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

Securities Code: 6460
June 1, 2023
(Start date for electronic provision measures: May 30, 2023)
Haruki Satomi
President, Representative Director
SEGA SAMMY HOLDINGS INC.
Sumitomo Fudosan Osaki Garden Tower,
1-1-1 Nishi-Shinagawa, Shinagawa-ku,
Tokyo, Japan
Dear Shareholders:

Notice of the 19th Ordinary General Meeting of
Shareholders to be held on June 22, 2023
We inform you that the 19th Ordinary General Meeting of Shareholders of SEGA SAMMY HOLDINGS INC.
(the “Company”) will be held at the Head Office of SEGA SAMMY Group (LIGHTHOUSE Hall, 11F, GRAND
HARBOR, Sumitomo Fudosan Osaki Garden Tower, 1-1-1 Nishi-Shinagawa, Shinagawa-ku, Tokyo, Japan) on
Thursday, June 22, 2023 at 10:00 a.m. for the purposes listed below.
Regarding the convocation of this General Meeting of Shareholders, measures for electronic provision havebeen taken for the Reference Documents for the General Meeting of Shareholders, etc. (matters to be provided
electronically), and the documents have been posted on the following websites on the Internet.
The Company’s website:
https://www.segasammy.co.jp/en/ir/stock/general_meeting/
The Tokyo Stock Exchange (TSE) website (TSE Listed Company Search):https://www2.jpx.co.jp/tseHpFront/JJK020010Action.do?Show=Show
Please access the TSE website above, enter and search for the issue name (company name) or securities code,and select “Basic information” and “Documents for public inspection/PR information” to confirm.
Net-de-Shoshu (online convocation):
https://s.srdb.jp/6460
If you are unable to attend the meeting, you may exercise your voting rights via the Internet or by mail (inwriting). Therefore, please review the Reference Documents for General Meeting of Shareholders listed in thematters to be provided electronically, and kindly exercise your voting rights before 6:00 p.m., Japan Standard
Time, on Wednesday, June 21, 2023.

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Details of the Meeting
1. Date and time:Thursday, June 22, 2023 at 10:00 a.m. (Reception commences at 9:00 a.m.)

2. Venue:

LIGHTHOUSE Hall, 11F, GRAND HARBOR,
Head Office of SEGA SAMMY Group
Sumitomo Fudosan Osaki Garden Tower,
1-1-1 Nishi-Shinagawa, Shinagawa-ku, Tokyo, 141-0033, Japan

3. Agenda:
Matters to be reported:

1. The Business Report and the Consolidated Financial Statements for the 19th
fiscal year (from April 1, 2022 to March 31, 2023) and results of audits by
the Accounting Auditor the Audit and Supervisory Committee on theConsolidated Financial Statements
2. Non-Consolidated Financial Statements for the 19th fiscal year (from April
1, 2022 to March 31, 2023)

Matters to be resolved:
Proposal 1: To amend certain parts of the Articles of Incorporation
Proposal 2: To elect eight (8) Directors (excluding Directors serving as Audit and Supervisory
Committee Members)* If you attend the meeting in person, please submit the enclosed voting form at the reception desk at the meeting location on the
day of the meeting.
* Please note that persons other than shareholders of the Company such as a proxy and an accompanying person cannot attend themeeting.
* If you do not indicate approval or disapproval of the proposals on the voting form, it will be treated as an indication of approval.
* If you exercise your voting rights both via the Internet and in writing, we will treat the voting rights exercised via the Internet as
valid. If you exercise your voting rights multiple times via the Internet, we will treat the last vote made as valid.
* Pursuant to the provisions of laws and regulations and Article 16 of the Company’s Articles of Incorporation, the following
matters are not included in the documents sent to shareholders who have requested delivery of documents. Accordingly, these
documents are part of the documents audited by the Audit and Supervisory Committee and the Accounting Auditor when
preparing the audit report.
・ Business Report: III Company stock options, etc., V Accounting auditor, VI Overview of structures for ensuring the proprietyof business operations and the state of their operation
・ Consolidated Financial Statements: Consolidated statement of changes in shareholders’ equity, Notes on the consolidated
financial statements
・ Non-Consolidated Financial Statements: Non-consolidated statement of changes in shareholders’ equity, Notes on the nonconsolidated financial statements* Should any change need to be made to the matters to be provided electronically, the notice and the matters before and afterrevision shall be posted on each website listed above.
* For voting results, an extraordinary report shall be posted on the website of the Company in place of the Notice of Resolutions.
Information in English will be posted on our English website.
* We will take appropriate measures to prevent COVID-19 according to the circumstance on the day of the meeting.
Should any significant change need to be made to the operation of the meeting in response to circumstances, such changes shallbe posted on the website of the Company. Please check the updated information on our English website.
(https://www.segasammy.co.jp/en/ir/stock/general_meeting/).

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Information on Exercise of Voting Rights
We recognize that the shareholders’ voting right to be exercised in the General Meeting of Shareholders is an
important right for our shareholders.
Please review the Reference Documents for General Meeting of Shareholders listed in the matters to be provided
electronically, and we respectfully request that you exercise your voting rights.
The following three methods are available for exercising your voting rights.
Attending the meeting in person
Exercise of your voting rights on-site at the meeting
Please submit the enclosed voting form at the reception desk of the venue.
Date and time of the meeting: Thursday, June 22, 2023 at 10:00 a.m.
Not attending the meeting in person
Exercise of your voting rights via the Internet
Please enter “for” or “against” the proposals following the instructions listed in the matters to be provided
electronically.
Deadline: Wednesday, June 21, 2023 by 6:00 p.m.
Exercise of your voting rights in writing
Please indicate “for” or “against” the proposals on the enclosed voting form and return it by mail to theCompany.
Deadline: Wednesday, June 21, 2023, 6:00 p.m. (time of receipt)
Guidelines on filling out the voting form
Please indicate “for” or “against” for each of the proposals in the voting form.
Proposal 1- To approve, circle “賛” mark.
- To disapprove, circle “否” mark.
Proposal 2- To approve all nominees, circle “賛” mark.
- To disapprove all nominees, circle “否” mark.
- To disapprove part of nominees, circle “賛” mark and enter the number of nominees whom you are against.

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Information on Exercise of Voting Rights via the Internet, etc.
Please read the following when you exercise your voting rights via the Internet.
Deadline for Exercise of Voting Rights: Wednesday, June 21, 2023 by 6:00 p.m.
* Please exercise your voting rights as soon as possible.
By scanning the QR code
Scan the “QR code for login” and you can log on to the voting website without entering the “voting rights
exercise code” and “temporary password”.
1. Scan the QR code.
Use your smartphone and scan the “QR code for login” printed on the right-hand side of the enclosed voting
form slip.
2. Select the option of exercise of voting rights.
The screen displays available options for exercise of voting rights. Select your preferred option for exercise
of voting rights.
3. Select “for” or “against” each proposal.
Follow the on-screen instructions and select “賛成(for)” or “反対(against)” each proposal.
Follow the on-screen instructions to complete your exercise of voting rights.
■Electronic proxy voting platform for institutional investors
Institutional investors can use the electronic proxy voting platform that is operated by Investor
Communications Japan, Inc., which is designed for institutional investors to exercise their voting rights
electronically.

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FAQs for exercise of voting rights
Q: If the voting rights are exercised both via the Internet and in writing, which one is valid?
A: The Internet vote will be deemed as valid.
Q: If voting rights are exercised more than once via the Internet, are all of the votes valid?
A: If voting rights are exercised more than once, the last vote will be deemed as valid.
By entering the “voting rights exercise code” and “temporary password”
1. Access the voting website.
Voting website
https://evote.tr.mufg.jp/
Click “次の画面へ(Proceed)”.
2. Enter the “voting rights exercise code” and “temporary password” printed on the right-hand side ofthe enclosed voting form slip.
Click “ログイン(Login)”.
3. Fill in the fields “New Password” and “New Password (for confirmation).”Click “送信(Send)”.
Follow the on-line instructions and enter “for” or “against”.

Notes on use
Handling of the voting website
You can exercise your voting rights via the Internet by accessing the voting website (https://evote.tr.mufg.jp/)
using your personal computer or smartphone (except from 2:00 a.m. to 5:00 a.m.).
About Internet access1. You may be unable to use the voting website depending on your Internet configuration, your subscription
service, or the device you use.
2. Please note that any costs incurred in using the designated voting website, such as Internet connection fees
and communication charges, shall be borne by the shareholder.
Handling of passwords
To prevent unauthorized access or falsification of the content for exercising voting rights by a person otherthan a shareholder, shareholders who exercise voting rights via the Internet are kindly requested to change
the “temporary password” on the voting website.

For inquiries concerning operating procedures for the voting website:
Securities Agency Division, Mitsubishi UFJ Trust and Banking Corporation
Toll-free line: 0120-173-027 (Domestic [Japan] call only)
Hours: 9:00 a.m. - 9:00 p.m.
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[English Translation of Convocation Notice Originally Issued in the Japanese Language]

Information on Live Stream via the Internet and Acceptance of Questions in Advance
The General Meeting of Shareholders will be streamed live on a website exclusively for shareholders so thatyou may watch it at home, etc.
In addition, we accept questions from shareholders in advance regarding the agenda for the General Meeting of
Shareholders on the website exclusively for shareholders.
1.

Engagement Portal Site
https://engagement-portal.tr.mufg.jp/*Engagement Portal is a website exclusively for shareholders operated by Mitsubishi UFJ Trust andBanking Corporation.

2.

Date and time of live stream
Thursday, June 22, 2023 at 10:00 a.m.
You may not participate in resolutions on the day of the General Meeting of Shareholders.
Please exercise your voting rights in advance via the Internet or by mail (in writing).

3.

Period for acceptance of questions in advance
From the arrival of the Notice of Convocation until Thursday, June 15, 2023 at 6:00 p.m.
We plan to answer questions of particular interest to all shareholders on the day of the General Meeting of
Shareholders.
*Please note that we are unable to provide individual responses to questions received in advance.

Please refer to the enclosed leaflet for how to log in to the Engagement Portal, how to watch the live stream,
how to ask questions in advance, and to view notes.
Information for Shareholders Attending the General Meeting of Shareholders
In consideration of the privacy of shareholders, etc., the meeting will be filmed from the back of the venue
during the live stream on the day of the event. However, please be forewarned that shareholders attending themeeting may unavoidably appear in the video.

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Reference Documents for General Meeting of Shareholders
Proposals and reference information
Proposal 1: To amend certain parts of the Articles of Incorporation
1. Reasons for the amendments“The Act for Partially Amending the Industrial Competitiveness Enhancement Act and Other Related Acts”(Act No.70 of 2021) came into effect on June 16, 2021 and allows listed companies to hold general meetingsof shareholders without specifying a location (so-called "virtual-only shareholders meetings") by stipulating
it in their Articles of Incorporation.
The Company will amend Article 14 of its present Articles of Incorporation in order to enable virtual-only
shareholders meetings if the Board of Directors determines that it is not appropriate in light of the interestsof shareholders to hold a general meeting of shareholders at a specific location due to the spread of infectious
diseases or the occurrence of natural and other large-scale disaster, etc.
On June 14, 2022, the Company received confirmation from the Minister of Economy, Trade and Industry
and the Minister of Justice that its virtual-only shareholders meetings would meet the requirements specified
by their respective Ordinances as they would contribute to the enhancement of industrial competitivenesswhile taking into account shareholders’ interests.
2. Details of the proposed amendments(The parts to be amended are underlined)
Present Articles of Incorporation
Proposed amendment
Article 14 (Venue)
Article 14 (Venue)
A general meetings of shareholders shall be convened 14.1 A general meetings of shareholders shall bein the area of head office, at a neighboring location orconvened in the area of head office, at a
at a location in a ward of the Metropolis of Tokyo.
neighboring location or at a location in a ward of
the Metropolis of Tokyo. This provision shall not
apply if the Company holds a general meeting ofshareholders without specifying a location
pursuant to the following paragraph.
(Newly established)
14.2 The Company may hold a general meeting ofshareholders without specifying a location if theBoard of Directors determines that it is not
appropriate in light of the interests ofshareholders to hold the general meeting ofshareholders at a specific location due to the
spread of infectious diseases or the occurrence of
natural and other large-scale disaster.

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Proposal 2: To elect eight (8) Directors (excluding Directors serving as Audit and Supervisory Committee
Members)
The terms of office of all eight (8) Directors (excluding Directors serving as Audit and Supervisory Committee
Members) will expire at the conclusion of this Ordinary General Meeting of Shareholders. Accordingly, weare seeking to elect eight (8) Directors (excluding Directors serving as Audit and Supervisory Committee
Members).
As a result of deliberations by the Audit and Supervisory Committee, we have received the opinion that there
are no particular opinions regarding this proposal.
The nominees for Directors (excluding Directors serving as Audit and Supervisory Committee Members) areas described below.
NomineeNo.

Name

GenderAge

No. of
Years
Servedas
Director

Position and Responsibilities
at the Company

Male
81
Male
44

18 years

1

Hajime Satomi[Reappointment]

2

Haruki Satomi[Reappointment]

3

Koichi Fukazawa[Reappointment]

Male
57

8 years

4

Yukio Sugino[Reappointment]

Male
52

1 year5

Hideo Yoshizawa[Reappointment]

Male
58

4 years

6

Kohei Katsukawa

Male
72

7 years

7

Melanie Brock

Female59

4 years8

Fujiyo Ishiguro[Reappointment]
External Director
Independent Director[Reappointment]
External Director
Independent Director[Reappointment]
External Director
Independent Director

Chairman, Representative
Director
President and Group CEO,
Representative Director
in charge of Public Relations
Office and Sustainability
Division
Senior Executive Vice
President and Group CFO,
Director of the Boardin charge of Gaming Business
Division, Corporate Planning
Division, Finance &Accounting Division, IT
Solution Division and Human
Resources Development
Division
Senior Executive Vice
President, Director of theBoard
in charge of Group Licensing
Division
Senior Vice President,
Director of the Boardin charge of General
Corporate Administration
Division, Legal & Intellectual
Property Division and Global
Corporate Governance
Division
Director of the Board

Female65

2 years

11 years

0

Attendanceat Board of
Directors’Meetings

13/13(100%)
13/13(100%)

013/13(100%)

0

11/11(100%)

013/13(100%)

013/13(100%)

Director of the Board

1

12/13
(92%)

Director of the Board

2

13/13
(100%)

Note: The age and the number of years served as Director of each nominee are as of the conclusion of this meeting.

8

No. ofConcurrent
Positionsat Other
ListedCompanies0[English Translation of Convocation Notice Originally Issued in the Japanese Language]
NomineeNo.

Name(Date of Birth)

Brief Career Profile, Position and Responsibilities at the Company, and Important Concurrent
Duties outside the Company
Mar.
1980 President, Representative Director of Sammy Industry Co., Ltd. (nowSammy Corporation)
Feb.
2004 Chairman of the Board, Representative Director of SEGACORPORATION[Reappointment]
Jun.
2004 Chairman and CEO, Representative Director of Sammy CorporationJun.
2004 Chairman and CEO, Representative Director of SEGA CORPORATION
Hajime Satomi
Oct.
2004 Chairman, President and CEO, Representative Director of the Company(January 16, 1942)
Jun.
2007 President, CEO and COO, Representative Director of SEGAAge 81CORPORATION
Gender: MaleMay
2008 Chairman and CEO, Representative Director of the above
Apr.
2012 Chairman of the Board of Sammy CorporationMay
2013 Chairman and CEO, Representative Director of the above
Number of the1
Company’s sharesJun.
2015 Advisor to NDK (current position)
owned:
Jun.
2016 Chairman, President, CEO and COO, Representative Director of the7,202,938 sharesCompany
Apr.
2017 Chairman and CEO, Representative Director of the Company
No. of years served as
Apr.
2017 Chairman of the Board, Representative Director of Sammy Corporation
Director:(current position)
18 years
Apr.
2017 Honorary Chairman of the Board of SEGA Holdings Co., Ltd. (now SEGACORPORATION) (current position)
Attendance at Boardof Directors’ meetings: Apr.
2018 Chairman and Group CEO, Representative Director of the Company
100% (13/13)
Apr.
2021 Chairman, Representative Director of the Company (current position)
Apr.
2022 Chief Advisor of PHOENIX RESORT CO., LTD. (current position)Jun.
2022 Honorary Advisor of Japan Amusement Industry Association (current
position)[Important concurrent duties outside the Company (No. of concurrent positions at other listed companies: 0)]
Chairman of the Board, Representative Director of Sammy Corporation and Honorary Chairman of the Board of SEGACORPORATION[Reason for nomination as candidate for Director]
Mr. Hajime Satomi has served as a corporate manager of the Company and Group companies, demonstrated leadership over many
years and contributed to the development of the Group.
We seek appointment of Mr. Hajime Satomi as Director as we expect he will continue to benefit the decision making of theCompany’s Board of Directors with such wealth of experience, career record and hard-earned insight, and contribute to improving
the corporate value of the Company.
Notes: 1. The Company conducts transactions relating to intermediary services for insurance, etc. with FSC Co., Ltd., of which
Mr. Hajime Satomi and Mr. Haruki Satomi own a majority of voting rights.
2. The Company has concluded a directors and officers liability insurance contract with an insurance company with all of
its Directors as insured persons. The Company has assumed the costs of insurance premiums in full for all of the insured
parties with respect to the insurance policy, which covers statutory compensation for damages, litigation expenses andother such outlays that an insured party may incur. All candidates will be insured under the insurance contract, whichis to be renewed during their terms of office.

