[Translation]
Note: This document has been translated from a part of 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.
(Stock Exchange Code 8050)
June 9, 2022
To Shareholders with Voting Rights:
Shuji Takahashi
President
SEIKO HOLDINGS CORPORATION
5-11, Ginza 4-chome, Chuo-ku, TokyoNOTICE OF
THE 161ST ORDINARY GENERAL MEETING OF SHAREHOLDERS
We would like to express our appreciation for your continued support and patronage.
Please be informed that we will hold the 161st Ordinary General Meeting of Shareholders of
SEIKO HOLDINGS CORPORATION (the “Company”). The meeting will be held for the purposes
described below.
When deciding whether to attend the General Meeting of Shareholders in person, we kindly ask
you to take into consideration the status of the spread of the novel coronavirus, and your own healthconditions as of the date of the General Meeting of Shareholders, including the option of exercising
your voting rights in writing or via the Internet.
In order for shareholders to be able to view the proceedings of the Meeting, live streaming of themeeting will be made available via the Internet (for details, please refer to the “Notice of Live
Streaming of the General Meeting of Shareholders” (page 3) below).
Please review the attached Reference Documents for the General Meeting of Shareholders (pages
6 through 25), and exercise your voting rights in accordance with the “Notice regarding Exercise of
Voting Rights” (pages 4 through 5) by 6 p.m. on Tuesday, June 28, 2022, Japan time.
1. Date and Time:

Wednesday, June 29, 2022, at 10 a.m. Japan time
(The reception desk will open at 9 a.m. Japan time.)

2. Place:

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

3. Meeting Agenda:
Matters to be reported:

The Business Report, Non-consolidated Financial Statements,
Consolidated Financial Statements and results of audits by the
Accounting Auditor and the Board of Corporate Auditors of theConsolidated Financial Statements, for the Company’s Fiscal Year
Ended on March 31, 2022 (from April 1, 2021 to March 31, 2022)

Proposals to be resolved: Proposal 1: Distribution of Surplus
Proposal 2: Partial Amendment to the Articles of Incorporation
Proposal 3: Election of Nine (9) Directors
Proposal 4: Election of One (1) Corporate Auditor

-24. Decisions Concerning Convocation
(1)

(2)

Should you choose to exercise your voting rights via a proxy, you may designate a shareholder
other than yourself, who is entitled to vote with respect to the Company, as your proxy. Insuch case, please have the proxy submit a power of attorney together with your Voting Rights
Exercise Form to the reception desk.
Should you diversely exercise your voting rights, please notify the Company in writing to thiseffect, together with the reason thereof, at least three (3) days prior to the date of the General
Meeting of Shareholders.

・ In order for shareholders who are unable to attend to be able to view the proceedings of the
Meeting, live streaming of the meeting will be made available via the Internet on the day of themeeting. For details, please refer to the “Notice of Live Streaming of the General Meeting of
Shareholders” (page 3) below.
・ The measures described above may be updated according to the status of the spread of the novel
coronavirus infection, announcements from the government, etc. in the days leading up to themeeting. In addition, the venue and starting time are subject to change, as necessary. Any changes tothe operation of the meeting will be published on the Company’s website(https://www.seiko.co.jp/ir/).
・ The number of seats at the Meeting is limited, as the spacing between seats will be expanded toprevent the spread of the novel coronavirus infection. Accordingly, we may have to refuse admissionof shareholders to the venue on the day.
・ Body temperature measurements will be taken near the entrance to the venue, and persons who
have a fever or appear to be in ill health may be refused admission and asked to leave, in order toprevent the spread of the novel coronavirus.
・ Shareholders attending the meeting should wear a mask.
Notice regarding the distribution of the Business Report video
Prior to the meeting, a video regarding the Business Report will be distributed.
Distribution period (scheduled): Wednesday, June 15, 2022 to Friday, September 30, 2022
Distribution URL: https://v.srdb.jp/8050/2022soukai_visual/

-3Notice of Live Streaming of the General Meeting of Shareholders
The proceedings of the General Meeting of Shareholders will be streamed live via the Internet.
1. Please access the following website designated by the Company.
Wednesday, June 29, 2022, from 10 a.m. Japan time to the end of the meeting
Distribution date
* The distribution website can be accessed approximately 60 minutes prior to the start ofand time
the General Meeting of Shareholders (9 a.m. Japan time).
Distribution URL

https://v.srdb.jp/8050/2022soukai/

2. When the screen for entering your ID and password appears, please enter your ID and password as shown
below.
ID

Separately notified to shareholders

Password

Separately notified to shareholders

Notes:










Please note that you may not be able to view the live streaming, depending on your computer or otherdevices, your Internet connection environment, or your connection conditions.
Shareholders will be responsible for communication charges and other costs associated with viewing thelive streaming.
Shareholders who view the live streaming will not be able to participate in the resolutions on the day of theGeneral Meeting of Shareholders. Please exercise your voting rights in advance, using any of the methods
described on pages 4 through 5 below, prior to viewing the live streaming.
We will not be able to accept questions or comments from shareholders who are viewing the live streaming.
In consideration of the privacy of the shareholders who attend the meeting, the live streaming will belimited to the vicinity of the Chairman’s and officers’ seats. However, please note that there may be cases
where shareholders are unavoidably visible.
The live streaming may be unavoidably interrupted or cancelled due to the Internet environment, equipment
trouble, or other circumstances.
Please refrain from recording, photographing, or saving the live streaming. Please do not disclose your IDor password to the public.

For inquiries on how to view the live streaming and network on the day of the meeting:
TAKARA PRINTING CO., LTD.
(Live streaming support company)

Separately notified
to shareholders

Contact time
Wednesday, June 29, 2022, from 9 a.m. to
12 p.m. Japan time-4Regarding disclosures on the Internet◎ Among the documents to be provided with this Notice, the following items are posted on the
Company’s website (at the URL provided below) via the Internet pursuant to laws and regulations
and Article 16 of the Articles of Incorporation of the Company; therefore, they are not included in
the documents attached hereto:(i) “Overview of the system to ensure proper operations and the implementation status thereof” forthe Business Report(ii) “Consolidated Statements of Changes in Equity” and “Notes to Consolidated Financial
Statements” for Consolidated Financial Statements(iii) “Non-Consolidated Statements of Changes in Equity” and “Notes to Non-Consolidated
Financial Statements” for Non-Consolidated Financial Statements◎The Accounting Auditor and Corporate Auditors have audited each document subject
to auditing, including the above Internet disclosure items.
◎Corrections, if any, to the Reference Documents for the meeting or the attachments will be postedon the Company’s website.
<The Company’s Website>
https://www.seiko.co.jp/ir/

Notice regarding Exercise of Voting Rights
Voting rights may be exercised by any of the means described below. Shareholders are requested toreview the Reference Documents for the General Meeting of Shareholders before exercising voting
rights.
Shareholders attending the meeting in person
Date and time of the meeting:Wednesday, June 29, 2022, at 10 a.m., Japan time
When attending the meeting, please submit the enclosed Voting Rights Exercise Form at thereception desk. Please also bring this convocation notice.
Shareholders not attending the meeting in person
Exercise of voting rights in
Exercise of voting rights via
writing“Smart Exercise”
Deadline: Must reach theCompany by 6 p.m. on
Tuesday, June 28, 2022, Japantime
Please indicate your votes foror against the proposals on theenclosed Voting Rights
Exercise Form and return thesame so that it is received by
the deadline for exercising
voting rights.

