generally accepted inJapan. Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether the consolidated financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
consolidated financial statements. The procedures selected depend on our judgement, including the assessmentof the risks of material misstatement of the consolidated financial statements, whether due to fraud or error.
In making those risk assessments, we consider internal control relevant to the entity’s preparation and fairpresentation of the consolidated financial statements in order to design audit procedures that are appropriate in
the circumstances, while the objective of the financial statement audit is not for the purpose of expressing an
opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating theappropriateness of accounting policies used and the reasonableness of accounting estimates made bymanagement, as well as evaluating the overall presentation of the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinion.
27

[English Translation of Convocation Notice Originally Issued in the Japanese Language]
OpinionIn our opinion, the consolidated financial statements referred to above present fairly, in all material respects,
the financial position and the results of operations of SEGA SAMMY HOLDIGNS INC. and its consolidated
subsidiaries for the period, for which the consolidated financial statements were prepared, in accordance withaccounting principles generally accepted in Japan.
Other Matter
Our firm and engagement partners have no interest in the Company which should be disclosed pursuant to theprovisions of the Certified Public Accountants Law of Japan.
Notes to the Reader of Independent Auditor’s Report:
The Independent Auditor’s Report herein is the English translation of the Independent Auditor’s Report as
required by the Companies Act.

28

[English Translation of Convocation Notice Originally Issued in the Japanese Language]

Non-Consolidated Balance Sheet（As of March 31, 2016）
Item
AssetsCurrent assets

Amount

Item(Unit: millions of yen)AmountCash and deposits

22,890Accounts receivable-trade
Short-term investment securities
Prepaid expenses
Short-term loans receivable fromsubsidiaries and associates
Accounts receivable-other
Income taxes receivable
Deferred tax assets
Other

425
28,001260

Liabilities
Current liabilities
Current portion of long-term loans
payableCurrent portion of bonds
Accounts payable-other
Income taxes payable

7,329

Accrued expenses

Noncurrent assets
Property, plant and equipment
Buildings, net
Structures, net
Machinery and equipment, net
Aircraft, net
Vehicles, net
Tools, furniture and fixtures, net

370,434
5,912
834
624
1
2,295
51
687

Land
Intangible assets
Software
Other
Investments and other assets
Investment securities
Stocks of subsidiaries and affiliates
Investments in capital ofsubsidiaries and associates
Long-term loans receivable fromsubsidiaries and associates

66,998

6,166
1,636
51
235

1,418
31
29
1
364,489
29,780314,712449
19,034Long-term loans receivable

24Long-term prepaid expenses

56

Other

3,650

Allowance for doubtful accounts(3,219)

7,400
6,600
5,736
8
358

Deposits received
Unearned revenue
Provision for bonuses
Provision for directors' bonuses
Other
Noncurrent liabilities
Bonds payable
Long-term loans payable
Provision for retirement benefits
Asset retirement obligations
Deferred tax liabilities
Other

9,615
21
136
123
207
94,53344,60045,588
65
43
3,906
328

Total liabilities

124,740

Net assets
Shareholders' equity
Capital stock
Capital surplus
Legal capital surplus
Other capital surplus

303,626
29,953
192,244
29,945
162,299

Retained earnings

136,472

Other retained earnings

136,472

Retained earnings brought
forward136,472

Treasury stock
Valuation and translation
adjustments
Valuation difference on
available-for-sale securities
Subscription rights to shares(55,043)

Total net assets

312,691

Total assets
437,432 Total liabilities and net assets
Note: Figures shown in millions of yen have been rounded down to the nearest million.
29

30,207

8,263
8,263
801
437,432

[English Translation of Convocation Notice Originally Issued in the Japanese Language]

Non-Consolidated Statement of Income(From April 1, 2015 To March 31, 2016)(Unit: millions of yen)AmountItem
Operating revenue
Consulting fee income
Dividends income

4,727
8,010

12,737

Operating expenses
Selling, general and administrative expenses

6,551

6,551

Operating income
Non-operating income
Interest income
Interest on securities
Dividends income
Gain on investments in partnership
Income from operation of noncurrent assets
Other

6,186
390
219
807
45
136
53

1,653

Non-operating expenses
Interest expenses
Interest on bonds
Commission fee
Bond issuance cost
Loss on investments in partnership
Loss on valuation of compound financial instruments
Other

268
327
184
41
74
364
52

1,313

Ordinary income
Extraordinary income
Gain on sales of investment securities
Gain on reversal of subscription rights to shares
Other

6,526

Extraordinary loss
Loss on support to subsidiaries and associates
Provision of allowance for doubtful accounts
Loss on valuation of shares of subsidiaries and associates
Income before income taxes
Income taxes-current
Income taxes-deferred

99
14
11

124

130
3,212
696

4,038
2,612

(282)
(46)

Net income
Note: Figures shown in millions of yen have been rounded down to the nearest million.

30

(329)
2,941

[English Translation of Convocation Notice Originally Issued in the Japanese Language]

Non-Consolidated Statement of Changes in Net Assets(From April 1, 2015 To March 31, 2016)(Unit: millions of yen)

Capital stock
Balances as of April 1, 2015
Changes of items during the period
Dividends from surplus
Net income
Purchase of treasury stock
Disposal of treasury stock
Total changes of items during the period
Balances as of March 31, 2016

Balances as of April 1, 2015
Changes of items during the period
Dividends from surplus
Net income
Purchase of treasury stock
Disposal of treasury stock
Total changes of items during theperiodBalances as of March 31, 2016

29,953

Shareholders’ equity
Capital surplus
Legal capital
Other capitalsurplussurplus

Total capitalsurplus29,945

162,285

192,230──

29,95329,94514
14
162,29914
14
192,244

Shareholders’ equity
Retained earnings
Other retained
earnings
Total retained Treasury stock
Retainedearnings
earnings
brought
forward142,966
142,966(49,621)

Total
shareholders’equity(9,436)2,941(9,436)
2,941

315,529(5,549)127(9,436)
2,941(5,549)141(6,494)(6,494)(5,421)(11,902)

136,472

136,472(55,043)

303,626

Valuation andtranslation adjustments
Subscription
Valuation
Total
difference on valuation and rights to sharesavailable - for - translation
sale securities adjustments
14,89014,890832
Balances as of April 1, 2015
Changes of items during the period
Dividends from surplus
Net income
Purchase of treasury stock
Disposal of treasury stock
Net changes of items other than
(6,627)(6,627)(31)
shareholders’ equity
Total changes of items during the(6,627)(6,627)(31)
period
8,263
8,263
801
Balances as of March 31, 2016
Note: Figures shown in millions of yen have been rounded down to the nearest million.