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Nominee
No.

2

Name
(Date of Birth)

Brief Career Profile, Position and Responsibilities at the Company, and Important Concurrent
Duties outside the Company
Mar.
2004 Joined Sammy CorporationJan.
2005 Joined SEGA CORPORATION
Jun.
2012 Senior Vice President, Director of the Board of the Company
Jun.
2012 Senior Vice President, Director of the Board of SEGA CORPORATION[Reappointment]Apr.
2014 Senior Vice President, Director of the Board of Sammy Corporation
Nov.
2014 Deputy COO, Representative Director of SEGA CORPORATION
Nov.
2015 Deputy COO, Representative Director of Sammy Corporation
Haruki Satomi
Apr.
2016 President and COO, Representative Director of the above(January 11, 1979)
Jun.
2016 Executive Vice President, Director of the Board of the Company
Age 44Apr.
2017 President and COO, Representative Director of the Company
Gender: MaleApr.
2017 President and CEO, Representative Director of Sammy Corporation(current position)
Number of theApr.
2017 Chairman and CEO, Representative Director of SEGA Games Co., Ltd.
Company’s shares(now SEGA CORPORATION) (current position)
owned:
Apr.
2018 President and Group COO, Representative Director of the Company
3,905,461 shares
Apr.
2018 Chairman of the Board of PHOENIX RESORT CO., LTD. (current
position)
No. of years served as
Apr.
2021 President and Group CEO, Representative Director of the Company
Director:(current position)
11 years
Apr.
2021 Chairman of the Board of Sammy Networks Co., Ltd. (current position)
Attendance at Board
Apr.
2021 Officer of NDK (current position)of Directors’ meetings:
Apr.
2021 Officer of KEIZAI DOYUKAI (Japan Association of Corporate
100% (13/13)
Executives) (current position)
Apr.
2022 Chairman of the Board of TMS ENTERTAINMENT CO., LTD. (current
position)
Chairmanof the Board of Sunrockers, Ltd. (current position)
Sep.
2022

[Important concurrent duties outside the Company (No. of concurrent positions at other listed companies: 0)]
President and CEO, Representative Director of Sammy Corporation and Chairman and CEO, Representative Director of SEGACORPORATION[Reason for nomination as candidate for Director]
Mr. Haruki Satomi has served as a corporate manager of the Company and Group companies and contributed to the improvementof corporate earnings. He currently serves as President, Representative Director of the Company and demonstrates leadership as a
Chief Executive Officer of the Group.
We seek appointment of Mr. Haruki Satomi as Director as we expect he will continue to benefit the decision making of theCompany’s Board of Directors with such experience, career record and leadership, and contribute to improving the corporate valueof the Company.
Notes: 1. The Company conducts transactions relating to intermediary services for insurance, etc. with FSC Co., Ltd., of which
Mr. Hajime Satomi and Mr. Haruki Satomi own a majority of voting rights.
2. The Company has concluded a directors and officers liability insurance contract with an insurance company with all of
its Directors as insured persons. The Company has assumed the costs of insurance premiums in full for all of the insured
parties with respect to the insurance policy, which covers statutory compensation for damages, litigation expenses andother such outlays that an insured party may incur. All candidates will be insured under the insurance contract, whichis to be renewed during their terms of office.

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

Name(Date of Birth)

Brief Career Profile, Position and Responsibilities at the Company, and Important Concurrent
Duties outside the Company
Apr.
1990 Joined The Sanwa Bank, Limited (now MUFG Bank, Ltd.)Jul.
2003 Joined Sammy Corporation
Aug. 2003 Vice President, Executive Officer and Managing Director of President’s
Office of the above
Oct.
2004 Vice President, Executive Officer and Managing Director of President’s
Office of the Company[Reappointment]
Oct.
2004 Vice President, Executive Officer and Managing Director of Chairman’s
Office and President’s Office of SEGA CORPORATION
Koichi Fukazawa Jun. 2005 Senior Vice President, Director of the Board and Managing Director of
Chairman’s Office and President’s Office of the above(November 2, 1965)
Age 57
Jan.
2007 President, Representative Director of SEGA SAMMY ASSET
Gender: Male
MANAGEMENT INC. (now MARZA ANIMATION PLANET INC.）
Aug. 2007 Senior Vice President, Executive Officer and in charge of the
Corporate Strategy and External Affairs of the Company
Number of theMay2008 Senior Vice President, Director of the Board and Managing Director of
3
Company’s shares
New Business Division of SEGA CORPORATION
owned:
Apr.
2009
Officer of KEIZAI DOYUKAI (Japan Association of Corporate
63,500 shares
Executives) (current position)2009 President, Representative Director of SEGASAMMY VISUAL
No. of years served as Jun.
ENTERTAINMENT INC. (now MARZA ANIMATION PLANET INC.)
Director:
8 years
Apr.
2014 Senior Executive Vice President, Representative Director of SEGA TOYS
CO., LTD.
Attendance at Board
Jun.
2015 Senior Vice President, Director of the Board of the Company
of Directors’ meetings:
Jun.
2016 Executive Vice President and CFO, Director of the Board of the Company
100% (13/13)
Apr.
2018 Executive Vice President and Group CFO, Director of the Board of theCompanyJun.
2020 Senior Executive Vice President and Group CFO, Director of the Board of
the Company (current position)
Apr.
2021 Senior Vice President, Director of the Board of Sammy Corporation(current position)[Important concurrent duties outside the Company (No. of concurrent positions at other listed companies: 0)]
Senior Vice President, Director of the Board of Sammy Corporation[Reason for nomination as candidate for Director]
Mr. Koichi Fukazawa has served as a corporate manager of the Company and Group companies in various fields including
corporate planning, administration and new businesses. He currently serves as CFO of the Group and promotes the gaming
business.
We seek appointment of Mr. Koichi Fukazawa as Director as we expect he will continue to benefit the decision making of theCompany’s Board of Directors with such wealth of experience and career record, and contribute to improving the corporate valueof the Company.
Notes: 1. There is no special interest between the Company and Mr. Koichi Fukazawa.
2. The Company has concluded a directors and officers liability insurance contract with an insurance company with all of
its Directors as insured persons. The Company has assumed the costs of insurance premiums in full for all of the insured
parties with respect to the insurance policy, which covers statutory compensation for damages, litigation expenses andother such outlays that an insured party may incur. All candidates will be insured under the insurance contract, whichis to be renewed during their terms of office.

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

Name(Date of Birth)

Brief Career Profile, Position and Responsibilities at the Company, and Important Concurrent
Duties outside the Company
Apr.
1993 Joined SEGA Enterprises, Ltd. (now SEGA CORPORATION)
Jun.
2003 Vice President, Executive Officer and General Manager of ProjectManagement Division of SEGA CORPORATION
Jun.
2009 Senior Vice President, Director of the Board and General Manager of
President’s Office of the aboveJul.
2010 Senior Vice President, Director of the Board and General Manager of Sega
R&D/Production of the above[Reappointment]May
2012 Executive Vice President, Director of the Board and General Managing
Director of Consumer Online Business Headquarters of the above
Jun.
2012
Director & Chairman of Sega of America, Inc.
Yukio SuginoJun.
2012 Director & Chairman of Sega Europe Ltd.
(June 25, 1970)
Age 52
Apr.
2014 President, Representative Director of ATLUS. CO., LTD.
Gender: Male
Apr.
2015 Senior Vice President, Director of the Board of SEGA Holdings Co., Ltd.
(now SEGA CORPORATION)
Apr.
2015 President and CEO, Representative Director of SEGA Interactive Co., Ltd.
Number of the(now SEGA CORPORATION)
Company’s shares
4
Apr.
2017
Senior Executive Vice President, Director of the Board of SEGA Holdings
owned:
Co., Ltd. (now SEGA CORPORATION)
20,000 shares
Apr.
2020 President and COO, Representative Director of SEGA CORPORATION(current position)
No. of years served as
Director:
Apr.
2020 Deputy COO, Representative Director of SEGA GROUP CORPORATION
1 year(now SEGA CORPORATION)
Jun.
2020 Executive Vice President, Executive Officer of the Company
Attendance at Board
Aug. 2020 Chairman, Representative Director of ATLUS. CO., LTD. (current
of Directors’ meetings:
position)
100% (11/11)
Apr.
2021 Senior Vice President, Director of the Board of SEGA TOYS CO., LTD.
(current position)Jun.
2022 Senior Executive Vice President, Director of the Board of the Company(current position)
Apr.
2023 Senior Vice President, Director of the Board of DARTSLIVE Co., Ltd.
(current position)
Apr.
2023 Chairman of the Board of MARZA ANIMATION PLANET INC.
(current position)[Important concurrent duties outside the Company (No. of concurrent positions at other listed companies: 0)]
President and COO, Representative Director of SEGA CORPORATION[Reason for nomination as candidate for Director]
Mr. Yukio Sugino has served as a corporate manager of the Group’s entertainment contents business companies. He currently
serves as President and Representative Director of SEGA CORPORATION and leads the business growth of the SEGA Group on
a global stage.
We seek appointment of Mr. Yukio Sugino as Director as we expect he will continue to benefit the decision making of theCompany’s Board of Directors with such knowledge and experience, and contribute to improving the corporate value of theCompany.
Notes: 1. There is no special interest between the Company and Mr. Yukio Sugino.
2. The Company has concluded a directors and officers liability insurance contract with an insurance company with all of
its Directors as insured persons. The Company has assumed the costs of insurance premiums in full for all of the insured
parties with respect to the insurance policy, which covers statutory compensation for damages, litigation expenses andother such outlays that an insured party may incur. All candidates will be insured under the insurance contract, whichis to be renewed during their terms of office.

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

Name(Date of Birth)

Brief Career Profile, Position and Responsibilities at the Company, and Important Concurrent
Duties outside the Company
Apr.
1987 Joined Japan Leasing Corporation (now Sumitomo Mitsui Finance andLeasing Co., Ltd.)
Jun.
1999 Manager of Financial Planning Department of the aboveJul.
2001 Joined Sammy CorporationJun.
2002 Vice President, Executive Officer and Deputy Managing Director of
President Office of the above
Jun.
2004
Senior Vice President, Director of the Board and Managing Director of[Reappointment]
Administration Division of the above
Oct.
2004 Senior Vice President, Director of the Board and Managing Director of
Corporate Division and President Office of the above
Hideo Yoshizawa(August 27, 1964)
Aug. 2007 Senior Vice President, Executive Officer of the Company
Age 58
Mar.
2012 Senior Vice President, Director of the Board of PHOENIX RESORT CO.,
Gender: Male
LTD.
Apr.
2015 President, Representative Director of TAIYO ELEC Co., Ltd.
Apr.
2016 Senior Vice President, Director of the Board of SEGA Holdings Co., Ltd.
Number of the(now SEGA CORPORATION)
5
Company’s shares
Jun.
2016
Senior Vice President, Director of the Board and Managing Director ofowned:
Corporate Division of the above
28,500 sharesJun.
2016 Senior Vice President, Director of the Board of SEGAENTERTAINMENT CO., LTD. (now GENDA GiGO Entertainment Inc.)
No. of years served as
Director:
Jun.
2016 Auditor of Sega Amusements Taiwan Ltd.
4 years
Apr.
2017 Executive Vice President, Director of the Board and Managing Director of
Corporate Division of SEGA Holdings Co., Ltd. (now SEGA
Attendance at Board
CORPORATION)
of Directors’ meetings:
Jun.
2017
Audit
& Supervisory Board Member of SEGA Games Co., Ltd. (now100% (13/13)
SEGA CORPORATION)
Oct.
2018 Senior Vice President, Executive Officer and Managing Director of Legal
Division of the Company
Jun.
2019 Senior Vice President, Director of the Board of the Company (current
position)Jun.
2020 Senior Vice President, Director of the Board of SEGA CORPORATION(current position)[Important concurrent duties outside the Company (No. of concurrent positions at other listed companies: 0)]
Director of the Board of SEGA CORPORATION[Reason for nomination as candidate for Director]
Mr. Hideo Yoshizawa has served as a corporate manager of the Company’s and the Group’s pachinko and pachislot machines
business, entertainment contents business, and resort business companies, and has extensive knowledge and a wealth of experiencein the Company’s core business.
We seek appointment of Mr. Hideo Yoshizawa as Director as we expect he will continue to benefit the decision making of theCompany’s Board of Directors with such knowledge and experience, and contribute to improving the corporate value of theCompany.
Notes: 1. There is no special interest between the Company and Mr. Hideo Yoshizawa.
2. The Company has concluded a directors and officers liability insurance contract with an insurance company with all of
its Directors as insured persons. The Company has assumed the costs of insurance premiums in full for all of the insured
parties with respect to the insurance policy, which covers statutory compensation for damages, litigation expenses andother such outlays that an insured party may incur. All candidates will be insured under the insurance contract, whichis to be renewed during their terms of office.

13

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

Name
Brief Career Profile, Position and Responsibilities at the Company, and Important Concurrent(Date of Birth)
Duties outside the Company[Reappointment]
Apr.
1974 Joined Sumitomo Bank (now Sumitomo Mitsui Banking Corporation)[Nominee forApr.
2001 Executive Officer, Head of Osaka Corporate Banking Division II ofExternal Director]
Sumitomo Mitsui Banking Corporation[Independent Director] Apr.
2005 Managing Executive Officer, Deputy Head of Whole sale Banking Unit (inKohei Katsukawa(January 8, 1951)
Age 72
Gender: Male

6

Number of theCompany’s shares
owned:
0
No. of years served as
Director:
7 years

Jun.

2007

Jul.
Apr.
Dec.

2010
2014
2014

Jun.
Jun.
Jan.
Jun.
Jun.
Jun.

2016
2016
2021
2022
2022
2022

charge of East Japan) of the above
Executive Vice President and Representative Director of NIF SMBC
Ventures Co., Ltd. (now SMBC Venture Capital Co., Ltd.)
President and Representative Director of SMBC Venture Capital Co., Ltd.
President and Representative Director of GINSEN Co., Ltd.
Outside Director of Kyoto University Innovation Capital Co., Ltd. (current
position)
Director of the Board (External) of the Company (current position)
Outside Director of ELECOM CO., LTD.
Advisor of GINSEN Co., Ltd. (current position)
Outside Director of DX Antenna Co., Ltd. (current position)
Outside Director of HAGIWARA Solutions Co., Ltd. (current position)
Outside Director of Logitec INA Solutions Co., Ltd. (current position)

Attendance at Boardof Directors’ meetings:
100% (13/13)[Important concurrent duties outside the Company (No. of concurrent positions at other listed companies: 0)]
None[Reason for nomination as candidate for External Director and outline of expected roles]
Mr. Kohei Katsukawa has appropriately fulfilled the roles of an External Director to determine important management matters andoversee the execution of business from a fair standpoint. We seek appointment of Mr. Kohei Katsukawa as External Director as
we expect that he will continue to provide valuable opinions and suggestions on the management of the Company based on his
wealth of experience and broad-ranging insight gained over many years as a corporate manager.
Notes: 1. There is no special interest between the Company and Mr. Kohei Katsukawa.
2. Mr. Kohei Katsukawa is an External Director-nominee, and the Company has notified the Tokyo Stock Exchange (TSE)of his inauguration as Independent Director under the regulations of TSE. The Independence Criteria for Independent
Directors of the Company is listed in page 19.
3. The Company has concluded a liability agreement with Mr. Kohei Katsukawa that limits his liability to the minimum
liability amount stipulated in laws and regulations. If the reelection of Mr. Kohei Katsukawa is approved, the Company
plans to continue the said limited liability agreement.
4. The Company has concluded a directors and officers liability insurance contract with an insurance company with all of
its Directors as insured persons. The Company has assumed the costs of insurance premiums in full for all of the insured
parties with respect to the insurance policy, which covers statutory compensation for damages, litigation expenses andother such outlays that an insured party may incur. All candidates will be insured under the insurance contract, whichis to be renewed during their terms of office.

