To the Shareholders

Items Posted on Internet Concerning
Notice of the 17th Ordinary General Meeting of
Shareholders

June 1, 2021

SEGA SAMMY HOLDINGS INC.

1

Contents
1.

Company’s Share Subscription Rights ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ p. 3

2.

Independent Auditors ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ p. 3

3.

Outline of Resolutions Regarding Preparation of Internal Control Systemand so forth to Ensure Appropriate Business Execution ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ p. 4

4.

Consolidated Statement of Changes in Net Assets ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ p. 95.

Notes to Consolidated Financial Statements ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ p. 11

6.

Non-Consolidated Statement of Changes in Net Assets ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ p. 27

7.

Notes to Non-Consolidated Financial Statements ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ p. 28

Pursuant to the provisions of laws and regulations and the Article 16 of the Articles of Incorporation, theabove information shall be deemed to be provided to all shareholders by posting it on the website of
SEGA SAMMY HOLDINGS INC. (the “Company”):(https://www.segasammy.co.jp/japanese/ir/stock/meeting/).
Information in English will be posted on our English website(https://www.segasammy.co.jp/english/ir/stock/meeting/).

2

[English Translation of Convocation Notice Originally Issued in the Japanese Language]
1. Company’s Share Subscription Rights(1) Outline of Share Subscription Rights Issued to the Company’s Directors and Audit & Supervisory
Board Members as Remuneration for Their Services as of the End of the Fiscal Year Ended March 31,
2021
Not applicable.
(2) Outline of Share subscription rights Issued to Company Employees or Subsidiary Directors, Audit &Supervisory Board Members, or Employees as Remuneration for Their Services During the Fiscal
Year Ended March 31, 2021
Not applicable.
2. Independent Auditors(1) Name
KPMG AZSA LLC(2) Liability Limitation Agreement with Independent Auditors
Although, the Company amended its articles of incorporation and established regulations regarding liability
limitation agreements with independent auditors at the Second Ordinary General Meeting of Shareholders on
June 20, 2006, the Company has not entered into the liability limitation agreement with KPMG AZSA LLC.
(3) Remuneration, etc.
Remuneration, etc.
Remuneration, etc., related to the fiscal year ended March 31, 2021

¥142 million

Total of cash and other profits that should be paid to independent auditors
by the Company and its subsidiaries (together, the “Group”)¥271 million

Notes: 1. The Company’s subsidiaries, Sega Europe Ltd., etc. are audited by auditors that differ from theCompany’s.
2. As a result of checking and reviewing the independent auditor’s audit plan and record of
remuneration for the last year, the Audit & Supervisory Board of the Company gave consent to the
remuneration etc. for the independent auditor pursuant to Article 399, Paragraph 1 of theCompanies Act.
3. The non-audit services for which the Company paid remuneration to auditing certified public
accountants and other accountants include contracted business research, which are outside thescope of the services stipulated in Article 2, Paragraph 1 of the Certified Public Accountants Law.
(4) Policy Regarding Determination of Termination or Not Reappointing
The Company will include in objectives of the General Meeting of Shareholders the dismissal of the
independent auditor prescribed in any clause within Article 340, Section 1 of the Companies Act as well as
the dismissal or non-reappointment of the independent auditor if it is deemed difficult for the independent
auditor to perform its duty appropriately.

3

[English Translation of Convocation Notice Originally Issued in the Japanese Language]
3. Outline of Resolutions Regarding Preparation of Internal Control System and so forth to Ensure
Appropriate Business Execution(Outline of Resolutions Regarding Preparation of Internal Control System)
Based on the Companies Act, the Company made the following resolutions regarding the “Basic Policy on
Preparation of Internal Controls System” and has worked to prepare this system.
(1) System to Ensure the Efficient Implementation of the Duties of the Company’s Directors andCompliance with Laws and the Articles of Incorporation
In accordance with the Group Mission, establish a Group CSR Charter, Group Code of Conduct, GroupManagement Policies, and Guidelines (hereinafter, collectively referred to as “Group Philosophy and Code”)
and President (Representative Director) will repeatedly communicate the spirit of Group Philosophy and
Code to employees in administrative post, in order to thoroughly establish compliance with laws, etc., as acondition for all corporate activities. These efforts will reflect the Company’s fundamental policy offulfilling its social responsibility as a member of society and provide a basis for establishing a compliancesystem that comprises such policy.
In addition, in the interest of further strengthening corporate governance, the Board of Directors will makeefforts to build an effective internal controls system and to secure a system for compliance with laws for theCompany as a whole, based on the Group Management Policies stipulated for a unified management of theentire Group and the Guidelines that show the standard for operation and management of the entire Groupso that the Company’s business execution is appropriate and sound.
Also, the Audit & Supervisory Board will audit the effectiveness and functionality of this internal controls
system, and make efforts to identify and correct issues early through regular inspection.
In order to prevent participation in management by anti-social forces, it will be specified that all relations
with anti-social forces are removed in the Group Code of Conduct. Moreover, the Group will contain socalled “Bo-hi jyoko” (terms and clauses concerning exclusion of organized crime groups) in contracts,
establish a system to check whether or not our business partners correspond to anti-social forces, andestablish a system to address systematically in corporation with outside organizations including the police
and lawyers appropriately when anti-social forces approach the Group.
(2) System Related to the Retention and Management of Information Related to the Implementation of
the Duties of the Company’s Directors
President (Representative Director) will appoint the Director in charge of the Administrative Division as
the person in charge of the entire Company with respect to preservation and management of information
related to execution of Directors’ duties. Information related to execution of Directors’ duties will berecorded in writing or electronic media based on the Company regulations etc., and preserved and managed
so that the Directors and Audit & Supervisory Board Members are able to appropriately view suchinformation and also so that such information is easy to search.
In order to manage trade secrets and other information, etc., properly, policies concerning information
management and IT security, as well as guidelines for IT security will be established, and it is planned thatthey will be fully informed of and complied with.
(3) Regulations and Other Systems Regarding Risk Management for Losses of the Company
With respect to risks related to the Company’s business, each relevant division and department will analyze
and identify anticipated risks and clarify the risk management system. The Internal Audit Department willaudit each division’s and department’s risk management and report the results regularly to the management
decision-making body and executive and supervisory management organization.
In order to capture and manage properly important risks underlying inside and outside the management
including emergency responses, policies concerning risk management and crisis management guidelines willbe established as one of the Group Management Policies and Guidelines, and in the event of a situation likely
to have a severe impact on the Group, crisis management teams of the Company and the Group companies
shall cooperate to discuss about countermeasures for prompt and effective actions.

4[English Translation of Convocation Notice Originally Issued in the Japanese Language](4) System to Ensure that the Duties of the Company’s Directors are Implemented Efficiently
Adopt an Audit & Supervisory Board Member system for efficient execution of Directors’ duties, as well
as for Company Directors and Audit & Supervisory Board Members to be well-informed about the Group’sbusinesses and promptly and appropriately make decisions for the Group. The system should also enableappropriate and efficient execution of duties under rules related to authorities and decision-making based on
the Regulations of the Board of Directors, etc.
(5) System to Ensure Appropriate Compliance with Laws and the Articles of Incorporation Concerning
the Implementation of the Duties of the Company’s Employees
The Company will promote the group compliance measures for employees to act appropriately incompliance with laws, the Articles of Incorporation, Company regulations, and social norms. These
measures must be based on the Group Philosophy and Code as code of conduct.
Establish a “Hot Line” system that enables an employee to report as a whistle-blowing any violation oflaws, the Articles of Incorporation, Company regulations, or conduct in violation of social norms that theylearn. Also establish a system that enables the person in charge promptly to report any material matters to
the Board of Directors and the Audit & Supervisory Board.
Such a whistle-blower will be kept in secret, and will not receive any disadvantageous treatments due tothe report. Establish an internal reporting contact office comprised of outside counsel, etc. as recipients ofan informant’s report other than the ordinary reporting line, as part of a system that maintains transparency
and accurately addresses relevant issues.
(6) System Shown Below and Other Systems to Ensure that the Businesses of the Group, Comprised of
the Company, its Parent, and its Subsidiaries, are Implemented Properly① System to report to the Company matters related to the execution of the duties by the directors, the Statutory
Executive Officers, officers executing the duties, and people who should execute the duties of Article 598,
Section 1 of the Companies Act of the Company’s subsidiaries (referred to as “the directors, etc.” in ③
and ④ below)
By having the Company’s employees in administrative post concurrently serve as the directors or the Audit& Supervisory Board members of its Group companies, a system will be established to report and share
information of the Group companies to and with the Company through such officers.
At the same time, a system will be established to communicate important matters, report, share information
on matters of whistle-blowing, report and share information on matters of accounting wrongdoings anderrors based on the vertical chain of the Regulations of Management of Related Companies between the
Company and its Group companies. However, the whistle-blower will be kept in secret, and will not receive
any disadvantageous treatments due to the report.
Hold meetings, etc. for the Group’s Compliance & Risk and the Group’s Audit & Supervisory Board
Members, where various problems in the Group or governance matters with material risks are addressed.
The Company’s internal audit department will conduct audits for the benefit of the Group as a whole, andefforts will be made to ensure to the extent possible that information is shared among members of the Groupand businesses are properly executed.
② System regarding risk management for losses of the Company’s subsidiaries
Regarding common priority items and measures of the Group that the Company has stipulated, while they
will be addressed by each of its Group companies, specific risks of each subsidiary will be managed inconsideration of scale, nature, business category, etc. of each of its Group companies.
③ System to ensure that the duties of the directors, etc. of the Company’s subsidiaries are executed efficiently
As with the Company, in its Group companies, adopt an Audit & Supervisory Board member system for
efficient execution of directors’ duties, as well as for Company Directors and Audit & Supervisory Board
members to be well-informed about the Group’s businesses and promptly and appropriately make decisions
for the Group. The system should also enable appropriate and efficient execution of duties under rules related
to authorities and decision-making based on the Regulations of the Board of Directors, etc. However, thesystem will be established in consideration of scale, nature, business category, etc. of each of its Group
companies.