31

Total
net assets
331,252(9,436)
2,941(5,549)141(6,658)(18,560)
312,691

[English Translation of Convocation Notice Originally Issued in the Japanese Language]

Independent Auditor’s Report
May 12, 2016
The Board of Directors
SEGA SAMMY HOLDINGS INC.
KPMG AZSA LLC
Kiyoyuki Sakurai (Seal)
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
Naoya Miyaki (Seal)
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
Kentaro Maruta (Seal)
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
We have audited the financial statements, comprising the balance sheet, the statement of income, the statementof changes in net assets and the related notes, and the supplementary schedules of SEGA SAMMYHOLDINGS INC. as at March 31, 2016 and for the year from April 1, 2015 to March 31, 2016 in accordancewith Article 436-2-1 of the Companies Act.
Management’s Responsibility for the Financial Statements and Others
Management is responsible for the preparation and fair presentation of the financial statements and the
supplementary schedules in accordance with accounting principles generally accepted in Japan, and for suchinternal control as management determines is necessary to enable the preparation of financial statements andthe supplementary schedules that are free from material misstatements, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on the financial statements and the supplementary schedules basedon our audit as independent auditor. We conducted our audit in accordance with auditing standards generally
accepted in Japan. Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements and the supplementary schedules are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in thefinancial statements and the supplementary schedules. The procedures selected depend on our judgement,
including the assessment of the risks of material misstatement of the financial statements and the
supplementary schedules, whether due to fraud or error. In making those risk assessments, we consider
internal control relevant to the entity’s preparation and fair presentation of the financial statements and the
supplementary schedules in order to design audit procedures that are appropriate in the circumstances, while
the objective of the financial statement audit is not for the purpose of expressing an opinion on theeffectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness ofaccounting policies used and the reasonableness of accounting estimates made by management, as well as
evaluating the overall presentation of the financial statements and the supplementary schedules.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinion.

32

[English Translation of Convocation Notice Originally Issued in the Japanese Language]
OpinionIn our opinion, the financial statements and the supplementary schedules referred to above present fairly, in allmaterial respects, the financial position and the results of operations of SEGA SAMMY HOLDINGS INC. forthe period, for which the financial statements and the supplementary schedules were prepared, in accordancewith accounting principles generally accepted in Japan.
Other Matter
Our firm and engagement partners have no interest in the Company which should be disclosed pursuant to theprovisions of the Certified Public Accountants Law of Japan.
Notes to the Reader of Independent Auditor’s Report:
The Independent Auditor’s Report herein is the English translation of the Independent Auditor’s Report as
required by the Companies Act.

33

[English Translation of Convocation Notice Originally Issued in the Japanese Language]

Audit Report
The Audit & Supervisory Board has received the reports of the audit procedures and results concerning theexecution of the duties of the Directors during the 12th fiscal year from April 1, 2015 through March 31, 2016
prepared by each of the Audit & Supervisory Board Members. After discussing the reports, we have preparedthis Audit Report and report as follows.
1. Procedures and details of the audits by the Audit & Supervisory Board Members and the Audit &Supervisory Board(1) The Audit & Supervisory Board established the audit policy, allocation of duties, and other relevant
matters, and received reports from each Audit & Supervisory Board Member regarding theimplementation of audits and results thereof, as well as reports from the Directors, other relevant
personnel, and the independent auditor regarding the execution of their duties, and sought explanations
as necessary.
(2) Each Audit & Supervisory Board Member complied with the auditing standards for Audit &Supervisory Board Members established by the Audit & Supervisory Board, followed the audit policies,
allocation of duties, etc., communicated with Directors, the internal audit department, and other
employees, as well as worked to enhance environment for information collection and auditing, while
conducting the audit by the following methods:
1) Each Audit & Supervisory Board Member participated in meetings of the Board of Directors andother important meetings, received reports from the Directors, employees, and other relevant
personnel regarding performance of their duties, and sought explanations as necessary. We
examined important authorized documents and associated information, and investigated theoperations and assets at the head office and principal offices.
With respect to subsidiaries, we communicated and exchanged information with Directors, Audit &Supervisory Board Members, and other relevant personnel of the subsidiaries, and received business
reports from the subsidiaries as necessary.
2) We received the periodical reports from Directors, employees, and other relevant personnel, sought
explanations as necessary, and expressed our opinions on the status of development and operation of
the system for ensuring that the execution of the duties of the Directors conforms to the relevantlaws and regulations and the Articles of Incorporation, as well as the details of the resolutions of theBoard of Directors regarding the organization of the system stipulated in Article 100, Paragraph 1
and 3 of the Enforcement Regulations of the Companies Act and the status of the system (internal
control system) based on said resolutions, a necessary measure for ensuring proper businessexecution by a joint stock corporation and a corporate group consisting of its subsidiaries.
As to the internal control system associated with financial reports, we received reports from
Directors and the independent auditor, KPMG AZSA LLC regarding the evaluation of the internal
control and its audit, and sought explanations and expressed our opinions where necessary.
3) We monitored and verified whether the independent auditor maintained its independence andimplemented appropriate audits, and we received reports from the independent auditor regarding theperformance of its duties and sought explanations as necessary. In addition, we received notice fromthe independent auditor that “systems for ensuring that duties are performed properly” (matters set
forth in each Item of Article 131 of the Corporate Calculation Regulations) were maintained inaccordance with the “Quality Management Standards Regarding Audits” (Business Accounting
Council, October 28, 2005) and other relevant standards, and sought explanations as necessary.
Based on the above methods, we examined the business report and supporting schedules, financial
statements (balance sheet, statement of income, statement of changes in net assets, and notes tonon-consolidated financial statements) and supporting schedules, and consolidated financial statements(consolidated balance sheet, consolidated statement of income, consolidated statement of changes in net
assets, and notes to consolidated financial statements) for the current fiscal year.
2. Result of audit(1) The Report of Business Operations
1) In our opinion, the business report and supporting schedules are in accordance with the related laws
and regulations and Articles of Incorporation, and fairly represent the Company’s condition.
2) With regard to the execution of the duties of the Directors, we have found no evidence of wrongfulaction or material violation of the relevant laws and regulations, nor of any violation with respect to34