14

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

Name
Brief Career Profile, Position and Responsibilities at the Company, and Important Concurrent(Date of Birth)
Duties outside the Company[Reappointment]
Nov.
1987 Earned Bachelor of School of Humanities at The University of Western[Nominee forAustralia
External Director]
Nov.
1990 Earned Master of Arts in Japanese, Conference Interpreting and[Independent Director]
Translation at The University of Queensland

Melanie Brock(April 10, 1964)
Age 59Gender: Female

7

Number of theCompany’s shares
owned:
0
No. of years served as
Director:
4 years

Mar.
Mar.
Apr.

2003
2010
2010

Apr.
Oct.
Dec.
Nov.

2010
2010
2012
2016

Jun.
Jul.

2019
2019

Oct.

2019

CEO of AGENDA (now Melanie Brock Advisory Ltd.) (current position)
Board Member of Australia-Japan Foundation
Board Member of Australia Japan Business Co-operation Committee(current position)
Chair of Australian and New Zealand Chamber of Commerce in Japan
Regional Manager - Japan of Meat & Livestock Australia
Chair of Australian Business Asia
Chair Emeritus of Australian and New Zealand Chamber of Commerce inJapan (current position)
Director of the Board (External) of the Company (current position)
Board Member of Australia-Japan Research Center (AJRC) (current
position)
Global Ambassador of Advance, an initiative supported by AustralianGovernment funding (current position)
Outside Director of Mitsubishi Estate Co., Ltd. (current position)
Outside Director, Member of the Board of Kawasaki Heavy Industries,
Ltd. (scheduled)

Jun.
2022
Attendance at Board
Jun.
2023
of Directors’ meetings:
92% (12/13)[Important concurrent duties outside the Company (No. of concurrent positions at other listed companies: 1)]
CEO of Melanie Brock Advisory Ltd. and Outside Director of Mitsubishi Estate Co., Ltd.

[Reason for nomination as candidate for External Director and outline of expected roles]
Ms. Melanie Brock has appropriately fulfilled the roles of an External Director to determine important management matters andoversee the execution of business from a fair standpoint. We seek appointment of Ms. Melanie Brock as External Director as we
expect that she will continue to strengthen the Company’s corporate governance system and improve the quality of management
decision making based on her diverse range of ideas and values, making use of her extensive experience and career record as aninternational business leader.
Notes: 1. There is no special interest between the Company and Ms. Melanie Brock.
2. Ms. Melanie Brock is an External Director-nominee, and the Company has notified the Tokyo Stock Exchange (TSE)of her inauguration as Independent Director under the regulations of TSE. The Independence Criteria for Independent
Directors of the Company is listed in page 19.
3. The Company has concluded a liability agreement with Ms. Melanie Brock that limits her liability to the minimum
liability amount stipulated in laws and regulations. If the reelection of Ms. Melanie Brock is approved, the Company
plans to continue the said limited liability agreement.
4. The Company has concluded a directors and officers liability insurance contract with an insurance company with all of
its Directors as insured persons. The Company has assumed the costs of insurance premiums in full for all of the insured
parties with respect to the insurance policy, which covers statutory compensation for damages, litigation expenses andother such outlays that an insured party may incur. All candidates will be insured under the insurance contract, whichis to be renewed during their terms of office.

15

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

Nominee
No.

8

Name
Brief Career Profile, Position and Responsibilities at the Company, and Important Concurrent(Date of Birth)
Duties outside the Company[Reappointment]Jan.
1981 Joined BROTHER INDUSTRIES, LTD.
[Nominee forJan.
1988 Joined Swarovski Japan Ltd.
External Director]
Sep.
1994 President of Alphametrics, Inc.
[Independent Director]
Jan.
1999 Director of Netyear Group, Inc.
Jul.
1999 Director of Netyear Group Corporation
May
2000 President & CEO of the above
Fujiyo Ishiguro(February 1, 1958)
Jun.
2013 Outside Audit & Supervisory Board Member of Sompo Japan Insurance
Age 65
Inc.
Gender: FemaleMar.
2014 Outside Director of Hottolink, Inc.
Jun.
2014 Outside Director of Monex Group, Inc. (current position)
Jun.
2015 Outside Director of Sompo Japan Nipponkoa Insurance Inc. (now Sompo
Number of theJapan Insurance Inc.)
Company’s sharesMay
2021 Outside Director of WingArc1st Inc.
owned:
0Jun.
2021 Director of Netyear Group Corporation (current position)Jun.
2021 Director of the Board (External) of the Company (current position)
No. of years served asJun.
2022 External Director of The Shoko Chukin Bank, Ltd. (current position)
Director:
Jun.
2023 External Director of MITSUI & CO., LTD (scheduled)
2 years

Attendance at Boardof Directors’ meetings:
100% (13/13)[Important concurrent duties outside the Company (No. of concurrent positions at other listed companies: 2)]
Outside Director of Monex Group, Inc. and Director of Netyear Group Corporation[Reason for nomination as candidate for External Director and outline of expected roles]
Ms. Fujiyo Ishiguro has appropriately fulfilled the roles of an External Director to determine important management matters andoversee the execution of business from a fair standpoint. We seek appointment of Ms. Fujiyo Ishiguro as External Director as we
expect she will continue to provide valuable opinions and suggestions on the management of the Company based on her wealth ofknowledge in corporate management and IT/DX fields as a founder of Netyear Group Corporation and experience as an Outside
Director of other listed companies.
Notes: 1. There is no special interest between the Company and Ms. Fujiyo Ishiguro.
2. Ms. Fujiyo Ishiguro is an External Director-nominee, and the Company has notified the Tokyo Stock Exchange (TSE)of her inauguration as Independent Director under the regulations of TSE. The Independence Criteria for Independent
Directors of the Company is listed in page 19.
3. The Company has concluded a liability agreement with Ms. Fujiyo Ishiguro that limits her liability to the minimum
liability amount stipulated in laws and regulations. If the reelection of Ms. Fujiyo Ishiguro is approved, the Company
plans to continue the said limited liability agreement.
4. The Company has concluded a directors and officers liability insurance contract with an insurance company with all of
its Directors as insured persons. The Company has assumed the costs of insurance premiums in full for all of the insured
parties with respect to the insurance policy, which covers statutory compensation for damages, litigation expenses andother such outlays that an insured party may incur. All candidates will be insured under the insurance contract, whichis to be renewed during their terms of office.

16

[English Translation of Convocation Notice Originally Issued in the Japanese Language][Reference] Major skills matrix of the members of the Board of Directors
Expertise and experience possessed by the members of the Board of Directors will be as shown below, if
Proposal 2 is approved.
It is our basic policy that the Company selects Director-nominees based on consideration of their conformity to
the Skills Matrix, personalities, and other factors in a comprehensive manner.
Expertise and Experience
Name

Category

HajimeSatomiHaruki
Satomi
KoichiFukazawa
Yukio
SuginoHideo
Yoshizawa
Kohei
Katsukawa
Melanie
Brock
FujiyoIshiguro
YukitoSakaueKazutaka
Okubo

ShioneKinoshita

Naoko
Murasaki

External Director
Independent
Director
External Director
Independent
Director
External Director
Independent
Director

Corporate
Management

Entertainment
Business
Creation

Male

●

●

Male

●

●

Male

●

●

Male

●

●

Male

●

●

●

Male

●

●

●

Female●Female●GenderRisk
Finance /Management /Accounting
Compliance

ICT /
DX

Global Sustainability

●
●

●

●
●

●

●

●

●

●

Audit andSupervisory

Male

●

●

●

●

●

●

●

●

Committee Member
External Director
Independent
Director
Audit andSupervisory
Committee Member

MaleExternal Director
Independent
Director
Audit andSupervisory
Committee Member

FemaleExternal Director
Independent
Director
Audit andSupervisory
Committee Member

Female

●

●

●

●

●

Note: A maximum of four elements particularly required of each person are presented. The above list does notindicate all the insight and experience possessed by them.

17

[English Translation of Convocation Notice Originally Issued in the Japanese Language]
Details of expertise and experience
The Company selected experience and knowledge required as a publicly traded company, along with those thatare required to achieve the long-term vision of the Company.
Corporate Management
Entertainment Business
Creation
Finance / Accounting
Risk Management /Compliance
ICT / DX
GlobalSustainability

Manager of a listed company or equivalent organization
Experience as a business development manager or in starting a new business in the Group’sbusiness segments
Professional experience at financial institutions, auditing firms, etc. or experience as an officer
in charge of a financial department at a major company
Attorney, or other professional experience, or experience as an officer in charge of legal affairs,
compliance or audit at a major company
Experience at IT companies, vendors, consulting firms, and other professional services, or
experience as an officer in charge of IT at a major company
Experience of living abroad, experience at an overseas operating company, or equivalentexperience
Individuals who have insight into Environment and Human Resources (Diversity), which arepart of the Company’s five material issues (materiality)*, and are expected to play an active rolein the promotion of sustainability by the Group*Environment, Addiction, Human Resources, Products and Services, and Governance[Reference] Composition of the Board of Directors
If Proposal 2 is approved, the composition of the Board of Directors will be as follows.
The Ratio of Independent External
Directors
Independent External Directors

The Ratio of Female Directors
Female Directors

Foreign Directors

6/12 Directors, 50%

4/12 Directors, 33.3%

1/12 Directors, 8.3%

18

The Ratio of Foreign Directors

[English Translation of Convocation Notice Originally Issued in the Japanese Language][Reference]
Policy and procedures for selection of Director-nominees
It is our basic policy that the Company selects Director-nominees based on consideration of their conformity to the Skills Matrix,
personalities and other factors in a comprehensive manner. The Independent Advisory Committee comprising of Independent
External Directors shall examine the draft of Director-nominees presented by the President, Representative Director, holdinterviews with such nominees, and report the result of evaluation to the President, Representative Director as its opinion. The
President, Representative Director shall determine the Director-nominees based on the evaluation result in accordance with theabove policy, and the Board of Directors shall review and approve it. The same shall apply to a case where the Independent
Advisory Committee makes recommendation of Director-nominees to the President, Representative Director. In the appointment
of Directors serving as Audit and Supervisory Committee Members and Substitute Directors serving as Audit and Supervisory
Committee Members, consent of the Audit and Supervisory Committee shall be obtained in advance.

[Reference]
The Independence Criteria for Independent Directors
The “independence” criteria regarding Independent External Directors of the Company have been prepared, on the assumptionthat provisions stipulated in the Companies Act and the Tokyo Stock Exchange are complied with, to set forth rules. The Board of
Directors shall select a person who meets the said criteria and who is expected to contribute to honest, active and constructive
discussion at the Board of Directors. Outline of the rules regarding the independence is as follows.
(a) The Independence Criteria is based on qualifications for External Directors as stipulated in the Companies Act, and the
independence standards stipulated by the Tokyo Stock Exchange, and wording of “major,” “a large amount of,” etc., aredefined by the guideline developed by referring to published models of selection criteria for independent officers. The
followings are its summaries.
* A person shall not fall under any of the items below in order to be Independent External Director of the Company.
(1) A party whose major business partner is the Group or an executive person thereof
The “major” in this item is defined as that such party received payment from the Group in the amount equivalent to 2%of the total consolidated net sales of the said party or more for the most recent fiscal year.
(2) A party who is a major business partner of the Company or an executive person thereof
The “major” in this item is defined as that the Company received payment from such party in the amount equivalent to
2% of the total consolidated net sales of the Company or more for the most recent fiscal year.
(3) A major shareholder who holds 10 % or more of the total shares issued and outstanding of the Company or an executive
person thereof.
(4) A party of which the Group holds 10% or more of the total shares issued and outstanding or an executive person thereof(5) The said External Director who has received, directly from the Group, compensation as legal professional, accounting
or taxation specialist, or consultant for an average of 10 million yen or more annually (excluding compensation paid forthe position as Director of the Company) for the last three years.
(6) The amount of donation by the Group to non-profit organization for which the said External Director serves as an
executive person was 10 million yen or more for the most recent fiscal year.
(7) A party who has fallen under any of the above 6 items in the past one year(8) The said External Director whose spouse, relative within the second degree, or relative living together falls under any
items from 1 to the preceding item, or serves as Executive Director, Executive Officer, Manager, or employee in an
important position at the GroupThe “important” in this item is defined as being in a position of manager level or above.
(b) With regard to minor criteria concerning attribute information to be stated in the Independent Director Designation Form,
the Company deems “less than 100 million yen” as minor for “transactions,” and “less than 10 million yen” for “donation,”for the most recent fiscal year, and for the period starting from the beginning date of the current fiscal year to the submission
date of the most recent designation form.

19

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

Business Report(From April 1, 2022 To March 31, 2023)
I

Present State of the Group
1. Business progress and results
Regarding the environment of the Entertainment Contents Business, in the consumer area, with the
expansion and diversification of gaming platforms, game content and services are becoming increasingly
digitalized. As a result, the market environment continues to change significantly with the appearance
and growth of download content sales, free-to- play games (F2P), subscription services, etc., in addition
to packaged products, as well as the diversifying revenue opportunities and prolonged sales period, etc.
Although the market trends seem to have cooled down in reaction to global changes in consumer behavior
caused by the spread of COVID-19, there still remains an expectation for the revitalization and growthof the game market on a global scale. As for amusement machines market, although the impacts of raw
material price hikes caused by the depreciation of the Japanese yen have appeared, the prize category has
been strongly performing and driving the overall market, and the overall performance was strong.
With regard to the pachislot and pachinko industry, for pachinko machines, the utilization continues
centered on regular machines, while for pachislot machines, the utilization level is on an upward trend
due to No. 6.5 models and smart pachislot, responding to the revision of regulation. Although theprocurement of parts and materials continues to require close monitoring, there were signs ofimprovement in the procurement situation.
In the resort industry, in Japan, there were no restrictions on activities due to the implementation ofpriority measures to prevent the spread of COVID-19 during the fiscal year ended March 31, 2023, andnationwide travel support measures to stimulate tourism demand also contributed to a high recovery intravel demand. As for international visitors to Japan, some recovery was seen as the easing of bordercontrol measures for entry into Japan progressed.
In this business environment, net sales for the fiscal year ended March 31, 2023 amounted to¥389,635 million, (an increase of 21.4% from the previous fiscal year). The Group posted an operating
income of ¥46,789 million (an increase of 46.0% from the previous fiscal year), ordinary income of¥49,473 million (an increase of 48.4% from the previous fiscal year), also, due to recording deferred tax
assets for a subsidiary in U.S., decreasing taxable income from net loss carried forward, and decreasing
income taxes from tax credit relevant to research and development for subsidiaries in U.K., profit
attributable to owners of parent of ¥45,938 million (an increase of 24.1% from the previous fiscal year).