5

[English Translation of Convocation Notice Originally Issued in the Japanese Language]④ System to ensure appropriate compliance with laws and the Articles of Incorporation concerning executionof the duties of the directors, etc. and employees of the Company’s subsidiaries
As with the Company, the Board of Directors of its Group companies will establish a compliance system
in order to fulfill Group Philosophy and Code based on importance of compliance with laws, etc. and of
fundamental policy of fulfilling social responsibilities as a member of a society.
(7) Matters Regarding Employees whom Audit & Supervisory Board Members of the Company with
Audit & Supervisory Board Members Request to Assist Them in Their Duties, Matters Related to the
Independence of the Employees from the Directors of the Company with Audit & Supervisory Board
Members, and Matters Related to Ensuring Effectiveness of Instructions to the Employees by Audit& Supervisory Board Members of the Company with Audit & Supervisory Board Members
Establish an Audit & Supervisory Board Member’s Office as an organization that reports directly to the
Audit & Supervisory Board and employees in such office will assist the Audit & Supervisory Board
Members’ duties under their direction and order.
Employees who assist the Audit & Supervisory Board Members in their duties will be dedicated employees
in principle and will not be directed or supervised by the Directors. However, under unavoidable
circumstances, employees who serve concurrently in a position of the executive side will be assigned.
Concerning such concurrent employees, independence will be especially considered. Appointment, dismissal,
personnel transfer, evaluation, disciplinary action, revision of wages, etc. of the employees will require aprior agreement of the Audit & Supervisory Board.
(8) System Shown Below and Other Systems Related to Reporting to Audit & Supervisory Board
Members of the Company with Audit & Supervisory Board Members① System to enable Directors, Accounting Advisors, and employees of the Company with Audit &Supervisory Board Members to report to Audit & Supervisory Board Members of the Company with Audit& Supervisory Board Members
The Directors and employees of the Company must report promptly to the Audit & Supervisory Board on
material violations of laws and the Articles of Incorporation or a fact of illegal conduct related to executionof the duties or a fact that might cause conspicuous harm to the Company that they learn. Decisions thatmaterially affect the Company’s business or organization and results of internal audits will be treated in thesame way.
② System to enable directors, Accounting Advisors, Audit & Supervisory Board members, Statutory
Executive Officers, officers executing the duties, people who should execute the duties of Article 598,
Section 1 of the Companies Act of subsidiaries of the Company with Audit & Supervisory Board members
and other people equivalent to these people and employees or people who received reports from thesepeople to report to the Audit & Supervisory Board Members of the Company with Audit & Supervisory
Board Members
The directors, the Audit & Supervisory Board members, the Executive Officers, employees, etc. of theGroup companies or people who received reports from these people must report promptly to the Audit &Supervisory Board of the Company on material violations of laws and the Articles of Incorporation or a factof illegal conduct related to execution of the duties or a fact that might cause conspicuous harm to theCompany that they learn. Decisions that materially affect the Company’s business or organization and resultsof internal audits will be treated in the same way.
The Audit & Supervisory Board Members of the Company will make efforts to maintain systems from theperspective of focusing on so-called group management so that the Audit & Supervisory Board Members of
the Group companies are able to become receivers of report from the business execution side and to become
mediators.
(9) System to Ensure that People Who Made the Report Described in the Previous Clause Will Not
Receive Disadvantageous Treatments Because of Making Such Report
The reporter described in the previous clause will not receive disadvantageous treatments because of
making such report. Such disadvantageous treatments will be subject to punitive action.

6

[English Translation of Convocation Notice Originally Issued in the Japanese Language](10) Matters Concerning Policies Related to Procedures of Prepayment or Reimbursement of Expenses
Arising from Implementation of the Duties of the Audit & Supervisory Board Members of theCompany with Audit & Supervisory Board Members and Other Treatments of Expenses or Liabilities
Arising from Implementation of Such Duties
The Company will bear expenses arising from the execution of the duties of the Audit & Supervisory Board
Members in accordance with the Company regulations, responding to requests from the Audit & Supervisory
Board or Standing Audit & Supervisory Board Members. This includes expenses incurred in using outsideadvisors, etc., as prescribed in the clause (11).
(11) Systems Established to Ensure the Efficacious Performance of Auditing Responsibilities by Audit &Supervisory Board Members of the Company with Audit & Supervisory Board Members
Representative Directors regularly will meet with Audit & Supervisory Board Members, exchange
opinions related to Company management, in addition to business reports, and otherwise communicate
effectively with them.
The Board of Directors will ensure Audit & Supervisory Board Members’ participation in important workrelated meetings to ensure that the Company’s business is executed properly.
The Audit & Supervisory Board will use attorneys, certified public accountants, and other outside advisors,
as necessary for itself, and its opportunities to receive advice related to audit work will be guaranteed.
(Outline of Implementation Status of Internal Control System to Ensure Appropriate Business Execution)
The implementation status of the foregoing Basic Policy of the Company is as outlined below:(1) Compliance① Compliance training is held every fiscal year for the officers of the Company and the Group, divided into
separate groups of new officers and existing officers. For Directors of the Company, officer training is held
(theme of labor laws, including long work hours was held during the current fiscal year).
② As a place to share important issues and relevant measures for internal controls such as compliance andrisk management, the Group compliance liaison meeting is in place. The main contents of the meeting arepresented as feedback to the Board of Directors, etc. of major Group companies.
③ In an effort to enhance the compliance system, the Company designates priority compliance matters eachfiscal year that are common across the Group, from among all social requirements and issues affecting theGroup, and implements group training. The Company also engages in “compliance promotion activities” ona continual basis for the purpose of boosting compliance awareness and knowledge among the Group
employees.
④ As an initiative to eliminate anti-social forces, the Company has introduced a Group-wide checking system
to detect if business partners apply as anti-social forces and supports its implementation.
⑤ For the purpose of early detection and preventing misconduct such as violations of laws and regulations,the Company has established “Corporate Ethics Hot Line” as a whistle-blowing system. The Company isactively involved in informing employees of the system.
⑥ The Company’s internal audit department conducts internal audits of the Company and the Group
companies and strives to further enhance the internal audit system by sharing audit information andstrengthening mutual cooperation with the internal audit departments of the Group companies.
(2) Risk Management
By identifying significant risks underlying inside and outside management and clarifying issues to beaddressed, the Company and the Group companies are committed to business executions and mitigating lossof management resources and recurrence thereof.

7

[English Translation of Convocation Notice Originally Issued in the Japanese Language](3) Effectiveness of Audits by Audit & Supervisory Board Members① In order to complement enhanced information provision to Audit & Supervisory Board Members forinternal control purposes, the meetings of “Holdings Audit Liaison Committee” consisting of Audit &Supervisory Board Members and the Independent Auditor, “Audit & Supervisory Board Members andInternal Auditing Office Liaison Committee” where Audit & Supervisory Board Members and the internal
audit department discuss progress in audits and exchange information, and “Group Audit Liaison Committee”
consisting of all Standing Audit & Supervisory Board Members of the Group are held.
② The Company assigns employees dedicatedly serving as an assistant to Audit & Supervisory Board
Members to provide support for Audit & Supervisory Board Members in executing their duties.

8[English Translation of Convocation Notice Originally Issued in the Japanese Language]
4. Consolidated Statement of Changes in Net Assets(From April 1, 2020 To March 31, 2021)(Unit: millions of yen)
Shareholders’ equity
Capitalstock
Balances as of April 1, 2020

Capitalsurplus29,953Retainedearnings

118,564

206,334

Treasury
stock

Total
shareholders’equity(53,555)

301,296

Changes of items during theperiodDividends from surplus(7,052)(7,052)

Profit attributable to owners ofparent

1,274

1,274

Effect of changes in accounting
period of consolidated
subsidiaries

(4)

(4)

Purchase of treasury stock

(11)

(11)

5

5

Disposal of treasury stock(0)

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

(88)

(88)

Tax effect of items other thanshareholders' equity

(427)

(427

Total changes of items during theperiodBalances as of March 31, 2021

(516)

(5,782)(5)(6,304)

118,048

200,551(53,561)

294,991

29,953

Accumulated other comprehensive income
Valuation
Deferred gains Revaluationdifference onor losses onreserve foravailable-forhedges
landsale securities

Foreigncurrencytranslation
adjustment

Total
Remeasuremen accumulated
ts of definedotherbenefit plans comprehensive
income

4,470

(596)

(1,109)(8,480)(1,478)(7,193)

Net changes of items otherthan shareholders’ equity(2,540)

(129)

-

4,612

1,019

2,961

Total changes of items during theperiod(2,540)

(129)

-

4,612

1,019

2,961

Balances as of March 31, 2021

1,930

(725)

(1,109)(3,867)(459)(4,231)

Balances as of April 1, 2020
Changes of items during theperiodDividends from surplus
Profit attributable to owners ofparentEffect of changes inaccounting period of
consolidated subsidiaries
Purchase of treasury stock
Disposal of treasury stock
Change in ownership interestof parent due to transactions
with non-controlling interests
Tax effect of items other thanshareholders' equity

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[English Translation of Convocation Notice Originally Issued in the Japanese Language](Unit: millions of yen)
Subscription rights Non-controllingto shares
interests
Balances as of April 1, 2020

813

1,941

Total
net assets
296,858

Changes of items during theperiodDividends from surplus(7,052)