Deadline: By 6 p.m. on
Tuesday, June 28, 2022, Japantime
Please scan the “Smart
Exercise” QR code displayedon the bottom right of theenclosed Voting Rights
Exercise Form via asmartphone or tablet device,
and enter your votes for oragainst the proposals.
* Please refer to page 5 fordetails.

Exercise of voting rights via
the Internet
Deadline: By 6 p.m. on
Tuesday, June 28, 2022, Japantime
Access the Company’s
designated voting website, andenter your votes for or against
the proposals in accordancewith the screen instructions.
* Please refer to page 5 fordetails.

-5Exercise of Voting Rights via “Smart Exercise” Using the QR Code
Procedures for exercising voting rights
1. Scan the QR code and access the website
Scan the “Smart Exercise” QR code on the bottom right of the enclosed Voting Rights Exercise
Form using a smartphone or tablet device.
* An application or function that can scan QR codes is required. (QR code is a registered trademarkof DENSO WAVE INCORPORATED.)
2. Select the voting method
There are two ways to exercise your voting rights.
3. When instructing each proposal individually, enter your votes for or against the proposals inaccordance with the screen instructions.
4. If there is no problem on the confirmation screen, click the “exercise with this content” button tocomplete the exercise.
! If you wish to change your exercise content after exercising your voting rights, you will need to scan
the QR code again, and enter your “voting rights exercise code” and “password” displayed on the
Voting Rights Exercise Form.

Exercise of Voting Rights via the Internet
Please access the voting website (https://soukai.mizuho-tb.co.jp/), and exercise your voting rights inaccordance with the screen instructions.
＜Contact information regarding “Smart Exercise” and exercise via the Internet＞
Stock Transfer Agent Department, Mizuho Trust & Banking Co., Ltd.
Phone number: 0120-768-524 (toll free, accessible only in Japan)(Usage time: 9 a.m. to 9 p.m. (excluding the year end and New Year holidays))（For reference）
Institutional investors may use the electronic proxy voting platform operated by ICJ, Inc.
If duplicate votes are exercised* If you exercise a voting right both in writing and via the Internet (including “Smart Exercise”), thevote exercised via the Internet will be taken as the valid vote.
* If you exercise a voting right multiple times via the Internet (including “Smart Exercise”), the votelast exercised will be taken as the valid vote.

-6[Translation]
Reference Documents for the General Meeting of Shareholders
Agenda of the Ordinary General Meeting of Shareholders

Proposal 1: Distribution of surplus
The Company has a policy to provide consistent dividend payments while considering theconsolidated business results for the fiscal year under review and taking into account the enrichmentof internal reserves to strengthen our management foundation. Based on this policy, with regard to
the year-end dividend for the fiscal year under review, we hereby propose to distribute the surplus
as described below.
Matters related to the year-end dividend(1) Type of dividend assets
Cash(2) Allotment of dividend property to shareholders and its total amountAmount per common share: 25 yen
Total amount of dividends: 1,033,589,475 yen
Note: As the Company has already paid an interim dividend of 25 yen per share, the annual
dividend for the 161st fiscal year will be 50 yen per share.
(3) Effective date of distribution of surplus
June 30, 2022

-7Proposal 2: Partial amendment to the Articles of Incorporation
Reason for proposal(1)

The business environment surrounding the Company Group is changing rapidly and there is anurgent need to establish a structure to strengthen and develop the Group’s comprehensive
capabilities. Under such circumstances, the Company proposes to amend its trade namestipulated in Article 1 of the current Articles of Incorporation for the purpose of transformingfrom a holding company structure that mainly administers the management of each businesssegment to a holding company structure that strengthens mutual use of management resourcesof each business segment and supports innovation creation.
Supplementary provisions are established to the effect that the amendments will take effect on
October 1, 2022, and the supplementary provisions will be deleted on the same date.

(2)

The amended provisions prescribed in the proviso of Article 1 of the supplementary provisionsof the “Act Partially Amending the Companies Act” (Act No. 70 of 2019) will be enforced on
September 1, 2022. Accordingly, in order to prepare for the introduction of the system forelectronic provision of materials for general meetings of shareholders, the Articles ofIncorporation of the Company shall be amended as follows.
(i) The proposed Article 16, paragraph 1 provides that information contained in the
Reference Documents for the General Meeting of Shareholders, etc. shall be provided
electronically.
(ii) The proposed Article 16, paragraph 2 establishes a provision to limit the scope of mattersto be included in the paper copy to be sent to shareholders who have requested it.
(iii) Article 16 of the current Articles of Incorporation (Internet Disclosure and Deemed
Provision of Reference Documents for the General Meeting of Shareholders, etc.) will
become unnecessary and will therefore be deleted.
(iv) In line with the above establishment and deletion of the provisions, supplementaryprovisions related to the effective date, etc. shall be established.

(3)

The Company will make necessary changes to Article 19 (Minutes of the General Meetings ofShareholders), Article 30 (Minutes of the Board of Directors Meetings), and Article 40(Minutes of the Board of Corporate Auditors Meetings) of the current Articles of Incorporation
to enable the preparation of electronic records of the minutes of General Meetings ofShareholders, Board of Directors meetings, and Board of Corporate Auditors meetings.
Current Articles of Incorporation
CHAPTER I GENERAL PROVISIONS(Trade Name)
Article 1
The Company shall be called Seiko
Holdings Kabushiki Kaisha, and the name in
English shall be SEIKO HOLDINGSCORPORATION.

(Underlines denote amendments.)
Proposed Amendment
CHAPTER I GENERAL PROVISIONS(Trade Name)
Article 1
The Company shall be called Seiko Group
Kabushiki Kaisha, and the name in English
shall be SEIKO GROUP CORPORATION.

-8Current Articles of Incorporation
CHAPTER III GENERAL MEETING OF
SHAREHOLDERS(Internet Disclosure and Deemed Provisionof Reference Documents for the General
Meeting of Shareholders, etc.)
Article 16
When convening general meetings ofshareholders, the Company may be deemed
to have provided information relating tomatters that should be stated or indicated inreference documents for general meetings ofshareholders, business reports, financial
statements, and consolidated financial
statements to shareholders by disclosing
such information through methods which
use the Internet in accordance with theOrdinance for Enforcement of theCompanies Act and Corporate Accounting
Rules.

Proposed Amendment
CHAPTER III GENERAL MEETING OF
SHAREHOLDERS(Omitted)(Newly established)(Measures for Electronic Provision, etc.)
Article 16
1. The Company shall, when convening
general meetings of shareholders, provide
information contained in reference
documents for general meetings ofshareholders, etc. electronically.
2. Among the matters to be provided
electronically, the Company may choose
not to include all or part of the matters
stipulated in the Ordinance of the
Ministry of Justice in the paper copy to
be sent to shareholders who haverequested it by the record date for voting
rights.

(Minutes of the General Meetings ofShareholders)
Article 19
Minutes of the general meetings ofshareholders shall be prepared in writing andkept by the Company in accordance with theprovisions of applicable laws andregulations.