20

[English Translation of Convocation Notice Originally Issued in the Japanese Language]
Result of each segment is as follows.
Net sales in each segment here do not include inter-segment sales between segments.
« Entertainment Contents »In the consumer area, for Full Game, the Group released “Sonic Frontiers”, “Persona 5 Royal(Remaster)”, “Like a Dragon: Ishin!”, etc. as new titles, leading to sales of 10,090 thousand copies(8,770 thousand copies for the previous fiscal year). Meanwhile, sales of repeat titles were sluggish due
to a cooling of market co nditions, leading to sales of 17,790 thousand copies (18,430 thousand copies
for the previous fiscal year). As a result, overall sales for Full Game totaled 27,890 thousand copies(27,200 thousand copies for the previous fiscal year). F2P was strongly perf ormed, driven by “Project
SEKAI COLORFUL STAGE! feat. Hatsune Miku”, and “ONE PIECE Bounty Rush” developed by
SEGA CORPORATION and published by Bandai Namco Entertainment Inc.
In the amusement machine area, the Group mainly sold UFO Catcher® series and prizes, etc.
In the animation and toy area, for animation, the Group released “Detective Conan: The Bride ofHalloween” and recorded animation production and distribution revenue, etc., and for toy, new products
such as “With a front camera! Fun to change mouse covers! Sumikkogurashi Personal Computer
Premium Design by yourself”, etc., and regular products were sold.
As a result, net sales in this segment were ¥282,881 million (an increase of 19.9% from the previous
fiscal year) and ordinary income was ¥41,181 million (an increase of 11.7% from the previous fiscal
year).
« Pachislot and Pachinko Machines »For pachislot machines, the Group recorded overall sales of 94 thousand units (77 thousand units forthe previous fiscal year) with strong performance of No. 6.5 models such as “Pachislot Kabaneri of theIron Fortress” and “Pachislot Saga of Tanya the Evil”. In particular, “Pachislot Kabaneri of the Iron
Fortress” released in July 2022, has remained a high level of utilization and the sales units significantly
exceeded the business plan at the beginning of the fiscal year due to multiple additional sales. For
pachinko machines, the Group sold “P Shin Hokuto Muso Chapter 4”, etc., leading to overall sales of
103 thousand units (97 thousand units for the previous fiscal year). In addition, the Group recorded thesales of partial units for titles releasing in the fiscal year ending March 31, 2024 due to pre-delivered
within the fiscal year ended March 31, 2023.
As a result, net sales in this segment were ¥94,253 million (an increase of 24.2% from the previous
fiscal year) and ordinary income was ¥20,713 million (an increase of 101.4% from the previous fiscal
year).
« Resort »In the resort business, “Phoenix Seagaia Resort” achieved the highest sales and first profitability since
it joined the Group due to the contribution of the government and facility’s own measures to stimulate
tourism demand, as well as the implementation of various measures and the enhancement of CRM
focusing on individual customers.
Overseas, “PARADISE CITY”, operated by PARADISE SEGASAMMY Co., Ltd. (affiliate accounted
for using the equity method), the gradual recovery of casino sales has been seen after June 2022 with theeasing of travel restrictions, and the rapid recovery of the drop amount (purchased amount of chips bycustomers) by Japanese VIP has been seen after October 2022, it has surpassed the level before the spreadof COVID-19.
*PARADISE SEGASAMMY Co., Ltd. is posted 3 months delay due to the fiscal year ended in
December.
As a result, net sales in this segment were ¥11,540 million (an increase of 33.2% from the previous
fiscal year) and ordinary loss was ¥3,217 million (ordinary loss of ¥6,738 million for the previous fiscal
year).

21

[English Translation of Convocation Notice Originally Issued in the Japanese Language]
2.

Issues to be addressed
Ongoing changes in the consumer market significantly affect the environment in which theEntertainment Contents Business operates. These changes include diversifying game distribution
platforms, expanding opportunities to supply content and services globally based on the digitaltransformation of content and services, and sales opportunities broadening beyond limited timeframes.
While growth in the game market has temporarily slowed as part of a global rebound from changes in
consumer behavior wrought by COVID-19, expectations for market growth over the medium to longterm remain high. The Group has positioned the consumer area as a growth area, on which it plans tofocus management resources to promote business development globally. It considers as key management
topics its efforts to enhance its development structure and to develop quality content by securing anddeveloping outstanding human resources; to enrich its library by creating and deploying intellectual
property (IP); and to bolster user engagement through the long-term deployment of products and services.
In the pachislot and pachinko industry, despite large-scale changes in regulatory and market
environments, utilization rates have demonstrated a trend toward recovery since the introduction of the
6.5-series pachislot machines in June 2022. This was followed by the introduction of smart pachislot
machines in November of the same year. Conditions remain favorable for rates of use of popular pachinkomodels. Given these conditions, in addition to striving to develop products that offer the gaming featuresthat will meet market needs while adapting to regulations and other factors, the Group must work toward
its long-term goals of maintaining and increasing its shares of utilization, installation, and sales bysupplying products through the appropriate procurement of parts and materials in line with demand.
Additionally, the Group must consider boosting profitability via cost improvements and more efficientdevelopment based on the reuse of resources, while advancing the standardization of pachislot andpachinko parts and materials as a key management topic.
In the Resort Business, tourism demand is recovering thanks to various factors, including easing
COVID-19 restrictions and measures to stimulate sightseeing demand. In addition to continuing efforts
to enhance individual attractions, the Group see as key management topics the need to build sustainable
revenue structures by providing high-value-added services that deliver unique and moving experiences.
During the five-year period from the fiscal year ended March 31, 2022, through the fiscal year ending
March 31, 2026, the Group plan to invest a total of ¥250 billion in growth, targeting the growth areas of
the consumer area, in which the Group will invest ¥100 billion; the gaming area, in which it will invest¥100 billion; and other areas, in which it will invest ¥50 billion. While the Group has already
implemented growth investments in certain areas under study, it will continue to identify growth
opportunities to achieve growth and strengthen corporate value.
The Group’s mission is captured in the words Constantly Creating, Forever Captivating: Making Life
More Colorful. The Group strive to achieve a sustainable society while strengthening corporate value. In
October 2020, the Group identified the five materialities (key issues) listed below as priority topics, basedon the external framework of the structural analysis of social behavior (SASB) model established toconsider major issues concerning its businesses. In May 2022, the Group formulated its vision forsustainability: Sustainability helps keep life colorful. The Group continues to regard as a central
management topic the realization of a sustainable society with regard to the environment, society, andgovernance (ESG ).
 Human Resources: Developing people who can create captivating experiences Products and Services: Providing safe, dependable, and innovative products and services
 Environment: Strategic commitment to action on climate change Addiction: Prevention of addictions and disorders
 Governance: Strengthening sustainability governance3.

Fundraising and other topics(1) Fundraising
Seeking to create a Groupwide safety net by securing funds liquidity over the medium to longterm, the Company has concluded agreements with its banks for lines of credit amounting to
113,000 million yen.

22

[English Translation of Convocation Notice Originally Issued in the Japanese Language]
In the current consolidated fiscal year, the Group raised 30,000 million yen in funding via existinglines of credit, including current account overdraft lines of credit, which the Group allocated tooperating funds. These funds have been paid off; their balance stood at zero as of the end of
March 2023.
The Group has adopted a cash management system to put Group internal funds to effective use.
This system is used by 20 companies in total, including the Company, SEGA CORPORATION,
and Sammy Corporation.
(2) Capital investment
The Group invested 11,896 million yen in capital investment in the current consolidated fiscal
year. This consisted mainly of capital investments of 5,986 million yen in the Entertainment
Contents Business, 4,266 million yen in the Pachislot and Pachinko Machines Business, and 1,258
million yen in the Resort Business.
(3) Business transfer, absorption-type corporate split, or spinoff
No noteworthy matters in this regard emerged during the current consolidated fiscal year.
(4) Acquisition of businesses from other companies
No noteworthy matters in this regard emerged during the current consolidated fiscal year.
(5) Succession of rights or obligations related to the businesses of other corporations or other entities
through absorption-type merger, absorption-type corporate split, etc.
No noteworthy matters in this regard emerged during the current consolidated fiscal year.
(6) Acquisition or disposal of stock or other equity, stock options, etc. in other companies
No noteworthy matters in this regard emerged during the current consolidated fiscal year.
4.

Finances and profit/loss
Fiscal year

FY2020April 1, 2019 –March 31, 2020

FY2021
April 1, 2020 –March 31, 2021

FY2022
April 1, 2021 –March 31, 2022

FY2023
April 1, 2022 –March 31, 2023

Net sales(millions of yen)

366,594

277,748

320,949

389,635

Ordinary income(millions of yen)

25,296

1,715

33,34449,473

Profit attributable toowners of parent(millions of yen)

13,775

1,274

37,02745,938Net income per share

(yen)

58.65

5.42

158.85208.07

Total assets(millions of yen)

458,268

421,599

435,492

501,566

Net assets(millions of yen)

296,858

291,256

292,637

331,347

Category

Notes: 1. Figures presented in units of millions of yen are rounded down to the nearest million yen.
2. Calculations of net income per share are based on the average number of shares during theperiod.

23

[English Translation of Convocation Notice Originally Issued in the Japanese Language]
5.

The Group’s main business segments
The Group’s businesses are the Entertainment Contents Business, the Pachislot and Pachinko Machines
Business, and the Resort Business. Their main lines of business are shown below.
Segment
Entertainment Contents
Business
Pachislot and Pachinko
Machines BusinessResort Business

6.

Main product and business
Development and sales of consumer game software including Full
Game, F2P, etc. and amusement machines, planning, production andsales of animated films, development, manufacture, and sales of toys
Development, manufacture, and sales of pachislot and pachinko
machines
Development and operation of hotels and golf courses, etc. in the
integrated resorts business and other facilities businesses

Main Group facilities, etc.
(1) Company sites
Head office (Shinagawa Ward, Tokyo)(2) Sites of main subsidiaries
 SEGA CORPORATIONHead office (Shinagawa Ward, Tokyo)
 Sammy Corporation
Head office (Shinagawa Ward, Tokyo)
Kawagoe Plant (Kawagoe, Saitama Prefecture)
Branch offices (8 branches)(3) Employees
Number of employees (YOY change)
8,219 (up 459)
Note: Number of employees refers to the number currently employed in the Group, including
seconded personnel. It does not include temporary employees.

24[English Translation of Convocation Notice Originally Issued in the Japanese Language]
7.

Material conditions concerning the parent company and subsidiaries(1) Parent company
Not applicable(2) Subsidiaries
Company

Investment
stake

CapitalMain lines of business

SEGA CORPORATION

100 million yen 100.0%

Sammy Corporation

18,221 million
100.0%
yen

Planning, development, and sale of gamecontent for mobile phones, PCs, smart
devices, and home video game consoles;
development and sale of amusement
machines
Development, manufacture, and sale ofpachislot and pachinko machines

ATLUS CO., LTD.

10 million yen 100.0%*

Development of video game software

Sega of America, Inc.

USD110,000,000 100.0%*

Sega Europe Ltd.

GBP10,000,000 100.0%*

Sega Publishing Europe Ltd.

GBP0 thousand 100.0%*

Sega Logistics Service Co., Ltd.

100 million yen 100.0%*

DARTSLIVE Co., Ltd.

10 million yen 100.0%*

SEGA TOYS CO., LTD.

100 million yen 100.0%*

TMS ENTERTAINMENT CO.,LTD.

100 million yen 100.0%*

MARZA ANIMATION
PLANET INC.

100 million yen 100.0%*

RODEO Co., Ltd.

100 million yen 100.0%*

TAIYO ELEC Co., Ltd.

100 million yen 100.0%*

Sammy Networks Co., Ltd.

100 million yen 100.0%*

SEGA SAMMY CREATION
INC.

10 million yen 100.0%

PHOENIX RESORT CO., LTD.

93 million yen 100.0%

Development management and sale of video
game software
Development management and sale of video
game software
Development management and sale of video
game software
Maintenance services, transportation, andwarehouse services
Planning, development, and sale of gameequipment and game software
Development, manufacture, and sale of toys
Planning, production, and sale of animatedfilms
Production of computer graphics animation;planning and production of animated films;
licensing business
Development, manufacture, and sale ofpachislot machines
Development, manufacture, and sale ofpachislot and pachinko machines
Planning, production, and sale of game andmusic content through mobile phones, theInternet, and other channels
Development, manufacture, and sale ofcasino gaming machines
Operation of resort facilities, including
hotels, spas, golf courses, restaurants, andinternational conference centers* The investment stake includes indirect holdings.
(3) Specified wholly owned subsidiaries at the end of the current fiscal year
Specified wholly owned subsidiary

Address

Total book value

SEGA CORPORATION

1-1-1 Nishi-Shinagawa, Shinagawa-ku, Tokyo

117,666 million yen

Sammy Corporation

1-1-1 Nishi-Shinagawa, Shinagawa-ku, Tokyo

152,095 million yen

Note: The Company holds total assets of 410,155 million yen.

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[English Translation of Convocation Notice Originally Issued in the Japanese Language]
8.

Main lenders and amounts of borrowings
LenderSumitomo Mitsui Banking Corporation
MUFG Bank, Ltd.
Mizuho Bank, Ltd.
Resona Bank, LimitedAozora Bank, Ltd.
The Bank of Yokohama, Ltd.
Sumitomo Mitsui Trust Bank, Limited
Total

9.

Balance of borrowings
17,500 million yen
7,000 million yen
5,000 million yen
4,200 million yen
4,000 million yen
3,640 million yen
660 million yen
42,000 million yen

Policy on exercise of authority in cases in which the Articles of Incorporation provide for the
Board of Directors to decide on matters such as the distribution of retained earnings
Having positioned the return of profits to shareholders as a key management topic, the Company has
established a basic policy on shareholder returns that call for maintaining a total payout ratio of 50% or
higher while considering the optimal balance between investments to achieve business growth and efforts
to optimize capital efficiency. Practical decisions on dividends are made in line with a dividend policyof maintaining a dividend on equity ratio (DOE) of 3% or higher as an indicator of stable dividends,
based on a consideration of actual past dividends. The Company regards the acquisition of treasury stock
as an effective means of providing returns to shareholders and make related decisions dynamically, basedon a consideration of matters such as trends in business performance and stock markets.
Dividends of surplus for the fiscal year ended March 31, 2023, were 59 yen per share (including aninterim dividend of 20 yen per share), based on the above basic policy on returns to shareholders.

10. Other significant matters concerning the current state of the GroupNo noteworthy matters in this regard emerged during the current consolidated fiscal year.

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[English Translation of Convocation Notice Originally Issued in the Japanese Language]
II Stock
1. Number of shares authorized for issue

800,000,000 shares

2.

Total shares issued and outstanding

241,229,476 shares

3.

Number of shareholders

4.

Ten largest shareholders

60,659Investment in SEGA SAMMY HOLDINGS
Name

Shares held

Shareholding ratio(%)

HS Company

36,008,000

16.31

The Master Trust Bank of Japan, Ltd. (trust account)

27,345,000

12.38

FSC Co., Ltd.

13,682,840

6.19

Custody Bank of Japan, Ltd. (trust account)

13,173,200

5.96

Hajime Satomi

7,202,938

3.26

State Street Bank and Trust Company 505001

5,684,392

2.57

Korea Securities Depository-Samsung

5,649,300

2.55

Haruki Satomi

3,905,461

1.76

The Bank of New York Mellon 140044

2,888,091

1.30

BBH for UMB BK, Natl Association-Global Alpha
2,775,955
Intl Small Cap Fund LP
Note: Calculations of shareholding ratios exclude treasury stock (20,476,041 shares).

1.25

5.

Shares issued to Company officers in consideration of duties executed during the current fiscal
year
Number of shares
Number of recipients(transfer-restricted shares)
Directors (excluding Audit and Supervisory
45,000 shares
4
Board members and External Directors)
Notes: 1. Details of the stock compensation are described under “IV Company Directors: 2.
Executive Compensation.”
2. In addition to the above, the Company issued 33,200 shares to 49 individuals consisting ofCompany Effective Officers and certain Directors and Effective Officers of its subsidiaries.

6.

Other important stock-related matters(1) Retirement of treasury stock
The Company retired treasury stock under a resolution passed by the Board of Directors in its
meeting held May 13, 2022. This retirement reduces the number of shares of treasury stock by
25,000,000 shares.
(2) Disposal of treasury stock
The Company disposed of treasury stock as transfer-restricted share-based compensation under aresolution passed by the Board of Directors in its meeting held July 21, 2022. This disposal
reduces the number of shares of treasury stock by 78,200 shares.

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[English Translation of Convocation Notice Originally Issued in the Japanese Language]
III 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 applicable28

[English Translation of Convocation Notice Originally Issued in the Japanese Language]
IV Company Directors
1. Directors (as of March 31, 2023)
Name

Title and areas of responsibility

Important concurrent posts

Hajime Satomi

Chairman (Representative Director)

Honorary Chairman of the Board of
SEGA CORPORATION
Chairman of the Board (Representative
Director) of Sammy Corporation

Haruki Satomi

President and Group CEO(Representative Director) in charge of
Public Relations Office andSustainability Promotion Division

Chairman and CEO (Representative
Director) of SEGA CORPORATION
President and CEO (Representative
Director) of Sammy Corporation

Koichi Fukazawa

Senior Executive Vice President andSenior Vice President, Director of theGroup CFO, Director of the Board in
Board of Sammy Corporation
charge of Integrated Resort Business
Division, Corporate Planning Division,
Finance & Accounting Division, IT
Solution Division, and Human
Resources Development Division

Yukio Sugino

Senior Executive Vice President,
Director of the Board in charge ofGroup Licensing Division

Hideo Yoshizawa

Senior Vice President, Director of the Director of the Board of SEGA
Board in charge of General Corporate CORPORATION
Administration Division, Legal &Intellectual Property Division, andGlobal Corporate Governance Division

Kohei Katsukawa

Director of the Board

Melanie Brock

Director of the Board

CEO of Melanie Brock Advisory Ltd.,
Outside Director of Mitsubishi EstateCo., Ltd.

Fujiyo Ishiguro

Director of the Board

Director of Netyear Group Corporation
Outside Director of Monex Group, Inc.
Outside Director of WingArc1st Inc.