Profit attributable to owners ofparent1,274

Effect of changes inaccounting period of
consolidated subsidiaries(4)

Purchase of treasury stock(11)

Disposal of treasury stock

5

Change in ownership interestof parent due to transactions
with non-controlling interests(88)

Tax effect of items other thanshareholders' equity(427)

Net changes of items otherthan shareholders’ equity(813)(1,444)703

Total changes of items during theperiod(813)(1,444)(5,601)-

496

291,256

Balances as of March 31, 2021

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

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[English Translation of Convocation Notice Originally Issued in the Japanese Language]
5. Notes to Consolidated Financial Statements
I Significant Accounting Policies Used in Preparation of Consolidated Financial Statements(1) Scope of Consolidation
Number of consolidated subsidiaries
63
For a complete list of major consolidated subsidiaries, refer to the section “I Outline of the Group’s
Business” under “7. Material Parent Company and Subsidiaries” of “(2) Relationships with subsidiaries”.
Number of non-consolidated subsidiaries
10
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 net income corresponding to the percentage of equity interest heldby the Company, and the combined amount of retained earnings corresponding to the percentage of equity
interest held by the Company, do not have significant effect on the consolidated financial statements.
(2) Application of the Equity Method
Number of non-consolidated subsidiaries accounted for under the equity-method Number of affiliated companies accounted for under the equity method
11
Major equity-method affiliates: PARADISE SEGASAMMY Co., Ltd. and INTERLIFE HOLDINGS CO.,LTD. etc.
Number of non-consolidated subsidiaries and affiliated companies which are not accounted for under theequity method
11
Major non-consolidated subsidiaries and affiliated companies which are not accounted for under theequity method: CHARA-WEB.CO., LTD. etc.
Some of the Company’s non-consolidated subsidiaries and affiliates are not accounted for under theequity method because the combined amount of net income corresponding to the percentage of equity
interest held by the Company, and the combined amount of retained earnings corresponding to thepercentage of equity interest held by the Company do not have significant effect on the consolidated
financial statements even if they are excluded from the scope of equity method, and have no significanceas a whole.
(3) Fiscal Year for Consolidated Subsidiaries
Consolidated subsidiaries whose fiscal year-ends differ from the consolidated balance sheet date are listed
below. Necessary adjustments are made on consolidation for material transactions that occurred between
the end of the fiscal years of these subsidiaries and the end of the consolidated balance sheet date.
From the fiscal year ended March 31, 2021, the consolidated subsidiary, MPandC INC. has changed the fiscal
year-end from 31 December to 31 March in order to disclose the consolidated financial statements more
appropriately. Due to the change in the accounting period, profit and loss for the three months from January 1,
2020 to March 31, 2020 was adjusted as changes in retained earnings.

Consolidated subsidiary
Sega Amusements Taiwan Ltd.
Beijing SEGA Mobile Entertainment Technology Co., Ltd.
Sega Black Sea Ltd.

11

Fiscal year-end
December 31
December 31
December 31[English Translation of Convocation Notice Originally Issued in the Japanese Language](4) Accounting Policies① Valuation standards and accounting treatment for important assets
a. Held-to-maturity debt securities
Held-to-maturity debt securities are stated at amortized cost (the straight - line method).
b. Available-for-sale securities
Securities with fair value
Securities with fair value are stated at fair value. The difference between acquisition cost and fair value
is accounted for as valuation difference on available-for-sale securities in net assets, with cost of sales
determined by the moving-average method.
With respect to compound financial instruments whose fair values cannot be categorized and measured
for each embedded derivative, the entire compound financial instruments are appraised by fair value, andunrealized gains or losses are reported as income or expenses for the fiscal year ended March 31, 2021.
Securities without fair value
Securities without fair value are carried at cost, which is determined by the moving-average method.
The net amount of equity included in the Company’s financial statements from limited liability
investment partnerships and similar investments, regarded as marketable securities under Article 2-2 ofthe Financial Investment and Exchange Law of Japan, is calculated based on the relevant financial
statements for the partnership available as of the reporting date stipulated in the partnership agreement.
c. Derivatives
Derivatives are stated at fair value.
d. Inventories
Inventories are stated at cost, cost being determined mainly by the gross-average method (or at the net
realizable value (NRV) calculated by writing down the book value to reflect a decrease in the NRV).
Work in process is also stated at cost, cost being determined by the specific identification method (orat the NRV calculated by writing down the book value to reflect a decrease in the NRV).
② Depreciation and amortization for important assets
a. Property, plant and equipment (excluding lease assets):
Depreciation is calculated primarily using the straight-line method.
Range of useful life for the assets is as follows:
Buildings and Structures: 2 - 50 years
Machinery, equipment and vehicles: 2 - 12 years
Amusement machines and facilities: 2 - 5 years
b. Intangible assets (excluding lease assets):
Amortization is calculated using the straight-line method. The software used in the Company isamortized by the straight-line method based on the useful lives within the Company (less than 5 years).
c. Lease assets
Finance leases which transfer ownership:
Depreciation method for such assets is the same as that which applies to property, plant and equipment
owned by the Company.
Finance leases which do not transfer ownership:
Depreciated, using the straight-line method over a useful life equal to the lease period with a residual
value of zero.
d. Right-of-use assets
The lease period or the useful life of the asset, whichever is shorter, is used as the useful life, and theresidual value is calculated as zero.
③ Accounting for deferred assets
Bond issue cost: All expenses are expensed when incurred.

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[English Translation of Convocation Notice Originally Issued in the Japanese Language]④ Accounting for allowances and provisions
a. Allowance for doubtful accounts
Allowance for doubtful accounts is provided in the amount sufficient to cover possible losses based ona historical write-off of general receivables. Receivables with default possibility and bankrupt receivables
are calculated based on an individual assessment of the possibility of collection.
b. Provision for bonuses
The estimated amount of bonuses was recorded to meet the payment of employee bonuses, an amountcorresponding to the current fiscal year.
c. Provision for directors’ bonuses
The estimated amount of bonuses was recorded to meet the payment of Directors and Audit &Supervisory Board Members bonuses, an amount corresponding to the current fiscal year.
d. Provision for point card certificatesIn order to provide for the usage of points granted to customers under the point system, the estimatedfuture usage amount for the end of the fiscal year ended March 31, 2021 has been recorded.
e. Provision for dismantling of fixed assets
To provide for expenses for dismantling unused decrepit buildings, estimated future expenses arerecorded.
⑤ Accounting method for retirement benefitsa. Attribution method for projected retirement benefits
In calculating retirement benefits obligations, benefit formula attribution is adopted for the purpose of
attributing projected retirement benefits to the period up to the end of the fiscal year ended March 31,
2021.
b. Treatment of actuarial gains and losses and prior service costs
Prior service costs are amortized equally over a certain number of years (10 years in principle) within
the average remaining years of service for the employees at the time of accrual, or are charged to income
collectively at the time of accrual. Actuarial gains and losses are amortized by the straight-line method
over a certain number of years (10 years in principle) within average remaining years of service for theemployees at the time of accrual in each fiscal year, commencing from the following fiscal year after theaccrual for each employee, or are charged to income collectively in the following fiscal year after theaccrual.
⑥ Accounting for significant hedge
a. Hedge accounting
The Group adopts deferred hedge accounting. However, special treatment is used for qualifying interest
rate swap transactions. Moreover, allocation hedge accounting is applied to qualifying currency swap
transactions and forward exchange contracts.
b. Hedging instruments and hedged items
Hedging instrument: Currency swaps, interest rate swaps, and forward exchange contracts
Hedged item: Interest on loans payable, receivables and payables denominated in foreign currencies
c. Hedge policy
Derivative instruments are used to mitigate risks associated with foreign exchange and interest rate
fluctuations.
As a rule, hedging is only used for items in which actual demand exists, and not for speculative purposes.
d. Evaluation of hedge effectivenessHedge effectiveness is evaluated through comparative analysis of the cumulative fluctuations in themarket between the hedged item and the hedging instrument. Evaluation of hedge effectiveness at fiscal
year-end is omitted for currency swap transactions, as material conditions for the notional principal ofhedging instruments and those for hedged items are the same and these transactions are deemed to offset
the market fluctuations. Evaluation of hedge effectiveness at fiscal year-end is omitted also for interest
rate swap transactions applied to special treatment.

