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

Start date of electronic provision: May 31, 2024

Notice of convocation of general meeting of shareholders
for the fiscal year ended March 31, 2024
(Items omitted from printed documents)

May 31, 2024

SEGA SAMMY HOLDINGS INC.

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

Contents
1. Company stock options, etc............................................................................................................................. 3
2. Accounting auditor .......................................................................................................................................... 4
3. Overview of structures for ensuring the propriety of business operations and the state of their operation ..... 5
4. Consolidated statement of changes in shareholders’ equity .......................................................................... 10
5. Notes on the consolidated financial statements ............................................................................................. 12
6. Non-consolidated statement of changes in shareholders’ equity ................................................................ 32
7. Notes on the non-consolidated financial statements ...................................................................................... 33

The items above are omitted from documents issued to shareholders who request printed documents inaccordance with applicable laws, regulations, and Article 16 of the Company Articles of Incorporation.

2

[English Translation of Convocation Notice Originally Issued in the Japanese Language]Company stock options, etc.
1. Overview of details of stock options issued in consideration of duties executed held by Company
officers on the ending date of the current fiscal year
Not applicable2.

Overview of details of issue of stock options in consideration of duties executed to Company
employees and officers and employees of subsidiaries during the current fiscal year
Not applicable3

[English Translation of Convocation Notice Originally Issued in the Japanese Language]
Accounting auditor
1. Name
KPMG AZSA LLC
2.

Contracts limiting the liability of the accounting auditor
In its second ordinary general meeting of shareholders held June 20, 2006, the Company amended the
Articles of Incorporation to establish provisions regarding contracts limiting the liability of theaccounting auditor. However, no contract limiting the liability of the accounting auditor KPMG AZSALLC has been concluded.

3.

Amounts of remuneration, etc.
Amount paid
Amount of remuneration, etc. for the current fiscal year

¥162 million

Total amount of monetary and other financial gains payable by the Company andits subsidiaries to the accounting auditor¥276 million

Notes: 1. Company consolidated subsidiaries including Sega Europe Ltd. are audited by audit firms
other than the Company’s accounting auditor.
2. The Company Audit & Supervisory Committee provides the consent stipulated in Article
399, Paragraph 1, of the Companies Act regarding remuneration, etc. of the accounting
auditor, based on the reviews and consideration of matters such as the accounting auditor’s
audit plans and actual remuneration in the prior fiscal year.
3. Details of non-audit activities for which the Company provides remuneration to auditing
certified public accountants and others include the entrustment of business inspection
operations other than the operations provided for in Article 2, Paragraph 1, of the Certified
Public Accountants Act.
4.

Policy on decisions on dismissal or non-reappointment
In addition to the dismissal of the accounting auditor as provided for in the subparagraphs to Article
340, Paragraph 1, of the Companies Act, the Company leaves decisions concerning the dismissal or nonreappointment of the accounting auditor in cases in which it deems the accounting auditor is unfit torender his or her duties appropriately to general meetings of shareholders.

4[English Translation of Convocation Notice Originally Issued in the Japanese Language]
Overview of structures for ensuring the propriety of business operations and the state of their operation(Structures for ensuring the propriety of business operations)Pursuant to the Companies Act, the Company has established the following basic policy on the maintenanceof internal controls systems and strives to maintain such systems accordingly.
(1) Structure for ensuring that the duties of Company Directors are discharged in accordance withlaws, regulations, and the Articles of Incorporation
To ensure that compliance with laws, regulations, etc. is recognized thoroughly as a preconditionof various business activities, the Company has established fundamental policies concerning thesocial responsibilities it must fulfill as a good corporate citizen. As the basis of the compliancestructure, these policies are articulated in the Group CSR Charter, Sega Sammy Group Code of
Conduct, and Group Management Policy and Guidelines (referred to collectively as “Group
policies and standards” hereinafter), all based on the Group Mission. The Representative Director
and President repeatedly communicates to executives and employees the spirit of these Group
policies and standards.
Furthermore, to ensure that Group business execution is undertaken properly and soundly andenhances corporate governance, the Board of Directors strives to establish structures to ensure
legal and regulatory compliance and to build effective internal controls systems based on theGroup Management Policy established to enable integrated Group wide management and Group
Guidelines stipulating Groupwide management and operational standards.
In addition to auditing the efficacy and functions of these internal controls systems, the Audit &Supervisory Committee undertakes regular verification thereof. The internal audit section under
the direct control of the Audit & Supervisory Committee strives to swiftly discover and rectify
any issues through business audits of individual sections and to assess the efficacy of internal
controls related to financial reporting.
To safeguard against the involvement of antisocial forces in management, the Sega Sammy Group
Code of Conduct clearly calls for the eradication of any and all ties to antisocial forces. The
Group incorporates provisions on eliminating antisocial forces from contracts. Additionally, asystem is in place to check whether transaction counterparties are considered antisocial forces.
Structures are also in place to respond systematically and appropriately in cooperation withoutside agencies, including law enforcement and attorneys, in the event of any contact with
antisocial forces.
(2) Systems related to the retaining and managing information concerning the execution of the duties
of Company Directors
The Representative Director and President appoints a Director in charge of administration sections
as the individual responsible for retaining and managing information concerning execution of theduties of Company Directors. This information is recorded on paper or electromagnetically inaccordance with internal rules and other provisions and maintained and managed to allow ready
retrieval and review by Directors.
To enable effective management of trade secrets and similar information, the Company has
established policies on information management and IT security within the SEGA SAMMY
Group, as well as basic IT security guidelines. The Company strives to ensure thoroughunderstanding of and compliance with these policies.
(3) Rules on managing the risk of losses to the Company and the structure thereof
Within the Group Management Committee, the Company has established a Group Risk andCompliance Subcommittee to address risks related to business execution. This Subcommittee
identifies important management risks; deliberates on the formulation of Group risk andcompliance policies; and assesses and makes recommendations regarding risk analysis byindividual related sections, among other activities, in cooperation with the Group Governance
Division. In this way, the risk management structure is defined clearly. In addition, the internal
audit section under the direct control of the Audit & Supervisory Committee audits the state ofrisk management in each section and reports regularly on the results thereof to management
5[English Translation of Convocation Notice Originally Issued in the Japanese Language]decision-making bodies and administrative organizations involved in business execution andsupervision.
To identify and properly manage important potential internal management risks, including
emergency response, the Company has established Group Management Policies, Sega SammyGroup policies on risk management, and crisis management rules. In the event of circumstances
expected to seriously affect the Group, the crisis response organizations of the Company andGroup companies work together to discuss and determine and properly implement responses.
(4) Structure for ensuring the efficiency of the performance of the duties of Company Directors
To improve deliberations by and to strengthen the oversight functions of the Board of Directors,
the Company has chosen the status of a company with an Audit & Supervisory Committee. Thismeans a significant portion of important decisions on business execution can be entrusted to
Directors in charge of business execution. The Company has adopted a structure whereby duties
are performed appropriately and efficiently in accordance with provisions on job authority anddecision-making under the rules for the Board of Directors and other rules and regulations.
(5) Structure for ensuring that performance of the duties of Company employees complies with laws,
regulations, and the Articles of Incorporation
The Company promotes Group compliance measures intended to ensure that Company employees
perform their duties in compliance with laws, regulations, the Articles of Incorporation, and otherinternal rules as well as social norms. These measures must be formulated based on Groupphilosophies and standards serving as codes of conduct.
The Company has established an internal whistleblowing program under which employees canreport violations of laws, regulations, the Articles of Incorporation, other internal norms, andsocial norms. The Company has also established a structure under which the individual
responsible reports promptly to the Board of Directors and the Audit & Supervisory Committee
regarding major violations.
Confidential information concerning any whistleblower is protected. No whistleblowers will
experience disadvantageous treatment due to their whistleblowing actions. As part of efforts to
respond appropriately while maintaining transparency, the Company maintains whistleblowing
contact points through outside attorneys and other parties, in addition to routine channels forreporting operational matters.
(6) Systems to ensure the propriety of business operations of the Group (consisting of the Company,
its parent company, and its subsidiaries), including the structures described below(i)

Structure for reporting to the Company on matters related to the performance of the duties of
Directors, executive officers, employees tasked with business execution, and parties tasked
with performance of the duties stipulated in Article 598, Paragraph 1, of the Companies Act(referred to collectively as “Directors” in (iii) and (iv)) at Company subsidiaries
Information on Group companies is reported to and shared with the Company throughCompany executives and employees who serve concurrently as Directors and as Corporate
Auditors of Group companies.
In addition, a structure is in place whereby information is communicated, reported, andshared on important matters, information on whistleblowing reports is shared, andinformation on accounting improprieties or errors is reported and shared based on vertical
chains of communication between the Company and Group companies under the affiliate
management rules. The confidentiality of whistleblowers is protected. Whistleblowers areprotected against disadvantageous treatment resulting from whistleblowing reports.
The Company has also established a Group Risk and Compliance Promotion Committee, aGroup Corporate Auditors Liaison Council, and other organizations to address controls
related to various issues or major risks in the Group, and the internal audit section under the
direct control of the Audit & Supervisory Committee carries out auditing based on theperspective of Groupwide interests. The Company seeks to share information and ensure
appropriate business execution within the Group as much as possible.