Yukito Sakaue

Director (Standing Audit &Supervisory Committee Member)

Audit & Supervisory Board Member of
SEGA CORPORATION
Audit & Supervisory Board Member ofSammy Corporation

29

President and COO (Representative
Director) of SEGA CORPORATION

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

Title and areas of responsibility

Important concurrent posts

Kazutaka Okubo

Director (Audit & Supervisory
Committee Member)President and Representative Directorof Okubo Associates Inc.
President and Representative Directorof K.K. SS Dnaform
Outside Director of Sun Frontier
Fudousan Co., Ltd.
Outside Director of LIFULL Co., Ltd.
Outside Director of SALA Corporation
Outside Director of Musashi Seimitsu
Industry Co., Ltd. (Audit &Supervisory Committee Member)
Outside Director of BrainPad Inc.
(Audit & Supervisory Committee
Member)Shione Kinoshita

Director (Audit & Supervisory
Committee Member)

Attorney-at-law of Daiichifuyo Law
OfficeNaoko Murasaki

Director (Audit & Supervisory
Committee Member)President and Representative Directorof Nobligier Co., Ltd.
Outside Director of Sansei Landic Co.,
Ltd.

Notes: 1. The six Directors (Kohei Katsukawa, Melanie Brock, Fujiyo Ishiguro, Kazutaka Okubo,
Shione Kinoshita, and Naoko Murasaki) are External Directors of the Board as stipulated in
Article 2, Paragraph 15, of the Companies Act.
2. The Company has appointed a Standing Audit & Supervisory Committee Member who
chairs the Audit & Supervisory Committee and is responsible for auditing from theindependent, objective perspective of an External Director and Audit & Supervisory
Committee Member. The Standing Audit & Supervisory Committee Member is charged
with reporting to the Audit & Supervisory Committee on the results of reviews ofimportant documents and the state of business execution by Directors, executive officers,
and employees, in cooperation with the Corporate Auditors and internal audit sections ofGroup companies.
3. The Company has submitted to the Tokyo Stock Exchange notification of the six Directors(Kohei Katsukawa, Melanie Brock, Fujiyo Ishiguro, Kazutaka Okubo, Shione Kinoshita,
and Naoko Murasaki) as Independent Directors.
4. The Company has adopted an executive officer system to accelerate decision-making,strengthen oversight of business execution, and reinforce business execution functions. The
Company has 12 executive officers, three of whom serve concurrently as Directors of theBoard (Koichi Fukazawa, Yukio Sugino, and Hideo Yoshizawa) and nine of whom do notserve concurrently as Directors of the Board (Makoto Takahashi, Managing Director of the
Corporate Planning Division and the Human Resources Development Division; Yoichi
Owaki, Managing Director of the Finance & Accounting Division; Toru Nakahara, GeneralCounsel; Takaharu Kato, Managing Director of the IT Solution Division; Hironobu Otsuka,
Managing Director of the Public Relations Office; Koji Takeyama, Managing Director of
the General Corporate Administration Division and Global Corporate Governance
Division; Yuka Ichiki, Managing Director of the Sustainability Promotion Division; Yukio
Kawasaki, Managing Director of the Internal Audit Division; and Natsue Ishida, Managing
Director of the Legal & Intellectual Property Division).
5. At the ordinary general meeting of shareholders held June 22, 2022, Hiroshi Ishikura was
appointed a Substitute Audit & Supervisory Committee Member as stipulated in Article
329, Paragraph 3, of the Companies Act. The appointment accounts for the potential
absence of a Director and Standing Audit & Supervisory Committee Member.

30

[English Translation of Convocation Notice Originally Issued in the Japanese Language]
2.

Executive compensation(1) Total amounts of executive compensation

Category

Directors (excluding
Audit & Supervisory
Committee Members)(of which, External
Directors)
Directors (Audit &Supervisory Committee
Members)(of which, External
Directors)
Corporate Auditors(of which, External
Corporate Auditors)

Total
remuneration
amount(millions ofyen)

PayeesTotal amounts by type of remuneration (millions of yen)Baseremuneration

Performance- Seniority-based
linked transfertransferrestricted share- restricted sharebased
based
remuneration
remuneration

Bonuses

9

1,454

640

641

72

100

(4)

(46)

(46)

(―)

(―)

(―)

4

50

50

―

―

―

(3)

(32)

(32)

(―)

(―)

(―)

3

10

10

―

―

―

(2)

(6)

(6)

(―)

(―)

(― )

Notes: 1. Each of the amounts of bonuses, performance-linked transfer-restricted share-based
remuneration, and seniority-based transfer-restricted share-based remuneration represents
the amount posted as expenses in the current fiscal year.
2. Under a resolution to amend the Articles of Incorporation passed at the Regular General
Meeting of Shareholders held June 22, 2022, the Company has migrated from the status ofa company with an Audit & Supervisory Board to one with an Audit & Supervisory
Committee. Amounts of remuneration paid to Corporate Auditors represent remuneration
for the period before the change in status to a company with an Audit & Supervisory
Committee. Amounts paid to Audit & Supervisory Committee members represent
remuneration for the period following the change in status to a company with an Audit &Supervisory Committee.
3. As of the end of the current fiscal year, the number of Directors, excluding Audit &Supervisory Committee Members, was eight, including three External Directors. The
number of Audit & Supervisory Committee Members, including three External Directors,
was four. The details under “Payees” above do not agree perfectly with these numbers
because they include remuneration for one External Director (excluding Audit &Supervisory Committee Members) for the period before the migration to the status as acompany with an Audit & Supervisory Committee.
(2) Policies on decisions related to details of remuneration for individual Directors
The system of remuneration for Directors (excluding Audit & Supervisory Committee Members
and External Directors) is intended primarily to create incentive to strengthen the Group’s
corporate value and achieve sustained growth. Its basic policy calls for a highly transparent andobjective decision-making process.
The policy for decisions on Directors’ remuneration and other amounts calls for the
Representative Director and President to provide the Independent Advisory Committee withinformation on matters such as the compensation system and the procedures applied to calculate
each compensation type. The Independent Advisory Committee deliberates on and evaluates thesedetails and submits its views to the Representative Director and President. Referring to these
opinions, the Representative Director and President consults with the Board of Directors andmakes a final decision on the policy for determining amounts of remuneration and other specifics.
Decisions concerning the specifics of Director remuneration are made by the Board of Directors
in accordance with the recommendations based on results of deliberations and evaluations by the
Independent Advisory Committee.
31

[English Translation of Convocation Notice Originally Issued in the Japanese Language]
Based on the basic policy, compensation for Company Directors (excluding Audit & Supervisory
Committee Members and External Directors) consists of fixed remuneration, executive bonuses,
and transfer-restricted share-based remuneration.
Of these, fixed remuneration is paid in fixed monthly amounts representing the total of basic
remuneration and role-based remuneration, calculated based on the Company’s remunerationtable.
Remuneration of External Directors consists solely of fixed remuneration (basic remunerationonly) in light of their roles, with the goal of assuring their independence. Amounts are determinedby the Board of Directors.
Remuneration for Audit & Supervisory Committee Members consists of fixed remuneration(basic remuneration only) reflecting their duties and their responsibility to audit the execution ofduties throughout the Group. Amounts are deliberated on and determined by the Audit &Supervisory Committee.
(3) Policy on decisions on details and amounts or calculation of performance-linked
remuneration, non-monetary remuneration, etc.
Bonuses for Directors are paid as performance-linked remuneration. The amount of a Director’sbonus is determined by multiplying fixed compensation by a coefficient determined based on abonus table that specifies the number of months’ pay on which Directors’ bonuses are to be based,in light of three factors: ordinary income, degree to which business plans are achieved, and yearon-year growth.
* No Directors’ bonuses are paid if a loss attributable to owners of the parent is recorded.
The evaluation indicator applied to calculate Directors’ bonuses is ordinary income, which
represents income generated on a regular basis by the Group through its business activities,
including gains and losses on equity method investments in its main businesses. In addition, thedegree to which business plans are achieved and year-on-year growth are evaluated to determine
accountability vis-a-vis announced plans and sustained growth.
Presented below are the targets and actual amounts of the indicators associated with performancelinked remuneration in the current fiscal year.
(Unit: billions of yen)
FY2022
ActualNet sales

320.9

Ordinary income

33.3

FY2023
YoY change
Business
Actual
plans
375.0
389.6
+68.6
40.0

49.4

+16.1

vs. business
plan
+14.6
+9.4

The transfer-restricted share-based remuneration program was adopted by the Ordinary General
Meeting of Shareholders held June 21, 2019, to incentivize Company Directors (excluding
External Directors) to achieve continuing growth in the Company’s corporate value and to
facilitate the sharing of value between shareholders and Directors.
At the Ordinary General Meeting of Shareholders held June 24, 2021, the Company revised thetransfer-restricted share-based remuneration program to further align the long-term interests of
Directors with those of shareholders and to link remuneration of Company Directors to the SEGASAMMY Group Medium-Term Plan for the fiscal year ended March 31, 2022, through the fiscal
year ending March 31, 2024 (“Mid-Term Plan” hereinafter) with a goal of increasing theCompany’s corporate value over the medium to long term. The transfer-restricted share-based
remuneration program now consists of seniority-based transfer-restricted shares for which transfer
restrictions are released in proportion to the length of continual service in the post of Director or
similar post, and performance-linked transfer-restricted shares for which transfer restrictions are
32

[English Translation of Convocation Notice Originally Issued in the Japanese Language]
released in proportion to both the period of continual service in the post of Director or similar post
and achievement of the business performance targets of the Mid-Term Plan. In addition, alongwith the migration to the status of a company with an Audit & Supervisory Committee, theRegular General Meeting of Shareholders held June 22, 2022, passed resolutions limiting
compensation under this program to no more than 300 million yen per year for Company
Directors, excluding Audit & Supervisory Committee Members and External Directors, andlimiting the total number of shares of Company common stock that may be issued to or disposedof by eligible Directors to no more than 300,000 shares. The rates at which the shares will be
released from the restrictions on transfer according to the degree of achievement of businessperformance targets in the Mid-Term Plan are shown below.
ROE as of the end of the fiscal year
ending March 31, 2024
10% or more

Rate of release
100%

8% or more but less than 10%

50%

Less than 8%0%Specific details of payment and allocation will be decided by the Board of Directors, in a manner
under which the ratio of fixed compensation for a single fiscal year, performance-based bonuses
for the single fiscal year, and transfer-restricted share-based remuneration at the time ofachievement of the Mid-Term Plan would be approximately 1:1:1. In addition, plans call for theratio of seniority-based transfer-restricted shares to performance-based transfer-restricted shares
under the current Mid-Term Plan to be approximately 1:3.
(4) Resolutions of the General Meeting of Shareholders concerning remuneration of Directors
Resolutions of the General Meeting of Shareholders concerning remuneration of Company
Directors were made on the following dates: Remuneration of Directors (excluding Audit & Supervisory Committee Members) is limited tono more than 1,700 million yen (including 100 million yen for External Directors) under aresolution passed in the Ordinary General Meeting of Shareholders held June 22, 2022. At thetime of this resolution, the Company had eight Directors (three of whom were External
Directors; excluding Audit & Supervisory Committee Members).
 Remuneration of Audit & Supervisory Committee Members is limited to no more than 100
million yen under a resolution passed in the Ordinary General Meeting of Shareholders held
June 22, 2022. At the time of this resolution, the Company had four Audit & Supervisory
Committee Members.
 Separately from the above remuneration of Directors, the Ordinary General Meeting of
Shareholders held June 21, 2019 passed a resolution on the introduction of a system of transferrestricted share-based remuneration for Directors (excluding External Directors). In addition,
the Ordinary General Meeting of Shareholders held June 24, 2021 revised this system into one
consisting of seniority-based transfer-restricted shares, for which transfer restrictions are
released in proportion to the length of continual service in the post of Director or similar, andperformance-linked transfer-restricted shares, for which transfer restrictions are released inproportion to both the period of continual service in the post of Director or similar andachievement of the business performance targets of the Mid-Term Plan. In addition, along withthe migration to the status of a company with an Audit & Supervisory Committee, the Regular
General Meeting of Shareholders held June 22, 2022 passed resolutions limiting compensation
under this program to no more than 300 million yen per year for Company Directors (excluding
Audit & Supervisory Committee Members and External Directors), and limiting the total
number of shares of Company common stock that may be issued to or disposed of by eligible
Directors to no more than 300,000 shares. The Company had five eligible Directors at the timeof these resolutions.
33

[English Translation of Convocation Notice Originally Issued in the Japanese Language]
3.

Liability limitation agreements
The Company Articles of Incorporation stipulate that the Company may enter into agreements with
Directors, excluding executive Directors and similar parties, that limit their liability for damages.
Summarized below are the agreements on liability limitations concluded under the Articles ofIncorporation by the Company with its Directors, excluding executive Directors and similar parties.
(Overview of Liability Limitation Agreement)
Liability to provide compensation for damages under Article 423, Paragraph 1, of the Companies Act
is limited to the minimum liability provided by law, except in cases of malicious intent or grossnegligence.

4.

Executive liability insurance policy
The Company has concluded with an insurer an executive liability insurance policy naming Directors,
Corporate Auditors, and managerial employees of the Company and its subsidiaries as the insured. The
Company and its subsidiaries bear the cost of all premiums on this insurance policy for all insured persons.
(Overview of the executive liability insurance policy)
This policy covers compensation for damages and legal defense costs borne by the insured in casessuch as litigation with third parties, shareholders’ representatives, or other companies. However, thepolicy incorporates measures to avoid impediments to the proper performance of duties by executives by
exempting from compensation damages due to malicious intent or gross negligence.

5.

External Directors(1) Relations between the Company and important concurrent posts of External Directors
No conflict of interests exist between the Company and the important concurrent posts of External
Directors shown under “IV Company Directors: 1. Directors (as of March 31, 2023).”(2) Main activities in the current fiscal year
Category

Name

Main activities

External Director

Kohei
Katsukawa

Attended 13 of 13 Board of Directors meetings during the
fiscal year (12 of 12 regular meetings); maderecommendations to ensure the validity and fairness ofdecision-making by the Board by offering opinions basedon his wealth of experience and broad-ranging insights
based on a long career serving primarily as a manager.

External Director

Melanie
Brock

Attended 12 of 13 Board of Directors meetings during the
fiscal year (12 of 12 regular meetings); maderecommendations to ensure the validity and fairness ofdecision-making by the Board by offering opinions basedon her wide-ranging experience and extensive track record,
primarily as an international business leader.

External Director

FujiyoIshiguro

Attended 13 of 13 Board of Directors meetings during the
fiscal year (12 of 12 regular meetings); maderecommendations to ensure the validity and fairness ofdecision-making by the Board in various ways, including
offering opinions based on a wealth of knowledge ofcorporate management and IT/digital transformation (DX)fields.

34

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

Name

Main activities

External Director(Audit &Supervisory
Committee
Member)Kazutaka
Okubo

Attended 13 of 13 Board of Directors meetings during the
fiscal year (12 of 12 regular meetings);
made recommendations to ensure the validity and fairnessof decision-making by the Board in various ways, including
offering opinions based on his years of experience withaudits as a certified public accountant, highly specialized
knowledge of finance and accounting, and wealth ofknowledge regarding governance.
Attended three of three meetings of the Audit &Supervisory Board and 11 of 11 meetings of the Audit &Supervisory Committee during the fiscal year; engaged invarious activities, including exchange of opinions on audit
results and discussions of important matters related toaudits.

External Director(Audit &Supervisory
Committee
Member)ShioneKinoshita

Attended 13 of 13 Board of Directors meetings during the
fiscal year (12 of 12 regular meetings); maderecommendations and engaged in other activities to ensure
the validity and fairness of decision-making by the Board,drawing primarily on her high level of specialized
knowledge of labor law and wealth of insights on
governance in addition to her experience as an attorney.
Attended three of three meetings of the Audit &Supervisory Board and 11 of 11 meetings of the Audit &Supervisory Committee during the fiscal year; engaged invarious activities, including exchange of opinions on audit
results and discussions of important matters related toaudits.

External Director(Audit &Supervisory
Committee
Member)

Naoko
MurasakiAttended 13 of 13 Board of Directors meetings during the
fiscal year (12 of 12 regular meetings); engaged in various
activities, including making recommendations to ensure thevalidity and fairness of decision-making by the Board invarious ways, including offering opinions based on highly
specialized capabilities in the fields of global risk andgovernance and an extensive knowledge of governance.
Attended 11 of 11 meetings of the Audit & Supervisory
Committee since her appointment as an Audit &Supervisory Committee Member; engaged in various
activities, including exchanging opinions on audit results
and engaging in discussions of important matters related toaudits.