13

[English Translation of Convocation Notice Originally Issued in the Japanese Language]⑦ Amortization method and period of goodwill
If the duration of the effect of goodwill can be rationally estimated, amortization is made over theestimated number of years by the straight-line method. In other cases, amortization is made over a fiveyear-period by the straight-line method.
⑧ Accounting method for consumption taxes
Consumption taxes and local consumption taxes are accounted using the net-of-tax method, and nondeductible consumption taxes and local consumption taxes on assets are posted mainly as expenses whenincurred.
⑨ Application of the consolidated taxation system
The Company and certain domestic consolidated subsidiaries applied the consolidated taxation system.
⑩ Application of tax effect accounting for the transition from the consolidated taxation system to the grouptax sharing system
With respect to the transition to the group tax sharing system created under the Act for Partial Revisionof the Income Tax Act and Other Acts (Act No. 8 of 2020) and the items on which non-consolidated
taxation system was revised in conjunction with the transition to the group tax sharing system, due to thetreatment prescribed in Paragraph 3 of the Practical Solution on the Treatment of Tax Effect Accounting
for the Transition from the Consolidated Taxation System to the Group Tax Sharing System (PITF No. 39,
March 31, 2020), the Company will not apply the provisions under Paragraph 44 of the Implementation
Guidance on Tax Effect Accounting (ASBJ Guidance No. 28, February 16, 2018), and the amount ofdeferred tax assets and deferred tax liabilities are based on the provisions of the Income Tax Act prior to
the amendment.
II Notes to Changes in Presentation Methods(Application of “Accounting Standard for Disclosure of Accounting Estimates”)
The Company applied “Accounting Standard for Disclosure of Accounting Estimates” (ASBJ Statement
No. 31, March 31, 2020) to the consolidated financial statements at the end of the current fiscal year, anddisclosed the notes to the important accounting estimates with regard to the consolidated financial statements.
III Notes to Accounting Estimates(1) Valuation for inventories in the Entertainment Contents Businessa. Amounts posted to the consolidated financial statements in the current fiscal year
Work in process¥29,518 million“Other” under intangible assets¥6,729 million
b. Calculation method of the amounts posted to the consolidated financial statements in the current fiscal
year
Work in process and software amounts etc. posted on account of production of game contents in theEntertainment Contents Business are stated at acquisition cost, and are routinely treated as cost inaccordance with anticipated sales volumes and service schedule periods. However, in the event that the
future recoverable value falls below that of the book value of work in process and software, the amount of
said difference is posted to cost of sales.
c. Key assumptions used in the calculation of amount posted to the consolidated financial statements in thecurrent fiscal year
The future recoverable value is an estimate based on sales forecasts for the following fiscal years.
d. Impact on the consolidated financial statements in the following fiscal year
In case of possible discrepancy between the forecasts and actual results due to the timing of release of
new products from rival companies in the same market and the nature of hit businesses, there may be an
impact to profit and loss.

14

[English Translation of Convocation Notice Originally Issued in the Japanese Language](2) Valuation of Raw Materials in the Pachislot and Pachinko Machines Businessa. Amount posted to the consolidated financial statements in the current fiscal year
Raw materials¥11,793 million
b. Calculation method of the amounts posted to the consolidated financial statements in the current fiscal
year
Raw materials are posted using the acquisition cost, although in the event that anticipated future raw
material usage falls below stock, the surplus is posted to cost of sales.
c. Key assumptions used in the calculation of amount posted to the consolidated financial statements in thecurrent fiscal year
Raw material usage forecasts are estimated based on the projected volume of pachinko and pachislot
machine sales for the following fiscal years, and replacement demand is projected based on the arrival of
the withdrawal deadline for formerly compliant machines.
d. Impact on the consolidated financial statements in the following fiscal year
In case of possible discrepancy between the forecasts and actual results due to the timing of release of
new products from rival companies in the same market and the nature of hit businesses, there may be an
impact to profit and loss.
(3) Valuation of Noncurrent Assets Held by PHOENIX RESORT CO., LTD.
a. Amounts posted to the consolidated financial statements in the current fiscal year
Property, plant and equipment¥10,229 million
Intangible assets¥272 million
b. Key assumptions used in the calculation of amount posted to the consolidated financial statements in thecurrent fiscal year
Operating income and loss generated by operating activities continues to be negative, and indicators of
impairment in the asset group are becoming apparent. Given this, the Company has calculated
undiscounted future cash flow, and made a determination on whether or not to recognize an impairment
loss.
Business plans and the medium-term management plan, which are fundamental to future cash flow under
this determination, have been impacted by COVID-19, although formulations have been made based on
the hotel occupancy rate, average daily rate, number of golf rounds, and golf round rates, with demandpremised on a gradual recovery through the following fiscal year.
As a result, the Company has determined that an impairment loss should be recognized, and therefore
consider the net realizable value based on the real estate appraisal value as recoverable value, and posted
the difference with the book value to impairment loss.
c. Impact on the consolidated financial statements in the following fiscal year
Estimates of future cash flows are made based on best estimates from management. However, in the eventthat COVID-19 impacts demand trends which cause estimates to differ from actual results, there may be
an impact on profit and loss.

15

[English Translation of Convocation Notice Originally Issued in the Japanese Language](4) Valuation of Shares of Affiliates with Regard to PARADISE SEGASAMMY Co., Ltd.
a. Shares of subsidiaries and affiliates¥17,146 million
b. Calculation method of the amounts posted to the consolidated financial statements in the current fiscal
year
PARADISE SEGASAMMY Co., Ltd. (PSS) is an affiliate of the Company accounted for using the equity
method. Investments into PSS are treated under equity method accounting.
PSS applies IFRS, and in addition to when there appears to be indicators of impairment in its cash
generating unit groups, such as goodwill, it conducts impairment tests on a monthly basis. As a result of
its impairment tests, in the event that the recoverable value declines below book value, the book value in
the PSS financial statement is reduced to the recoverable value, and together with recognizing an
impairment loss, this exerts an impact on the shares of affiliates of the Company through equity-method
accounting.
PSS has posted ¥129,014 million in property, plant and equipment, including goodwill of ¥8,681 million.
c. Key assumptions used in the calculation of amount posted to the consolidated financial statements in thecurrent fiscal year
PSS conducts impairment tests on its cash generating unit groups, such as goodwill, and its cash
generating unit groups that show indicators of impairment, and makes calculations for recoverable value
based on value in use or on fair value after deducting disposal costs.
Key assumptions that utilize measurements of value in use are the business plans which are fundamental
to calculations of future cash flow, as well as growth rates and discount rates. Business plans and mediumterm management plans have been impacted by COVID-19, although formulations have been made basedon the number of casino users and the drop amount (the amount of chips purchased at tables), premised on
demand recovering gradually through the following fiscal year. In addition, for the period following therelevant term of the medium-term management plan, the discount rate is calculated using weighted average
cost of capital as a basis and by reflecting the risk associated with businesses, which is determined basedon external and internal information.
Fair value following the deduction of disposal costs uses the real estate appraisal value of external experts
who take into consideration the repurchase cost of the relevant asset and such related cost factors.
d. Impact on the consolidated financial statements in the following fiscal year
Estimates of future cash flows are made based on best estimates from management. However, in the eventthat COVID-19 impacts trends in the number of users which cause estimates to vary from actual results,
there may be an impact on profit and loss.
(5) Accounting Estimates Associated with the Spread of COVID-19
Buffeted by the expanding rate of COVID-19 infections, in the current fiscal year the Group experienced
delays to parts’ procurement, postponements to development schedules, and the suspension of operations at
various facilities.
Although there will be disparities in the impact of COVID-19 according to business or region in thefollowing fiscal year, it is the Group’s assumption that demand will recovery gradually through the following
fiscal year, and its accounting estimates are based on the determination of the recoverability of deferred tax
assets and the determination on impairment losses, among other factors.
There is a high degree of uncertainty in these assumptions, and in the event of a change in the impact that
COVID-19 has on the economic environment, there may be an impact on future financial position andmanagement results.

16

[English Translation of Convocation Notice Originally Issued in the Japanese Language]
IV Notes to Consolidated Balance Sheet(1) Accumulated depreciation of property, plant and equipment¥102,780 million(2) Assets pledged
Shares of affiliates (Note)¥17,146 million(Note) For loans from financial institutions to the equity-method affiliate PARADISE SEGASAMMY
Co., Ltd. at the end of the current fiscal year ¥68,512 million (KR₩725,000 million), the sharesof this company were provided as a pledge.
(3) Revaluation reserve for Land
Consolidated subsidiary SEGA Holdings Co., Ltd. has revalued land for business, pursuant to Japan’s
Law Concerning Revaluation of Land (Law No. 34, March 31, 1998) and Amendments to the Law
Concerning Revaluation of Land (Law No. 19, March 31, 2001). Accordingly, SEGA Holdings Co., Ltd.
has recorded an item for the revaluation reserve for land under net assets.
Revaluation method
SEGA Holdings Co., Ltd. computed the value of land based on the methodology regarding rational
adjustments to valuation of fixed assets stipulated in Article 2-3, and appraisals by licensed real estateappraisers prescribed in Article 2-5 of the Enforcement Ordinance No. 119 (March 31, 1998) pertaining to
the Law Concerning Revaluation of Land.
Date of the revaluation
March 31, 2002
Difference between the fair value at the end of the fiscal year and the book value after revaluation ofrevalued land¥(425) million(4) Outstanding balance of overdraft account:
Outstanding balance of commitment line:¥140,525 million¥78,000 million

V Notes to Consolidated Statement of Income(1) The book value devaluation of inventories held for normal sales purpose based on decline in profitability.
Cost of sales¥10,622 million(2) R&D expenses included in general and administrative expenses and the manufacturing cost for the current
fiscal year
¥48,285 million(3) Breakdown of major extraordinary items① Breakdown of gain on sales of noncurrent assets
Machinery, equipment and vehicles¥0 million
Land¥15,249 million
Other property, plant and equipment¥8 million
Total¥15,258 million② Breakdown of loss on sales of noncurrent assets
Machinery, equipment and vehicles
Other property, plant and equipment
Total

17

¥0 million¥0 million¥0 million

[English Translation of Convocation Notice Originally Issued in the Japanese Language]③ Breakdown of impairment loss
(Unit: millions of yen)
Use
Location
Type
AmountBuildings and structures
4,708
Machida-shi,
Amusement facilities Tokyo andOther property, plant and equipment, etc.
1,213
192 other locations
Other intangible assets
32
Buildings and structures
3,405
Machinery, equipment and vehicles
2
Amusement machines and facilities
10,411
Ota -ku, Tokyo
Assets for businessand 8 other locations Land
12
Other property, plant and equipment
142
Other intangible assets
1,161
Total
21,091For each business segment, the Group classifies assets or asset groups based on whether their cash
flows can be estimated independently. The book values of assets or asset groups whose fair values
declined significantly or that are projected to consistently generate negative cash flows are reduced totheir recoverable value. The amount of this reduction is deemed an impairment loss and is recorded
under extraordinary loss.
In addition, impairment loss of ¥17,743 million is included in “Structural reform expenses” asextraordinary losses.
(4) Structural reform expenses
The expenses were incurred by working to transform its business structure to adapt to the external
environment.
VI Notes to Consolidated Statement of changes in Net Assets(1) Issued Stock
Type of stock
Common stock