[English Translation of Convocation Notice Originally Issued in the Japanese Language]
the Articles of Incorporation.
3) In our opinion, the contents of the resolutions of the Board of Directors regarding the internal
control system are fair and reasonable. In addition, we have found no matters on which to remark inregard to the execution of the duties of the Directors regarding the internal control system, including
the one associated with financial reports.
(2) Audit result of the Financial Statements and supporting schedules
In our opinion, the audit procedures and audit results received from the independent auditor KPMG
AZSA LLC are appropriate.
(3) Audit result of the Consolidated Financial Statements and consolidated supporting schedules
In our opinion, the audit procedures and audit results received from the independent auditor KPMG
AZSA LLC are appropriate.
May 13, 2016
Audit & Supervisory Board,
SEGA SAMMY HOLDINGS INC.
Tomio Kazashi, Standing Audit & Supervisory Board Member(Outside Audit & Supervisory Board Member)
Toshio Hirakawa, Outside Audit & Supervisory Board Member
Yukito Sakaue, Audit & Supervisory Board Member
Mineo Enomoto, Outside Audit & Supervisory Board Member

35

[English Translation of Convocation Notice Originally Issued in the Japanese Language]

Reference Documents for General Meeting of Shareholders
Proposals and reference information
Proposal 1: To amend certain parts of the Articles of Incorporation
1. Reasons for the amendments(1) The Company will add the purposes of companies that have newly entered the SEGA SAMMY Groupand the purposes newly established at subsidiaries of the Company to the existing proposes, in order tocontrol and manage those companies and subsidiaries as a holding company and amend them as
required.
(2) In line with the change in paragraph numbering for the provision of the Companies Act associated withthe enforcement of the Act for Partial Revision of the Companies Act (Act No. 90 of 2014), theCompany will make a necessary change to the provision referred to in Article 40, paragraph 3 of thecurrent Articles of Incorporation which provides for the election of Substitute Audit & Supervisory
Board Members.
2. Details of the amendments
The details of the amendments in the Articles of Incorporation are as follows:(The modified parts are indicated by underlining.)
Present Articles of Incorporation
Article 1

Proposed Amendment
Article 1(Omitted)

Article 2 (Purpose)
The purpose of the Company shall be: tomanage and control the business activities of
the corporations that conduct the following
businesses and businesses equivalent thereto
and to engage in operations incidental thereto
by owning shares in such corporations:

Article 2 (Purpose)(1) to (8)(1) to (8)(Omitted)(Unchanged)(Unchanged)(Unchanged)(9) Planning, development, manufacture,marketing, importing and exporting of gems,
precious metals, antiques, cameras, stationery,books, magazines, musical instruments, sports
gear, DIY tools, gardening tools, fertilizers,
feed, soil conditioners, automobiles, automobile
parts, automobile goods, bicycles, food, dietary
supplement, food for specified health use,alcoholic beverages, soft drinks, tobaccos, daily
necessities, system equipment for emergency
notification for the prevention of crimes, fires
and disaster damages, disposal units ofindustrial wastes (kitchen garbage),photovoltaic generators, food processing
machines and equipment;(9) Planning, development, manufacture,marketing, importing and exporting of gems,
precious metals, antiques, cameras, stationery,books, magazines, musical instruments, sports
gear, DIY tools, gardening tools, trees forgardening, plants, gardening materials and fresh
flowers, fertilizers, feed, soil conditioners,
automobiles, automobile parts, automobile
goods, bicycles, food, pharmaceutical products,
dietary supplement, food for specified healthuse, alcoholic beverages, soft drinks, daily
necessities, system equipment for emergency
notification for the prevention of crimes, fires
and disaster damages, disposal units ofindustrial wastes (kitchen garbage),photovoltaic generators, food processing
machines and equipment;(10) to (34)(10) to (34)

(Omitted)(35) Gardening construction and forestry
management businesses;(Unchanged)(35) Gardening construction, forestry management,
and planting management businesses;

36

[English Translation of Convocation Notice Originally Issued in the Japanese Language]

Present Articles of Incorporation(36) to (51)

Proposed Amendment(36) to (51)(Omitted)(Unchanged)(52) Sale and purchase, leasing, administration andintermediacy of real estate;(52) Sale and purchase, leasing, administration,cleaning and intermediacy of real estate;(53) to (58)(53) to (58)

(Omitted)(Newly established)(59) Printing and bookbinding, procurement andmanagement of office supplies and equipment,
filing service, office automation equipment
operation service, outsourced clerical works andaccounting works;(Newly established)(60) Sale of tobacco, salt, stamps and revenue
stamps, as well as agency and intermediaryservice for such sale;(Newly established)(61) Acupuncture, moxibustion and massage
services;(Newly established)(62) Maintenance and management of office security
systems;(Newly established)(63) Outsourced automobile operation management
service and related consulting service;(Newly established)(64) Waste collection and disposal service;(Newly established)(65) Debugging service for various software andhardware-related appliances;(Newly established)(66) Contract manufacturing line service;(59) Operation to manage and control the businessactivities of the corporations that conduct thebusinesses set forth in each of the preceding
items and businesses equivalent thereto byowning shares in such corporations.

(67)

2.

2.

(Omitted)

Article 3 to 39(Unchanged)(Unchanged)(Unchanged)

Article 3 to 39(Omitted)(Unchanged)

Article 40 (Term of office of Audit & Supervisory
Board Members)(Omitted)

Article 40 (Term of office of Audit & Supervisory
Board Members)(Unchanged)

2.

2.

3.

(Omitted)A resolution for election of Substitute Audit &Supervisory Board Members adopted inaccordance with Article 329, paragraph 2 of theCompanies Act shall be effective until theconclusion of the ordinary general meeting ofshareholders pertaining to the last fiscal year
ending within one year after their election.

4.
Article 41 to 55

3.

(Unchanged)
A resolution for election of Substitute Audit &Supervisory Board Members adopted inaccordance with Article 329, paragraph 3 of theCompanies Act shall be effective until theconclusion of the ordinary general meeting ofshareholders pertaining to the last fiscal year
ending within one year after their election.

4.