(Minutes of the General Meetings ofShareholders)
Article 19
Minutes of the general meetings ofshareholders shall be prepared in writing orelectronically and kept by the Company inaccordance with the provisions of applicablelaws and regulations.

-9Current Articles of Incorporation
CHAPTER IV DIRECTORS AND
BOARD OF DIRECTORS

Proposed Amendment
CHAPTER IV DIRECTORS AND
BOARD OF DIRECTORS(Minutes of the Board of Directors
Meetings)
Article 30
Minutes of the Board of Directors meetings
shall be prepared in writing in accordancewith the provisions of the applicable laws
and regulations, and kept by the Company
after the Directors and Corporate Auditorspresent thereat have affixed their names andseals thereto.

(Minutes of the Board of Directors
Meetings)
Article 30
Minutes of the Board of Directors meetings
shall be prepared in writing or electronicallyin accordance with the provisions of theapplicable laws and regulations, and kept by
the Company after the Directors andCorporate Auditors present thereat haveaffixed their names and seals orelectronically signed thereto.

CHAPTER V CORPORATE AUDITORSAND BOARD OF CORPORATE
AUDITORS

CHAPTER V CORPORATE AUDITORSAND BOARD OF CORPORATE
AUDITORS(Minutes of the Board of Corporate Auditors
Meetings)
Article 40
Minutes of the Board of Corporate Auditors
meetings shall be prepared in writing inaccordance with the provisions of theapplicable laws and regulations, and kept by
the Company after the Corporate Auditorspresent thereat have affixed their names andseals thereto.

(Minutes of the Board of Corporate Auditors
Meetings)
Article 40
Minutes of the Board of Corporate Auditors
meetings shall be prepared in writing orelectronically in accordance with theprovisions of the applicable laws andregulations, and kept by the Company after
the Corporate Auditors present thereat haveaffixed their names and seals orelectronically signed thereto.

(Newly established)

Supplementary provisions
Article 1
Amendments to Article 1 shall take effect asof October 1, 2022. Article 1 of these
supplementary provisions shall be deleted
after the lapse of the effective date of such
amendments.
Article 2
1. Amendments to Article 16 shall takeeffect on September 1, 2022, the effective
date of the amended provisions
prescribed in the proviso of Article 1 ofthe supplementary provisions of the Act
Partially Amending the Companies Act(Act No. 70 of 2019) (hereinafter referred
to as the “Effective Date”).
2. Notwithstanding the preceding paragraph,
Article 16 (Internet Disclosure andDeemed Provision of Reference
Documents for the General Meeting of
Shareholders, etc.) shall remain in effectfor a general meeting of shareholders
held within six (6) months from the
Effective Date.

- 10 Current Articles of Incorporation

Proposed Amendment
3. Article 2 of these supplementaryprovisions shall be deleted on the datewhen six (6) months have elapsed fromthe Effective Date or three (3) months
have elapsed from the date of the general
meeting of shareholders in the preceding
paragraph, whichever comes later.

- 11 Proposal 3: Election of Nine (9) Directors
The terms of office of all eleven (11) Directors will expire at the closing of this General Meeting of
Shareholders. In addition, the Company intends to introduce the system of executive officer (senior
vice president) on June 29, 2022 for the purpose of strengthening supervisory functions of the Boardof Directors and accelerating the execution of business, by separating management decision-making
and supervision from the execution of business. Accordingly, the Company proposes to reduce thenumber of Directors by two (2) and elect nine (9) Directors.
The candidates for Director are as follows.
Candidate
No.

Name

GenderPositions and responsibilities at theCompany

Attendanceat the Boardof Directors
meetings

1

Reappointed

Shinji
Hattori

MaleChairman & Group CEOGroup Chief Culture Officer(Group CCO)

13 out of 13
meetings(100.0%)2

Reappointed

Shuji
Takahashi

Male

President

13 out of 13
meetings(100.0%)3

Newly
Appointed

Akio Naito

Male

―

―

4

Newly
Appointed

Takahiro
Naito

Male

―

―

5

Reappointed

Jun Sekine

Male

Director in charge of IT
Planning and DX Business
Promotion

10 out of 10
meetings(100.0%)Executive Director in charge ofFinancial Management andReal Estate Management
General Manager of the
Financial Management
Department

13 out of 13
meetings(100.0%)6

Reappointed

ShimesuTakizawa

Male

7

Reappointed

Tsuyoshi
NaganoOutside Director
Male
Independent Director

Outside Director

8

Reappointed

YasukoTerauraOutside Director
FemaleIndependent Director

Outside Director

9

Newly
Appointed

Noboru
Saito

Outside Director
Male
Independent Director―

13 out of 13
meetings(100.0%)13 out of 13
meetings(100.0%)―- 12 1.

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

Number of shares of the Company held: 2,279,289(2)Length of service as a Director: 15 years(3)

Attendance at the Board of Directors meetings during the fiscal
year ended March 31, 2022: 13 out of 13 meetings (100.0%)(4)Career, positions, and responsibilities(5)

April 1975

Joined Mitsubishi Corporation

July 1984

Joined Seikosha Co., Ltd.

January 1996

Director of Seiko Precision Inc.

June 2001

President of Seiko Precision Inc.

June 2003

President & CEO of SEIKO WATCH CORPORATION

June 2007

Director of the Company

June 2009

Executive Vice President of the Company

April 2010

President of the Company

October 2012

Chairman & Group CEO of the Company (to present)

June 2015

President & CEO of SEIKO WATCH CORPORATION

April 2017

Chairman & CEO of SEIKO WATCH CORPORATION

June 2020

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

June 2020

Group Chief Culture Officer (Group CCO) of the Company (topresent)

April 2021

Chairman of SEIKO WATCH CORPORATION (to present)

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

(6)

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

(7)

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

- 13 2.

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

Number of shares of the Company held: 10,900(2)Length of service as a Director: 9 years(3)

Attendance at the Board of Directors meetings during the fiscal
year ended March 31, 2022: 13 out of 13 meetings (100.0%)(4)Career, positions, and responsibilities
April 1980
February 2011

(5)

Joined the Company
Senior Vice President of SEIKO WATCH CORPORATION

June 2012

Director, Senior Vice President of SEIKO WATCHCORPORATION

June 2013

Director of the Company

April 2014

Director, Executive Vice President of SEIKO WATCHCORPORATION

June 2015

Director, Senior Executive Vice President of SEIKO WATCHCORPORATION

June 2016

Executive Director of the Company

April 2017

Director of the Company

April 2017

President & COO & CMO of SEIKO WATCH CORPORATION

June 2021

President of the Company (to present)

Significant concurrent positions:―(6)

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

(7)

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

- 14 3.

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

Number of shares of the Company held: 9,000(2)Length of service as a Director: ―(3)

Attendance at the Board of Directors meetings during the fiscal
year ended March 31, 2022: ―(4)

Career, positions, and responsibilities(5)

April 1984

Joined the Company

January 2002

Managing Director of SEIKO Australia Pty. Ltd.