As of April 1,
2020
266,229,476-(Unit: shares)
As of March 31,
2021
266,229,476

Increase

Decrease

7,687

3,344

(Unit: shares)
As of March 31,
2021
31,142,581

Increase

Decrease-(2) Treasury Stock
As of April 1,
2020
Common stock
31,138,238(Outline of Causes of Change)
The causes of the increase are as follows:
Increase due to purchase of odd-lot stock
Type of stock

7,687 shares

The causes of the decrease are as follows:
Decrease due to sales of odd-lot stock

144 shares

Decrease due to exercise of stock options

3,200 shares(3) Dividends① Dividend AmountResolution

Type of
Stock

Board of Directors’ Meeting
held on May 13, 2020
Board of Directors’ Meeting
held on November 6, 2020

Commonstock
Commonstock

Total
Dividend
dividend per share(¥ million)(¥)

Record date

Effective date

4,701

20

March 31, 2020

June 4, 2020

2,350

10

September 30,
2020

December 1, 202018

[English Translation of Convocation Notice Originally Issued in the Japanese Language]② Dividends of which the record date is in the fiscal year ended March 31, 2021, but the effective date is in
the following fiscal year
Resource
Total
Dividend
Type of
RecordEffective
Resolutionofdividend per share
Stock
date
date
dividend (¥ million)(¥)
Board of Directors’ Meeting Common Retained
March 31, June 4,
4,701
20
held on May 13, 2021
Stock
Earnings
2021
2021(4) Number and type of shares to be issued upon exercise of subscription rights to shares (except for the ones
before the first day of the exercisable period) as of the end of the fiscal year ended March 31, 2021
Not Applicable.

19

[English Translation of Convocation Notice Originally Issued in the Japanese Language]
VII Notes on the Financial Instruments(1) Matters regarding the current status of financial instruments
The Group’s signed an agreement concerning commitment lines with financial institutions, such as
securing medium- to long-term fund liquidity with the Company as a holding company, as a safety net for
the entire Group. In addition, capital for each business is financed based on the financial plan as needed,through bank borrowing or bond issue applying Cash Management System for the purpose of the efficientutilization of the Group funds. Most funds are invested primarily in low-risk and high-liquidity financial
assets, while some are invested in compound financial instruments such as bonds etc. for the purpose of
efficiently managing funds. Derivatives are mainly used, not for speculative purposes, but to manage
exposure to financial risks as described later.
Credit risks of the clients in terms of notes and accounts receivable - trade are mitigated under the credit
management rules, etc. at each Group company.
Short-term investment securities are mainly negotiable certificates of deposit. The Group’s credit risk
exposure is minimal as these transactions are restricted to highly rated financial institutions in accordancewith the capital management rules etc. of each Group company. Investment securities are mainly stocks
and the relevant information such as fair values of these stocks and financial conditions of the issuers(business partners) is reviewed and reported to the Board of Directors of each Group company, etc. on aregular basis. Shareholding status is also continually reviewed in view of the relationship with business
partners that issue these stocks. With certain compound financial instruments etc., the Group is exposed torisks associated with fair value fluctuations etc. in the stock markets but periodically evaluates them on amark-to-market basis.
Borrowings as well as bonds is intended to secure funds necessary for the purpose of working capital andcapital expenditures etc. and diversify means for procuring funds. Each Group company reviews its own
actual and projected cash position on a monthly basis, which is eventually verified collectively by theCompany as part of the Group’s liquidity risk management.
The Group’s derivative transactions are restricted to forward exchange contracts and currency swap
transactions as hedges against currency fluctuation risks on its foreign currency-denominated operatingreceivables and debt as well as foreign currency-denominated loans payable, and interest rate swap
transactions etc. to mitigate interest rate risks on some of the Group’s variable interest rate loans payable.
These transactions are executed and managed mainly by the financial department or the accounting
department upon obtaining internal approvals in compliance with the derivative transactions management
rules, etc. of each Group company. Furthermore, reports on the status of the derivative transactions are
made to the Board of Directors at each company as appropriate.

20

[English Translation of Convocation Notice Originally Issued in the Japanese Language](2) Matters regarding the fair value etc. of financial instruments
Consolidated balance sheet amounts and fair values of the Group’s financial instruments and thedifference between the two as of the end of the fiscal year ended March 31, 2021 are as follows. Fair valuesof financial instruments named in Note 2 below are extremely difficult to grasp, thus are not included in
the following list.
(Unit: millions of yen)
Consolidated balance
Fair values
Difference
sheet amount(1) Cash and deposits
154,972
154,972(2) Notes and accounts receivable - trade38,17638,150(26)(3) Short-term investment securities andinvestment securities
1) Held-to-maturity debt securities
608
610
2
2) Available-for-sale securities
4,254
4,254
3) Stocks of affiliates
805
972
166
(4) Notes and accounts payable - trade
16,994
16,994(5) Long-term loans payable
42,00041,93960(6) Bonds payable
10,0009,918
81(7) Derivative transactions (Note)
1) Hedge accounting is not applied2) Hedge accounting is applied
(725)
(725)
Note: Net receivables and payables resulting from derivative transactions are shown as net amount.
Notes: 1. Matters regarding the methods to calculate the fair values of financial instruments and securities
and derivative transactions(1) Cash and deposits; and (2) Notes and accounts receivable - trade
Of these, items that are settled in the short term (within a year) are recorded using book values,
as their fair values approximate book values. In addition, of notes and accounts receivable - trade,those which more than a year to the payment date from the end of the fiscal year ended March
31, 2021 are stated at the present values by discounting the amount of claim for each receivablewith the interest rate calculated by the payment period and credit risk.
(3) Short-term investment securities and investment securities
The fair values of stocks are determined using the quoted price at the stock exchange, and thoseof debt securities are determined using the quoted price at the stock exchange or the quoted priceobtained from the financial institutions. In addition, negotiable certificates of deposit included
in available-for-sale securities are recorded using book values, as they are settled in the shortterm (within a year) and their fair values approximate book values.
(4) Notes and accounts payable - trade
Of these, items that are settled in the short term (within a year) are recorded using book values,
as their fair values approximate book values. Of the short-term loans payable, fair values of theloans hedged by interest rate swap contracts meeting certain conditions are calculated applying
the special treatment by combining them with the relevant interest rate swap.
(5) Long-term loans payable; and (6) Bonds payable
These are stated with the present values calculated by discounting the aggregated values of theprincipal and interest using an assumed interest rate if loans are newly made. Of the long-termloans payable, fair values of the loans hedged by interest rate swap contracts with special
treatment applied and by interest rate and currency swap contracts with combined treatment
applied (subject to special treatment and allocation hedge accounting) are calculated by
combining them with the relevant interest rate swap or interest rate and currency swap.
(7) Derivative transactions
These market prices are based on the prices offered by the financial institutions.

21

[English Translation of Convocation Notice Originally Issued in the Japanese Language]
2. Financial instruments whose fair values are not readily determined
Consolidated balance sheet
Categoryamount(millions of yen)
Investments in unlisted stocks, etc.
2,696
Investments in investment limited partnerships, etc.
9,784
Stocks of non-consolidated subsidiaries
345
Stocks of affiliates
19,024
Investments in capital of subsidiaries and affiliates
1,525
Items above are not included in “(3) Short-term investment securities and investment securities”,
because there is no fair value, future cash flows cannot be estimated and it is very difficult to
identify fair values.
VIII Note Regarding Investment and Rental Property
Status and fair value of investment and rental property
This disclosure is omitted due to the immateriality of the total amount of the investment and rental property.
IX Note Regarding Per Share Information
Net assets per share¥1,236.82
Net income per share¥5.42
X Note Regarding Business Combination(Transaction under common control)
The merger between consolidated subsidiaries completed as of April 1, 2020 based on the resolution of theCompany’s Board of Directors’ meeting held on December 24, 2019.
(1) Objectives of the merger
The Company expects for the global game market to continue expanding as new game platforms andbusiness models become more widespread with the development of technologies and infrastructures such as
5G and the Cloud. In order to increase the presence of the Group and realize further growth, the Company
decided to reorganize the Group because of the necessity of integrating the two major consolidated
subsidiaries of the Company, SEGA Games Co., Ltd. and SEGA Interactive Co., Ltd., in order to makereallocation of the domestic R&D resources of the Group more flexibly than ever before, thereby
strengthening our competitiveness in global markets.
(2) Overview of the merger① Legal form of business combination
SEGA Interactive Co., Ltd. was disappeared on the effective date through an absorption-type merger
with SEGA Games Co., Ltd. as the surviving company.
② Overview of the companies involved in the merger (As of March 31, 2020)
SEGA Games Co., Ltd.
SEGA Interactive Co., Ltd.
Name
(Disappearing company)(Surviving company)
Planning, development, and sales ofDevelopment and sales of amusement
game-related contents for mobile
Details of businessmachines
phones, PCs, smart devices, and home
video game consoles
Sumitomo Fudosan Osaki Garden
Sumitomo Fudosan Osaki Garden
Location
Tower, 1-1-1 Nishi-Shinagawa,Tower, 1-1-1 Nishi-Shinagawa,Shinagawa-ku, Tokyo, Japan
Shinagawa-ku, Tokyo, Japan
Capital stock¥100 million¥100 million(Note) SEGA Games Co., Ltd. changed the company name to SEGA CORPORATION as of April 1, 2020.
(3) Overview of the accounting treatment adoption
The merger has been treated as a transaction under common control in accordance with the “AccountingStandard for Business Combinations” (ASBJ Statement No. 21, January 16, 2019), and “Implementation
Guidance on Accounting Standard for Business Combinations and Accounting Standard for Business
Divestitures” (ASBJ Guidance No. 10, January 16, 2019).
22