(Omitted)

Article 41 to 55(Omitted)

37(Unchanged)(Unchanged)

[English Translation of Convocation Notice Originally Issued in the Japanese Language]
Proposal 2: To elect eight (8) Directors
The terms of office of all nine (9) Directors will expire at the conclusion of this Ordinary General Meetingof Shareholders. Accordingly, we are seeking to elect eight (8) Directors.
The nominees for Directors are as described below:
Nominee
No.

1

Name
(Date of Birth)

Hajime Satomi(January 16, 1942)

Brief Career Profile, Important Concurrent Duties outside the Company,
Title and Area of Responsibilities at the Company
Mar.

1980

Nov.
Feb.

2003
2004

May

2004

Jun.

2004

Jun.

2004

Oct.

2004

Mar.

2005

Jun.
Jun.

2005
2005

Dec.

2006

May

2007

Jun.

2007

May

2008

Apr.
Jun.

2012
2012

Jul.

2012

May

2013

Apr.

2015

President and Representative Director of Sammy Industry Co.,
Ltd. (now Sammy Corporation)
Chairman and Director of Sammy NetWorks Co., Ltd.
Chairman and Representative Director of SEGACORPORATION (now SEGA Games Co., Ltd.)
Chairman of JAMMA (JAPAN AMUSEMENT MACHINERYMANUFACTURES ASSOCIATION) (now Japan Amusement
Machinery Manufacturers Association) (current position)
Chairman, Representative Director and Chief Executive
Officer of Sammy Corporation
Chairman, CEO and Representative Director of SEGACORPORATION (now SEGA Games Co., Ltd.)
Chairman of the Board and Chief Executive Officer of theCompany (current position)
Senior Advisor to NICHIYUKYO (Japan Play Equipment
Industry Association) (current position)
Chairman and Director of SEGA TOYS CO., LTD.
Chairman and Director of TMS ENTERTAINMENT CO.,LTD.
Chairman of Japan Amusement Industry Association(current position)
Chairman of NDK (Japan Electric Game Manufacturers’
Association)
President, Representative Director, Chief Executive Officer
and Chief Operating Officer of SEGA CORPORATION (nowSEGA Games Co., Ltd.)
Chairman, Representative Director and Chief Executive
Officer of the above
Chairman of Sammy Corporation
Chairman and Director of PHOENIX RESORT CO., LTD.
(current position)
Director of SEGA Networks Co., Ltd (now SEGA Games Co.,
Ltd.)
Chairman, Representative Director and Chief Executive
Officer of Sammy Corporation (current position)
Chairman, Representative Director and Chief Executive
Officer of SEGA Holdings Co., Ltd. (current position)
Advisor to NDK (current position)

Number of theCompany’s
Shares Owned

31,869,338
sharesJun.
2015[Reason for nomination as candidate for Director]
Mr. Hajime Satomi has demonstrated leadership over many years as the CEO of the Company and Group companies andcontributed to the development of the Group.
We seek appointment of Mr. Hajime Satomi as Director as we expect he will continue to benefit the decision making of theCompany’s Board of Directors with such wealth of experience and career record and hard-earned insight and contribute toimproving the corporate value of the Company.

38

[English Translation of Convocation Notice Originally Issued in the Japanese Language]

Nominee
No.

2

Name
(Date of Birth)

Naoya Tsurumi(February 8, 1958)

Brief Career Profile, Important Concurrent Duties outside the Company,
Title and Area of Responsibilities at the Company
Mar.
Dec.

1992
2004

Sep.
Jun.

2005
2006

Jun.
Oct.
May

2006
2006
2008

Jun.

2009

Sep.
Apr.

2009
2012

May

2012

Jun.
Jun.
Jul.

2012
2012
2012

Sep.

2013

Apr.

2014

Apr.

2014

Jun.

2014

Jun.

2014

Apr.

2015

May

2015

Jun.

2015

Joined Sega Enterprises, Ltd. (now SEGA Games Co., Ltd.)
Executive Officer of SEGA CORPORATION (now SEGA
Games Co., Ltd.)CEO of SEGA PUBLISHING EUROPE LTD.
Senior Executive Officer of SEGA CORPORATION (nowSEGA Games Co., Ltd.)CEO and President of SEGA HOLDINGS U.S.A., INC.
Chairman of SEGA OF AMERICA, INC.
Director, General Manager of Overseas Consumer Business
Division of SEGA CORPORATION (now SEGA Games Co.,Ltd.)Managing Director of General Manager of Consumer Business
Division of the above
Chairman of SEGA EUROPE LTD.
President, Representative Director and Chief Operating Officer
of SEGA CORPORATION (now SEGA Games Co., Ltd.)
Vice Chairman and CEO of Sega Jinwin (Shanghai)
Amusements Co., Ltd.
CEO and President of SEGA HOLDINGS EUROPE LTD.
Director of the Company
Director of SEGA Networks, Co., Ltd. (now SEGA Games
Co., Ltd.)
President and Representative Director of SEGA DREAMCORPORATION (now ATLUS. CO., LTD.)
Vice Chairman of SEGA CORPORATION (now SEGA Games
Co., Ltd.)
Senior Managing Director and Representative Director of theCompany (current position)
Vice Chairman and Director of PHOENIX RESORT CO.,LTD. (current position)
Member of the Board of Directors of PARADISESEGASAMMY Co., Ltd. (current position)
Vice Chairman of the Board of SEGA Holdings Co., Ltd.
(current position)
Chairman, Representative Director and President of SEGALIVE CREATION Inc. (current position)
Chairman and Director of Sega Sammy Golf Entertainment
Inc. (current position)
President of SEGA SAMMY BUSAN INC. (current position)

Number of theCompany’s
Shares Owned

12,100sharesJun.
2015[Reason for nomination as candidate for Director]
Mr. Naoya Tsurumi has been promoting the Resort Business, one of the main focuses of the Company, with his wealth ofexperience as a corporate manager of the Company and Group companies.
We seek appointment of Mr. Naoya Tsurumi as Director as we expect he will continue to benefit the decision making of theCompany’s Board of Directors with such experience and career record and contribute to improving the corporate value of theCompany.

39

[English Translation of Convocation Notice Originally Issued in the Japanese Language]

Nominee
No.

3

Name
(Date of Birth)

Koichi Fukazawa(November 2,
1965)

Brief Career Profile, Important Concurrent Duties outside the Company,
Title and Area of Responsibilities at the Company
Apr.