April 2006

General Manager, Legal & Intellectual Property Department of theCompany

June 2011

Director of the Company

June 2013

Executive Director of the Company

June 2016

Director of the Company

June 2016

Director, Senior Executive Vice President of SEIKO WATCHCORPORATION

October 2018

Chairman & CEO of Grand Seiko Corporation of America (topresent)

December 2019

Director, Deputy Chief Operating Officer of SEIKO WATCHCORPORATION

April 2021

President of SEIKO WATCH CORPORATION (to present)

Significant concurrent positions:
President of SEIKO WATCH CORPORATION
Chairman & CEO of Grand Seiko Corporation of America(6)

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

(7)

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

- 15 4.

Takahiro Naito (Date of Birth: September 5, 1955) (Newly Appointed)(1)

Number of shares of the Company held: 2,000(2)Length of service as a Director: ―(3)

Attendance at the Board of Directors meetings during the fiscal
year ended March 31, 2022: ―(4)

Career, positions, and responsibilities
April 1979

(5)

Joined Suwa Seikosha Co., Ltd. (currently Seiko Epson
Corporation)

December 2001

Manager of Hong Kong Branch of Seiko Epson Corporation.

October 2006

General Manager of Audit Office of Seiko Epson Corporation.

October 2010

General Manager of Watch Business of Seiko Epson Corporation.

September 2015

Director of SEIKO WATCH CORPORATION

June 2016

Senior Vice President, Director of SEIKO WATCHCORPORATION

April 2019

Senior Vice President of Seiko Instruments Inc.

April 2019

General Manager, Motion Device Business of Seiko Instruments
Inc.

June 2019

Director of Seiko Instruments Inc.

April 2020

General Manager, Precision Device Business of Seiko Instruments
Inc.

June 2020

Director, Executive Vice President of Seiko Instruments Inc.

April 2021

Director, Senior Executive Vice President of Seiko Instruments Inc.

April 2022

President of Seiko Instruments Inc. (to present)

Significant concurrent positions:
President of Seiko Instruments Inc.

(6)

Reasons for nomination as candidate for director:
The Company nominates Mr. Takahiro Naito as a candidate for Director, expecting
him to perform full functions as a Board member in the decision-making to execute
important business and supervise the other Directors’ execution of their duties byutilizing his wealth of experience and achievement, including the following: (i) having
held key positions at the precision device companies; (ii) having been engaged mainlyin the precision device business and motion device business since being appointed as
Senior Vice President of Seiko Instruments Inc. in April 2019 and having a broad
range of knowledge and experience regarding its businesses; and (iii) currently being
engaged in management direction as President of Seiko Instruments Inc.

(7)

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

- 16 5.

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

Number of shares of the Company held: 1,800(2)Length of service as a Director: 1 year

(3)

Attendance at the Board of Directors meetings during the fiscal
year ended March 31, 2022: 10 out of 10 meetings (100.0%)(4)Career, positions, and responsibilities
April 1984

Joined IBM Japan, Ltd.

April 1998

Sales Manager, Insurance of IBM Japan, Ltd.

June 2002

General Manager, Insurance of IBM Japan, Ltd.

January 2006

Managing Director of IBM Japan, Ltd.

July 2012(5)

President and Director of ESCCO JAPAN K.K.

January 2013

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

July 2015

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

December 2015

Director and Executive Vice President of SEIKO Solutions Inc.

April 2017

President of SEIKO Solutions Inc. (to present)

June 2021

Director in charge of IT Planning and DX Business Promotion of
the Company (to present)

Significant concurrent positions:
President of SEIKO Solutions Inc.

(6)

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

(7)

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

- 17 6.

Shimesu Takizawa (Date of Birth: July 2, 1963) (Reappointed)(1)

Number of shares of the Company held: 3,600(2)Length of service as a Director: 6 years(3)

Attendance at the Board of Directors meetings during the fiscal
year ended March 31, 2022: 13 out of 13 meetings (100.0%)(4)Career, positions, and responsibilities(5)

April 1987

Joined the Company

August 1993

Seconded to SEIKO U.K. Limited

June 2010

General Manager, Finance & Accounting Department of theCompany

June 2016

Director of the Company

June 2018

Outside Director of Jedat Inc. (to present)

June 2019

Executive Director of the Company (to present)

April 2022

In charge of Financial Management and Real Estate Management,
and General Manager, Financial Management Department of theCompany (to present)

Significant concurrent positions:
Outside Director of Jedat Inc.

(6)

Reasons for nomination as candidate for director:
The Company nominates Mr. Shimesu Takizawa as a candidate for Director, expecting
him to perform full functions as a Board member in the decision-making to execute
important business and supervise the other Directors’ execution of their duties byutilizing his wealth of experience and achievement, including the following: (i) having
been engaged mainly in finance & accounting, and corporate strategy planning as amember of the Company Group since joining the Company; and (ii) currently being incharge of financial management and real estate management as Executive Director of
the Company.

(7)

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

- 18 7.

Tsuyoshi Nagano (Date of Birth: November 9, 1952)(Reappointed) (Outside Director) (Independent Director)(1)

Number of shares of the Company held: 8,400(2)Length of service as a Director: 3 years(3)

Attendance at the Board of Directors meetings during the fiscal
year ended March 31, 2022: 13 out of 13 meetings (100.0%)(4)Career, positions, and responsibilities
April 1975

Joined Tokio Marine & Fire Insurance Co., Ltd.

June 2003

Executive Officer and General Manager of Nagoya Production
Dept. III, Tokai Division of Tokio Marine & Fire Insurance Co.,
Ltd.

October 2004

Executive Officer and General Manager of Nagoya Production
Dept. III of Tokio Marine & Nichido Fire Insurance Co., Ltd.

June 2006

Managing Executive Officer of Tokio Marine & Nichido Fire
Insurance Co., Ltd.

June 2008

Managing Director of Tokio Marine & Nichido Fire InsuranceCo., Ltd.

June 2008

Director of Tokio Marine Holdings, Inc.

June 2010

Senior Managing Director of Tokio Marine & Nichido Fire
Insurance Co., Ltd.
Senior Managing Director of Tokio Marine Holdings, Inc.

June 2011
June 2012

Executive Vice President of Tokio Marine & Nichido Fire
Insurance Co., Ltd.

June 2012

Executive Vice President of Tokio Marine Holdings, Inc.

June 2013

President & Chief Executive Officer of Tokio Marine & Nichido
Fire Insurance Co., Ltd.
President & Chief Executive Officer of Tokio Marine Holdings,
Inc.
Chairman of the Board Tokio Marine & Nichido Fire InsuranceCo., Ltd. (retired in June 2019)
Chairman of the Board of Tokio Marine Holdings, Inc. (topresent)

June 2013
April 2016
June 2019
June 2019(5)

Outside Director of the Company (to present)

Significant concurrent positions:
Chairman of the Board of Tokio Marine Holdings, Inc.