[English Translation of Convocation Notice Originally Issued in the Japanese Language](Transfer shares of SEGA ENTERTAINMENT CO., LTD.)
SEGA GROUP CORPORATION (SHQ), a consolidated subsidiary of the Company, transferred a portionof its shares of SEGA ENTERTAINMENT CO., LTD. (renamed GENDA SEGA Entertainment Inc.) (SE)to GENDA Inc. on December 30, 2020. As a result of the transfer of shares, SHQ's voting rights in SE was
14.9%, and SE was excluded from the scope of consolidation.
(1) Overview of the business divestitures① Name of successor company
GENDA Inc.
② Details of business divestitures
Planning and operation of amusement facilities③ Reason for business divestitures
In light of the situation that many of the Group's business are significantly affected by COVID-19, theCompany have established a Structural Reform Committee to reform the organization structure to adapt tothe external environment, and working to review the balance sheet for non-business properties, to build anorganizational structure that can adapt to changes in the market environment, and to reduce costs centeredon group-wide fixed expenses, etc.
As the amusement center operations field in the Entertainment Contents Business is strongly affected by
COVID-19, utilization of facilities has declined remarkably, and a significant loss was recorded at the firstquarter of the fiscal year ended March 31, 2021. In addition, despite the recent recovery trend, the situation
remains uncertain.
The Company had been considering various options in order to adapt to these changes in business aiming
for improvement of the profitability and early recovery of sales of the amusement center operations field.
In this process, the Company had discussed the transfer of SE shares to GENDA Inc., a company that has
a strong desire to expand amusement center operations business and decided to conclude the share transfer
agreement at Board of Directors meeting held on November 4, 2020.
④ Date of business divestitures
December 30, 2020
⑤ Items regarding other transactions including legal form
Share transfer whereby the consideration is specific assets such as cash(2) Overview of accounting treatment① Profit and loss on transfer
Structural reform expenses¥187 million② Book values and breakdown of the assets and liabilities of the transferred business(millions of yen)
Current assets
6,881
Noncurrent assets
5,638
Total assets
12,520Current liabilities
4,920
Noncurrent liabilities
7,626
Total liabilities
12,547③ Accounting treatment
The difference between the book value and transfer value of the transferred shares on a consolidated basis
was recorded as structural reform expenses under extraordinary losses.
(3) Approximate amounts of profit or loss of the divested business included in the quarterly consolidated
statements of income
Net sales¥19,967 million
Ordinary loss
¥1,472 million

23

[English Translation of Convocation Notice Originally Issued in the Japanese Language](Transfer shares of Sega Amusements International Ltd.)SEGA CORPORATION (SOJ), a consolidated subsidiary of the Company, transferred of its shares of Sega
Amusements International Ltd. (SAI) to KAIZEN ENTERTAINMENT Ltd. on March 30, 2021. As a resultof the transfer of shares, SAI was excluded from the scope of consolidation.
(1) Overview of the business divestitures① Name of successor company
KAIZEN ENTERTAINMENT Ltd.
② Details of business divestitures
Import, sales and manufacture of amusement machines③ Reason for business divestitures
In light of the situation that many of our Group's business are significantly affected by COVID19, inorder to reform our organizational structure to adapt to the external environment and we are continuing oureffort to review the balance sheet for non-business properties, build an organizational structure that canadapt to changes in the market environment, reduce costs centered on group-wide fixed expenses and others.
Sales of amusement machines in the U.S. and Europe declined significantly as it is strongly affected by
COVID-19 and recorded losses in the fiscal year ended March 31, 2021. In addition, the situation remains
uncertain due to the factors such as the continuation of lockdown in the United Kingdom and others. The
Group has been considering various options in order to respond flexibly and efficiently to these changes
in business environment and within this process, the Group has been discussing transfer of SAI shares to
KAIZEN, the newly established company by Paul Williams, SAI's current CEO, in the MBO method andhave decided to conclude the share transfer agreement at the Board of Directors meeting held on March
25, 2021.
As for amusement machine sales in the U.S. and Europe territories, the Group will change the business
scheme to grant the right to use Sega brand to SAI.
④ Date of business divestitures
March 30, 2021
⑤ Items regarding other transactions including legal form
Share transfer whereby the consideration is specific assets such as cash(2) Overview of accounting treatment① Profit and loss on transfer
Structural reform expenses¥3,120 million② Book values and breakdown of the assets and liabilities of the transferred business(millions of yen)
Current assets
2,157
Noncurrent assets
1,342
Total assets
3,499
Current liabilities
522
Noncurrent liabilities
192
Total liabilities
715③ Accounting treatment
The difference between the book value and transfer value of the transferred shares on a consolidated basis
was recorded as structural reform expenses under extraordinary losses.
(3) Approximate amounts of profit or loss of the divested business included in the quarterly consolidated
statements of income
Net sales¥1,220 million
Ordinary loss
¥196 million

24

[English Translation of Convocation Notice Originally Issued in the Japanese Language]
XI Note Regarding Significant Subsequent Events(Transaction under common control)(1) Purpose of company split and absorption-type merger
The Group has been working on structural reform to transform its business structure to adapt to the external
environment. Furthermore, the Company resolved to restructure the organization of the Company and theGroup in order to build an even more efficient structure at Board of Directors meeting held on January 29,
2021, and implemented the split and absorption-type merger with an effective date of April 1, 2021, andimplemented the split and absorption-type merger with an effective date of April 1, 2021.
(2) Overview of the company of the split① Details of business to be split
Sammy Corporation: Corporate functions and other administrative functions
SEGA GROUP CORPORATION : Corporate functions and other administrative functions② Legal form of business combination
This was an absorption-type company split in which Sammy and SEGA GROUP CORPORATION weremade into the splitting company in absorption-type split and the Company was the successor of absorptiontype company split.
③ Overview of the companies of the split (As of March 31, 2021)
Split company
in absorption-typemergerSucceeding company

Split company
in absorption-typemergerName

SEGA SAMMYHOLDINGS INC.

Details of
business

Business management andincidental operations of theGroup as a holding
Business management andcompany for aincidental operations ofcomprehensive
SEGA Group
entertainment corporate
group

Development,
manufacturing, and salesof pachinko, pachislot,
arrange-ball, and jankyu
machines, etc.

Location

Sumitomo Fudosan Osaki
Garden Tower,
1-1-1, Nishi-Shinagawa,Shinagawa-ku, Tokyo

Sumitomo Fudosan Osaki
Garden Tower,
1-1-1, Nishi-Shinagawa,Shinagawa-ku, Tokyo

Sumitomo Fudosan Osaki
Garden Tower,
1-1-1, Nishi-Shinagawa,Shinagawa-ku, Tokyo¥29,953 million¥44,092 million¥18,221 million

Capital stock

SEGA GROUPCORPORATIONSammy Corporation(3) Overview of the absorption-type merger① Legal form of business combination
SEGA GROUP CORPORATION was disappeared through an absorption-type merger with SEGACORPORATION as the surviving company.
② Overview of the companies involved in the merger (As of March 31, 2021)
Surviving company

Disappearing company

Name

SEGA CORPORATIONSEGA GROUP CORPORATION

Details of
business

Planning, development, and sales ofgame-related contents for mobile
phones, PCs, smart devices, and home
video game consoles, and development
and sales of Amusement Machines

Business management and incidental
operations of SEGA Group

Location

Sumitomo Fudosan Osaki Garden
Tower,
1-1-1, Nishi-Shinagawa, Shinagawa-ku,
Tokyo

Sumitomo Fudosan Osaki Garden
Tower,
1-1-1, Nishi-Shinagawa, Shinagawa-ku,
Tokyo¥100 million¥44,092 million

Capital stock25

[English Translation of Convocation Notice Originally Issued in the Japanese Language](4) Overview of the accounting treatment adoption
The merger will be treated as a transaction under common control in accordance with the “AccountingStandard for Business Combinations” (ASBJ Statement No. 21, January 16, 2019), and “Implementation
Guidance on Accounting Standard for Business Combinations and Accounting Standard for Business
Divestitures” (ASBJ Guidance No. 10, January 16, 2019).

26

[English Translation of Convocation Notice Originally Issued in the Japanese Language]
6. Non-Consolidated Statement of Changes in Net Assets(From April 1, 2020 To March 31, 2021)

Capital stock
Balances as of April 1, 2020
Changes of items during the period
Dividends from surplus
Net income
Purchase of treasury stock
Disposal of treasury stock
Total changes of items during the period
Balances as of March 31, 2021

Balances as of April 1, 2020
Changes of items during the period
Dividends from surplus
Net income
Purchase of treasury stock
Disposal of treasury stock
Total changes of items during the period
Balances as of March 31, 2021

29,953(Unit: millions of yen)
Shareholders’ equity
Capital surplus
Legal capital
Other capital
Total capitalsurplussurplussurplus29,945
162,234
192,179(0)(0)
162,234(0)(0)
192,179

Shareholders’ equity
Retained earnings
Other retained
earnings
Total retained Treasury stock
Retainedearnings
earnings
brought
forward111,595
111,595(53,833)

Total
shareholders’equity--29,95329,945(7,052)
10,046

2,993
114,589(7,052)
10,046

2,993
114,589(11)
5(5)(53,839)

Valuation andtranslation adjustments
Subscription
Valuation
Total
difference on valuation and rights to sharesavailable-fortranslation
sale securities adjustments
Balances as of April 1, 2020
3,374
3,374
813
Changes of items during the period
Dividends from surplus
Net income
Purchase of treasury stock
Disposal of treasury stock
Net changes of items other than
(3,290)(3,290)(813)
shareholders’ equity
Total changes of items during the period(3,290)(3,290)(813)
Balances as of March 31, 2021
83
83
Note: Figures shown in millions of yen have been rounded down to the nearest million.