1990

Jul.
Aug.

2003
2003

Oct.

2004

Oct.

2004

Jun.

2005

Jan.

2007

Aug.

2007

May

2008

Apr.

2009

Jun.

2009

Apr.

2014

Joined The Sanwa Bank, Limited (now The Bank ofTokyo-Mitsubishi UFJ, Ltd.)
Joined Sammy Corporation
Executive Officer and General Manager of the President’s
Office of the above
Executive Officer and General Manager of the President’s
Office of the Company
Executive Officer and General Manager of Chairman andPresident’s Office of SEGA CORPORATION (now SEGA
Games Co., Ltd.)
Director and General Manager of Chairman and President
Office of the above
President and Representative Director of SEGA SAMMYASSET MANAGEMENT INC. (now MARZA ANIMATION
PLANET INC.)
Senior Executive Officer and in charge of the
Corporate Strategy and External Affairs of the Company
Director and Division Manager of New Business Division of
SEGA CORPORATION (now SEGA Games Co., Ltd.)
Officer of Keizai Doyukai (Japan Association of Corporate
Executives) (current position)
President and Representative Director of SEGASAMMY
VISUAL ENTERTAINMENT INC. (now MARZAANIMATION PLANET INC.)
Senior Managing Director and Representative Director of
SEGA TOYS CO., LTD.
Director of the above (current position)
Director of the Company (current position)

Number of theCompany’s
Shares Owned

20,000shares

Apr.
2015
Jun.
2015
[Reason for nomination as candidate for Director]
Mr. Koichi Fukazawa has contributed to improving corporate earnings through his wealth of experience as a corporate managerof the Company and Group companies.
We seek appointment of Mr. Koichi Fukazawa as Director as we expect he will continue to benefit the decision making of theCompany’s Board of Directors with such wealth of experience and career record and contribute to improving the corporate valueof the Company.

40

[English Translation of Convocation Notice Originally Issued in the Japanese Language]

Nominee
No.

4

Name
(Date of Birth)

Haruki Satomi(January 11, 1979)

Brief Career Profile, Important Concurrent Duties outside the Company,
Title and Area of Responsibilities at the Company
Apr.

2001

Mar.
Jan.
Oct.
Oct.
Jul.

2004
2005
2005
2005
2009

Oct.

2011

Nov.
Apr.
Jun.
Jun.

2011
2012
2012
2012

Jun.
Jul.

2012
2012

Apr.
Jun.
Nov.

2014
2014
2014

Apr.

2015

Apr.

2015

Apr.
Apr.
Apr.
Nov.
Apr.

2015
2015
2015
2015
2016

Apr.

2016

Joined KOKUSAI Securities Co., Ltd. (now Mitsubishi UFJ
Morgan Stanley Securities Co., Ltd.)
Joined Sammy Corporation
Joined SEGA CORPORATION (now SEGA Games Co., Ltd.)
Director of SEGA OF AMERICA, INC.
Director of Sega Holdings U.S.A., INC.
Vice President of Digital Business of SEGA OF AMERICA,
INC.
Senior Vice President of Digital Business of SEGA OFAMERICA, INC.
Director of Sammy NetWorks Co., Ltd.
President, Representative Director (CEO) of the above
Director of SEGA OF AMERICA, INC.
Director of SEGA CORPORATION (now SEGA Games Co.,Ltd.)
Director of the Company (current position)
President and CEO, Representative Director of SEGA
Networks Co., Ltd. (now SEGA Games Co., Ltd.)
Director of Sammy Corporation
Director of Sanrio Company, Ltd. (current position)
Executive Vice President and Representative Director of SEGACORPORATION (now SEGA Games Co., Ltd.)
Executive Vice President and Representative Director of SEGA
Holdings Co., Ltd. (current position)
President, Representative Director and Chief Executive Officer
of SEGA Games Co., Ltd. (current position)
Chairman of SEGA OF AMERICA, INC.
Chairman of Sega Europe Ltd.
Chairman of the Board of Directors of SEGA Networks Inc.
Vice President, Representative Director of Sammy Corporation
President, Representative Director and COO of the above(current position)
Chairman, Representative Director of Sammy NetWorks Co.,
Ltd. (current position)
Director of SEGA OF AMERICA, INC. (current position)
Director of Sega Europe Ltd. (current position)

Number of theCompany’s
Shares Owned

3,026,961
shares

Apr.
2016
Apr.
2016
[Reason for nomination as candidate for Director]
Mr. Haruki Satomi has demonstrated leadership as Director of the Company, President, Representative Director of a subsidiary(Sammy Corporation) and corporate manager of Group companies and contributed to the improvement of corporate earnings.
We seek appointment of Mr. Haruki Satomi as Director as we expect he will continue to benefit the decision making of theCompany’s Board of Directors with such experience and career record and leadership and contribute to improving the corporate
value of the Company.

41

[English Translation of Convocation Notice Originally Issued in the Japanese Language]

Nominee
No.

5

Name
(Date of Birth)

Hideki Okamura(February 1, 1955)

Brief Career Profile, Important Concurrent Duties outside the Company,
Title and Area of Responsibilities at the Company
Jan.
Jun.

1987
1997

Jun.

2000

Jun.

2002

Jun.

2003

Jun.
Jun.

2004
2004

Oct.
Jun.

2004
2007

Jun.

2008

Apr.
Apr.

2014
2014

Jun.
Apr.

2014
2015

Apr.
Apr.

2015
2015

Apr.

2015

Apr.

2015

Apr.

2015

Apr.

2015

May

2015

Sep.