(6)

Reasons for nomination as candidate for Outside Director and the overview of
expected roles:
The Company nominates Mr. Tsuyoshi Nagano as a candidate for Outside Director,
expecting him to contribute to strengthening supervisory functions over the executionof business and provide advice from a wide-ranging management perspective based on

- 19 his extensive experience and high insight cultivated in his career as a management
member of corporations over many years.
(7)

Special relationship of interest between the Company and the candidate for Outside
Director and the candidate’s independence from the Company:
There is no special relationship of interest between the Company and Mr. Tsuyoshi
Nagano.
Mr. Nagano is currently serving as Chairman of the Board of Tokio Marine Holdings,
Inc. The Tokio Marine Group and the Company Group have transactions related toinsurance contracts. However, these transactions constitute less than one percent ofconsolidated ordinary income (equivalent to consolidated net sales) of Tokio Marine
Holdings, Inc. and the Company’s consolidated net sales, and is thus insignificant.
Mr. Tsuyoshi Nagano satisfies the requirements of an independent director under therules of the Tokyo Stock Exchange, and has been reported thereto as an independent
director. If his appointment is approved at this Ordinary General Meeting of
Shareholders, he will continue to serve as an independent director.

- 20 -

8.

Yasuko Teraura (Date of Birth: October 16, 1970)(Reappointed) (Outside Director) (Independent Director)(1)

Number of shares of the Company held: 500(2)

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

Attendance at the Board of Directors meetings during the fiscal
year ended March 31, 2022: 13 out of 13 meetings (100.0%)(4)Career, positions, and responsibilities(5)

April 2000

Registered as an attorney

October 2006

Certified as a New York State attorney

March 2010

Established Endeavour Law Office, Partner Attorney of
Endeavour Law Office (to present)

June 2014

Outside Director of Neturen Co., Ltd. (to present)

June 2019

Outside Director of the Company (to present)

Significant concurrent positions:
Partner Attorney of Endeavour Law OfficeOutside Director of Neturen Co., Ltd. (scheduled to retire in June 2022)(6)

Reasons for nomination as candidate for Outside Director and the overview of
expected roles:
The Company nominates Ms. Yasuko Teraura as a candidate for Outside Director,
expecting her to contribute to strengthening supervisory functions over the executionof business and provide advice by leveraging her legal expertise based on her
extensive knowledge and experience cultivated over many years as an attorney.
Although Ms. Teraura does not have any previous experience of being involved incorporate management other than through serving as an Outside Director, theCompany has determined that she is capable of appropriately performing the duties ofan Outside Director based on the aforementioned reasons.

(7)

Special relationship of interest between the Company and the candidate for Outside
Director and the candidate’s independence from the Company:
There is no special relationship of interest between the Company and Ms. Yasuko
Teraura.
Ms. Yasuko Teraura satisfies the requirements of an independent director under therules of the Tokyo Stock Exchange. If her appointment is approved at this Ordinary
General Meeting of Shareholders, she will continue to serve as an independent
director.

- 21 9.

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

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

Length of service as a Director: ―(3)

Attendance at the Board of Directors meetings during the fiscal
year ended March 31, 2022: ―(4)

Career, positions, and responsibilities
April 1986

Joined Burroughs Corporation (currently BIPROGY Inc.)

April 2004

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

April 2009

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

April 2010

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

April 2012

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

April 2013

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

April 2016

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

June 2016
April 2020
(5)

Significant concurrent positions:Representative Director, Executive Corporate Officer of BIPROGY Inc.

(6)

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

(7)

Special relationship of interest between the Company and the candidate for Outside
Director and the candidate’s independence from the Company:
There is no special relationship of interest between the Company and Mr. Noboru
Saito.
Mr. Saito is currently serving as Representative Director, Executive Corporate Officerof BIPROGY Inc. The BIPROGY Group and the Company Group have transactions in
the Systems Solutions Business. However, these transactions constitute less than one

- 22 percent of BIPROGY Inc. and the Company’s consolidated net sales, and is thus
insignificant.
Mr. Noboru Saito satisfies the requirements of an independent director under the rulesof the Tokyo Stock Exchange, and will be reported thereto as an independent director,
if his appointment is approved at this Ordinary General Meeting of Shareholders.

Note 1: The Company entered into an agreement with Mr. Tsuyoshi Nagano and Ms. Yasuko
Teraura to limit liability for damages set forth in Article 423, paragraph 1 of theCompanies Act, pursuant to Article 427, paragraph 1 thereof. The limit on the liability
for damages under the said agreement will be the minimum limit of liability
prescribed in Article 425, paragraph 1 of the Companies Act. If their appointment isapproved, the Company will continue the aforementioned liability limitationagreement with them. If the appointment of Mr. Noboru Saito is approved, theCompany plans to enter into a similar agreement with Mr. Saito.
Note 2: The Company has entered into a directors and officers liability insurance (D&O
insurance) policy with an insurance company, with all Directors of the Company as
the insured, as prescribed in Article 430-3, paragraph 1 of the Companies Act. The
details of the insurance policy are as described in the Business Report (page 44). If theappointment of the candidates is approved, each candidate will be included as aninsured under the insurance policy. The Company plans to renew the insurance policy
with the same conditions during the term of office of each candidate.

- 23 Proposal 4: Election of One (1) Corporate Auditor
The Company proposes the election of one (1) Corporate Auditor to replace Mr. Tomoyasu Asano,
Corporate Auditor, who will retire from office by voluntary resignation at the closing of thisOrdinary General Meeting of Shareholders.
The Company has obtained consent from the Board of Corporate Auditors with regard to this
proposal.
The candidate for Corporate Auditor is as follows.
Kenji Sakurai (Date of Birth: August 17, 1959)(Newly Appointed) (Outside Corporate Auditor)(Independent Corporate Auditor)(1)

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

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

Attendance at the Board of Directors meetings during the fiscal
year ended March 31, 2022: ―Attendance at the Board of Corporate Auditors meetings during
the fiscal year ended March 31, 2022: ―(4)

Career and positions
April 1982

Joined The Dai-ichi Mutual Life Insurance Company

April 2008

Executive Officer of The Dai-ichi Mutual Life Insurance
Company

April 2011

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

June 2014

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

April 2015

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

October 2016

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

October 2016

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

April 2017

Vice President of Dai-ichi Life Holdings, Inc.

April 2017

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

April 2021

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

June 2021

Representative Director, President of THE DAI-ICHI
BUILDING CO., LTD. (to present)- 24 (5)Significant concurrent positions:Representative Director, President of THE DAI-ICHI BUILDING CO., LTD.

(6)

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

(7)

Special relationship of interest between the Company and the candidate for Outside
Corporate Auditor and the candidate’s independence from the Company:
There is no special relationship of interest between the Company and Mr. Kenji
Sakurai.
Mr. Sakurai is currently serving as Representative Director, President of THE DAIICHI BUILDING CO., LTD. THE DAI-ICHI BUILDING CO., LTD. and theCompany Group have transactions related to real estate leases. However, thesetransactions constitute less than one percent of the net sales of THE DAI-ICHI
BUILDING CO., LTD. and the Company’s consolidated net sales, and is thus
insignificant. Mr. Sakurai previously worked at Dai-ichi Life Holdings, Inc. However,
Mr. Sakurai has not been involved in execution of operations at Dai-ichi Life
Holdings, Inc. since he retired from office of Director of the said company in June
2021. The Dai-ichi Life Group and the Company Group have transactions related toinsurance contracts. However, these transactions constitute less than one percent ofconsolidated ordinary revenues (equivalent to consolidated net sales) of Dai-ichi Life
Holdings, Inc. and the Company’s consolidated net sales, and is thus insignificant. In
addition, the Company Group has borrowed funds from the Dai-ichi Life Group.
However, the amount of such borrowings constitutes less than two percent ofconsolidated total assets of Dai-ichi Life Holdings, Inc. and the Company, and is thus
insignificant.
Mr. Kenji Sakurai satisfies the requirements of an independent auditor under the rulesof the Tokyo Stock Exchange, and will be reported thereto as an independent auditor,
if his appointment is approved at this Ordinary General Meeting of Shareholders.