(3) Total amount of remuneration of External Directors
PayeesTotal amount of
remuneration of External
Directors

635

Total amount of
remuneration

Executive remuneration fromsubsidiaries included at left

85 million yen- million yen

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

137 million yen

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

238 million yen

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 previous 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.

36[English Translation of Convocation Notice Originally Issued in the Japanese Language]
VI Overview of structures for ensuring the propriety of business operations and the state of theiroperation(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, Group Code of Conduct, andGroup Management Policy and Guidelines (referred to collectively as “Group policies andstandards” hereinafter), all based on the Group Mission. The Representative Director andPresident 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 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, a system isin place to check whether transaction counterparties are considered antisocial forces. Structures
are also in place to respond systematically and appropriately in cooperation with outside 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 appropriately manage trade secrets and similar information, the Company has establishedpolicies on information management and IT security, as well as guidelines on IT security. The
Company strives to ensure thorough understanding 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 Strategy Committee, the Company has established a Group Risk
and Compliance 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
37

[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, 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 and Group 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.
38

[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
39[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 was established 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 Groupwide to determine whether transaction counterparties
qualify as antisocial forces. The Company provides the support needed to make this systemeffective 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.
40

[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)

The Company has established a Group Sustainability Vision and key performance indicators(KPIs) and monitor the state of their progress.

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

Within the Group Management Strategy Committee, the Company has established a Group
Risk and Compliance Subcommittee to identify important management risks; deliberate on
the formulation of Group risk and compliance policies; and assess and makerecommendations regarding risk analysis by individual related sections, among otheractivities, 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 provision of information to the Audit & Supervisory
Committee as part of internal controls, meetings are held of the Holding Company Audit
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.

41

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

Consolidated balance sheet(Unit: millions of yen)
FY2023Item
AssetsCurrent assets
Cash and deposits
Notes, accounts receivable - trade,and contract assets
Merchandise and finished goods
Work in process
Raw materials and supplies
Income taxes receivable
Other
Allowance for doubtful accounts
Noncurrent assets
Property, plant, and equipment
Buildings and structures
Machinery, equipment, andvehiclesAmusement machines andfacilities
Land
Construction in progress
Other

FY2023Liabilities
Current liabilities
Notes and accounts payable - trade353,862
179,50953,370

Short-term borrowings

18,50350,68920,26915,62016,205(304)
147,70360,482
27,966

Accrued expenses
Income taxes payable
Contract liabilities
Provision for bonuses
Provision for directors’ bonuses
Provision for point card certificates
Other
Noncurrent liabilities
Bonds payable

1,314
599
18,581534
11,485Intangible assets

13,247

Goodwill
Other
Investments and other assets
Investment securities
Long-term loans receivable
Lease and guarantee deposits
Net defined benefit assets
Deferred tax assets

2,592
10,65473,97339,538
247
6,924
5,362
16,499

Other

5,785

Allowance for doubtful accounts(383)

Total assets

Item(April 1, 2022 March 31, 2023)

17,00019,865
4,776
25,852
9,689
1,187
187
11,21649,886
10,00025,000

Lease obligations

5,352

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

42

120,332
30,556Long-term borrowings

Net defined benefit liability
Deferred tax liabilities
Asset retirement obligations
Provision for dismantling of fixed
assets
Other
Total liabilities
Net assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury stock
Accumulated other comprehensive
incomeValuation difference on availablefor-sale securities
Deferred gains or losses on hedges
Revaluation reserve for land
Foreign currency translation
adjustment
Remeasurements of defined benefit
plans
Share acquisition rights
Non-controlling interests
Total net assets
Total liabilities and net assets

501,566(April 1, 2022 March 31, 2023)

3,877
754
2,607
420
1,874
170,218
326,755
29,95372,213261,840(37,251)
4,099
2,626
382
(1,109)3,730(1,531)468
24
331,347
501,566

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

Consolidated statements of income(Unit: millions of yen)Item

FY2023 (April 1, 2022 - March 31, 2023)

Net sales
Cost of sales
Gross profit
Selling, general, and administrative expenses
Operating income
Non-operating income
Interest income
Dividends income
Gain on investments in partnership
Foreign exchange gains
Other
Non-operating expenses
Interest expenses
Equity in affiliate losses
Commission fee
Loss on investments in partnership
Loss on retirement of noncurrent assets
Other
Ordinary income
Extraordinary income
Gain on sales of noncurrent assets
Extraordinary losses
Loss on sales of noncurrent assets
Impairment loss
Loss on valuation of investment securities
Structural reform expenses
Other
Income before income taxes
Income taxes - current
Income taxes - deferred
ProfitLoss attributable to non-controlling interests
Profit attributable to owners of parent

389,635
231,568
158,067
111,278
46,789
433
516
1,929
1,354
734
321
520
146
563
285
446

3
0
446
81
1,783
96
4,137
(3,000)Note: Figures presented are rounded down to the nearest million yen.

43

4,968

2,284
49,473
3

2,408
47,0691,136
45,932
6
45,938

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

Consolidated statement of changes in shareholders’ equity
FY2023 (April 1, 2022 - March 31, 2023)(Unit: millions of yen)
Shareholders’ equity

Balances as of April 1, 2022

Capital stock

Capital surplus

29,953

117,689

Retainedearnings

Treasury stock

224,684(77,886)

Total
shareholders’equity294,440

Changes in items during the period
Dividends from surplus
Profit attributable to owners ofparentEffect of changes in accounting
period of consolidated
subsidiaries
Purchase of treasury stock

Balances as of March 31, 2023

(8,873)45,93845,93890

90(4,987)(4,987)

31

142

174

(45,480)

45,480–

Disposal of treasury stock
Cancellation of treasury stock
Change in ownership interest ofparent due to transactions with
non-controlling interests
Total changes in items during theperiod(8,873)

(27)

(27)

–

(45,475)

37,15540,63532,31529,95372,213261,840(37,251)

326,755

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

Balances as of April 1, 2022

Total
Remeasurements accumulated
otherof defined benefit
comprehensive
plansincome

Revaluation
reserve forland

Foreigncurrencytranslation
adjustment(1,109)41(3,199)(2,028)

3,688

1,667

6,128

2,270

(33)

356

415

Total changes in items during theperiod

356

415

–

3,688

1,667

6,128

Balances as of March 31, 2023

2,626

382

(1,109)3,730(1,531)

4,099

Changes in items during the period
Dividends from surplus
Profit attributable to owners ofparentEffect of changes in accounting
period of consolidated
subsidiaries
Purchase of treasury stock
Disposal of treasury stock
Cancellation of treasury stock
Change in ownership interest ofparent due to transactions with
non-controlling interests
Net changes of items other thanshareholders’ equity

44

[English Translation of Convocation Notice Originally Issued in the Japanese Language](Unit: millions of yen)ShareacquisitionrightsBalances as of April 1, 2022

Noncontrollinginterests

176

49

Total net
assets292,637

Changes in items during the period
Dividends from surplus(8,873)

Profit attributable to owners ofparent45,938

Effect of changes in accounting
period of consolidated
subsidiaries

90

Purchase of treasury stock(4,987)

Disposal of treasury stock

174

Cancellation of treasury stock–

Change in ownership interest ofparent due to transactions with
non-controlling interests(27)

Net changes of items other thanshareholders’ equity

292

(25)

6,395

Total changes in items during theperiod292(25)

38,710

Balances as of March 31, 2023

468

24

331,347

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

45

[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: 61
Major consolidated subsidiaries:
SEGA CORPORATION, Sammy Corporation, ATLUS CO., LTD., Sega of America, Inc., Sega
Europe Ltd., Sega Publishing Europe Ltd., 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., SEGASAMMY CREATION INC., PHOENIX RESORT CO., LTD., and 45 other companies
Number of non-consolidated subsidiaries: 11
Major non-consolidated subsidiaries:
SEGA (SHANGHAI) SOFTWARE 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 Company and the combined amount of retained earnings corresponding to the percentage of equity
interest held by the Company 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: 13
Major non-consolidated subsidiaries and affiliates not accounted for by the equity method: CHARAWEB CO., LTD., etc.
Some of the Company’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 Company and the combined amount of retained earnings corresponding to the percentage ofequity interest held by the Company 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.
During the current consolidated fiscal year, consolidated subsidiary Sega Taiwan Ltd., whose fiscal
year had ended on December 31, changed to a fiscal year ending on March 31, to enable more
appropriate disclosure on the consolidated financial statements. As a result, profit and loss during thethree-month period from January 1 through March 31, 2022, has been adjusted as an increase/decrease
in retained earnings.
Name of consolidated subsidiary
Sega Black Sea Ltd.

Ending date of fiscal year
December 31

46

[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 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.
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.
Software used at the Company is amortized by the straight-line method based on useful lives
within the Company (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.
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.
47

[English Translation of Convocation Notice Originally Issued in the Japanese Language](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.
(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.
(vi) Accounting method for significant hedge
Hedge accounting
The Company 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
48

[English Translation of Convocation Notice Originally Issued in the Japanese Language]
Hedge policy
Use of derivative instruments is intended to mitigate risks associated with foreign exchange
and interest rate fluctuation. As a rule, hedging is only used for items for which 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. An evaluation of hedge effectivenessfor currency swaps is omitted. This is because the material conditions for the notional
principal of the hedging instrument and for the hedged item are the same and thesetransactions can offset market fluctuations. Also omitted is an evaluation of hedge
effectiveness for interest rate swaps applied with special treatment.
(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 manufactureor 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.
49[English Translation of Convocation Notice Originally Issued in the Japanese Language](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.
(5)

Supplementary information
Accounting treatment of national and local income tax or related tax effect accounting
The Company and some domestic consolidated subsidiaries have applied the group tax-sharing system
beginning with this consolidated fiscal year. Accounting treatment and disclosure for national and local
income tax or related tax-effect accounting are undertaken in accordance with the Practical Solution on
the Accounting and Disclosure Under the Group Tax Sharing System (PITF No. 42, August 12, 2021).

II Notes concerning changes in accounting policies(1) Application of Implementation Guidance on Accounting Standard for Fair Value Measurement
The Company has applied the “Implementation Guidance on Accounting Standard for Fair Value
Measurement” (ASBJ Guidance No. 31, June 17, 2021; hereinafter “Fair Value Measurement Guidance”)
since the start of the current consolidated fiscal year. The new accounting policies stipulated by the Fair
Value Measurement Guidance are applied to current and future accounts in accordance with the transitional
treatment provided in Paragraph 27-2 of the Fair Value Measurement Guidance. This has had no impact on
the consolidated financial statements for the current fiscal year.
(2) Application of “Leases” (U.S. GAAP Topic 842)
Subsidiaries that apply U.S. GAAP have applied “Leases” (U.S. GAAP Topic 842) since the start of thecurrent consolidated fiscal year. This standard calls for the lessee to record all leases as assets and liabilities
on the balance sheet, in principle. In accordance with the transitional treatment provided for in the applicationof U.S. GAAP Topic 842, the Company employs the method of recognizing the cumulative effect of thechange in accounting policies on the starting date of its application. This has had only minor impact on the
consolidated financial statements for the current fiscal year.
III 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
47,043 millions of yen“Other” under intangible assets
6,410 millions of yen(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.
50

[English Translation of Convocation Notice Originally Issued in the Japanese Language](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
16,136 millions of yen(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.
(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 17,867 million yen(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 ¥125,811 million in noncurrent assets, including goodwill of ¥7,771 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.

51

[English Translation of Convocation Notice Originally Issued in the Japanese Language]
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.
IV Notes on the consolidated balance sheet(1) Accumulated depreciation of property, plant and equipment
101,345 million yen(2)

Assets pledged as collateral
Shares of subsidiaries and affiliates*

17,867 million yen* Shares of the equity-method affiliate PARADISE SEGASAMMY Co., Ltd. are pledged as collateral
for a loan of ¥73,007 million (KR₩725,000 million) from financial institutions to PARADISESEGASAMMY Co., Ltd. in the current consolidated fiscal year.
(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: ¥(425) million(4)

Balance of unrealized borrowings based on current account overdraft agreements: ¥181,654 million
Balance of unrealized borrowings based on commitment line contracts: ¥113,000 million

52

[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¥9,871 million(2)

R&D expenses included in general and administrative expenses and manufacturing cost for the fiscal
year under review¥51,410 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¥3 million
03(ii) Breakdown of loss on sale of noncurrent assets:
Amusement machines and facilities
Other noncurrent assets
Total¥0 million
00(iii) A breakdown of depreciation loss is provided below.
(Unit: millions of yen)
Use
Assets for business

Location
State of Nevada,
U.S.A., and twoothersType

Amount ofdepreciation loss
recorded

Buildings and structures

141

Amusement machines andfacilities

2

Other property, plant, andequipment

297

Other intangible assets

5

Total

446

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.
(4) Loss on business restructuring
This loss is primarily related to game content for which development was suspended in connection
with restructuring of the European business.

53

[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

266,229,476

End of current
consolidated fiscal
year

Decrease–

25,000,000(Overview of causes of change)
Cause of the decrease:
Decrease due to retirement of treasury stock:241,229,476

25,000,000 shares(2) Treasury stock(Unit: shares)
Class of sharesStart of current
consolidated fiscal
year

Common stock

Increase

43,307,930

Decrease

2,246,395

25,078,284

End of current
consolidated fiscal
year
20,476,041(Overview of causes of change)
Causes of the increase:
Increase due to purchase on the market under Board of Directors resolution: 2,240,700 shares
Increase due to purchase of odd-lot stock:
5,695 shares
Causes of the decrease:
Decrease due to demands for sale of odd-lot stock:
84 shares
Decrease due to transfer-restricted share-based compensation:
78,200 shares
Decrease due to retirement of treasury stock:
25,000,000 shares(3) Dividends(i) Cash dividends paid
Resolution

Class of shares

Total dividend(millions of yen)

Board of Directors
meeting held May 13, Common stock2022
Board of Directors
meeting held October Common stock
31, 2022

Dividends per
share (yen)Record date

Effective date

4,458

20 March 31, 2022

June 2, 2022

4,415

20

September 30,
2022

December 1,
2022(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 12,
stock
2023

(4)

Source of Total dividend
dividends (millions of yen)

Retainedearnings

8,609

Dividends per
share (yen)Record date

39 March 31, 2023

Effective dateJune 2, 2023

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 applicable54

[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 bonds. Since bonds are secured through transactions solely with highly
rated financial institutions, in accordance with Group company rules on funds management and otherrules and resolution, they entail only minor credit risk. Investment securities consist mainly of stock.
Information on topics such as their current market values and the financial standings of their issuers(business partners) is ascertained at regular intervals and reported to the Board of Directors or otherrelevant body within each company. Decisions on whether to continue to hold such securities is reviewed
based on a consideration of relationships with the business partners that issued them. While somecomponent financial instruments are exposed to risks of market price fluctuations such as those of stockmarket fluctuations, their current market values are ascertained at regular intervals.
Borrowings and corporate bonds are secured to obtain working capital, make capital investments, anddiversify fundraising sources. The Group manages liquidity risk in various ways, including having eachGroup company prepare monthly reports on fundraising results and forecasts for confirmation by theCompany.
Derivative transactions consist of forward foreign exchange contracts intended to hedge against
exchange rate fluctuation risks associated with certain operating payables denominated in foreign
currency and interest-rate swap transactions intended to hedge against interest-rate fluctuation risks
associated with certain borrowings with variable interest rates. These are handled mainly by the financeor accounting sections of individual Group companies, allowing internal approval based on the 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

Consolidated balance
sheet amount
52,673

Fair value

Difference

52,673

–

104
4,654
30,55617,00025,00010,000104
4,654
30,55617,00024,915
9,814

(0)
–
–
–
84
185

–
382

–
382

–
–

*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 10,808 million yen.

55

[English Translation of Convocation Notice Originally Issued in the Japanese Language]*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)
4,538
9,984
846
18,586824

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 12

Level 3

Total

4,082
290
280
4,654

4,082
–
–
4,082

–
290
280
571

–
–
–
–

4,082
290
280
4,654

–
382
382

–
–
–

–
382
382

–
–
–

–
382
382

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

(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

Consolidatedbalance sheet
amountFair value
Level 1

Level 12

Level 3

Total

52,673–52,673–52,673104
52,778––104
52,778––104
52,77856

[English Translation of Convocation Notice Originally Issued in the Japanese Language]
Category
Notes and accounts payable trade
Short-term borrowings
Long-term borrowings
Bonds payable
Total liabilities

Consolidatedbalance sheet
amountFair value
Level 1

Level 12

Level 3

Total

30,556–30,556–30,55617,00025,00010,00082,556––––17,00024,915
9,814
82,287––––

17,00024,915
9,814
82,287

Note: 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.
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.