2015

Joined Sega Enterprises, Ltd. (now SEGA Games Co., Ltd.)
Director and Deputy Division Manager of Consumer BusinessGroup Division, General Manager of Saturn Business Divisionof the above
Director in charge of Dreamcast Business Division of theabove
Vice President and Representative Director of DigiCube Co.,Ltd.
Senior Executive Officer, Division Manager of Consumer
Business Group Division of SEGA CORPORATION (nowSEGA Games Co., Ltd.)
Director of TMS ENTERTAINMENT CO., LTD.
Managing Director, Division Manager of Consumer BusinessGroup Division of SEGA CORPORATION (now SEGA
Games Co., Ltd.)
Director of the Company
Director of SEGA CORPORATION (now SEGA Games Co.,Ltd.)
President and Representative Director of TMS
ENTERTAINMENT CO., LTD.
Vice Chairman and Director of the above
President, Representative Director and COO of SEGACORPORATION (now SEGA Games Co., Ltd.)
Director of the Company (current position)
President, Representative Director and Chief Operating Officer
of SEGA Holdings Co., Ltd. (current position)
Chairman of the Board of SEGA Games Co., Ltd.
Chairman of the Board of SEGA Interactive Co., Ltd. (current
position)
Chairman, Representative Director of TMS
ENTERTAINMENT Co., LTD. (current position)
Chairman, Representative Director of SEGA TOYS CO., LTD.
(current position)
Chairman, Representative Director of MARZA ANIMATION
PLANET INC. (current position)
Chairman, Representative Director of DARTSLIVE Co., Ltd.
(current position)
Chairman, Representative Director of SEGA Games Co., Ltd.
(current position)
President, Director of SEGA ENTERTAINMENT Co., Ltd.
(current position)

Number of theCompany’s
Shares Owned

19,112shares[Reason for nomination as candidate for Director]
Mr. Hideki Okamura has contributed to the improvement of corporate earnings in such positions as Director of the Company,
President and Representative Director of a subsidiary (SEGA Holdings Co., Ltd.).
We seek appointment of Mr. Hideki Okamura as Director as we expect he will continue to benefit the decision making of theCompany’s Board of Directors with such experience and career record and contribute to improving the corporate value of theCompany.

42

[English Translation of Convocation Notice Originally Issued in the Japanese Language]

NomineeNo.

Name(Date of Birth)

Brief Career Profile, Important Concurrent Duties outside the Company,
Title and Area of Responsibilities at the Company

Joined Tohato Tokyo Seika Co., Ltd. (now Tohato Inc.)
Joined General Aircon Inc. (now GAC CORPORATION)
Registered with the Japan Federation of Bar Associations(current position)
Apr.
1981 Joined Yanagita Sakuragi Law OfficeSep.
1984 Partner of Lillick McHose and Charles Law Office (nowPilsbury Winthrop Shaw Pittman LLP) (current position)
Yuji Iwanaga
6−(April 3, 1941)
Dec.
1984 Registered with the State Bar of California (current position)
Apr.
2003 Outside Director of Manufacturers Bank
Jun.
2005 Outside Director of JMS North America Corporation (current
position)Jun.
2006 Outside Director of TAIYO YUDEN CO., LTD.
(current position)
Jun.
2007 Outside Director of the Company (current position)[Reason for nomination as candidate for Outside Director]
We seek appointment of Mr. Yuji Iwanaga as Outside Director as we deem him capable of appropriately executing his duties as
an Outside Director from his expert vantage point as an international lawyer, considering his very successful career related to theinternational corporate legal affairs of global corporations and his in-depth insight relating to management.
Apr.
1988 Joined TOKYO GAS Co., Ltd.
Sep.
1997 Joined NTT Mobile Communications Network, Inc. (now NTT
DOCOMO, Inc.)
Jun.
2005 Executive Officer and General Manager of Multimedia
Services Department of the aboveMay
2008 Guest Professor, Graduate School of Media and Governance of
Keio UniversityJun.
2008 Outside Director of the Company (current position)
Jun.
2008 Director of PIA Corporation (current position)
Jun.
2008 Outside Director of transcosmos inc. (current position)
2,000
Takeshi Natsuno
7
Jun.
2008 Director of NTT Resonant Inc. (current position)(March 17, 1965)
sharesDec.
2008 Director of DWANGO Co., Ltd. (current position)
Jun.
2009 Outside Director of DLE, Ltd. (current position)
Sep.
2009 Outside Director of GREE, Inc. (current position)Dec.
2010 Outside Director of U-NEXT Co., Ltd. (current position)
Apr.
2013 Guest Professor, Faculty of Environment and Information
Studies of Keio University
Nov.
2013 Guest Professor, Graduate School of Media and Governance of
Keio University (current position)Oct.
2014 Director, Member of the Board of KADOKAWA DWANGOCORPORATION (current position)[Reason for nomination as candidate for Outside Director]
We seek appointment of Mr. Takeshi Natsuno as Outside Director as we deem that he will continue to provide valuable opinions
and suggestions on the management of the Company based on his wealth of experience and broad-ranging insight gained overmany years as a corporate manager.
Apr.
Sep.
Apr.

1964
1970
1981

Number of theCompany’s
Shares Owned

43

[English Translation of Convocation Notice Originally Issued in the Japanese Language]

NomineeNo.

Name(Date of Birth)

Brief Career Profile, Important Concurrent Duties outside the Company,
Title and Area of Responsibilities at the Company
Apr.

Number of theCompany’s
Shares Owned

1974

Joined Sumitomo Bank (now Sumitomo Mitsui Banking
Corporation)
Apr.
2001 Executive Officer, Head of Osaka Corporate Banking Division
II of Sumitomo Mitsui Banking Corporation
Apr.
2005 Managing Executive Officer, Deputy Head of Whole sale
Banking Unit (in charge of East Japan) of the above*Kohei Katsukawa
8
−
Jun.
2007
Executive Vice President and Representative Director of NIF(January 8, 1951)
SMBC Ventures Co., Ltd. (now SMBC Venture Capital Co.,
Ltd.)
Jul.
2010 President and Representative Director of SMBC Venture
Capital Co., Ltd.
Apr.
2014 President and Representative Director of GINSEN Co., Ltd.
(current position)[Reason for nomination as candidate for Outside Director]
We seek appointment of Mr. Kohei Katsukawa as Outside Director as we deem him capable of providing valuable opinions andsuggestions on the management of the Company based on his wealth of experience and broad-ranging insight gained over many
years as a corporate manager.
(A nominee marked with “*” is a new nominee for Director.)
Notes: 1. The Company conducts transactions relating to intermediary services for insurance with FSC Co., Ltd., of which Mr.
Hajime Satomi and Mr. Haruki Satomi own a majority of voting rights.
2. There are no special interests between the Company and the other Director-nominees.
3. Mr. Yuji Iwanaga, Mr. Takeshi Natsuno and Mr. Kohei Katsukawa are Outside Director-nominees. The Company
has notified the Tokyo Stock Exchange (TSE) of inauguration of Mr. Yuji Iwanaga and Mr. Takeshi Natsuno as
independent directors under the regulations of TSE. The Company intends to notify the Tokyo Stock Exchange (TSE)of inauguration of Mr. Kohei Katsukawa as independent director under the regulations of TSE, if he is elected andassumes the position as Outside Director.
4. The Company has concluded a limited liability agreement limiting the amount of the liability limit to the minimum
liability limit provided for under laws and regulations with Mr. Yuji Iwanaga and Mr. Takeshi Natsuno, respectively.
If the proposal to elect Directors is approved at the Ordinary General Meeting, the Company plans to conclude
limited liability agreements limiting the amount of the liability limit to the minimum liability limit provided for underlaws and regulations with Mr. Yuji Iwanaga, Mr. Takeshi Natsuno, and Mr. Kohei Katsukawa.
5. Mr. Yuji Iwanaga and Mr. Takeshi Natsuno shall have served as Outside Directors of the Company for nine years andeight years, respectively, at the conclusion of this Ordinary General Meeting of Shareholders.
6. Mr. Takeshi Natsuno has formerly served as Outside Director of the Company subsidiary SEGA Networks Co., Ltd.
now SEGA GAMES Co., Ltd.).
7. Other positions and responsibilities held at the Company by each of the candidates who is currently serving as
Director of the Company are stated in “1. Directors and Audit & Supervisory Board Members (As of March 31,2016)” of “IV Company Directors and Audit & Supervisory Board Members” of the Business Report.