27279,894(7,052)
10,046(11)
52,987
282,881Total
net assets
284,082(7,052)
11,046(11)
5(4,104)(1,117)
282,965

[English Translation of Convocation Notice Originally Issued in the Japanese Language]
7. Notes to Non-Consolidated Financial Statements
I Notes Regarding Material Matters Related to Accounting Policies
1. Valuation standards and accounting treatment for assets(1) Valuation standards and methods for securities① Shares of subsidiaries and affiliates
Shares of subsidiaries and affiliates are stated at moving-average cost.
② Available-for-sale securities
Securities with fair value
Securities with fair value are stated at fair value. The difference between acquisition cost and fair value
is accounted for as valuation difference on available-for-sale securities, with cost of sales determined by
the moving average method.
With respect to compound financial instruments whose fair values cannot be categorized and measured
for each embedded derivative, the entire compound financial instruments are appraised by fair value, andunrealized gains or losses are reported as income or expenses for the fiscal year ended March 31, 2021.
Securities without fair value
Securities without fair value are stated at moving-average cost.
The net amount of equity included in the Company’s financial statements from limited liability
investment partnerships and similar investments, regarded as marketable securities under Article 2-2 ofthe Financial Investment and Exchange Law of Japan, is calculated based on the relevant financial
statements for the partnership available as of the reporting date stipulated in the partnership agreement.
(2) Derivatives
Derivatives are stated at fair value.
2. Depreciation and amortization of noncurrent assets(1) Property, plant and equipment
Depreciation is calculated by the straight-line method.
Range of useful life for the assets is as follows:
Buildings: 2 - 50 years
Structures: 2 - 47 years
Aircraft:
8 years
Tools, furniture and fixtures: 2 - 15 years(2) Intangible assets
Amortization is calculated using the straight-line method. The software used in the Company is amortizedby the straight-line method based on the useful lives within the Company (less than 5 years).
3. Accounting for deferred assets
Bond issue cost: All expenses are expensed when incurred.
4. Accounting for provisions(1) Allowance for doubtful accounts
The reserve for doubtful accounts is provided in amount sufficient to cover possible losses. Allowance for
doubtful accounts is calculated on an individual assessment of the possibility of collection.
(2) Provision for bonuses
The estimated amount of bonuses was recorded to meet the payment of employee bonuses, an amountcorresponding to the current fiscal year.
(3) Provision for directors’ bonuses
The estimated amount of bonuses was recorded to meet the payment of Directors and Audit & Supervisory
Board Members bonuses, an amount corresponding to the current fiscal year.

28

[English Translation of Convocation Notice Originally Issued in the Japanese Language](4) Provision for retirement benefits
Attribution method for projected retirement benefits
In calculating retirement benefits obligations, benefit formula attribution is adopted for the purpose of
attributing projected retirement benefits to the period up to the end of the fiscal year ended March 31,
2021.
Treatment of actuarial gains and losses and prior service costs
Actuarial gains and losses are charged to income collectively in the following fiscal year after theaccrual. Prior service costs are charged to income collectively at the time of accrual.
5. Accounting for hedge(1) Accounting for hedge
Allocation hedge accounting is used for qualifying currency swap transactions, while special treatment isapplied to qualifying interest rate swap transactions.
(2) Hedging instruments and hedged items
Hedging instrument: Currency swaps, Interest rate swaps
Hedged item: Foreign currency-denominated loans payable and associated interest(3) Hedge policy
The Company engages in currency swap transactions with the purpose to avoid risks associated withforeign exchange fluctuations of loans payable, along with interest rate swap transactions with the purposeto avoid risks associated with interest rate fluctuations of loans payable. The Company has a policy not toengage in speculative derivative transactions.
(4) Evaluation of hedge effectivenessEvaluation of hedge effectiveness at fiscal year-end is omitted for currency swap transactions, as material
conditions for the notional principal of hedging instruments and those for hedged items are the same andthese transactions are deemed to offset the market fluctuations. Evaluation of hedge effectiveness at fiscal
year-end is omitted also for interest rate swap transactions as they adopt special treatment.
6. Other material matters that form the basis of accounting documents(1) Accounting method for consumption taxes
Consumption taxes and local consumption taxes are accounted using the net-of-tax method, and nondeductible consumption taxes and local consumption taxes on assets are posted mainly as expenses whenincurred.
(2) Application of the Consolidated Taxation System
The Company applied the Consolidated Taxation System.
(3) Application of Tax Effect Accounting for the Transition from the Consolidated Taxation System to theGroup Tax Sharing System
With respect to the transition to the group tax sharing system created under the Act for Partial Revision of
the Income Tax Act and Other Acts (Act No. 8 of 2020) and the items on which non-consolidated taxation
system was revised in conjunction with the transition to the group tax sharing system, due to the treatmentprescribed in Paragraph 3 of the Practical Solution on the Treatment of Tax Effect Accounting for theTransition from the Consolidated Taxation System to the Group Tax Sharing System (PITF No. 39, March
31, 2020), the Company will not apply the provisions under Paragraph 44 of the Implementation Guidanceon Tax Effect Accounting (ASBJ Guidance No. 28, February 16, 2018), and the amount of deferred tax assets
and deferred tax liabilities are based on the provisions of the Income Tax Act prior to the amendment.
II Notes to Changes in Accounting Estimates(Application of “Accounting Standard for Disclosure of Accounting Estimates”)
The Company applied “Accounting Standard for Disclosure of Accounting Estimates” (ASBJ Statement No.
31, March 31, 2020) to the non-consolidated financial statements at the end of the current fiscal year, anddisclosed the note to the important accounting estimates with regard to the non-consolidated financial
statements.
29

[English Translation of Convocation Notice Originally Issued in the Japanese Language]
III Notes to Accounting Estimates(1) Valuation of Shares of Affiliates with Regard to PARADISE SEGASAMMY Co., Ltd.
a. Shares of subsidiaries and affiliates¥30,557 million
b. Calculation method of the amounts posted to the non-consolidated financial statements in the current
fiscal year
PARADISE SEGASAMMY Co., Ltd. (PSS) is an affiliate of the Company, and its acquisition cost isrecorded as the value in the balance sheet, because its market value is deemed extremely difficult toascertain.
In the valuation of Shares of subsidiaries and affiliates, the acquisition cost is compared with the actual
value reflecting excess earning power, and if the actual value declines significantly due to deterioration in
the financial position of PSS, unless the possibility of recovery is supported by sufficient evidence, asubstantial reduction is made and treated as a loss in the current fiscal year, which affects the valuationof Shares of subsidiaries and affiliates of the Company.
c. Key assumptions used in the calculation of amount posted to the non-consolidated financial statementsin the current fiscal year
PSS conducts impairment tests on its cash generating unit groups, such as goodwill, and its cash
generating unit groups that show indicators of impairment, and makes calculations for recoverable value
based on value in use or on fair value after deducting disposal costs.
Key assumptions that utilize measurements of value in use are the business plans which are fundamental
to calculations of future cash flow, as well as growth rates and discount rates. Business plans and mediumterm management plans have been impacted by COVID-19, although formulations have been made basedon the number of casino users and the drop amount (the amount of chips purchased at tables), premised on
demand recovering gradually through the following fiscal year. In addition, for the period following therelevant term of the medium-term management plan, the discount rate is calculated using weighted average
cost of capital as a basis and by reflecting the risk associated with businesses, which is determined basedon external and internal information.
Fair value following the deduction of disposal costs uses the real estate appraisal value of external experts
who take into consideration the repurchase cost of the relevant asset and such related cost factors.
As a result of the above impairment test, the Company does not recognize a loss on valuation of sharesof subsidiaries and affiliates, because its actual value did not decline significantly during the current fiscal
year.
d. Impact on the non-consolidated financial statements in the following fiscal year
Estimates of future cash flows are made based on best estimates from management. However, in the eventthat COVID-19 impacts trends in the number of users which cause estimates to vary from actual results,
there may be an impact on profit and loss.
(2) Accounting Estimates Associated with the Spread of COVID-19
In light of the situation that many of the Group's business are significantly affected by COVID-19 in thecurrent fiscal year, the Group worked to adapt to the external environment, for reviewing the balance sheet
for non-business properties, building an organizational structure that can adapt to changes in the market
environment, and reducing costs centered on group-wide fixed expenses to reform the organization structure.
In light of the Group’s assumption that demands will gradually recover through the fiscal year ending March2022 although differ from businesses and regions, accounting estimates are reflected in accounting treatment
based on certain assumptions, including those used to determine the recoverability of deferred tax assets andthose used to determine impairment losses. However, there are many uncertainties, which could affect theGroup’s financial position and operating results in the future, in the case of changing the impact for the
economic environment from the spread of COVID-19.