57

[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

ResortSubtotal

Other

Total

Digital content sales

145,132

4,153–

149,285–

149,285

Product and merchandise
sales

95,32087,254–

182,575–

182,575––

11,540

11,540–

11,54042,4282,845–

45,274960

46,234

Revenue from contracts withcustomers

282,881

94,253

11,540388,675960

389,635

Sales to external customers

282,881

94,253

11,540388,675960

389,635

Resort facility sales
Other sales(2)

Pachislot
Pachinko
Machines

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.

(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

34,958
3,993
10,25758

52,673696
25,852

[English Translation of Convocation Notice Originally Issued in the Japanese Language]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 ¥9,368 million. The main cause of theincrease in contract liabilities was an increase 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
Total

Current consolidated fiscal year
24,2271,047
577
25,852IX 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
1,498.75 yen
Profit per share
208.07 yen

59

[English Translation of Convocation Notice Originally Issued in the Japanese Language]
XI Notes on significant subsequent events(1) Tender offer to acquire shares of Rovio Entertainment Oyj
At Board of Directors meeting held on April 17, 2023, the Company and SEGA CORPORATION("SEGA"), a subsidiary of the Company, resolved to implement a tender offer (tender offer under the
Finnish L aw, the “Tender Offer”) to acquire Rovio Entertainment Oyj (“Rovio”), a mobile gamecompany headquartered in Finland, through SEGA’s wholly-owned UK subsidiary SEGA Europe
Limited.
(i) Purpose of the acquisition and the tender offer(a)Positioning of the consumer business for the Company
The Company positions the consumer area of its Entertainment Contents Business as a
growth area under its medium-term plan (from FY2022 to FY2024), and has accelerated its
efforts to strengthen the business through initiatives such as converting existing IPs into
global brands, strengthening user engagement through multi-platform support and enhanced
media mix, etc.
As a part of its growth strategy to invest up to ¥250 billion during the five-year period
ending FY2026/3, the Company has been exploring investment opportunities in the
consumer area to strengthen its development capabilities as well as to create new
ecosystems.

(b) Background of the acquisition
The size of the global gaming market is projected to reach US$263.3 billion by 2026,
growing at a CAGR of 3.5% from 2022 to 2026. The mobile gaming market in particular, is
set to grow at a CAGR of 5.0% to represent 56% of the global gaming market overall, an
increase from 53% in 2022. (Source: IDG Report (dated October 2022))
The Company firmly believes that it is imperative to continue investing in its gamedevelopment and operating capabilities, in order to further strengthen its position in thisfast-growing mobile and global gaming market, which therefore led to the decision toacquire Rovio.
Through the Acquisition, the Company aims to take-in Rovio’s live-operated mobile gamedevelopment capabilities and expertise in mobile game operation, to accelerate thedevelopment of mobile-compatible and multi-platform- supported version of SEGA’s
existing game IPs, thereby strengthening and further accelerating global expansion of
SEGA’s game portfolio.
(c)Purpose of the acquisition
Rovio is a global mobile-first, games company that creates, develops, and publishes mobile
games, which have been downloaded over 5 billion times. Rovio is best known for the
global Angry Birds brand, which started as a popular mobile game in 2009, and has sinceevolved from games to various entertainment, anime, and consumer products throughbrand licensing.
SEGA aims to accelerate its growth in the global gaming market and increase its
corporate value by generating synergies between SEGA’s existing businesses and Rovio’s
strengths, including its global IPs and live-operated mobile game development capabilities.

(ii) Overview of the Tender Offer(a) Tender Offer (The offeror)
SEGA Europe Limited(b) Target of the Tender Offer(1) Trade Name
(2) Location of head office(3) Name/title of the representative(4) Business overview(5) Capital(c)

Rovio Entertainment Oyj
Keilaranta 7 02150, Espoo, Uusimaa Finland
Alexandre Pelletier-Normand / CEO
Planning, development, management, and distributionof mobile games, as well as licensing of Angry Birds IP
EUR 0.7 million (as of December 31, 2022)

Tender Offer period (tentative)
60

[English Translation of Convocation Notice Originally Issued in the Japanese Language]
Scheduled to begin on May 8, 2023, and end on July 3, 2023
The Company plans to commence the Tender Offer as soon as the offering document
related to the Tender Offer (Tender Offer document to be published to the shareholders of
Rovio) is approved by the Finnish Financial Supervisory Authority, the regulatory authorityof Finland’s financial markets.
(d) Tender Offer priceEUR 9.25 per share
The Tender Offer price represents approximately a 63.1% premium to the closing price on
January 19, 2023, approximately a 55.2% premium to the 3M VWAP ended January 19,
2023, approximately a 19.0% premium to the closing price of Rovio’s shares on April 14,
2023, the last day of trading before the announcement of the Tender Offer, andapproximately a 17.5% premium to the 3M VWAP ended April 14, 2023.
(e)

Funds required for the Tender Offer
EUR 706 million in total (c. ¥103,680 million)
The Company plans to use cash on hand to fund the Tender Offer.
(The Company may draw loans as appropriate based on its capital policy, in a way that does
not affect the capability and willingness to fund the offer).

(f)

Minimum Number of Shares to be Purchased
The Company has set the minimum acceptance level of at least 90% of all shares andvoting rights in Rovio (on a fully diluted basis) for the Tender Offer, which can be waived
by the Company, to successfully complete.

(iii) Number of shares to be acquired, acquisition price, and ownership of shares before and after theAcquisition*(1) Ownership of shares before
the acquisition(2) Number of shares to beacquired(3) Acquisition price(4) Intended Ownership ofshares after the Acquisition

0 shares (Number of voting rights: 0 shares) (Ratio of voting
rights: 0%)76,179,063 shares, 742,300 options (as of April 17, 2023)(Number of voting rights: 76,179,063 votes)
Acquisition Price: c. EUR 706 million (c.¥103,680 million)
Advisory Fee: c. EUR 9 million (c.¥1,300 million)
76,179,063 shares, 742,300 options (Number of voting
rights: 76,179,063) (Ratio of voting rights: 100%)* Acquisition price represents the amount of payment for purchasing shares and stock options.
Ownership of shares after the Acquisition provided above assumes that the Company
successfully completes the Tender Offer and acquires the entirety of Rovio’s shares outstanding
after the full exercise of options. If the Company successfully acquires more than 90% of allshares and voting rights in Rovio, the Company intends to implement a squeeze-out procedure set
forth in the Finnish Companies Act to acquire the remaining untendered shares and to makeRovio its wholly owned subsidiary.
(2)

Acquisition of treasury stock
At Board of Directors meeting held on April 28, 2023, the Company has resolved the matter related tothe acquisition of treasury stock, pursuant to the provisions of Article 156 of the Companies Act of Japan
as applied by replacing the provisions stipulated in Article 165 Paragraph 3 of the same law.
(i)

Reasons for the acquisition of treasury stock
The Group aims to maximize corporate value through the management focusing on capitalefficiency in its medium - term financial strategy until the fiscal year ending March 31, 2026 andwhile promoting aggressive investment for growth, the Company will also provide appropriate
shareholder returns. As a result of considering regarding shareholder returns including acquisitionof treasury stock based on the return policy of adopting higher of DOE 3% or more, or total return
ratio of 50% or more, the Company decided to acquire treasury stock.
61

[English Translation of Convocation Notice Originally Issued in the Japanese Language](ii) Details of the acquisition of treasury stock(a)Type of shares to be acquired
Common stock(b) Total number of shares to be acquired
8,000,000 shares (upper limit)
Ratio to total number of shares outstanding (excluding treasury stock): 3.62%(c)Total cost of acquisition
10.0 billion yen (upper limit)(d) Acquisition period
From May 1, 2023 to September 29, 2023
(e)Acquisition method
Market purchase on the Tokyo Stock Exchange

62

[English Translation of Convocation Notice Originally Issued in the Japanese Language]Non-consolidated balance sheet(Unit: millions of yen)
Item
AssetsCurrent assets
Cash and deposits
Accounts receivable - trade
Prepaid expenses
Short-term loans receivable fromsubsidiaries and affiliates
Accounts receivable - other
Other
Noncurrent assets
Property, plant, and equipment
Buildings
Structures
Machinery and equipment
VehiclesTools, furniture and fixtures
Land
Intangible assets
Software
Other
Investments and other assets
Investment securities
Shares of subsidiaries andaffiliates
Investments in capital ofsubsidiaries and affiliates
Long-term loans receivablefrom subsidiaries and affiliates
Long-term loans receivable
Long-term prepaid expenses
Other
Total noncurrent assets

Total assets

Current year
(as of March 31,
2023)

Item
Liabilities
Current liabilities
Current portion of long-termborrowings
Accounts payable - otherAccrued expenses
Income taxes payable
Deposits received
Provision for bonuses
Provision for directors’ bonuses
Other
Noncurrent liabilities
Bonds payable
Long-term borrowings
Asset retirement obligations
Provision for retirement benefits
Long-term deposits received
Deferred tax liabilities
Other
Total liabilities
Net assets
Shareholders’ equity
Capital stock
Capital surplus
Legal capital surplus
Other capital surplus
Retained earnings
Other retained earnings
Retained earnings brought
forwardTreasury stock
Valuation and translation
adjustments
Valuation difference on availablefor-sale securities
Share acquisition rights
Total net assets
Total liabilities and net assets

66,694
48,8391,140
735
12,6871,783
1,508
343,460
8,804
4,137
558
22
60
2,231
1,794
778
665
113
333,877
11,061
309,785794
16,36043
30
5,753(9,951)

410,155

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

63

Current year
(as of March 31,
2023)
103,777
17,000
1,733
805
140
82,202979
641
275
56,886
10,00025,000593
502
20,000510
279
160,664
248,41229,953
146,486
29,945116,540
109,348
109,348
109,348(37,375)
610
610
468
249,491
410,155

[English Translation of Convocation Notice Originally Issued in the Japanese Language]Non-consolidated statement of income(Unit: millions of yen)
Current year
(from April 1, 2022 to March 31, 2023)

Item
Operating revenue
Consulting fee income
Shared service income
Dividends income
Operating expenses
Selling, general, and administrative expenses
Operating income
Non-operating income
Interest income
Interest on securities
Dividends income
Gain on investments in partnership
Foreign exchange gains
Other

9,363
4,038
4,451
16,669

418
15
29
1,510
805
316

Non-operating expenses
Interest expenses
Interest on bonds
Commission fee
Loss on investments in partnership
Provision of allowance for doubtful accounts
Other
Ordinary income
Extraordinary income
Extraordinary losses
Gain on sales of stocks of subsidiaries and affiliates
Income before income taxes
Loss on valuation of investment securities
Income taxes - current
Income taxes - deferred
Total income taxes
Net income

540
37
145
542
196
303

2
423
59
(273)
57

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

64

17,853
16,669
1,184

3,096

1,765
2,514

426
59
2,880
(216)
3,097

[English Translation of Convocation Notice Originally Issued in the Japanese Language]Non-consolidated statement of changes
in shareholders’ equity
FY2023 (April 1, 2022 - March 31, 2023)(Unit: millions of yen)

Capital stock
Balances as of April 1, 2022
Changes in items during the period
Dividends from surplus
Net income
Purchase of treasury stock
Disposal of treasury stock
Cancellation of treasury stock
Total changes in items during theperiodBalances as of March 31, 2023

Balances as of April 1, 2022
Changes in items during the period
Dividends from surplus
Net income
Purchase of treasury stock
Disposal of treasury stock
Cancellation of treasury stock
Total changes in items during theperiodBalances as of March 31, 2023

Balances as of April 1, 2022
Changes in items during the period
Dividends from surplus
Net income
Purchase of treasury stock
Disposal of treasury stock
Cancellation of treasury stock
Net changes in items other thanshareholders’ equity
Total changes in items during theperiodBalances as of March 31, 2023

Shareholders’ equity
Capital surplus
Legal capital surplus

Other capital surplus

Total capital surplus

29,945

162,140

192,08531(45,631)31(45,631)(45,599)(45,599)

116,540

146,486

29,95329,95329,945

Shareholders’ equity
Retained earnings
Other capital
Total shareholders’
Treasury stock
surplus
Total capital
equitysurplusRetained earnings
carried forward
115,124
115,124(78,161)
259,001(8,873)
3,097(8,873)
3,097(4,987)
142
45,631(8,873)
3,097(4,987)174–(5,775)(5,775)40,786(10,589)

109,348

109,348(37,375)

248,412Valuation and translation adjustments
Valuation
Total valuation anddifference ontranslation
available-for-saleadjustments
securities
383
383

Share acquisitionrights176

Total net assets

259,560(8,873)
3,097(4,987)
174
–

227

227

292

519

227

227

292

(10,069)

610

610

468

249,491

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

65

[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 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 during the current fiscal year.
(iii) Provision for directors’ bonuses: The estimated amount of bonuses is recorded to meet thepayment of bonuses for directors.
(iv) Provision for retirement benefits
Method for allocating estimated retirement benefits to fiscal periods
66[English Translation of Convocation Notice Originally Issued in the Japanese Language]
In calculating retirement benefit obligations, benefit formula attribution is adopted for the purposeof 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 to currency swap transactions that meet therequirements for deferred hedge accounting and special treatment to interest rate swap
transactions that meet the requirements for special treatment.
(ii) Hedging instruments and subjects of hedging
Hedging instruments: Currency swaps and interest rate swaps
Subjects of hedging: Borrowings denominated in foreign currency and interest on borrowings(iii) Hedging policy
Use of derivative instruments is intended to mitigate risks associated with foreign exchange andinterest rate fluctuation. 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
An evaluation of hedge effectiveness for currency swaps is omitted. This is because the material
conditions for the notional principal of the hedging instrument and for the hedged item are thesame and these transactions can offset market fluctuations. Also omitted is an evaluation of hedge
effectiveness for interest rate swaps applied with special treatment.

(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.

II Notes concerning changes in accounting policies
Application of Implementation Guidance on Accounting Standard for Fair Value Measurement
The Company has applied the “Implementation Guidance on Accounting Standard for Fair Value
Measurement” (ASBJ Guidance No. 31, June 17, 2021; hereinafter “Fair Value Measurement Guidance”)
since the start of the current fiscal year. The new accounting policies stipulated by the Fair Value
Measurement Guidance are applied to current and future accounts in accordance with the transitional
treatment provided in Paragraph 27-2 of the Fair Value Measurement Guidance. This has had no impact on
the financial statements for the current fiscal year.

67

[English Translation of Convocation Notice Originally Issued in the Japanese Language]
III Notes on accounting estimates
Valuation of shares of subsidiaries and affiliates related to PARADISE SEGASAMMY Co., Ltd.
(1) Amount recorded to the financial statements for the current fiscal year
Shares of subsidiaries and affiliates: 34,872 million yen(2) Method for calculating amount recorded to the financial statements for the current fiscal year
PARADISE SEGASAMMY Co., Ltd. (“PSS” hereinafter) is a Company affiliate recorded at its
value on the balance sheet based on the acquisition cost, as stock with no market value.
In valuations of the shares of subsidiaries and affiliates, unless there are sufficient grounds forrecognizing the decrease to be recoverable, a marked decrease in the effective price due to PSS’s
worsening financial standing based on a comparison of the acquisition cost and effective pricereflecting the excess revenue-generating capability would affect valuations of the Company’s
shares of subsidiaries and affiliates. This is because they are recorded as losses in the current
period through an appropriate reduction in value.
(3) Key assumptions made in calculating amounts posted to the financial statements in the 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 measurement of value in use are based on matters such as businessplans fundamental to calculations 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.
(4) Impact on 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.
IV Notes on the balance sheet(1) Accumulated depreciation of property, plant and equipment
5,060 million yen(2)

Assets pledged as collateral
Shares of subsidiaries and affiliates*
34,872 million yen* Shares of the equity method affiliate PARADISE SEGASAMMY Co., Ltd. are pledged ascollateral for a loan of ¥73,007 million (KR₩725,000 million) from financial institutions to
PARADISE SEGASAMMY Co., Ltd. at the end of the current fiscal year.