44

[English Translation of Convocation Notice Originally Issued in the Japanese Language]
Proposal 3: To elect one (1) Audit & Supervisory Board Member
Audit & Supervisory Board Member Toshio Hirakawa will resign at the conclusion of this Ordinary General
Meeting of Shareholders. Accordingly, we are seeking the election of one (1) Audit & Supervisory Board
Member.
The term of office of Shigeru Aoki, the nominee for Audit & Supervisory Board Member, shall be theremaining term of the Audit & Supervisory Board Member who has retired from office according to the
Articles of Incorporation since the nominee is to be elected as the substitute for Audit & Supervisory Board
Member Toshio Hirakawa.
We have obtained the consent of the Audit & Supervisory Board with respect to the submission of this
proposal.
The nominee for Audit & Supervisory Board Member is as described below:
Name(Date of Birth)

Brief Career Profile, Important Concurrent Duties outside the Company
and Title at the Company
May

Number of theCompany’s
Shares Owned

2005

Joined SEGA CORPORATION (now SEGA Games Co., Ltd.)as Head CouncilorJun.
2005 Corporate Officer and General Manager of Office of China andAsia Business Management of the above
Aug. 2006 President of Sega Networks (China) Co., Ltd.
Jun.
2008 Executive Officer and General Manager of Business
Administration Department of Sammy Corporation
Aug. 2008 Executive Officer and General Manager of Corporate Divisionof the above*Shigeru Aoki
24,000(January 3, 1952)
Apr.
2009 Director and General Manager of Corporate Division of thesharesabove
Jun.
2011 Managing Director and General Manager of Corporate
Division of the above
Apr.
2012 President, Representative Director and COO of the aboveJun.
2013 Director of the Company (current position)May
2015 Supervisor of Japan Pachinko Machine Industry Association
Apr.
2016 Vice Chairman, Representative Director of Sammy
Corporation (current position)[Reason for nomination as candidate for Audit & Supervisory Board Member]
We seek appointment of Mr. Shigeru Aoki as Audit & Supervisory Board Member as we deem that his knowledge asa corporate manager and insight into corporate ethics and corporate governance, which he has gained from such roles
as Director of the Company and President, Representative Director of a subsidiary (Sammy Corporation), makes him
capable of providing appropriate advice and suggestions to the management of the Company.
(A nominee marked with “*” is a new nominee for Audit & Supervisory Board Member.)Notes: 1. There are no special interests between Mr. Shigeru Aoki and the Company.
2. Mr. Shigeru Aoki plans to retire as Director of the Company and Director of a subsidiary (Sammy Corporation) on
June 17, 2016.
3. If the proposal to elect an Audit & Supervisory Board Member is approved at the Ordinary General Meeting, theCompany plans to conclude a limited liability agreement limiting the amount of the liability limit to the minimum
liability limit provided for under laws and regulations with Mr. Shigeru Aoki.

45

[English Translation of Convocation Notice Originally Issued in the Japanese Language]
Proposal 4: To elect one (1) Substitute Audit & Supervisory Board Member
We are seeking to elect one (1) Substitute Outside Audit & Supervisory Board Member, in preparation for thecase where the number of Outside Audit & Supervisory Board Members becomes less than the number
prescribed by the laws and regulations.
We have obtained the consent of the Audit & Supervisory Board with respect to the submission of this
proposal.
The nominee for Substitute Audit & Supervisory Board Member is as described below:
Name(Date of Birth)

Brief Career Profile, Important Concurrent Duties outside the Company
and Title at the Company
Apr.