30

[English Translation of Convocation Notice Originally Issued in the Japanese Language]
IV Notes to Balance Sheet(1) Accumulated depreciation of property, plant and equipment¥6,458 million(2) Assets pledged¥30,557 million
Shares of affiliates (Note)(Note) For loans from financial institutions to the affiliated company PARADISE SEGASAMMY Co.,
Ltd. at the end of the current fiscal year ¥68,512 million (KR₩725,000 million), the shares of thiscompany were provided as a pledge.
(3) Receivables from and payables to subsidiaries and affiliates
Short-term receivables from subsidiaries and affiliates
Short-term payables to subsidiaries and affiliates¥3,629 million¥37,518 million

V Notes to Statement of Income
Transactions with subsidiaries and affiliates
Consulting fee income
Shared service fee income
Dividends income (Operating revenue)
SG&A expenses
Non-operating transactions¥7,467 million¥4,700 million¥7,045 million¥616 million¥352 million

VI Notes to Statement of Changes in Net Assets
Number and type of Treasury stock as of the end of the fiscal year ended March 31, 2021
Common stock
31,142,581 shares

31

[English Translation of Convocation Notice Originally Issued in the Japanese Language]
VII Notes Regarding Tax Effect Accounting(1) Significant components of deferred tax assets and deferred tax liabilities(Unit: millions of yen)
Deferred tax assets
Tax loss carry forward
821
Provision for bonuses
84
Allowance for doubtful account
2,958
Loss on valuation of shares of subsidiaries and affiliates
7,629
Valuation difference on available-for-sale securities
41
Other
949
Subtotal deferred tax assets
12,484
Valuation allowance for tax loss carry forward(821)
Valuation allowance for deductible temporary difference(11,397)
Subtotal valuation allowance(12,218)
Offset against deferred tax liabilities(266)
Total deferred tax assets
Deferred tax liabilities
Valuation difference on available-for-sale securities
Gain (loss) on valuation of investments in partnerships
Asset retirement obligations
Subtotal deferred tax liabilities
Offset against deferred tax assets
Total deferred tax liabilities
Deferred tax liabilities, net

96
387
189
673
(266)
407
(407)

(2) Breakdown by major causes of the significant difference between the statutory tax rate and the effective
tax rate for financial statement purposes, if any, by item.
Statutory tax rate
(Reconciliation)
Permanently non-deductible expenses including
entertainment expenses
Gain on reversal of subscription rights to shares
Changes in valuation allowance
Tax loss carry forward
Amount excluded from gross revenue such as dividend
incomeOther
Effective tax rate after tax effect accounting

32

30.6%
0.8%
(2.1%)(1.7%)
4.3%(18.7%)(0.8%)
14.0%

[English Translation of Convocation Notice Originally Issued in the Japanese Language]
VIII Notes Regarding Transactions with Related Parties(1) Subsidiaries and Affiliates(Unit: millions of yen)Type

Name of the

Votingcompany

rights (%)

Relationship

Description of thetransactions
Consulting fee
income (Note 2)

Management
Subsidiary

Sammy
Corporation

guidance to the
100.0

company,
interlocking
directorate

income (Note 3)
Consolidated

SubsidiaryLtd.
TAIYO ELEC
Co., Ltd.

100%

-

100%

-

Accounts(Note 1)end offiscal year

3,285

Accounts receivable – trade

1,346

301

Accounts receivable - trade123-

Accounts payable - other

1,253

-

Deposits received

8,47

taxation system
Deposits received /paid (Note 4)(Note 5)RODEO Co.,

Balance atamountShared service fee

Payment of interests

Subsidiary

Transaction

Deposits received /paid (Note 4)
Deposits received /paid (Note 4)
Consulting fee
income (Note 2)

148

Current liabilities - other45-

Deposits received

4,742

-

Deposits received

9,612

4,181

Accounts receivable - trade

2,346

383

Shared service fee
Management
Subsidiary

SEGA GROUPCORPORATION

guidance to the
100.0

company,

income (Note 3)
Consolidated

Accounts receivable - trade215-

Accounts payable - other

2,981

-

Deposits received

10,876

taxation systeminterlocking

Deposits received /directorate

paid (Note 4)

Short-term loans receivable
Reception ofinterests (Note 5)69

from subsidiaries and affiliates

1,000

Long-term loans receivable

4,265

from subsidiaries and affiliates
Management
SubsidiarySEGA
CORPORATION

guidance to the100

company,
interlocking
directorate

Shared service fee
income (Note 3)843

Accounts receivable - trade77

Consolidated-

Accrued income – other

1,193

taxation system
Long-term loans receivable

Subsidiary

SEGA SAMMY
CREATION INC.

Lending of funds
100.0

1,350

from subsidiaries and affiliates

11,750(Note 6)

Reception ofinterests (Note 5)

33

65

Current liabilities – other-[English Translation of Convocation Notice Originally Issued in the Japanese Language](Unit: millions of yen)Type

Name of the

Votingcompany

rights (%)

Relationship

Description of thetransactions
Consolidated
taxation system
Deposits received /paid (Note 4)

PHOENIX
Subsidiary

RESORT CO.,

100.0

LTD.

Transaction
amount(Note 1)end offiscal year-

Accounts payables - other249-

Deposits paid

17

Interlocking
directorate

Balance at
Accounts

Short-term loans receivable
Lending of funds

172

from subsidiaries and affiliates

1,000

Long-term loans receivable

4,487

from subsidiaries and affiliates
Reception ofinterests (Note 4)
Shared service fee
income (Note 3)
Consolidated
Sammy
Subsidiary

Networks Co.,

100.0

Ltd.

Interlocking

taxation system

directorate

Deposits received /paid (Note 4)
Payment of interests(Note 5)PARADISE
Affiliate

SEGASAMMY
Co., Ltd.

45.0

Interlocking

Provision of security

directorate(Note 7)

32

-

-

41

Accounts receivable - trade3-

Accounts payables - other123-

Deposits received

5,001

15

Current liabilities - other

6

-

-

30,557

Notes: 1. Consumption taxes are not included in transaction amounts.
2. The amount of the Consulting fee income is decided based on the Company’s necessary
expenses.
3. The amount of the shared service fee is determined based on the necessary expenses for the
relevant business.
4. Cash management system transactions are used for the purpose of uniformly and efficiently
procuring and managing funds within the Group. Lending and borrowing of funds are
executed at any time between the Group companies, thus the transaction amount is omitted.
5. Interest is determined with consideration to market interest rates.
6. For long-term loans receivable from subsidiaries and affiliates from SEGA SAMMY
CREATION INC., the Company recorded provision of allowance for doubtful accounts of¥9,616 million while recorded allowance for doubtful accounts of ¥582 million for the fiscal
year ended March 31, 2021.
7. For part of the loans from financial institutions to PARADISE SEGASAMMY Co., Ltd., theshares of the company were provided as a pledge.

34

[English Translation of Convocation Notice Originally Issued in the Japanese Language](2) Directors, Key Individual Shareholders, etc.
(Unit: millions of yen)Type

Name of
Votingrelatedrightsindividual and(%)
company

Relationship
Chairman of SEGA

Director

Haruki Satomi

1.59

SAMMY ARTSFOUNDATION

Description of thetransactions
Payment of donation(Note 2)

Transaction
Balance atamountAccounts
end of(Note 1)
fiscal year
112

Prepaid

Company inwhich Directors
or their relatives
own majority-

expenses
FSC Co., Ltd.
(Note 4)

5.85

Insurance
representative

Payment of insurance
premium (Note 3)21Long-term
prepaidvoting rights

-

9

0

expenses

Notes: 1. Consumption taxes are not included in transaction amounts.
2. The contribution amount of donations to the Foundation has been decided based on
approval by the Board of Directors.
3. Transaction prices are determined in the same way as for general transactions and withreference to fair values.
4. Hajime Satomi, Chairman and Group CEO, Representative Director, and Haruki Satomi,
President and Group COO, Representative Director, directly hold a majority of the sharesof FSC Co., Ltd.
IX Note Regarding Per Share Information
Net assets per share
Net income per share¥1,203.66¥42.7335

[English Translation of Convocation Notice Originally Issued in the Japanese Language]
X Note Regarding Significant Subsequent Events(Transaction under common control)(1) Purpose of company split and absorption-type merger
The Group has been working on structural reform to transform its business structure to adapt to the external
environment. Furthermore, the Company resolved to restructure the organization of the Company and theGroup in order to build an even more efficient structure at Board of Directors meeting held on January 29,
2021, and implemented the split and absorption-type merger with an effective date of April 1, 2021.
(2) Overview of the company of the split① Details of business to be split
Sammy Corporation: Corporate functions and other administrative functions
SEGA GROUP CORPORATION : Corporate functions and other administrative functions② Legal form of business combination
This was an absorption-type company split in which Sammy and SEGA GROUP CORPORATION weremade into the splitting company in absorption-type split and the Company was the successor of absorptiontype company split.
③ Overview of the companies of the split (As of March 31, 2021)
Split company
in absorption-typemergerSucceeding company
Name

SEGA SAMMYHOLDINGS INC.

Details of
business

Business management andincidental operations of theGroup as a holding
Business management andcompany for aincidental operations ofcomprehensive
SEGA Group
entertainment corporate
group

Development,
manufacturing, and salesof pachinko, pachislot,
arrange-ball, and jankyu
machines, etc.

Location

Sumitomo Fudosan Osaki
Garden Tower,
1-1-1, Nishi-Shinagawa,Shinagawa-ku, Tokyo

Sumitomo Fudosan Osaki
Garden Tower,
1-1-1, Nishi-Shinagawa,Shinagawa-ku, Tokyo

Sumitomo Fudosan Osaki
Garden Tower,
1-1-1, Nishi-Shinagawa,Shinagawa-ku, Tokyo¥29,953 million¥44,092 million¥18,221 million

Capital stock

SEGA GROUPCORPORATION

Split company
in absorption-typemergerSammy Corporation(3) Overview of the accounting treatment adoption
The merger will be treated as a transaction under common control in accordance with the “AccountingStandard for Business Combinations” (ASBJ Statement No. 21, January 16, 2019), and “Implementation
Guidance on Accounting Standard for Business Combinations and Accounting Standard for Business
Divestitures” (ASBJ Guidance No. 10, January 16, 2019).

36