(3)

Monetary claims and obligations with subsidiaries and affiliates
Short-term monetary claims
Short-term monetary obligations
Long-term monetary obligations

68

3,421 million yen
83,856 million yen
20,000 million yen

[English Translation of Convocation Notice Originally Issued in the Japanese Language]
V Notes on the income statement
Transactions with subsidiaries and affiliates
Management guidance fees
Shared service fees
Dividends received (operating revenues)
Selling, general, and administrative expenses
Transactions other than operating transactions

9,363 million yen
4,037 million yen
4,451 million yen
1,621 million yen
654 million yen

VI 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
20,476,041 shares
VII 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

(2)

(3)

805 million yen
303
2,987
7,346
63
1,260
12,768(805)(11,450)(12,256)(512)–

361 million yen
504
151
5
1,023
(512)
510
(510)

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
Amount of dividends received, etc. not included in profit
Other
Effective tax rate after tax effect accounting

2.8 %(0.4) %
8.2 %
(47.4) %(1.2) %
(7.5) %

Accounting treatment of national and local income tax or related tax effect accounting
The Company has applied the group tax-sharing system starting this fiscal year. The Company carries
out accounting treatment and disclosure for national and local income tax or related tax-effectaccounting in accordance with the Practical Solution on the Accounting and Disclosure Under theGroup Tax Sharing System (PITF No. 42, August 12, 2021).
69

[English Translation of Convocation Notice Originally Issued in the Japanese Language]
VIII Notes on transactions with related parties(1) Subsidiaries, affiliates, etc.
(Unit: millions of yen)Type

Name ofcompany, etc.

Percentage ofvoting rights
held by (or in)
the Company

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
3,183 receivable- tradeAccounts
968 receivable- tradeAccounts– payable other
Deposits
received
Longterm
deposits
received
Other
130 current
liabilities

291
59

608

7,807
15,00029

Subsidiary–Endingbalance

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

Deposits
received/paid*4–

Deposits
received

4,880

Subsidiary

Interest paid*5

Transaction
amount*1

TAIYO ELEC
Co., Ltd.

100% held
indirectly by theCompany–

Deposits
received/paid*4–

Deposits
received

10,256

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 ofloansInterest
received*570

Accounts
6,179 receivable- tradeAccounts
2,846 receivable- tradeAccounts– receivable- other
Deposits
received
144–
Short-termloans to
1,000
subsidiaries
and affiliates
–

39

–

566
203

381

36,613–
10,047–

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

SubsidiaryType

Name ofcompany, etc.

SEGA SAMMY
CREATION
INC.

Percentage ofvoting rights
held by (or in)
the Company

100% held
directly by theCompany

Relationship torelated party

Details oftransactions

Lending offunds

Concurrent
posting ofexecutives

Interest
received*5

Subsidiary

Amount of taxsharing effects
under the grouptax-sharing
systemDeposits
received/paid*4
PHOENIXRESORT CO.,LTD.

100% held
directly by theCompany

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

Longterm loans
to1,250
subsidiaries andaffiliates*6
Accounts
89 receivable- otherEndingbalance

14,3500Accounts– payable other152

Deposits
received

335–

Short-termloans to800 subsidiaries
andaffiliates
Long-termloans to920 subsidiaries
andaffiliates

2,600

1,970

Accounts
29 receivable- other
Accounts
45 receivable- tradeAccounts– receivable- other
Deposits
receivedOther
12 current
liabilities–

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

34,872

0
4

56

8,118
5

444

5,186
5,000

–

*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.

71

8

–

[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. Long-term loans to subsidiaries and affiliates to SEGA SAMMY CREATION INC. were recorded in the amount of 9,905
million yen during current fiscal year. In addition, 196 million yen was transferred to allowances for doubtful accounts
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

6.19% heldin theCompany
directly

Relationshipto related
party

Details oftransactions

Insurance
agent

Payment of
insurance
premiums*2

Transaction
amount*1

6

Account

Endingbalance

Prepaid expenses

1Long-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.

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

1,128.06 yen
14.03 yen

X Notes on significant subsequent events
Acquisition of treasury stock
Notes on this acquisition of treasury stock are omitted here because the same information is provided under“XI Notes on significant subsequent events: (2) Acquisition of treasury stock” in the Notes on the
consolidated financial statements.

72

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

Independent Auditor’s Report
May 11, 2023
To the Board of Directors of SEGA SAMMY HOLDINGS INC.:
KPMG AZSA LLC
Tokyo Office, Japan
Hidetoshi Fukuda
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
Danya Sekiguchi
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
Yoichi Ueno
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
OpinionWe have audited the consolidated financial statements, which comprise the consolidated balance sheet,the consolidated statement of income, the consolidated statement of changes in net assets and the related
notes of SEGA SAMMY HOLDINGS INC. (“the Company”) and its consolidated subsidiaries(collectively referred to as “the Group”), as at March 31, 2023 and for the year from April 1, 2022 toMarch 31, 2023 in accordance with Article 444-4 of the Companies Act.
In our opinion, the consolidated financial statements referred to above present fairly, in all material
respects, the consolidated financial position and the results of operations of the Group for the period, forwhich the consolidated financial statements were prepared, in accordance with accounting principles
generally accepted in Japan.

Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the Auditof the Consolidated Financial Statements section of our report. We are independent of the Group inaccordance with the ethical requirements that are relevant to our audit of the consolidated financial
statements in Japan, and we have fulfilled our other ethical responsibilities in accordance with theserequirements. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our opinion.

Other Information
The other information comprises the business report and its supplementary schedules. Management is
responsible for the preparation and presentation of the other information. The audit and supervisory73

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

committee are responsible for overseeing the directors’ performance of their duties with regard to thedesign, implementation and maintenance of the reporting process for the other information.
Our opinion on the consolidated financial statements does not cover the other information and we do not
express any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read theother information and, in doing so, consider whether the other information is materially inconsistent withthe consolidated financial statements or our knowledge obtained in the audit, or otherwise appears to bematerially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this otherinformation, we are required to report that fact.
We have nothing to report in this regard.

Responsibilities of Management and the Audit and Supervisory Committee for the Consolidated
Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial
statements in accordance with accounting principles generally accepted in Japan, and for such internal
control as management determines is necessary to enable the preparation of consolidated financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the Group’s
ability to continue as a going concern, disclosing, as applicable, matters related to going concern inaccordance with accounting principles generally accepted in Japan.
The audit and supervisory committee are responsible for overseeing the directors’ performance of theirduties with regard to the design, implementation and maintenance of the Group’s financial reporting
process.

Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as
a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’sreport that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guaranteethat an audit conducted in accordance with auditing standards generally accepted in Japan will always
detect a material misstatement when it exists. Misstatements can arise from fraud or error and areconsidered material if, individually or in the aggregate, they could reasonably be expected to influence
the economic decisions of users taken on the basis of these consolidated financial statements.
As part of our audit in accordance with auditing standards generally accepted in Japan, we exercise
professional judgment and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the consolidated financial statements,
whether due to fraud or error, design and perform audit procedures responsive to those risks, andobtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of
not detecting a material misstatement resulting from fraud is higher than for one resulting fromerror, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the74[English Translation of Convocation Notice Originally Issued in the Japanese Language]

override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit proceduresthat are appropriate in the circumstances, while the objective of the audit is not to express an
opinion on the effectiveness of the Group’s internal control.

Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.

Conclude on the appropriateness of management’s use of the going concern basis of accounting andbased on the audit evidence obtained, whether a material uncertainty exists related to events orconditions that may cast significant doubt on the Group’s ability to continue as a going concern. If
we conclude that a material uncertainty exists, we are required to draw attention in our auditor’sreport to the related disclosures in the consolidated financial statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to
the date of our auditor’s report. However, future events or conditions may cause the Group to cease
to continue as a going concern.



Evaluate whether the presentation and disclosures in the consolidated financial statements are inaccordance with accounting standards generally accepted in Japan, the overall presentation,
structure and content of the consolidated financial statements, including the disclosures, andwhether the consolidated financial statements represent the underlying transactions and events in amanner that achieves fair presentation.

Obtain sufficient appropriate audit evidence regarding the financial information of the entities orbusiness activities within the Group to express an opinion on the consolidated financial statements.
We are responsible for the direction, supervision and performance of the group audit. We remainsolely responsible for our audit opinion.

We communicate with the audit and supervisory committee regarding, among other matters, the planned
scope and timing of the audit, significant audit findings, including any significant deficiencies in internal
control that we identify during our audit.
We also provide the audit and supervisory committee with a statement that we have complied with
relevant ethical requirements regarding independence, and communicate with them all relationships andother matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.

Interest required to be disclosed by the Certified Public Accountants Act of Japan
Our firm and its designated engagement partners do not have any interest in the Company and its
subsidiaries which are required to be disclosed pursuant to the provisions of the Certified Public
Accountants Act of Japan.
Notes to the Reader of Independent Auditor’s Report:
The Independent Auditor’s Report herein is the English translation of the Independent Auditor’s Report
as required by the Companies Act for the conveniences of the reader.

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Independent Auditor’s Report

May 11,2023

To the Board of Directors of SEGA SAMMY HOLDINGS INC.:

KPMG AZSA LLC
Tokyo Office, Japan

PartnerPartnerPartner

Hidetoshi Fukuda
Designated Limited Liability
Engagement Partner
Certified Public Accountant
Danya Sekiguchi
Designated Limited Liability
Engagement Partner
Certified Public Accountant
Yoichi Ueno
Designated Limited Liability
Engagement Partner
Certified Public Accountant

OpinionWe have audited the financial statements, which comprise the balance sheet, the statement of income,the statement of changes in net assets and the related notes, and the accompanying supplementaryschedules (“the financial statements and the accompanying supplementary schedules”) of SEGASAMMY HOLDINGS INC. (“the Company”) as at March 31, 2023 and for the year from April 1, 2022
to March 31, 2023 in accordance with Article 436-2-1 of the Companies Act.
In our opinion, the financial statements and the accompanying supplementary schedules referred to above
present fairly, in all material respects, the financial position and the results of operations of the Company
for the period, for which the financial statements and the accompanying supplementary schedules wereprepared, in accordance with accounting principles generally accepted in Japan.

Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the Auditof the Financial Statements and the Accompanying Supplementary Schedules section of our report. We
are independent of the Company in accordance with the ethical requirements that are relevant to our auditof the financial statements in Japan, and we have fulfilled our other ethical responsibilities in accordancewith these requirements. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our opinion.

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Other Information
The other information comprises the business report and its supplementary schedules . Management is
responsible for the preparation and presentation of the other information. The audit and supervisorycommittee are responsible for overseeing the directors’ performance of their duties with regard to thedesign, implementation and maintenance of the reporting process for the other information.
Our opinion on the financial statements and the accompanying supplementary schedules does not cover
the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements and the accompanying supplementary schedules,
our responsibility is to read the other information and, in doing so, consider whether the otherinformation is materially inconsistent with the financial statements and the accompanying supplementaryschedules or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this otherinformation, we are required to report that fact.
We have nothing to report in this regard.

Responsibilities of Management and the Audit and Supervisory Committee for the Financial
Statements and the Accompanying Supplementary Schedules
Management is responsible for the preparation and fair presentation of the financial statements and theaccompanying supplementary schedules in accordance with accounting principles generally accepted inJapan, and for such internal control as management determines is necessary to enable the preparation offinancial statements and the accompanying supplementary schedules that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements and the accompanying supplementary schedules, management is
responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable,
matters related to going concern in accordance with accounting principles generally accepted in Japan.
The audit and supervisory committee are responsible for overseeing the directors’ performance of theirduties with regard to the design, implementation and maintenance of the Company’s financial reporting
process.

Auditor’s Responsibilities for the Audit of the Financial Statements and the Accompanying
Supplementary Schedules
Our objectives are to obtain reasonable assurance about whether the financial statements and theaccompanying supplementary schedules as a whole are free from material misstatement, whether due tofraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a highlevel of assurance, but is not a guarantee that an audit conducted in accordance with auditing standards
generally accepted in Japan will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis of these financial
statements and the accompanying supplementary schedules.
As part of our audit in accordance with auditing standards generally accepted in Japan, we exercise
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professional judgment and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the financial statements and theaccompanying supplementary schedules, whether due to fraud or error, design and perform audit
procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentionalomissions, misrepresentations, or the override of internal control.

Obtain an understanding of internal control relevant to the audit in order to design audit proceduresthat are appropriate in the circumstances, while the objective of the audit is not to express an
opinion on the effectiveness of the Company’s internal control.

Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.

Conclude on the appropriateness of management’s use of the going concern basis of accounting andbased on the audit evidence obtained, whether a material uncertainty exists related to events orconditions that may cast significant doubt on the Company’s ability to continue as a going concern.
If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’sreport to the related disclosures in the financial statements and the accompanying supplementaryschedules or, if such disclosures are inadequate, to modify our opinion. Our conclusions are basedon the audit evidence obtained up to the date of our auditor’s report. However, future events orconditions may cause the Company to cease to continue as a going concern.



Evaluate whether the presentation and disclosures in the financial statements and the accompanying
supplementary schedules are in accordance with accounting standards generally accepted in Japan,
the overall presentation, structure and content of the financial statements and the accompanying
supplementary schedules, including the disclosures, and whether the financial statements and theaccompanying supplementary schedules represent the underlying transactions and events in amanner that achieves fair presentation.

We communicate with the audit and supervisory committee regarding, among other matters, the planned
scope and timing of the audit, significant audit findings, including any significant deficiencies in internal
control that we identify during our audit.
We also provide the audit and supervisory committee with a statement that we have complied with
relevant ethical requirements regarding independence, and communicate with them all relationships andother matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.

Interest required to be disclosed by the Certified Public Accountants Act of Japan
Our firm and its designated engagement partners do not have any interest in the Company which arerequired to be disclosed pursuant to the provisions of the Certified Public Accountants Act of Japan .
Notes to the Reader of Independent Auditor’s Report:
This is an English translation of the Independent Auditor’s Report as required by the Companies Act ofJapan for the conveniences of the reader.

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Audit & Supervisory Committee’s Audit Report
The Audit & Supervisory Committee has audited the performance of the duties of Directors during the fiscal
year from April 1, 2022, through March 31, 2023. The method and results of this audit are reported below.
1. Audit methods and details
In addition to receiving periodic reports on the details of Board of Directors resolutions concerning thematters stipulated in Article 399-13, Paragraph 1, item 1, b and c of the Companies Act, and reports on
the structure and operational status of systems developed based on such resolutions (internal controls
systems) from Directors, employees, and others, as well as requesting explanations and offering
opinions, as necessary, the Audit & Supervisory Committee used the following methods to carry out
its audit:(i) In cooperation with the Company's internal controls sections, we attended important meetings,
received reports from Directors, employees, and others concerning the performance of their duties;
solicited explanations, as necessary, and viewed important decision-making documents and othermaterials in order to assess the status of operations and finances at the head office and importantbusiness sites in accordance with the audit policies, division of responsibilities, and otherprovisions established by the Audit & Supervisory Committee. At subsidiaries, we worked toachieve shared understanding and exchanged information with Directors, Corporate Auditors, andother subsidiary personnel and reviewed business reports from subsidiaries as necessary.
(ii) In addition to monitoring and verifying the independent status of and appropriate discharge of theaudit responsibilities of the accounting auditor, we received reports from the accounting auditor on
the state of the undertaking of its duties, and solicited explanations, as necessary. We also received
from the accounting auditor notification that systems for ensuring the appropriate performance of
duties (concerning the items enumerated in the paragraphs under Article 131 of the Corporate
Accounting Rules) were maintained in accordance with the Standards for Quality Control of
Audits (Business Accounting Council, October 28, 2005) and solicited explanations as necessary.
We reviewed the business report and its annexed details; the financial statements (balance sheet,statement of income, statement of changes in shareholders’ equity, and notes on the financial
statements) and their annexed details; and the consolidated financial statements (consolidated balance
sheet, consolidated statement of income, consolidated statement of changes in shareholders’ equity,and notes on the consolidated financial statements) for the current fiscal year based on the above
methods.
2. Audit findings(1) Findings of the audit of the business report, etc.
(i) We believe the business report and its annexed details accurately describe the state of theCompany in accordance with laws, regulations, and the Articles of Incorporation.
(ii) We have identified no improper actions or material violations of laws, regulations, or the
Articles of Incorporation with regard to the performance of duties of Directors.
(iii) We believe the resolutions of the Board of Directors concerning the internal controls system
to be appropriate. We found no items worthy of note regarding the business report or the
performance of the duties of Directors concerning the internal controls system.
(2) Findings of audit of the financial statements and their annexed details
We consider the methods and findings of the audit by KPMG AZSA LLC, the accounting auditor,
to be appropriate.
(3) Findings of audit of consolidated financial statements
We consider the methods and findings of the audit by KPMG AZSA LLC, the accounting auditor,
to be appropriate.
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May 12, 2023
Yukito Sakaue
Standing Audit & Supervisory Committee Member
Kazutaka Okubo
External Audit & Supervisory Committee Member
Shione Kinoshita
External Audit & Supervisory Committee Member
Naoko Murasaki
External Audit & Supervisory Committee Member
Audit & Supervisory Committee, SEGA SAMMYHOLDINGS INC.

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