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[English Translation of Convocation Notice Originally Issued in the Japanese Language](ii) Structure for management of risks of losses to Company subsidiaries
In addition to having Group companies tackle Groupwide priorities and measures identified
by the Company, the Company has each subsidiary manage risks specific to each subsidiary
based on company size, culture, business categories, and other factors.
(iii) Structure for ensuring the efficient performance of duties of Directors of Company
subsidiaries
As a structure for ensuring that the duties of Directors and other parties are carried out
efficiently based on a consideration of company size, culture, business category, and otherfactors, Company subsidiaries employ a Corporate Auditory structure under which swift andappropriate decision making is carried out by their executives and duties are performed inaccordance with the Board of Directors rules and other rules and regulations.
(iv) Structure for ensuring that performance of the duties of subsidiary directors and employees
complies with laws, regulations, and the Articles of Incorporation
As with the Company, the Boards of Directors of Group companies are required to maintaincompliance structures to enable compliance with laws and regulations as well as Groupphilosophies and standards based on the importance of fundamental policies for fulfillmentof social responsibility as good corporate citizens.
(7) Matters concerning employees assigned to assist the Audit & Supervisory Committee in theperformance of its duties, if so requested by the Audit & Supervisory Committee, theindependence of such employees from Directors (other than Audit & Supervisory Committee
members), and ensuring the efficacy of instruction from the Audit & Supervisory Committee tosuch employees
The Company has established an internal audit section under the direct control of the Audit &Supervisory Committee. Employees of the internal audit section assist in the duties of the Audit &Supervisory Committee under that committee’s command and control.
In principle, employees assisting in the duties of the Audit & Supervisory Committee devote
themselves to such assistance and are not subject to instruction or oversight by Directors who are
not members of the Audit & Supervisory Committee. However, if unavoidable, they may be
assigned to perform other duties concurrently. Special consideration is given to independence incases in which such employees serve concurrently on both the auditing and execution sides. The
prior consent of the Audit & Supervisory Committee is required in cases involving appointment,
dismissal, transfer, job performance evaluations, disciplinary measures, or wage revisions for such
employees.
(8) Systems related to reporting to the Audit & Supervisory Committee of the Company, including thestructures described below(i)

Structure for reporting to the Audit & Supervisory Committee of the Company by Directors
other than Audit & Supervisory Committee members, accounting consultants, andemployees
Company Directors other than Audit & Supervisory Committee members and other
employees must promptly report to the Audit & Supervisory Committee any facts they havelearned concerning serious violations of laws, regulations, or the Articles of Incorporation or
misconduct during the performance of their duties or any events that could result in serious
losses to the Company. The same applies to decisions or results of internal auditing that
could seriously affect business or the organization.

(ii) Structure for reporting to the Audit & Supervisory Committee of the Company by Group
company Directors, accounting consultants, Corporate Auditors, executive officers,
employees tasked with business execution, parties tasked with performance of the duties
stipulated in Article 598, Paragraph 1, of the Companies Act at Company subsidiaries,
similar parties, or employees, or others who have received reports from such parties
Group company Directors, Corporate Auditors, executive officers, employees, etc., and otherparties who have received reports from such parties must promptly report to the Audit &Supervisory Committee of the Company any facts they have learned concerning serious
7[English Translation of Convocation Notice Originally Issued in the Japanese Language]
violations of laws, regulations, or the Articles of Incorporation or misconduct during theperformance of their duties or any events that could result in serious losses to the Company.
The same applies to decisions or results of internal auditing that could seriously affectbusiness or the organization.
Based on the policy of the Group management, the Company shall strive to maintain astructure under which Group companies’ Audit & Supervisory Committees or Corporate
Auditors receive and serve as an intermediary for reports from the business execution side to
be transmitted to the Audit & Supervisory Committee of the Company.
(9) Structure for ensuring that parties who have made reports as described in the preceding paragraph
do not suffer disadvantageous treatment as a result
Parties who submit reports as described in the preceding paragraph are protected fromdisadvantageous treatment as a result. Any such disadvantageous treatment is subject todisciplinary action.
(10) Procedures for prepayment or reimbursement of the costs of performance of the duties of the
Audit & Supervisory Committee and other matters concerning policies related to processing ofcosts or obligations arising in connection with the performance of such duties
If demanded by the Audit & Supervisory Committee or Standing Corporate Auditors Committee,
the Company assumes the costs of performance of its duties, including the cost of outside advisors
consulted or hired under Paragraph 11.
(11) Other systems to ensure the efficacy of audits by the Audit & Supervisory Committee
Apart from reports on business matters, the Representative Director meets regularly withmembers of the Audit & Supervisory Committee to exchange opinions on Company management
and to ensure mutual understanding.
The Board of Directors allows members of the Audit & Supervisory Committee to attend
important meetings concerning business execution to ensure the propriety thereof.
As necessary, the Audit & Supervisory Committee may independently seek advice from outsideadvisors such as attorneys and certified public accountants regarding Committee operations.
The efficacy and independence of audits by the Audit & Supervisory Committee is ensured
through such auditing being conducted by the internal auditing section under the command andcontrol of the Audit & Supervisory Committee. The prior consent of the Audit & Supervisory
Committee is required in cases involving appointment, dismissal, transfer, job performance
evaluations, disciplinary measures, or wage revisions for such employees.
Overview of the state of operation of structures intended to ensure operational propriety
An overview of the state of operation regarding the above basic policies at the Company is provided below.
(1) Compliance(i)Company and Group executives are provided with annual compliance training, in separate
sessions for newly appointed and existing executives.

(ii) The Group Risk and Compliance Promotion Committee meets to share information on
important topics related to compliance, risk management, and other aspects of internal
controls and related measures.
(iii) Group training has been conducted to strengthen the compliance structure. In addition,
continual activities to raise awareness of compliance are carried out to improve knowledge
and culture of compliance among Group employees.
(iv) A system has been adopted throughout the Group in Japan to determine whether transaction
counterparties qualify as antisocial forces. The Company provides the support needed tomake this system effective and to prevent ties to such forces.
(v) An internal whistleblowing system has been established to swiftly identify and prevent legal
or regulatory violations and other improprieties. A corporate ethics hotline has been
established as the contact point for whistleblowing reports. Efforts are underway to ensurethat all employees become aware of this system.
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[English Translation of Convocation Notice Originally Issued in the Japanese Language](vi) The Company internal auditing section carries out internal audits of the Company and Group
companies.
(2) Sustainability(i)Within the Group Management Committee, the Company has established a Group
Sustainability Subcommittee to formulate Group policies and targets and to deliberate on
management topics, including the status of various initiatives and revisions of targets. The
Company Board of Directors makes decisions on matters such as Group policies and targets.
The policies and targets ultimately determined are shared with Group companies through theGroup Sustainability Promotion Committee. Each Group company that interacts with the
public ascertains information such as various requests and customer and user feedback
through its businesses and shares this information with other Group companies through thisCommittee. Efforts to be incorporated into Group policies and targets are reported to theGroup Sustainability Subcommittee for deliberation.

(ii) The Company posts comprehensive nonfinancial information in the Sustainability section of
its website.
(3) Risk management(i)

Within the Group Management Committee, the Company has established a Group Risk andCompliance Subcommittee to identify important management risks; deliberate on theformulation of Group risk and compliance policies; and assess and make recommendations
regarding risk analysis by individual related sections, among other activities, in cooperation
with the Group Governance Division.

(ii) To identify and properly manage important potential internal risks affecting management,
including emergency response, the Company has established Group Management Policies
and policies on risk management as well as crisis management rules. In the event of asituation expected to seriously affect the Group, the crisis response organizations of theCompany and Group companies work together to discuss and swiftly and properly
implement responses.
(4) Efficacy of the Audit & Supervisory Committee(i)

To supplement efforts to enhance the information provided to the Audit & Supervisory
Committee as part of internal controls, various bodies meet at regular intervals and whennecessary. These bodies include the Holding Company Audit Liaison Council, whose
membership includes Standing Audit & Supervisory Committee members and theaccounting auditor; the Corporate Auditor / Management Audits Office Liaison Council,
intended to monitor the progress of and to exchange information on audits by Group
Standing Corporate Auditors and internal auditing sections; and the Group Corporate
Auditor Liaison Council, whose membership consists of all Standing Audit & Supervisory
Committee members and Group Corporate Auditors.

(ii) The Company appoints employees tasked exclusively with assisting the duties of the Audit& Supervisory Committee.

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

Consolidated statement of changes in shareholders’ equity
FY2024 (April 1, 2023 - March 31, 2024)(Unit: millions of yen)
Shareholders’ equity

Balances as of April 1, 2023
Changes in items during the period
Dividends from surplus
Profit attributable to owners ofparentPurchase of treasury stock
Disposal of treasury stock
Purchase of shares of
consolidated subsidiaries
Total changes in items during theperiodBalances as of March 31, 2024

Capital stock

Capital surplus

29,95372,213Retainedearnings

Treasury stock

261,840(37,251)

Total
shareholders’equity326,755(13,687)(13,687)

33,05533,055(10,016)(10,016)

117

192

75
(3,025)(3,025)–(2,949)19,367(9,899)6,518

29,953

69,263

281,208(47,151)

333,274

Accumulated other comprehensive income
Valuation
Deferreddifference on
gains or losses
available-foron hedges
sale securities

Balances as of April 1, 2023
Changes in items during the period

2,626

382

429

(613)

429

(613)

3,056

(230)

Revaluation
reserve forland(1,109)Foreigncurrencytranslation
adjustment

Total
Remeasurements accumulatedof defined benefit
other
plans
comprehensive
income3,730(1,531)

4,099

16,658

3,072

19,546－

16,658

3,072

19,546(1,109)20,388

1,540

23,645

Dividends from surplus
Profit attributable to owners ofparentPurchase of treasury stock
Disposal of treasury stock
Purchase of shares of
consolidated subsidiaries
Net changes of items other thanshareholders’ equity
Total changes in items during theperiodBalances as of March 31, 2024

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[English Translation of Convocation Notice Originally Issued in the Japanese Language](Unit: millions of yen)ShareacquisitionrightsBalances as of April 1, 2023

Noncontrollinginterests

468

Total net
assets24

331,347

Changes in items during the period
Dividends from surplus(13,687)

Profit attributable to owners ofparent33,055Purchase of treasury stock(10,016)

Disposal of treasury stock

192

Purchase of shares of
consolidated subsidiaries(3,025)

Net changes of items other thanshareholders’ equity283

6

19,836

Total changes in items during theperiod283

626,354

Balances as of March 31, 2024

751

30

357,702

Note: Figures presented are rounded down to the nearest million yen.