- 25 Note 1: The Company proposes the election of Mr. Kenji Sakurai as a substitute, and his termof office will expire at the closing of the Ordinary General Meeting of Shareholders tobe held in 2024, when the term of office of his predecessor will expire, in accordancewith Article 35, paragraph 2 of the Company’s Articles of Incorporation.
Note 2: From October 2020 to October 2021, it was discovered that a former employee of The
Dai-ichi Life Insurance Company, Limited, where Mr. Kenji Sakurai was serving as
Representative Director, Vice President, was involved in the improper acquisition ofmoney from customers. Although the aforementioned misconduct occurred in businessactivities during his time in office, Mr. Sakurai was not directly involved in any of thefacts discovered. Mr. Sakurai had already retired from his position as Representative
Director, Vice President of the said company at the time he became aware of thesefacts. However, as a Director of Dai-ichi Life Holdings, Inc., the parent company of
the said company, he has fulfilled his responsibilities, including efforts to further
strengthen legal compliance initiatives and to prevent any recurrence.
Note 3: The Company plans to enter into an agreement with Mr. Kenji Sakurai to limit liability
for damages set forth in Article 423, paragraph 1 of the Companies Act, pursuant to
Article 427, paragraph 1 thereof, if his appointment is approved at this Ordinary
General Meeting of Shareholders. The limit on the liability for damages under the said
agreement will be the minimum limit of liability prescribed in Article 425, paragraph 1of the Companies Act.
Note 4: The Company has entered into a directors and officers liability insurance (D&O
insurance) policy with an insurance company, with all Corporate Auditors of theCompany as the insured, as prescribed in Article 430-3, paragraph 1 of the Companies
Act. The details of the insurance policy are as described in the Business Report (page44). If the appointment of Mr. Kenji Sakurai is approved, he will be included as aninsured under the insurance policy. The Company plans to renew the insurance policy
with the same conditions during his term of office.

- 26 [For reference]<Decision process of the nomination of the Director and Corporate Auditor candidates>
In order to procure the objectivity and transparency of the process to nominate officer candidates
and to determine compensation for officers, the Company established the Corporate GovernanceCommittee, a majority of the members of which are independent outside officers, as an advisory
body for the Board of Directors.
The nomination of the Director candidates listed in Proposal 3 and the Corporate Auditor candidate
listed in Proposal 4 were determined by the Board of Directors after being deliberated on by thatcommittee.

<Skills of Directors and Corporate Auditors (tentative) after this Ordinary General Meeting of
Shareholders>
Skills and experience

Positions after
this Meeting(tentative)

GenderShinji
Hattori

Chairman &Group CEOGroup CCO

Shuji
Takahashi

President

Name

Akio Naito
Takahiro
Naito
Jun Sekine
ShimesuTakizawa
Tsuyoshi
NaganoYasukoTerauraNoboru
Saito
HaruhikoTakagiTakashi
Nishimoto
HidekiAmano
Masatoshi
Yano
Kenji
Sakurai

Director, Senior
Executive Vice
President
Director, Senior
Executive Vice
President
Director, Senior
Executive Vice
President
Director,
Executive Vice
President
OutsideDirector
OutsideDirector
OutsideDirectorStanding
Corporate
AuditorStanding
Corporate
AuditorOutsideCorporate
AuditorOutsideCorporate
AuditorOutsideCorporate
AuditorCorporate
management

Brand
culture

Male

○

○

Male

○

○

Male

○

○

Male

○

Male

○

Marketing Technology

○

○
○

○
○

○

○
○

○
○

○
○

Male

○

○

Male

○

○

○

Male

○

○
○

Male

Male

○
○

○
○

○
○

FemaleMale

Global○○○Legal & Risk
management

○

Male
Male

Finance &Accounting

○

○
○

○

-27-

[For reference]
Basic Principle of Corporate Governance
Based on the principle "being a company that is trusted by society", Seiko Holdings Corporationconsiders "compliance with relevant laws and regulations", "implementation of managementtransparency and fairness", and "honoring social ethics" as core business goals. In order to achieve thesegoals, we will strengthen and promote our corporate governance framework and strive to achieve ourgroup’s sustainable growth and increase corporate value.
Basic Policy(1) Securing the Rights and Equal Treatment of Shareholders
We strive to develop a necessary environment that effectively ensures the rights of shareholders
including voting rights at the general meeting of shareholders, and provide them with necessary
information accurately so that they can exercise their rights appropriately. We are also committed tosecuring equality among shareholders, such as minority shareholders and foreign shareholders.
(2) Appropriate Cooperation with Stakeholders other than Shareholders
We recognize that our social responsibility is to contribute to the realization of a sustainable society
through implementation of our group's basic principle "being a company that is trusted by society".
Under such recognition, we strive to cooperate appropriately with our various stakeholders, including
our shareholders, customers, business partners, members of local communities and employees.
(3) Ensuring Appropriate Information Disclosure and Transparency
In order to obtain appropriate evaluation from our various stakeholders including our shareholders,
and to engage in a constructive dialogue with shareholders, we strive not only to disclose appropriate
information in compliance with relevant laws and regulations, but also to disclose other information
in a timely and appropriate manner so that such information would be clear and useful for the people
who use it.
(4) Responsibilities of the Board of Directors
Our Board of Directors will engage in free and constructive discussions and exchanges of opinions,and will appropriately fulfill its roles and responsibilities for the sustainable growth of company andthe enhancement of corporate value over the medium to long-term, including making decisions onimportant management matters such as business strategies, establishing an environment that supports
swift and decisive decision-making by the senior management, and enhancing management
supervision.
(5) Dialogue with Shareholders
We will promote constructive dialogue with our shareholders to contribute sustainable growth andenhancement of corporate value over the medium to long-term based on "Basic Policy on Constructive
Dialogue with Shareholders".

- 28 Corporate Governance Structure

- 29 -

[Translation][Attached Documents]
Business Report for the Fiscal Year Ended March 2022 (From April 1, 2021 To March 31, 2022)
1.

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

Business developments and results

In the world economy during the fiscal year ended March 31, 2022, many countries showed signs of a recovery
from the sudden economic declines caused by the spread of the novel coronavirus during the previous fiscal year.
In the U.S. economy, although the pace of growth in employment and consumption began to slow due to theimpact of a resurgence of infections and labor shortages, a trend toward recovery continued. In Europe, economic
activity was significantly affected mainly by the tightening of restrictions on movement prompted by the rapid
spread of the Omicron variant. In China, although the economy progressed steadily, growth was slowed by factors
such as the impact of the government’s “zero-COVID” policy and a sluggish real estate market.
The Japanese economy experienced cycles of activity restrictions and easing due to the spread of infections ofmutant strains, but maintained a recovery trend. Personal consumption, which had been subdued, showed signs ofa recovery after the declaration of a state of emergency was lifted in September 2022.