Number of theCompany’s
Shares Owned

1971

Joined Yamaka Securities Co., Ltd. (now NAITO Securities
Co., Ltd.)
Jun.
1995 Director and Manager of Corporate Department of the above
Feb.
1998 Managing Director of the above
Oct.
1998 Managing Executive Officer and General Manager ofCorporate Division of Japan Global Securities Co., Ltd. (nowNAITO Securities Co., Ltd.)
Apr.
1999 Joined Tokai Maruman Securities Co., Ltd. (now Tokai Tokyo
Securities Co., Ltd.) as Manager of Tokyo Finance Corporate
Department
Oct.
2000 In deputy charge of Institutional Investors Sales Department,
Tokyo Finance Corporate Department and Manager of Tokyo
Finance Corporate Department of Tokai Tokyo Securities Co.,Ltd.
*Takayoshi
11,655
Feb.
2002 Executive Officer in charge of Tokyo Business Corporate
Matsuzawa
sharesDepartment, Institutional Investors Sales Department, Tokyo(June 24, 1948)
Finance Corporate Department, Tokyo Corporation
Development Department, and Tokyo Corporate
Administrative Department of the above
Apr.
2006 Advisor of Utsunomiya Securities Co., Ltd.
Jun.
2006 Managing Director and General Manager of Administrative
Division of the aboveJun.
2008 Advisor of Tokai Tokyo Securities Co., Ltd.
Aug. 2009 Audit & Supervisory Board Member of Sammy Corporation(current position)
Jun.
2011 Audit & Supervisory Board Member of Joint Master, Inc.
(current position)
Jun.
2015 Audit & Supervisory Board Member of TAIYO ELEC Co.,
Ltd. (current position)[Reason for nomination as candidate for Substitute Outside Audit & Supervisory Board Member]
We seek appointment of Mr. Takayoshi Matsuzawa as Substitute Audit & Supervisory Board Member as we deemthat his insight into corporate ethics and corporate governance, which he has gained from such roles as Audit &Supervisory Board Member of a subsidiary (Sammy Corporation) makes him capable of providing appropriate advice
and suggestions to the management of the Company.
(A nominee marked with “*” is a new nominee for Substitute Audit & Supervisory Board Member.)Notes: 1. There are no special interests between Mr. Takayoshi Matsuzawa and the Company.
2. Mr. Takayoshi Matsuzawa is an Audit & Supervisory Board Member of our subsidiaries (i.e. Sammy Corporation,
Joint Master, Inc. and TAIYO ELEC Co., Ltd.)
3. Mr. Takayoshi Matsuzawa is a candidate for Substitute Outside Audit & Supervisory Board Member.
4. The Company intends to notify the Tokyo Stock Exchange (TSE) of the inauguration of Mr. Takayoshi Matsuzawa as
independent director under the regulations of TSE, if he assumes the position as Outside Audit & Supervisory Board
Member.
5. When Mr. Takayoshi Matsuzawa assumes the position as Outside Audit & Supervisory Board Member, the Company
plans to conclude a limited liability agreement limiting the amount of the liability limit to the minimum liability limit
provided for under laws and regulations with him.

46

[English Translation of Convocation Notice Originally Issued in the Japanese Language]
Proposal 5: To issue share subscription rights as share options to Directors
The current annual remuneration amount to Directors was approved to be within ¥1 billion (excluding
employee salaries paid to Directors who concurrently serve as employees) at the 8th Ordinary General
Meeting of Shareholders held on June 19, 2012. We propose issuing share subscription rights as shareoptions to the Directors excluding Outside Directors, of the Company to be within the annual amount of¥130 million in addition to the above-mentioned remuneration for Directors.
This remuneration excludes the employee salaries paid to Directors who concurrently serve as employees.
The number of Directors excluding Outside Directors will be five (5) if Proposal 2 is approved as originallyproposed.
1. Reasons why it is appropriate to grant the share subscription rights as remuneration of the Directors of
the Company
The share options will be granted in order to raise the motivation of the Directors of the Company toimprove business performance, and to promote management which puts into consideration ourshareholders as well as the stock price.
2. Outline of the share subscription rights(1) Total number of the share subscription rights to be issued
The maximum total number of the share subscription rights shall be 2,500 units. If it is appropriate toadjust the relevant number of shares because of a merger, issuance of shares for subscription, acompany split, a share split or consolidation of shares in which the Company engages, the Company
shall make such adjustment which it considers necessary.
(2) Class and number of shares to be issued upon exercise of the share subscription rights
The maximum total number of shares issued upon the exercise of the share subscription rights shall be
250,000 common shares of the Company. The number of shares to be issued upon exercise of one (1)unit subscription right shall be 100 shares.
If it is appropriate to adjust the number of shares because of a merger, issuance of shares forsubscription, a company split, a share split or consolidation of shares in which the Company engages,
the Company shall make such adjustment which it considers necessary.
(3) Cash payment for the share subscription rights
No cash payment will be required for the share subscription rights.
(4) Amount of property to be contributed upon the exercise of the share subscription rights
The amount of property to be contributed upon the exercise of the share subscription rights shall be theamount to be gained by multiplying the amount of property paid for one (1) share to be received upon
the exercise of the share subscription rights (hereinafter referred to as the “Exercise Price”) by the
number of shares underlying the relevant share subscription rights.
The Exercise Price shall be the amount to be gained by multiplying 1.05 by the average closing price ofregular transactions of the common shares of the Company at the Tokyo Stock Exchange on each day(excluding days where a transaction is not closed) of the month preceding the month in which the sharesubscription rights were allotted, and any fractional amount of less than one (1) yen resulting from suchcalculation shall be rounded up. However, if the amount is smaller than the closing price on the day
preceding the allotment day of the share subscription rights (if the closing price is not available, theclosing price of the latest day prior to the day will be adopted), the closing price shall be the Exercise
Price.
If it is appropriate to adjust the Exercise Price because of a merger, issuance of shares for subscription,
a company split, a share split or consolidation of shares in which the Company engages, the Company
shall make such adjustment which it considers necessary.
47

[English Translation of Convocation Notice Originally Issued in the Japanese Language](5) Fair value of the share subscription rights
It shall be based on the fair evaluation value to be computed based on the Black-Scholes formula inaccordance with various terms such as the Exercise Price.
(6) Period during which the share subscription rights are exercisable
Such period shall be two (2) years from the day on which two (2) years have passed since the day after
the day on which the share subscription rights were allotted.
(7) Terms for the excise of the share subscription rights
A person who has received the allotment of the share subscription rights must be a Director of theCompany or in a position equivalent to this as well when the share subscription rights are exercised.
However, this does not apply to a case where there is a valid reason, such as retirement due to the
expiration of his/her term of office or other reason equivalent to this.
(8) Restriction on acquisition of the share subscription rights by assignment
An acquisition of the share subscription rights by assignment requires the approval of the Board of
Directors of the Company.
(9) Capital stock and legal capital surplus that will be increased in cases where shares will be issued as aresult of the exercise of share subscription rights(i) Capital stock that will be increased in cases where common shares of the Company will be issued asa result of the exercise of share subscription rights must be a half of the maximum capital increaseamount obtained by the calculation pursuant to Article 17 of the Corporate Accounting Rules. If theobtained figure has a fraction less than ¥1, the figure is rounded up to the nearest yen.
(ii) Legal capital surplus that will be increased in cases where common shares of the Company will be
issued as a result of the exercise of share subscription rights must be the amount obtained bysubtracting the capital stock to be increased as specified in (i) above from the maximum capitalincrease amount described in (i) above.
(10) Other matters concerning the share subscription rights
Other matters concerning the share subscription rights shall be determined by the Board of Directors of
the Company, which determines the subscription requirements of the share subscription rights.

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