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

Notes on the consolidated financial statements
I

Basis of presenting consolidated financial statements(1) Scope of Consolidation
Number of consolidated subsidiaries: 72
Major consolidated subsidiaries:
SEGA CORPORATION, Sammy Corporation, ATLUS. CO., LTD., Sega of America, Inc., Sega
Europe Ltd., Sega Publishing Europe Ltd., Rovio Entertainment Corporation, Sega Logistics
Service Co., Ltd., DARTSLIVE Co., Ltd., SEGA TOYS CO., LTD., TMS ENTERTAINMENT
CO., LTD., MARZA ANIMATION PLANET INC., RODEO Co., Ltd., TAIYO ELEC Co., Ltd.,Sammy Networks Co., Ltd., SEGA SAMMY CREATION INC., PHOENIX RESORT CO.,LTD., and 55 other companies
Rovio Entertainment Corporation and its 13 subsidiaries were included in the scope of consolidation
due to the acquisition of its shares.
Number of non-consolidated subsidiaries: 12
Major non-consolidated subsidiaries:
SEGA XD CO., LTD., etc.
Non-consolidated subsidiaries are excluded from the scope of consolidation because the combined
amount of each of assets, net sales, and profit corresponding to the percentage of equity interest held by
the Group and the combined amount of retained earnings corresponding to the percentage of equity
interest held by the Group do not significantly affect the consolidated financial statements.
(2) Application of the Equity Method
Number of non-consolidated subsidiaries accounted for by the equity method: –Number of affiliates accounted for by the equity method: 8
Major equity method affiliates:
PARADISE SEGASAMMY Co., Ltd., etc.
Number of non-consolidated subsidiaries and affiliates not accounted for by the equity method: 16
Major non-consolidated subsidiaries and affiliates not accounted for by the equity method: CHARAWEB CO., LTD., etc.
Some of the Group’s non-consolidated subsidiaries and affiliates are not accounted for by the equity
method because the combined amount of profit corresponding to the percentage of equity interest heldby the Group and the combined amount of retained earnings corresponding to the percentage of equity
interest held by the Group do not significantly affect the consolidated financial statements, even if they
are excluded from the scope of the equity method, and have no significance as a whole.
(3) Fiscal Year for Consolidated Subsidiaries
Listed below is the consolidated subsidiary whose closing dates differ from the consolidated closing
date.
Necessary consolidation adjustments have been made on material transactions that occurred between
the closing date of these subsidiaries and the consolidated closing date.
Name of consolidated subsidiary
Sega Black Sea Ltd. and two other companies

Ending date of fiscal year
December 31

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[English Translation of Convocation Notice Originally Issued in the Japanese Language](4) Accounting Policies(i) Valuation standards and methods for important assets
Held-to-maturity debt securities
The amortized cost method (straight-line method) is applied.
Available-for-sale securitiesThose other than securities without available fair market value:
The fair value method is applied based on market prices and other information as of theending date of the fiscal year (processing the entire amount of revaluation gain/loss
through direct entry to net assets, with cost of sales calculated by the moving averagemethod).
With respect to compound financial instruments whose fair value cannot be categorized
and measured for each embedded derivative, the entire compound financial instrument isappraised by fair value. Unrealized gains or losses are reported as profit or loss for thecurrent fiscal year.
Securities without available fair market value:
The moving average cost method is applied.
The net amount of equity included in the Group’s financial statements from limited
liability investment partnerships and similar investments, regarded as marketablesecurities under Article 2, Paragraph 2 of the Financial Instruments and Exchange Act, iscalculated based on available and relevant financial statements for the partnership as of
the reporting date stipulated in the partnership agreement.
Derivatives
The fair value method is applied.
Inventories
Primarily gross average cost method (method whereby the net realizable value (NRV) is
calculated by writing down the book value to reflect a decrease in NRV)Work in process is stated at cost, cost being determined by the specific identification method(method whereby the NRV is calculated by writing down the book value to reflect a decreasein NRV).
(ii) Depreciation and amortization for important assets
Property, plant, and equipment (excluding leased assets and right-of-use assets)
The straight-line method is primarily applied.
Useful lives for the assets are as follows:
Buildings and structures
2 - 50 years
Machinery, equipment, and vehicles
2 - 12 years
Amusement machines and facilities
2 - 5 years
Intangible assets (excluding leased assets)
The straight-line method is applied.
The typical lifespan range is shown below.
Trademark rights
10 - 23 years
Software used at the Group is amortized by the straight-line method based on useful lives
within the Group (within five years).
Leased assets
Leased assets in finance leases that transfer ownership:
Depreciated using the same method applied to property, plant, and equipment owned by theCompany.
Leased assets in finance leases that do not transfer ownership:
Depreciated using the straight-line method based on the assumption that useful life equals
the lease period, with a residual value of zero.

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[English Translation of Convocation Notice Originally Issued in the Japanese Language]
Right-of-use assets
The lease period or useful life of the asset, whichever is shorter, is used as the useful life,
with a residual value of zero.
(iii) Accounting for significant deferred assets
Bond issuance cost:
All expenses are expensed at full amount at the time of payment.
(iv) Accounting for significant allowances and provisions
Allowance for doubtful accounts
Allowance for doubtful accounts is provided based on the following to prepare for possible
losses on doubtful accounts.
General receivables:
Allowance is provided based on the actual rate of losses from bad debts.
Receivables associated with the potential for default and bankruptcy or reorganization
claims, etc.:
Receivables associated with the potential for default and bankruptcy or reorganization
claims, etc. are calculated based on a case by case assessment of the collectability.
Provision for bonuses
The estimated amount of bonuses is recorded to meet the payment of employee bonuses
during the current fiscal year.
Provision for directors’ bonuses
The estimated amount of bonuses is recorded to meet the payment of bonuses for directors.
Provision for point card certificates
To provide for use of points granted to customers, the estimated future usage amount as ofthe end of the current fiscal year is recorded.
Provision for dismantling of fixed assets
To provide for expenses for dismantling unused decrepit buildings, estimated future
expenses are recorded.
Provision for share-based compensation
To provide for issue of shares and compensation in similar form to officers and employees
of some overseas subsidiaries, the estimated future amount of shares and compensation insimilar form to be issued as of the end of the current fiscal year is recorded.
(v) Accounting method for retirement benefits
Attribution method for projected retirement benefits
In calculating retirement benefit obligations, benefit formula attribution is adopted for the
purpose of attributing projected retirement benefits to the period up to the end of the current
fiscal year.
Treatment of actuarial gains and losses and prior service costs
Prior service costs are amortized equally over a certain number of years (10 years, inprinciple) within the average remaining years of service for the employees at the time ofaccrual, or are recorded as expenses collectively at the time of accrual.
Actuarial gains and losses are amortized by the straight-line method over a certain number ofyears (10 years, in principle) within the average remaining years of service for theemployees at the time of accrual in each fiscal year, starting from the fiscal year following
the year of accrual, or are recorded as expenses collectively in the fiscal year following theyear of accrual.

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[English Translation of Convocation Notice Originally Issued in the Japanese Language](vi) Accounting method for significant hedge
Hedge accounting
The Group adopts deferred hedge accounting. However, special treatment is applied toqualifying interest rate swap transactions.
Moreover, allocation hedge accounting is applied to qualifying currency swap transactions
and forward exchange contracts at the Company and some consolidated subsidiaries.
Hedging instruments and subjects of hedging
Hedging instruments: Currency swaps, interest rate swaps, and forward exchange contracts
Subjects of hedging: Interest on borrowings, receivables and payables denominated inforeign currencies
Hedge policy
Use of derivative instruments as necessary is intended to mitigate risks associated withforeign exchange and interest rate fluctuations. As a rule, hedging is only used for items forwhich actual demand exists, not for speculative purposes.
Evaluation method of hedge effectivenessHedge effectiveness is evaluated by ratio analysis of cumulative fluctuations in the market
between the hedged item and the hedging instrument. Evaluations of hedge effectiveness areomitted for interest rate swaps to which special treatment is applied and for currency swaps
in which the material conditions for the notional principal of the hedging instrument and forthe hedged item are the same and the transactions can offset market fluctuations.
(vii) Accounting policy for recognition of significant revenues and expenses
Accounting policy for recognition of significant revenues is as follows. Compensation for
individual performance obligations was received within roughly two months after their fulfillment
and did not include significant financial elements.
(a)Digital content
With regard to revenue from the granting of game distribution rights in the Entertainment
Contents Business, the Group provides game content primarily to platform operators alongwith distribution rights, and the Group’s performance obligation is to provide game content.
The Group determines that the performance obligation is satisfied by the provision of gamecontent to the platform operators, and if the contract is one in which usage fees are collectedbased upon the sales of the platform operator, the revenue is recognized when the sales ofthe platform operators are recorded, and in other cases, it is recognized when the gamecontent is provided.
With regard to revenue from sales from game downloads in the Entertainment Contents
Business, the Group’s performance obligation is to provide game content to customers. The
Group determines that the performance obligation is satisfied by the provision of the gamecontent to the customer, and recognizes the revenue when the game content is provided.
With regard to revenue from F2P items in the Entertainment Contents Business, andPachislot and Pachinko Machines Business, the Group’s performance obligation is toprovide the services specified for each item to the customer. Depending on the nature of theitem, the Group determines that the performance obligation is satisfied when the item is usedby the customer or over the course of the estimated usage period as calculated based on past
usage data for similar items, whereupon the revenue is recognized.
With regard to the annual update service for amusement machines in the Entertainment
Contents Business, the Group’s performance obligation is to consistently provide updates tocontent throughout the contract period. Therefore, the Group determines that theperformance obligation is satisfied over the course of the contract period, with the revenue
recognized over the period of the contract.

(b) Sales of products and merchandise
Revenue from sales of products and merchandise in the Entertainment Contents Businessand Pachislot and Pachinko Machines Business is primarily from sales through manufacture
15

[English Translation of Convocation Notice Originally Issued in the Japanese Language]or wholesale. The Group’s performance obligation is to deliver finished products ormerchandise in accordance with a sales contract or the like with the customer. The Group
determines that the performance obligation is satisfied when it delivers the finished products
or merchandise and the customer assumes control over said finished products ormerchandise, with the revenue recognized at the point of delivery. With regard to revenue
from sales from consignment type sales of certain merchandise, if, after the role (as theprincipal or agent) in the provision of goods or services is determined, the Group is involvedin the sale of the merchandise as an agent, the revenue is recognized using the net amountafter deducting the amount paid to the supplier from the amount received from the customer.
(c)

Resort facility sales
Revenue of resort facilities in the Resort Business is from the operation of hotels and golfcourses, with the Group’s performance obligation to provide accommodation, eating anddrinking, and space to play on the golf course at each facility. The Group determines that theperformance obligation is satisfied and the revenue recognized upon the completion of theprovision of the various services to the customers.