Amid these circumstances, the Company promoted the strategies of the Seventh Mid-Term Management Plan,
while paying close attention to the health and safety of stakeholders, given the rapid spread of infections of mutant
strains. In the Watches Business, net sales rose significantly especially for overseas markets, thanks to progress inefforts to expand Global Brands (GB), especially for Grand Seiko (GS) and Seiko Prospex. The Electronic
Devices Business steadily captured favorable demand in fields such as the medical field, and efforts by the
Systems Solutions Business to diversify business and expand the stock business proved successful. As a result,sales posted for both of these business segments exceeded those of the previous fiscal year and two years prior,
before the spread of the novel coronavirus. As a result, for the fiscal year ended March 31, 2022, the Group
reported consolidated net sales of 237.3 billion yen, a year-on-year increase of 17.1%.
On an overall consolidated basis, domestic net sales came to 124.4 billion yen (a year-on-year increase of 10.0%),
and overseas net sales were 112.9 billion yen (a year-on-year increase of 26.1%). Overseas net sales comprised
47.6% of net sales overall.
Advertising and promotion expenses for the fiscal year ended March 31, 2022 increased by approximately 7%
from the previous fiscal year, but fell by approximately 15% from two years prior. Other selling, general andadministrative expenses also generally returned to usual levels as business activities normalized and also due to anincrease resulting from the impact of changes in accounting standards. However, operating profit improved by 6.5
billion yen year on year to 8.7 billion yen (a year-on-year increase of 299.7%), as a result of a recovery in net sales
and improvements in profitability. Non-operating income and expenses improved year on year, primarily due toshare of profit of entities accounted for using equity method and foreign exchange gains and losses, and ordinary

- 30 -

profit increased by 9.3 billion yen year on year to 9.9 billion yen (ordinary profit of 0.6 billion yen in the previous
fiscal year). Subsidy income of 0.1 billion yen was posted as extraordinary income, and a total loss of 1.1 billion
yen, including a loss relating to the novel coronavirus, was posted as extraordinary losses. As a result, profit
attributable to owners of parent minus income taxes and profit attributable to non-controlling interests was 6.4
billion yen (a year-on-year increase of 84.6%).
The average exchange rates for the current fiscal year were 112.4 yen to 1 US dollar and 130.6 yen to 1 euro.

Results for each segment are as follows.

a. Watches BusinessNet sales under the Watches Business came to 125.7 billion yen, a year-on-year increase of 20.6 billion yen, or
19.7%. Although net sales of completed watches in Japan slightly fell short of the plan for the fiscal year ended
March 31, 2022 due to the spread of infections of mutant strains, they entered a recovery trend from the third
quarter. GS showed favorable performance, driven primarily by the 140th Anniversary commemorative model aswell as a model that features a dial depicting a majestic white birch forest, and sales increased year on year. Net
sales also grew for Seiko Astron. On a distribution channel basis, sales were steady for department stores andwatch stores, which were supported by vigorous purchasing power of wealthy customers.
Net sales of GB increased not only year on year, but also from two years prior in all regions overseas, driven by
GS. In the U.S., sales during the Christmas season showed favorable performance, and sales especially for GS and
Seiko Prospex grew significantly year on year and also from two years prior. In Europe, sales of GB such as GS
also grew in the U.K., France, and many other countries. In China, from the summer onward, social unease suchas growing concerns regarding the default of a real estate company led to a decline in consumer sentiment, and net
sales fell year on year. Due to the spread of infections of mutant strains, net sales in other Asian countries
remained roughly the same as those of the previous year. However, sales in Australia showed favorable
performance, especially for GB.
The watch movements business was sluggish for the Asian market.
Operating profit increased by 2.0 billion yen year on year, resulting in operating profit of 7.6 billion yen (a yearon-year increase of 36.4%) in conjunction with the increase in net sales, despite expenses returning to normal
levels year on year following a recovery in business activities.
b. Electronic Devices BusinessNet sales under the Electronic Devices Business came to 64.6 billion yen, a year-on-year increase of 28.8%.
Operating profit was 5.8 billion yen, a year-on-year increase of 347.4%. Business results were affected by delaysin the supply of components and materials for thermal printers and some precision devices. However, favorable

- 31 -

performance continued for micro batteries for medical equipment and quartz crystals, as well as oscillators, highperformance metals for semiconductor production equipment, precision turned parts for automobiles and data
centers, and other products. As a result, both revenue and profits grew significantly year on year.
c. Systems Solutions BusinessNet sales under the Systems Solutions Business came to 34.4 billion yen, a year-on-year increase of 0.9%.
Operating profit was 3.9 billion yen, a year-on-year increase of 11.5%. Some industries, such as food service, wereaffected by the coronavirus pandemic, and there were difficulties in procuring components and materials for someproducts. However, capturing the rising tide of the digitalization of society, there was growth in the digital
contract-related business, IIM Corporation’s performance management and security-related business, networkrelated business for 5G for the public sector and communications industry, and other businesses, resulting incontinued year-on-year growth in both revenue and profits for 24 consecutive quarters.
d. Time Creation, WAKO and other Businesses
Net sales under the Time Creation, WAKO and other Businesses amounted to 27.3 billion yen, a year-on-yearincrease of 2.4 billion yen, or 9.8%. Operating profit was 0.7 billion yen (compared to operating losses of 40
million yen in the previous fiscal year). Sales and operating profit of Time Creation, WAKO and other Businesses
recovered steadily from the third quarter when signs of improvement in personal consumption were observed inJapan. In the fourth quarter, the business succeeded in maintaining favorable performance, with limited impact
from the quasi-state of emergency measures implemented from January 2022 in Tokyo and other areas. Overseas
clock sales also increased year on year in line with a market recovery from the impact of the spread of the novel
coronavirus.

- 32 -

(2)

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

Positioning of SMILE145
SMILE145 is a five-year plan formulated by backcasting from the Group 10-year vision andaimed at FY2026, the 145th Anniversary of our founding and the midpoint of the vision, in orderto realize the Group 10-year vision, which represents what we aim to be for the 150th
Anniversary.

2.

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

3.

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

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

Group core strategies
The Company Group has defined five strategies as Group-wide core strategies to be implemented
in all businesses in order to achieve growth of the Group and society, and will promote its growthstrategy.

(i)

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

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

(iii)

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

(iv)

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

(v)

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

5.

Domain-specific ideals
The Company has set three strategic domains with the aim of “establishing management unified
by a common purpose, which aims to create business synergies through a purpose-driven
approach”, “innovating into a business model that solves social issues through DX”, and “creatinga distributed business structure that responds to the risk of changes in the business environment”.

- 34 -(i)

Emotional Value Solutions (EVS) Domain- Create products and services with high functional, emotional, and social value, with a sense of
beauty and meticulous attention to detail that excite customers- Improve our brand and corporate value by selling products that are partners for life, and can beenjoyed together in times of joy, through a superior customer experience(ii)

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

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

6.

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

7.