(viii) Amortization method and period of goodwill
Where the duration of the effect of goodwill can be estimated on rational grounds, it is amortizedover the estimated period by the straight-line method.
(ix) Application of the group tax-sharing system
The Company and certain domestic consolidated subsidiaries apply the group tax-sharing system.
II
Notes concerning accounting estimates(1) Valuation of inventories, etc. in the Entertainment Contents Business(i) Amounts posted to consolidated financial statements in the current fiscal year
Work in process¥42,698 million“Other” under intangible assets¥4,614 million(ii) Calculation method for amounts posted to consolidated financial statements in the current fiscal
year
Work in process and software, etc. amounts posted due to production of game contents, etc. in theEntertainment Contents Business are stated at acquisition cost. They are routinely treated as costs
considering anticipated sales volumes or expected service periods. However, in the event that the
future recoverable value falls below that of the book value of the work in process and software,etc., the amount of said difference is posted to cost of sales.
(iii) Key assumptions used in calculating amounts posted to consolidated financial statements in thecurrent fiscal year
Future recoverable value is an estimate based on sales forecasts for the following fiscal years.
(iv) Impact on consolidated financial statements in the following fiscal year
Discrepancies between forecasts and actual results arising from the timing of release of new
products from rival companies within the same market and sales fluctuations due to the nature of
hit-product business may affect profit and loss.
(2) Valuation of raw materials in the Pachislot and Pachinko Machines Business(i) Amount posted to consolidated financial statements in the current fiscal year
Raw materials¥17,353 million(ii) Calculation method for amounts posted to consolidated financial statements in the current fiscal
year
Raw materials are posted at acquisition cost. If anticipated future raw material usage falls below
stock, the surplus is posted to cost of sales.

16[English Translation of Convocation Notice Originally Issued in the Japanese Language](iii) Key assumptions used in calculating amounts posted to consolidated financial statements in thecurrent fiscal year
Raw material usage forecasts are estimated based on the projected volume of pachinko andpachislot machine sales for the following fiscal years.
(iv) Impact on consolidated financial statements in the following fiscal year
Discrepancies between forecasts and actual results arising from the timing of release of new
products from rival companies within the same market and sales fluctuations due to the nature of
hit-product business may affect profit and loss.
(3) Valuation of shares of affiliates with regard to PARADISE SEGASAMMY Co., Ltd.
(i) Amounts posted to consolidated financial statements in the current fiscal year
Shares of subsidiaries and affiliates ¥24,619 million(ii) Calculation method for amounts posted to consolidated financial statements in the current fiscal
year
PARADISE SEGASAMMY Co., Ltd. (“PSS” hereinafter) is a Company affiliate accounted forby the equity method. Investments in PSS are handled by equity method accounting.
PSS applies International Financial Reporting Standards (IFRS) and conducts impairment tests if
there is an indication of impairment in its cash generating units. For cash generating units
including goodwill, PSS conducts impairment tests on an annual basis, in addition to instances
associated with indication of impairment. If the results of these impairment tests show thatrecoverable value falls below book value, the book value in PSS financial statements is reduced to
the recoverable value. This, along with recognition of impairment loss, exerts an impact on theamount of shares of Company affiliates by equity method accounting.
PSS has posted ¥131,418 million in noncurrent assets, including goodwill of ¥7,589 million.
(iii) Key assumptions made in calculating amounts posted to the consolidated financial statements inthe current fiscal year
PSS conducts impairment tests on cash-generating units that include goodwill and cash-generating
units that show any signs of impairment. It calculates recoverable value based on value in use oron fair value less cost of disposal.
Key assumptions made in measurements of value in use are based on matters such as businessplans fundamental to the calculation of future cash flows and rates of growth and discount rates.
Business and other plans are formulated based on numbers of casino users and drop amounts(amounts of chips purchased at gaming tables) under the assumption of a market recovery andrelaxation of international travel restrictions. Figures used for rates of growth after the period
subject to business and other plans reflect consideration of business growth potential. The
discount rate is calculated based on the weighted average cost of capital while reflecting risks
associated with businesses, which are determined using external and internal information.
Fair value less cost of disposal is determined using mainly real estate appraisal values (under the
depreciated replacement cost approach) from outside experts, taking into consideration the
repurchase price of the relevant asset and related depreciation factors.
(iv) Impact on consolidated financial statements in the following fiscal year
Estimates of future cash flows are based on best estimates by management. Discrepancies
between forecasts and actual trends in areas such as numbers of users may affect profit and loss.
(4) Distribution of acquisition costs related to the acquisition of stock in Rovio Entertainment Corporation(i) Amounts posted to consolidated financial statements in the current fiscal year
Shown below are the intangible assets (trademark rights and intangible assets related totechnology) and goodwill recorded through the acquisition of an equity stake in Rovio
Entertainment Corporation (“Rovio” hereinafter) in the consolidated fiscal year under review.
Intangible assets¥53,281 million
Trademark rights¥47,630 million
Intangible assets related to technology¥5,651 million
17

[English Translation of Convocation Notice Originally Issued in the Japanese Language]
Goodwill¥29,089 million(ii) Method for calculating amounts posted to consolidated financial statements in the current fiscal
year
Amounts allocated of identifiable intangible assets are calculated via the income approach,converting expected future cash flows generated by the intangible assets, based on business plans
used in corporate valuations, to their current values.
Of these, trademark rights were valued using as the valuation model the multi-period excess
earnings method included in the income approach. Intangible assets related to technology werevalued using as the valuation model the with-and-without method, also included in the income
approach.
In the valuation of goodwill, the difference between the purchase price and the amounts allocatedto identifiable assets and liabilities on the merger date was used as expected excess earnings fromfuture business activities.
Outside experts were employed in these calculations because the choice of input data used in
calculation methods and discount rates requires special expertise.
(iii) Key assumptions made in calculating amounts posted to the consolidated financial statements inthe current fiscal year
In calculating future cash flow related to trademark rights, net sales per major game title and theirrates of decrease and game-business costs were set based on Rovio’s business plans.
In calculating future cash flow related to intangible assets related to technology, net sales per
major game title and their rates of decrease and projected profitability from use of intangible
assets related to technology were set based on Rovio’s business plans.
(iv) Impact on consolidated financial statements in the following fiscal year
While future business plans are based on management’s best estimates, profit and loss may beaffected by differences between net sales per major game title and other figures and projections
thereof.
III

Notes on changes in presentation methods(Consolidated Balance Sheet)
Due to their increased monetary importance, trademark rights (¥23 million in the prior year),included under other intangible assets in the prior year, are presented separately from current
fiscal year.

18

[English Translation of Convocation Notice Originally Issued in the Japanese Language]IV
Notes on the consolidated balance sheet(1) Accumulated depreciation of property, plant and equipment¥107,742 million(2) Assets pledged as collateral
Shares of subsidiaries and affiliates*¥24,619 million* In the current consolidated fiscal year, shares of the equity-method affiliate PARADISESEGASAMMY Co., Ltd. are pledged as collateral for a loan of ¥58,905 million (KR₩525,000
million) from financial institutions to PARADISE SEGASAMMY Co., Ltd.
(3) Revaluation of land
Consolidated subsidiary SEGA CORPORATION has revalued land for business use pursuant to the
Act on Revaluation of Land (Act No. 34 promulgated March 31, 1998) and the Act for Partial
Amendment of the Act on Revaluation of Land (Act No. 19 promulgated March 31, 2001). The valuationdifference has been recorded as revaluation reserve for land under net assets.
Revaluation method
The value of the land was calculated by making reasonable adjustments to the assessed value of
fixed assets for taxation purposes as stipulated in Article 2, Paragraph 3 of the Order for
Enforcement of the Act on Revaluation of Land (Cabinet Order No. 119, March 31, 1998) andappraisals by licensed real estate appraisers as stipulated in Paragraph 5 of that Article.
Date of revaluation:
March 31, 2002
Difference between fair value at the end of the fiscal year and book value after revaluation ofrevalued land:¥(386) million(4) Balance of unrealized borrowings based on current account overdraft agreements:
Balance of unrealized borrowings based on commitment line contracts:¥171,565 million¥114,000 million(5) Accounting for notes maturing as of the end date of the consolidated fiscal year under review
Notes maturing as of the end date of the consolidated fiscal year under review are settled as of theirdates of exchange.
Since the end date of the consolidated fiscal year under review was a holiday for financial institutions,the following notes maturing as of the end date are included in ending balances:
Notes receivable¥898 million
Notes payable¥1,628 million

19

[English Translation of Convocation Notice Originally Issued in the Japanese Language]
V
Notes on the consolidated statement of income(1) Amount of inventory write-downs attributable to reduced profitability of inventories held for regularsale purposes is shown below.
Cost of sales¥19,697 million(2) R&D expenses included in general and administrative expenses and manufacturing cost for the fiscal
year under review¥61,365 million(3) Breakdown of main items included in extraordinary losses(i) Breakdown of gain on sale of noncurrent assets:
Machinery, equipment, and vehicles
Other noncurrent assets
Total¥1 million
01(ii) Breakdown of loss on sale of noncurrent assets:
Buildings and structures
Other noncurrent assets
Total¥21 million
122(iii) A breakdown of depreciation loss is provided below.
(Unit: millions of yen)
Use

Location

Assets for businessWest Sussex, UK andsix others

Idle properties

Type

Kamo-gun, Shizuoka
Prefecture

Amount ofdepreciation loss
recorded

Buildings and structures

290

Amusement machines andfacilities

21

Other property, plant, andequipment

328

Other intangible assets

187

Land

0

Total

829

The Group independently assesses assets or asset groups whose cash flows can be estimatedseparately based on business segments. The book values of assets or asset groups whose market
values declined significantly or that are projected consistently to generate negative cash flows
from operating activities are reduced to their recoverable values. The amount of this reduction isrecorded as an impairment loss under extraordinary losses.
The amount of ¥478 million is included in loss on business restructuring under extraordinary
losses.
(4) Loss on business restructuring
This loss represents costs associated with structural reform initiatives in response to the externalbusiness environment. A breakdown is provided below.
Loss associated with suspension of game content development, etc.
¥11,564 million
Increased benefits for early retirement
3,417
Loss on sale of stock in affiliates
2,159
Impairment loss
478
Other
184
Total
17,80420

[English Translation of Convocation Notice Originally Issued in the Japanese Language]VI
Notes on the consolidated statement of changes in shareholders’ equity(1) Shares of stock issued and outstanding(Unit: shares)
Class of sharesStart of current
consolidated fiscal
year

Common stock

Increase

241,229,476

End of current
consolidated fiscal
year

Decrease––

241,229,476(2) Treasury stock(Unit: shares)
Class of sharesStart of current
consolidated fiscal
year

Common stock

Increase

20,476,041

Decrease

4,803,305

64,558End of current
consolidated fiscal
year
25,214,788(Overview of causes of change)
Causes of the increase:
Increase due to purchase on the market under Board of Directors resolution: 4,782,700 shares
Increase due to purchase of odd-lot stock:
6,505 shares
Increase due to gratis acquisitions associated with the resignation of individuals
eligible for transfer-restricted share-based compensation:
14,100 shares
Causes of the decrease:
Decrease due to demands for sale of odd-lot stock:358 shares
Decrease due to transfer-restricted share-based compensation:
64,200 shares(3) Dividends(i) Cash dividends paid
Resolution

Class of shares

Total dividend(millions of yen)

Board of Directors
meeting held May 12, Common stock2023
Board of Directors
meeting held
Common stock
November 8, 2023

Dividends per
share (yen)Record date

Effective date

8,609

39 March 31, 2023

June 2, 2023

5,078

23

September 30,
2023

December 1,
2023(ii) Dividends for which the record date falls in the current fiscal year but the effective date falls in
the following fiscal year
Resolution(planned)

Class ofsharesBoard of Directors
Commonmeeting held May 10,
stock
2024

Source of Total dividend
dividends (millions of yen)

Retainedearnings

5,832

Dividends per
share (yen)Record date

27 March 31, 2024

Effective dateJune 5, 2024

(4) Class and quantity of shares subject to share acquisition rights as of the ending date of the current fiscal
year (excluding those for which the exercise period has not yet begun)
Not applicable21

[English Translation of Convocation Notice Originally Issued in the Japanese Language]
VII
Notes concerning financial instruments(1) Current state of financial instruments
The Group has concluded agreements with its financial institutions concerning commitment lines ofcredit to secure medium- to long-term funds liquidity for the Company as the holding company. This isintended to serve as a safety net for the entire Group. In addition, the Group raises necessary funds foreach business based on its financial plans, through bank borrowings or issuing bonds, while applying acash management system to put Group funds to efficient use. Funds are invested primarily in low-riskhigh-liquidity financial assets; some funds are invested in compound financial instruments, such as bonds,
to achieve more efficient funds management. Derivatives are not used for speculative purposes; rather
they are used mainly to manage exposure to the risks described below.
The Group endeavors to reduce customer credit risks on notes and accounts receivable - trade inaccordance with Group company rules on claims management and other rules and regulations.
Securities consist mainly of investment trusts and similar instruments. Since these are secured throughtransactions solely with highly rated financial institutions, in accordance with Group company rules onfunds management and other rules and resolutions, they entail only minor credit risk. Investment
securities consist mainly of stock. Information on topics such as their current market values and thefinancial standings of their issuers (business partners) is ascertained at regular intervals and reported to
the Board of Directors or other relevant body within each company. Decisions on whether to continue tohold such securities is reviewed based on a consideration of relationships with the business partners thatissued them. While some component financial instruments are exposed to risks of market pricefluctuations such as those of stock-market fluctuations, their current market values are ascertained atregular intervals.
Borrowings and corporate bonds are secured to obtain working capital, make capital investments andengage in M&A activities, and diversify fundraising sources. The Group manages liquidity risk in various
ways, including having each Group company prepare monthly reports on fundraising results and forecasts
for confirmation by the Company.
Derivative transactions consist of interest rate swap transactions intended to hedge against interest rate
fluctuation risks associated with certain borrowings with variable interest rates, forward foreign exchange
contracts intended to hedge against exchange rate fluctuation risks associated with certain operating
payables denominated in foreign currency, and forward foreign exchange contracts intended to hedge
against exchange rate fluctuation risks associated with investments in overseas subsidiaries. These arehandled mainly by the finance or accounting sections of individual Group companies, allowing internal
approval based on Group company rules on derivatives management and other rules and regulations.
Status reports are submitted to each company’s Board of Directors as appropriate.
(2) Fair values, etc., of financial instruments
Shown below are consolidated balance sheet amounts, fair values, and the differences between themas of the end of the current consolidated fiscal year. Information on stocks and other financial instrumentswith no market value is provided under Note 3 and is not included in the following table. Notes on cash
and deposits are omitted because they are settled quickly and their fair value approximates their bookvalue.
(Unit: millions of yen)

(1) Notes and accounts receivable - trade(2) Short-term investment securities and investment
securities(i) Held-to-maturity debt securities(ii) Available-for-sale securities *1(3) Notes and accounts payable - trade(4) Short-term borrowings(5) Long-term borrowings(6) Bonds payable(7) Derivative transactions*2(i) Transactions outside the scope of hedge accounting(ii) Transactions subject to hedge accounting

22

Consolidated balance
sheet amount
54,269Fair value

Difference

54,269–103
13,88326,08522,507
124,500
10,000102
13,88326,08522,507124,259
9,776

(0)
–
–
–
240
223

–
(230)

–
(230)

–
–

[English Translation of Convocation Notice Originally Issued in the Japanese Language]*1. Excludes investments in business for which the amount corresponding to equity is recorded on the consolidatedbalance sheet as a net amount and similar businesses. The amount of such investments recorded on the consolidatedbalance sheet was ¥11,844 million.
*2. Net claims and obligations arising from derivatives are presented in net amounts. Totals that are net obligations areindicated in parentheses.
*3. Stock and other financial instruments with no market value
Consolidated balance sheet
amount (millions of yen)
5,666
11,1181,059
25,395726

Category
Investments in unlisted stocks, etc.
Investments in investment limited partnerships, etc.
Stock of non-consolidated subsidiaries
Stock of affiliates
Investments in capital of subsidiaries and affiliates(3) Breakdown of fair value information on financial instruments by level
The fair value of financial instruments is classified into the following three levels based on theobservability and materiality of the inputs used to measure fair value:
Level 1 fair value: Fair value measured by (unadjusted) quoted prices in active markets for thesame assets or liabilities
Level 2 fair value: Fair value measured by directly or indirectly observable inputs other thanLevel 1 inputs
Level 3 fair value: Fair value measured by material unobservable inputs
When using multiple inputs that are material to the fair value measurement, fair value is categorized in
the lowest priority input level in the fair value measurement.
(i)Financial assets and liabilities recorded on the consolidated balance sheet at fair value(Unit: millions of yen)
Category

Short-term investment securities
and investment securities
Available-for-sale securities
StocksDebt securities
Other
Total assets
Derivative transactions*
Currency-relatedInterest rate-related
Total derivative transactions

Consolidatedbalance sheet
amountFair value
Level 1

Level 2

Level 3

Total

3,813
606
9,463
13,883

3,813
–
93
3,907

–
606
9,021
9,628

–
–
347
347

3,813
606
9,463
13,883

–
(230)
(230)

–
–
–

–
(230)
(230)

–
–
–

–
(230)
(230)

* Net claims and obligations arising from derivatives are presented as net amounts. Totals that are net obligations areindicated in parentheses.

23[English Translation of Convocation Notice Originally Issued in the Japanese Language](ii) Financial assets and liabilities not recorded on the consolidated balance sheet at fair value(Unit: millions of yen)
Category
Notes and accounts receivable trade
Short-term investment securities
and investment securities
Held-to-maturity debt
securities
Bonds receivable
Total assets
Notes and accounts payable trade
Short-term borrowings
Long-term borrowings
Bonds payable
Total liabilities

Consolidatedbalance sheet
amountFair value
Level 1

Level 2

Level 3

Total

54,269–54,269–54,26910354,372––

102
54,372––

102
54,372

26,085–26,085–26,08522,507
124,500
10,000183,092––––

22,507124,259
9,776
182,627––––

22,507124,259
9,776
182,627(Note 1) Description of the valuation techniques and inputs used in fair value measurement
Short-term investment securities and investment securities:
Listed stocks, debt securities, and bonds receivable are valued based on quoted prices. Since listed stocks aretraded in active markets, their fair value is assigned to Level 1. The fair value of debt securities and bonds
receivable held by the Group is assigned to Level 2 because they are infrequently traded and are for that reason
not deemed to have quoted prices on active markets.
Other financial instruments include American depositary receipts, investment trusts, and simple agreements for
future equity (SAFEs). Since American depositary receipts are traded in active markets, their fair value isassigned to Level 1. The fair value of investment trusts is assigned to Level 2 because they are infrequently
traded and thereby deemed to lack quoted prices on active markets. SAFEs are assigned to Level 3 because themost recent fair values are estimated after accounting for factors that can affect the value of the financial
instruments.
Derivative transactions:
Fair values of interest rate swaps and forward foreign exchange contracts are measured by the discounted present
value method based on observable inputs, such as interest rates and exchange rates, and assigned to Level 2.
Notes and accounts receivable - trade:
The fair value of these items is measured by the discounted present value method based on the amounts ofreceivables, times to maturity, and interest rates reflecting credit risks for each grouping of receivables in a
specified period and assigned to Level 2.
Notes and accounts payable - trade:
The fair value of these items is measured by the discounted present value method based on future cash flows,times to maturity, and interest rates reflecting credit risks for each grouping of payables in a specified period andassigned to Level 2.
Short-term borrowings and long-term borrowings:
The fair value of short-term borrowings and long-term borrowings is measured by the discounted present value
method based on sums of principal and interest, times to maturity, and interest rates reflecting credit risks andassigned to Level 2.
Bonds payable:
The fair value of bonds payable issued by the Company is measured by the discounted present value method
based on sums of principal and interest, times to maturity, and interest rates reflecting credit risks and assigned to
Level 2.

24

[English Translation of Convocation Notice Originally Issued in the Japanese Language](Note 2) Information on fair value under Level 3 used to record financial assets and liabilities on the consolidatedbalance sheet(1) Adjustments from starting to ending balance and valuation gains/losses recognized during the period underreview(Unit: millions of yen)

Starting balance
Profit/loss or other comprehensive income during the period
Purchases, sale, issue, and settlement
Other
Ending balance

Securities andinvestment
securities
Available-for-salesecurities
Other
‒
‒
‒
347
347

Total

‒
‒
‒
347
347

(2) Description of fair valuation process
The fair value of financial instruments assigned to Level 3 are calculated in accordance with the AccountingStandard for Fair Value Measurement and other applicable standards. Calculations of fair value consider thevalidity of fair value level assignments and fair valuation techniques employed in accordance with the nature andcharacteristics of and risks posed by the subject assets.

25

[English Translation of Convocation Notice Originally Issued in the Japanese Language]
VIII
Notes on revenue recognition(1) Disaggregation of revenue from contracts with customers
The Group engages in the Entertainment Contents Business, the Pachislot and Pachinko Machines
Business, and the Resort Business. The main goods or services handled by these businesses are digitalcontent, products and merchandise, and resort facilities. Sales of goods or services by each business areshown below.
(Unit: millions of yen)
Reporting segment
Entertainment
Contents

Pachislot
Pachinko
Machines

Digital content sales

175,377

4,764–

Product and merchandise
sales

90,661

127,348–

Resort facility sales
Other sales
Revenue from contracts withcustomers
Other revenue*
Sales to external customers

Other

Total

180,142–

180,142–

218,009–

218,009–

12,356

12,356–

12,35650,711

3,856–

54,568

1,564

56,133

316,750

135,969

12,356

465,076

1,564

466,641

1,254

–

–

1,254

–

1,254

318,005

135,969

12,356466,3311,564

467,896

ResortSubtotal* Other revenue for the Entertainment Contents Business includes revenues from the Video Games
Expenditure Credit (VGEC) in the UK.
(2) Basic information for grasping revenue from contracts with customers(i) Information on contracts, performance obligations, and when performance obligations are
satisfied
Information on contracts, performance obligations, and when performance obligations are
satisfied is as described under “I Basis of presenting consolidated financial statements: (4)Accounting Policies: (vii) Accounting policy for recognition of significant revenues andexpenses.”(ii) Information on calculations of amounts allocated to performance obligations
When selling multiple items of game content in sets as part of activities that grant game
distribution rights or in association with download sales in the Entertainment Contents Business,the provision of each item of content is deemed to satisfy the corresponding performanceobligation. Performance obligations are allocated separately. In sales by the Entertainment
Contents Business of sets of amusement machines and bundled annual content update services,
sales of amusement machines and annual content update services are deemed to involve separate
performance obligations that are also separately allocated.
In such cases, the stand-alone selling prices as of the transaction dates in the contracts forindividual goods or services that serve as the bases for each performance obligation are calculated
and transaction prices are allocated based on the percentages corresponding to those stand-alone
selling prices.

26

[English Translation of Convocation Notice Originally Issued in the Japanese Language](3) Information for grasping revenue amounts for the current fiscal year and for the following fiscal years(i) Receivables from contracts with customers, balances of contract assets and liabilities, etc.
Shown below is a breakdown of receivables from contracts with customers, contract assets, andcontract liabilities.
(Unit: millions of yen)
Current consolidated fiscal year
Starting balanceEnding balance

Receivables from contracts with customers
Notes and accounts receivable - trade
Contract assets
Contract liabilities

52,673696
25,85254,269–19,367

Contract assets refer to unbilled claims related to revenues recognized based on measurement ofprogress, mainly for development projects under contract. Contract assets are transferred toaccounts receivable - trade at the point in time at which claims on payment become unconditional.
Contract liabilities refer mainly to balances of prepayments received from customers before
delivery of products or provision of services and points awarded to customers for which
performance obligations remain unfulfilled as of the end of the period. Contract liabilities arecancelled upon recognition of revenue.
Of the revenue recognized in the current fiscal year, the amount included in the balance ofcontract liabilities at the beginning of the period was ¥23,762 million. The main cause of thedecrease in contract liabilities was a decrease in prepayments received before delivery of
products.
(ii) Transaction prices allocated to remaining performance obligations
Shown below are the total price of transactions allocated to remaining performance obligations
and the time frames in which the Company expects to recognize the revenue amounts.
(Unit: millions of yen)
Within one year
More than one year but within two years
More than two years but within three years
More than three years but within four years
More than four years
Total

IX

Current consolidated fiscal year
15,367
1,322
277
2,257
143
19,367

Notes on rental property and other real estate

Notes on the status and fair value of rental property and other real estateThis information is omitted due to the immateriality of the total amount of rental property and other realestate.
X

Notes on per-share information
Net assets per share
Net income per share

1,652.29 yen
150.75 yen

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

Notes on business combination(Acquisition of stock in Rovio Entertainment Corporation)
In the Board of Directors meeting held April 17, 2023, the Company and SEGA CORPORATION(“SEGA”), a consolidated Company subsidiary, resolved to implement a tender offer (tender offer under
Finnish Law; “Tender Offer” hereinafter) to acquire Rovio Entertainment Corporation (“Rovio”), a mobile
game company headquartered in Finland, through SEGA Europe Ltd., SEGA’s wholly-owned subsidiary.
Rovio has been made a wholly-owned subsidiary through the first and second tender offers and a squeezeout merger.
(1) Overview of merger(i) Name and lines of business of acquisition
Name of acquired entity: Rovio Entertainment CorporationLines of business:
Mobile game development and operations, brand licensing(ii) Main reasons for merger
To boost the Group’s presence in global markets, including the rapidly growing mobile gamemarket, by acquiring the mobile game development capabilities and operating expertise of Rovio
Entertainment Corporation.
(iii) Date of merger
August 17, 2023 (date of stock acquisition)(iv) Legal form of merger
Stock acquisition paid in cash(v) Company name after merger
Unchanged(vi) Percentage of voting rights acquired
August 17, 2023
96.3%
September 6, 2023
1.3%
January 22, 2024
2.4%
Percentage of voting rights acquired
100.0%(vii) Key reasons for decision on acquiring company
Acquisition of all shares of stock for cash by the Company’s consolidated subsidiary SEGA
Europe Ltd.
(2) Period of financial results of the acquired company included on the consolidated financial statements
September 1, 2023 through March 31, 2024
(3) Cost of acquisition and breakdown thereof by type
Acquisition priceCash¥100,640 million
Cost of acquisition¥100,640 million(4) Details and amounts of main costs associated with acquisition
Advisory costs, etc.: ¥1,790 million(5) Amount, causes, depreciation method, and depreciation period of goodwill incurred(i) Amount of goodwill incurred¥29,089 million
Amounts of goodwill at the ends of the second and third quarters were recorded provisionallysince the allocation of acquisition costs was incomplete. However, the allocation of acquisition
costs was finalized at the end of the fiscal year under review. Finalizing this provisional recording
reduced goodwill incurred by ¥42,624 million.
(ii) CausesThis goodwill was incurred chiefly from future surplus revenues expected through future businessdevelopment.
(iii) Depreciation method and depreciation period of goodwill incurred
Straight-line depreciation over 15 years

28[English Translation of Convocation Notice Originally Issued in the Japanese Language](6) Changes in Company equity due to transactions with non-controlling interests(i) Major causes of changes in capital surplus
Additional acquisition of shares of subsidiaries(ii) Amount of decrease in capital surplus due to transactions with non-controlling interests¥3,025 million(7) Amounts of assets received and liabilities undertaken on date of merger and main details thereof
Current assets¥30,896 million
Noncurrent assets¥59,742 million
Total assets¥90,639 million
Current liabilities¥5,928 million
Noncurrent liabilities¥12,063 million
Total liabilities¥17,991 million(8) Amounts allocated to intangible assets other than goodwill and main breakdown thereof and weighted
average depreciation period by type(i) Amounts allocated to intangible assets¥53,281 million(ii) Main breakdown and depreciation periods
Trademark rights:¥47,630 million
Depreciation period: 23 years
Intangible assets related to technology:¥5,651 million
Depreciation period: 10 years(9) Estimates of the effects on the consolidated statements of income if the merger had been completed on
the start date of the fiscal year under review and calculation methods thereof
Net sales:¥18,556 million
Operating income:¥(1,079) million*Calculation methods for estimates
Rough estimates of effects were calculated as the difference between net sales and profit/loss information
based on the working assumption that the merger had been completed on the start date of the fiscal year
under review and net sales and profit/loss information provided on the Company’s consolidated statements
of income. In addition, depreciation amounts for goodwill, etc. recognized at the time of the merger were
adjusted based on the assumption that they were incurred on the start date of the fiscal year under review.
These notes have not been subjected to audit certification.
(Sale of stock in Relic Entertainment)
In a Board of Directors meeting held March 28, 2024, the Company resolved to sell all shares of stock heldby its consolidated subsidiary SEGA Europe Ltd. in Relic Entertainment, Inc. The stock was sold effective
March 28, 2024. As a result, Relic Entertainment, Inc. is no longer included in the Company’s scope of
consolidation of accounts.
(1) Overview of spinoff(i) Name of acquiring company
Emona Capital LLP(ii) Line of business spun off
Consumer software development(iii) Main reasons for spinoff
Due to the negative rebound from demand related to stay-at-home consumers during the COVID19 pandemic and other factors including inflation, the consumer area is changing rapidly,
particularly in Europe. This has resulted in lower profitability. In response, the Group chose to
implement structural reforms in its European operations with the goal of improving earnings
through rapid adaptation. Various measures targeting its European operations have been
examined, including medium-term lineup revisions, normalizing fixed costs, improvements ininvestment efficiency, and revisions of its development, sales, and management structures.
Against this backdrop, the Company chose to sell all shares of stock held in Relic Entertainment,
Inc., a consolidated Company subsidiary.
29

[English Translation of Convocation Notice Originally Issued in the Japanese Language](iv) Date of spinoff
March 28, 2024(v) Other matters related to the transaction summary, including legal structure
Sale of stock in exchange for receipt of cash and other assets only
(2) Overview of accounting treatment(i) Gains/losses on transfer
Structural reform expenses:¥2,159 million(ii) Appropriate book value of assets and liabilities related to the business transferred, and main
breakdown thereof
Current assets¥2,166 million
Noncurrent assets¥1,754 million
Total assets¥3,920 million
Current liabilities¥467 million
Noncurrent liabilities¥884 million
Total liabilities¥1,352 million(iii) Accounting treatment
The difference between the consolidated book value and transfer price of the shares sold wasrecorded as extraordinary losses.
(3) Summary of profit/loss related to the spun-off business recorded on the consolidated statements ofincome during the period under review
Net sales¥4,341 million
Operating income¥344 million
XII

Notes on significant subsequent events(Transactions under common control)(1) Purpose of this absorption-type of merger
The Group has established its Medium-term Management Plan, “Beyond the Status Quo -Breaking theCurrent Situation and Becoming a Sustainable Company-”, which position the fiscal year ended March2024 as the final year, and has been working to expand its corporate value. In the Entertainment Contents
Business, mainly in the consumer area, the Group promoted the Pillar Strategy, which focuses on multiplatform roll-out and simultaneous global launch of major titles such as Sonic the Hedgehog series,
Persona series, Like a Dragon series, and others, and the Group has steadily implemented that strategy.
In the next Medium-term Management Plan, which is currently under the formulation, the Group set
strengthening of transmedia as one of the key strategies for the Entertainment Contents Business in order
to expand the Pillar Strategy and move on to the next stage.
The Group has resolved to transfer Amusement Machine Business of SEGA CORPORATION, aconsolidated subsidiary of the Company, to SEGA TOYS CO., LTD., also a consolidated subsidiary of
the Company, through an absorption-type demerger and to change the trade name of the successor
company in absorption-type demerger (SEGA TOYS CO., LTD.) at its Board of Directors meeting heldon January 9, 2024, to establish a new business unit by integrating the Amusement Machine Businessand Toy Business as part of the promotion of the transmedia strategy, and the absorption-type demerger
and the change of trade name of the successor company in absorption-type demerger were implemented
effective April 1, 2024.
(2)

Overview of this absorption-type demerger(i) Detail of business to be demerged
SEGA CORPORATION: Amusement Machine Business(ii) Legal form of business combination
An absorption-type demerger, with SEGA CORPORATION as the demerged company and SEGATOYS CO., LTD. as the successor company in absorption-type demerger.

30

[English Translation of Convocation Notice Originally Issued in the Japanese Language](iii) Overview of the company concerned in this absorption-type demerger (as of March 31, 2024)
Demerged company
Successor company
in absorption-type demerger
in absorption-type demerger

Name
Details of business

Location
Capital Stock
Major shareholders
and share ratio

SEGA CORPORATIONSEGA TOYS CO., LTD.
Planning, development, and sales ofgame-related contents for mobile phones,
Development, manufacturing, and sales
PCs, smart devices, and home videoof toysgame consoles, and development andsales of Amusement Machines
Sumitomo Fudosan Osaki Garden Tower, Sumitomo Fudosan Osaki Garden Tower,
1-1-1, Nishi-Shinagawa, Shinagawa-ku, 1-1-1, Nishi-Shinagawa, Shinagawa-ku,
Tokyo
Tokyo
¥100 million¥100 million
SEGA SAMMY HOLDINGS INC.
SEGA CORPORATION 100%
100%

*SEGA TOYS, CO., LTD. changed its trade name to SEGA FAVE CORPORATION as of April 1, 2024.
(3)

Overview of accounting treatment adoption
The merger was treated as a transaction under common control in accordance with the “AccountingStandard for Business Combinations” (ASBJ Statement No. 21, January 16, 2019), and“Implementation Guidance on Accounting Standard for Business Combinations and AccountingStandard for Business Divestitures” (ASBJ Guidance No. 10, January 16, 2019).

31

[English Translation of Convocation Notice Originally Issued in the Japanese Language]Non-consolidated statement of changes
in shareholders’ equity
FY2024 (April 1, 2023 - March 31, 2024)(Unit: millions of yen)
Capital stock
Balances as of April 1, 2023
Changes in items during the period
Dividends from surplus
Net income
Purchase of treasury stock
Disposal of treasury stock
Total changes in items during theperiodBalances as of March 31, 2024

Balances as of April 1, 2023
Changes in items during the period
Dividends from surplus
Net income
Purchase of treasury stock
Disposal of treasury stock
Total changes in items during theperiodBalances as of March 31, 2024

Balances as of April 1, 2023
Changes in items during the period
Dividends from surplus
Net income
Purchase of treasury stock
Disposal of treasury stock
Net changes in items other thanshareholders’ equity
Total changes in items during theperiodBalances as of March 31, 2024

Shareholders’ equity
Capital surplus
Legal capital surplus

Other capital surplus

Total capital surplus

29,945116,540

146,486

75

75

75

75

116,615

146,561

29,95329,95329,945

Shareholders’ equity
Retained earnings
Other capital
Total shareholders’surplusTreasury stock
Total capital
equitysurplusRetained earnings
carried forward
109,348
109,348(37,375)
248,412(13,687)
9,809(13,687)
9,809(10,016)
117(13,687)
9,809(10,016)
192(3,878)(3,878)(9,898)(13,702)

105,470

105,470(47,274)

234,710

Valuation and translation adjustments
Valuation
Deferred gains Total valuationdifference onor losses on
and translation
available-forhedges
adjustments
sale securities
610
–
610

Share
acquisitionrights468

Total net assets

249,491(13,687)
9,809(10,016)
192

1,154

(223)

930

283

1,213

1,154

(223)

930

283

(12,488)

1,764

(223)

1,540

751

237,002

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

32

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

Notes on the non-consolidated financial statements
I

Notes on important accounting policies(1) Asset valuation standards and methods(i) Valuation standards and methods for securities
Shares in subsidiaries and affiliates
The method applied is the moving average cost method.
Available-for-sale securitiesThose other than securities without available fair market value:
The fair value method is applied on market prices and other information as of the ending
date of the fiscal year (processing the entire amount of revaluation gain/loss throughdirect entry to net assets, with cost of sales calculated by the moving average method).
With respect to compound financial instruments whose fair value cannot be categorized
and measured for each embedded derivative, the entire compound financial instrument isappraised by fair value. Unrealized gains or losses are reported as profit or loss for thecurrent fiscal year.
Securities without available fair market value:
The method applied is the moving average cost method.
The net amount of equity included in the Company’s financial statements from limited
liability investment partnerships and similar investments, regarded as marketablesecurities under Article 2, Paragraph 2 of the Financial Instruments and Exchange Act, iscalculated based on available and relevant financial statements for the partnership as of
the reporting date stipulated in the partnership agreement.
(ii) Derivatives: The fair value method is applied.
(2) Methods for depreciating noncurrent assets(i) Property, plant, and equipment: The straight-line method is applied.
Useful lives for main assets are shown below:
Buildings:
2 – 50 years
Structures:
2 – 47 years
Tools, furniture, and fixtures:
2 – 15 years(ii) Intangible assets: The straight-line method is applied.
Software used by the Company is amortized by the straight-line method based on the useful life
within the Company (up to five years).
(3) Accounting treatment for significant deferred assets
Bond issuance cost: All expenses are expensed at the full amount at the time of payment.
(4) Accounting standards for allowances and provisions(i) Allowance for doubtful accounts: This is recorded in the necessary amount based on aconsideration of the recoverability of individual claims for doubtful and other claims to prepare
for possible losses on doubtful accounts at the end of the fiscal year.
(ii) Provision for bonuses: The estimated amount of bonuses is recorded to meet the payment of
employee bonuses.
(iii) Provision for directors’ bonuses: The estimated amount of bonuses is recorded to meet thepayment of bonuses for directors.
(iv) Provision for share-based compensation: To provide for issue of shares and compensation insimilar form to officers and employees of some overseas subsidiaries, the estimated future amountof shares and compensation in similar form to be issued as of the end of the current fiscal year isrecorded.
33

[English Translation of Convocation Notice Originally Issued in the Japanese Language](v) Provision for retirement benefits:
Method for allocating estimated retirement benefits to fiscal periods
In calculating retirement benefit obligations, benefit formula attribution is adopted for the
purpose of attributing projected retirement benefits to the period up to the end of the current fiscal
year.
Treatment of actuarial gains and losses and prior service costs
Actuarial differences are recorded as expenses in one lump sum in the following fiscal year.
Prior service expenses are recorded as expenses in one lump sum when they arise.
(5) Hedge accounting methods(i) Hedge accounting
The Company applies deferred hedge accounting. However, special treatment is applied toqualifying currency swap transactions and to interest rate swap transactions.
(ii) Hedging instruments and subjects of hedging
Hedging instruments: Currency swaps, interest rate swaps, and forward exchange contracts
Subjects of hedging: Borrowings and interest on borrowings denominated in foreign currencies,
receivables and payables denominated in foreign currencies(iii) Hedging policy
Use of derivative instruments as necessary is intended to mitigate risks associated with foreignexchange and interest rate fluctuations. As a rule, hedging is only used for items for which actual
demand exists, not for speculative purposes.
(iv) Method for evaluating the effectiveness of hedging
Hedge effectiveness is evaluated by ratio analysis of cumulative fluctuations in the market
between the hedged item and the hedging instrument. Evaluations of hedge effectiveness areomitted for interest rate swaps to which special treatment is applied and for currency swaps inwhich the material conditions for the notional principal of the hedging instrument and for thehedged item are the same and the transactions can offset market fluctuations.
(6) Accounting standards for recognition of significant revenues and expenses
Revenues from management guidance are derived from the Company’s provision of guidance onmanagement, planning, and other activities to subsidiaries. The Company is obligated, under contracts
with its subsidiaries, to provide management guidance over the terms of such contracts. Such obligations
are deemed fulfilled over the full term of the contract; thus, revenues are recognized over the contractual
terms.
Revenues from shared services are derived from the Company’s provision to subsidiaries of generalaffairs, legal, human resource, accounting, and other services. The Company is obligated under contracts
with its subsidiaries to provide these services over the terms of such contracts. Such obligations are
deemed fulfilled over the full term of the contract; thus, revenues are recognized over the contractual
terms.
Revenues from dividends received are recognized as of the effective date of the dividends.
(7) Other important matters serving as the bases for the preparation of the financial statements
Application of the group tax-sharing system
The Company applies the group tax-sharing system, with the Company as the parent organization fortax sharing.

34

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

Notes on accounting estimates
Valuation of shares of subsidiaries and affiliates.
(1) Amount recorded to the financial statements for the current fiscal year
Shares of subsidiaries and affiliates: ¥315,604 million(2) Method for calculating amount recorded to the financial statements for the current fiscal year
In evaluation of stock in affiliates, while shares of stock in affiliates lacking market prices arerecorded to the balance sheet in acquisition costs, if comparisons of the cost of acquisition withthe effective price reflecting surplus earnings potential indicates a markedly lower effective price,
the value is accordingly reduced and a loss recorded in the period, except when the potential forrecoverability is backed by sufficient evidence.
Since no shares of stock in affiliates lacking market prices suffered marked loss of effective value
during the period under review, there are no reasons for concern regarding the recoverability ofeffective prices.

III
Notes on the balance sheet(1) Accumulated depreciation of property, plant and equipment¥5,583 million(2) Assets pledged as collateral
Shares of subsidiaries and affiliates*¥39,712 million* At the end of the current fiscal year, shares of the equity method affiliate PARADISESEGASAMMY Co., Ltd. are pledged as collateral for a loan of ¥58,905 million (KR₩525,000
million) from financial institutions to PARADISE SEGASAMMY Co., Ltd.
(3) Monetary claims and obligations with subsidiaries and affiliates
Short-term monetary claims
Short-term monetary obligations
Long-term monetary obligations
IV

Notes on the income statement
Transactions with subsidiaries and affiliates
Consulting fee income
Shared service income
Dividends income (Operating revenue)
Selling, general, and administrative expenses
Transactions other than operating transactions

V¥5,188 million¥99,895 million¥39,275 million¥10,549 million¥4,652 million¥13,008 million¥1,989 million¥1,645 million

Notes on the statement of changes in shareholders’ equity
Class and quantity of treasury stock at the end of the current fiscal year
Common stock
25,214,788 shares

35

[English Translation of Convocation Notice Originally Issued in the Japanese Language]VI
Notes on tax effect accounting(1) Significant components of deferred tax assets and deferred tax liabilities
Deferred tax assets
Losses carried forward
Exclusion of provision for bonuses from deductible expenses
Exclusion of provision of allowance for doubtful accounts from deductible
expenses
Exclusion of loss on valuation of shares of subsidiaries and affiliates fromdeductible expenses
Valuation difference on available-for-sale securities
Other
Subtotal deferred tax assets
Valuation allowance for tax loss carried forward
Valuation allowance for deductible temporary difference
Subtotal valuation allowance
Offset to deferred tax liabilities
Total deferred tax assets
Deferred tax liabilities
Valuation difference on available-for-sale securities
Gain (loss) on valuation of investment partnerships
Asset retirement obligations
Income taxes receivable
Subtotal deferred tax liabilities
Offset to deferred tax assets
Total deferred tax liabilities
Deferred tax liabilities, net

968 million yen
319
2,987
7,346
34
1,483
13,140(968)(11,477)(12,446)(694)–

826 million yen
550
147
6
1,530
(694)
835
(835)

(2) Breakdown by major causes of significant differences between the statutory tax rate and the effective
tax rate after application of tax effect accounting, if any
Effective statutory tax rate

30.6 %

Permanently non-deductible expenses, including entertainment expenses
R&D tax credit
Increase/decrease in valuation reserves
Retained loss for tax purposes
Amount of dividends received, etc. not included in profit
Other
Effective tax rate after tax effect accounting

1.0 %(0.2) %
2.4 %
0.1 %(44.8) %0.4 %(10.3) %(3) Accounting treatment of national and local income tax or related tax effect accounting
The Company applies the group tax-sharing system. The Company carries out accounting treatment anddisclosure for national and local income tax or related tax-effect accounting in accordance with thePractical Solution on the Accounting and Disclosure Under the Group Tax Sharing System (PITF No.
42, August 12, 2021).

36

[English Translation of Convocation Notice Originally Issued in the Japanese Language]
VII Notes on transactions with related parties(1) Subsidiaries, affiliates, etc.

Type

Name ofcompany, etc.

Percentage ofvoting rights
held by (or in)
the Company(Unit: millions of yen)

Relationship torelated party

Details oftransactions
Management
guidance fees*2

Subsidiary

Shared service
fees*3

Sammy
Corporation

100% held
directly by theCompany

Management
guidance
Concurrent
posting ofexecutives

Amount of taxsharing effects
under the grouptax-sharing
systemDeposits
received/paid*4

Account

Accounts
3,164 receivable- tradeAccounts
1,169 receivable- tradeAccounts– receivable- other
Deposits
received
Longterm
deposits
received
Other
168 current
liabilities

290
107

1,357
15,95330,00030

Subsidiary–Endingbalance

100% held
RODEO Co., Ltd. indirectly by theCompany–

Deposits
received/paid*4–

Deposits
received

5,286

Subsidiary

Interest paid*5

Transaction
amount*1

TAIYO ELEC
Co., Ltd.

100% held
indirectly by theCompany–

Deposits
received/paid*4–

Deposits
received

10,758

Management
guidance fees*2

Subsidiary

Shared service
fees*3SEGA
CORPORATION

100% held
directly by theCompany

Management
guidance
Concurrent
posting ofexecutives

Amount of taxsharing effects
under the grouptax-sharing
systemDeposits
received/paid*4
Interest paid*5
Collection ofloans
Lending offundsInterest
received*537

Accounts
7,384 receivable- tradeAccounts
3,232 receivable- tradeAccounts– payable other
Deposits
received
560–
Short-termloans to
3,265
subsidiaries
and affiliates
Long-termloans to100,640
subsidiaries
and affiliates
Accounts
676 receivable- other
–

676
294

1,580
39,592–
20,32893,140471

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

Subsidiary

SubsidiaryType

Name ofcompany, etc.

SEGA SAMMY
CREATION
INC.

PHOENIXRESORT CO.,LTD.

Percentage ofvoting rights
held by (or in)
the Company

Relationship torelated party

100% held
directly by theCompany

Concurrent
posting ofexecutives

100% held
directly by theCompany

Details oftransactions

Lending offundsInterest
received*5
Amount of taxsharing effects
under the grouptax-sharing
systemDeposits
received/paid*4

Concurrent
posting ofexecutives

Collection ofloans
Lending ofassetsInterest
received*5

Subsidiary

Shared service
fees*3

100% held
Sammy Networks
indirectly by theCo., Ltd.
Company

Amount of taxsharing effects
under the grouptax-sharing
systemDeposits
received/paid*4

Concurrent
posting ofexecutives

Subsidiary

Interest paid*5

TMS
100% held
ENTERTAINME indirectly by the
NT CO., LTD.
Company

Amount of taxsharing effects
under the grouptax-sharing
systemDeposits
received/paid*4

Concurrent
posting ofexecutives

Affiliate

Interest paid*5
PARADISESEGASAMMY
Co., Ltd.

45.0% held
directly by theCompany

Provision ofcollateral *7–

Transaction
amount*1

Account

Long-termloans to1,200 subsidiaries
andaffiliates*6
147

Endingbalance

15,550––Accounts– receivable- other

31

Deposits
received
Short-termloans to
1,920
subsidiaries
and affiliates
Long-termloans to127
subsidiaries
and affiliates
–

21

183
850

1,927

–

–

Accounts
50 receivable- trade4

Accounts– receivable- other72

Deposits
received
Longterm
deposits
receivedOther
13 current
liabilities–

Accounts– receivable- other
Deposits
received
Longterm
deposits
receivedOther
20 current
liabilities–

39,712

2,867
5,275
5

342
12,3824,000–*1. Transaction amounts exclude consumption tax.
*2. Amounts of management guidance fees are determined based on the expenses required of the Company to manage Group
company businesses.
*3. Amounts of shared service fees are determined based on the expenses required to perform the relevant operations.

38

6

–

[English Translation of Convocation Notice Originally Issued in the Japanese Language]*4. This transaction was conducted under the cash management system intended to integrate fund raising and investment in theGroup and put funds to effective use. Transaction amounts are not indicated because lending of funds among Group
companies takes place repeatedly.
*5. Interest is determined with reference to market interest rates.
*6. Concerning long-term loans receivable from subsidiaries and affiliates to SEGA SAMMY CREATION INC., an allowancefor doubtful accounts was recorded in the amount of ¥9,905 million during the current fiscal year.
*7. Shares of stock in PARADISE SEGASAMMY Co., Ltd. have been pledged as collateral for certain borrowings by thatcompany from financial institutions.

(2) Executives, individual shareholders, etc.
(Unit: millions of yen)
Percentage

Type

Name of company, of voting
rights heldetc.
by (or in) the
Company

Company, etc.
in which an
executive, or a*3
relative thereof, FSC Co., Ltd.
holds a majorityof voting rights

6.33% heldin theCompany
directly

Relationshipto related
party

Details oftransactions

Insurance
agent

Payment of
insurance
premiums*2

Transaction
amount*1

2

Account

Endingbalance

Prepaid expenses

0Long-term
prepaid expenses

2*1. Transaction amounts exclude consumption tax.
*2. Transaction amounts are determined in accordance with general transaction conditions, with market prices serving as
references.
*3. Company Chairman (Representative Director) Hajime Satomi and President and Group CEO (Representative Director)
Haruki Satomi own a majority of shares in FSC Co., Ltd.

VIII

Notes on per-share information
Net assets per share
Net income per share

1,093.68 yen
44.74 yen39