Group-wide management targets
SMILE145 focuses on medium- and long-term profitability and growth. Its objective is to ensure
the ongoing sustainability of the Company Group. Financial targets for FY2026 are consolidated
operating profit of 18.0 to 20.0 billion yen, an increase in consolidated gross profit margin of 5.0
percentage points (compared to FY2021), and a consolidated ROIC of over 6.5%. Regarding ESG
indicators, the Company aims to reduce CO2 emissions under SCOPE 1 and 2 by 25% (comparedto FY2020) in FY2026. In addition, the Company will use employee engagement studies to be
carried out from FY2022 to clearly prioritize issues, and strive to improve engagement scores byworking to address these issues.

- 35 -

(3)

Financing
There are no matters of special note.

(4)

Capital expenditures
The Company invested 2,141 million yen in the Watches Business and 2,324 million yen in the Electronic
Devices Business primarily to reinforce and renew manufacturing and other facilities, and 718 million yen
in the Systems Solutions Business primarily to acquire software for marketing purposes, respectively. In
addition, the Company has made capital investments of 556 million yen to acquire rental equipment(Chuo-ku, Tokyo) for external companies.

- 36 -

(5)

Trends in assets and profit/loss
The operating results and assets in the fiscal year ended March 31, 2022 and the past three years are as
follows.
(i) Consolidated
Item(Millions of yen)
FY2018FY2019FY2020

FY2021

Net sales

247,293239,150

202,671

237,382

Ordinary income

11,410

7,004

633

9,939

9,249

3,394

3,475

6,415

224

82

84

156

Total assets

303,036

299,990319,671327,533

Net assets

110,415

104,273

113,082

121,624

Net assets per
share
(Yen)

2,650

2,500

2,709

2,911

Net income
attributable toowners of parent
Net income per
share
(Yen)

(ii) Non-consolidated
Item
Operatingrevenue
Ordinary
income(Millions of yen)
FY2018FY2019FY2020

FY2021

11,301

12,031

11,301

12,043

2,691

3,027

809

-473

Net income

3,719

3,124

1,560

3,257

Net income per
share
(Yen)

90

76

38

79

Total assets

176,640

176,961

192,853

187,644

Net assets

55,02950,68155,495

57,120Net assets per
share
1,334
1,229
1,345
1,384
(Yen)
Note 1 Net income per share is calculated on the basis of the average number of shares during the fiscal
year.
Note 2 Treasury shares are indicated as a deduction item on net assets, and the values of net income pershare and of net assets are calculated by deducting the number of treasury shares from theaverage number of shares during the fiscal year and the total number of issued shares,
respectively.

- 37 -

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

(6)

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

- 38 -

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

Paid-in Capital

CapitalDetails of Major BusinessContribution Ratio

Activities

5,000 million yen

100.0%

200 million yen

100.0%(*)

2,000 million yen

100.0%(*)

Manufacturing watches

US$2,000

100.0%(*)

Sales of watches

US$112,000

100.0%(*)

Sales of watches

HK$129,300,000

100.0%(*)

HK$128,700,000

100.0%(*)

S$32,288,000

100.0%(*)

Sales of watches
Sales of watches and otherproducts

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

Seiko Instruments Inc.

9,756 million yen

100.0%

electronic devices and otherproducts
Development, sales, etc. of

SEIKO Solutions Inc.

500 million yen

100.0%

information andtelecommunication systems,
etc.
Manufacturing and sales of

SEIKO Time Creation Inc.

500 million yen

100.0%

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

WAKO Co., Ltd.

2,500 million yen

100.0%

apparel, and fashion
accessories

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

- 39 -

(7)

Major business segments of the Corporate GroupThe Company is a holding company. The details of business activities, main merchandise and finishedgoods of each business are as follows:Business Segment

Details of Business Activities

Watches Business

Manufacturing and sales

Electronic Devices Business

Manufacturing and sales

Main merchandise and products
Watches, watch movements
Quartz crystals, micro batteries andmaterials, printers, precision turned parts
Wireless communication equipment,

Systems Solutions Business

Development and sales

information network systems, dataservices, computer-performance
management software

Time Creation, WAKO andother Businesses(8)

Manufacturing, sales andother activities

Clocks, high-end jewelry, apparel,fashion accessories, systems clocks,
othersMajor business locations of the Corporate GroupThe Company has its headquarters in Chuo-ku, Tokyo, and the major location of each business is asfollows:
Business Segment(9)

Location

Watches Business

Chuo-ku, Tokyo

Electronic Devices Business

Mihama-ku, Chiba-shi, Chiba

Systems Solutions Business

Mihama-ku, Chiba-shi, Chiba

Time Creation, WAKO and other Businesses

Chuo-ku, Tokyo

Status of employees of the Corporate GroupThe number of employees of the Company and its consolidated subsidiaries is 11,984 (a decrease of 108
from the previous fiscal year-end).

(10)

Major lenders and amounts borrowed
Lenders

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

39,066

Sumitomo Mitsui Banking Corporation

21,459

Aozora Bank, Ltd.

13,085

- 40 -

2.

Matters related to the Company shares(1)

Total number of shares authorized to be issued

149,200,000 shares(2)

Total number of shares issued and outstanding

41,404,261 shares(including 60,682 treasury shares)(3)

Number of shareholders at the end of the fiscal year ended March 31, 2022

(4)

Major shareholders (top 10)
Name12,934

Number of shares

Percentage ofheldshares held
shares%The Master Trust Bank of Japan, Ltd. (Trust Account)

4,752,500

11.5

Sanko Kigyo K.K.

4,436,500

10.7

Etsuko Hattori

3,613,908

8.7

Shinji Hattori

2,279,289

5.5

The Dai-ichi Life Insurance Company, Limited

1,800,000

4.4

Hideo Hattori

1,622,455

3.9

Custody Bank of Japan, Ltd. (Trust Account)

1,598,500

3.9

GIC PRIVATE LIMITED-C

1,369,839

3.3

SHIMIZU CORPORATION

744,200

1.8

FUJI BUILDING Co., Ltd.

671,400

1.6

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

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

3.

Number of share recipients

The Company’s common shares
5,600 shares

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

1- 41 -

4.

Matters related to officers(1)

Name, etc. of Directors and Corporate Auditors (as of March 31, 2022)
Name

Position and responsibility
at the Company
Chairman & Group CEO

Shinji HattoriGroup Chief Culture Officer(Group CCO)

Yoshinobu
Nakamura
Shuji Takahashi

Significant concurrent positions at other entities
Chairman of SEIKO WATCH CORPORATION
Chairman of WAKO Co., Ltd.

Vice Chairman
President
Executive Director in charge ofCorporate Planning andShimesu

Finance & Accounting

Takizawa

General Manager of the
Finance & Accounting

Director, Executive Vice President of Seiko
Instruments Inc.
Outside Director of Jedat Inc.

Department
KiyokoNiwasakiExecutive Director in charge ofCorporate Branding and ESG& SDGs Promoting

Director, Executive Vice President of WAKO Co.,Ltd.

Kazuhiko

Director in charge of Human

Director, Senior Executive Vice President of WAKO

Sakamoto

Resources and Legal

Co., Ltd.

Director in charge of
Secretaries, General Affairs,
MakotoIchimura

and Strategy Planning

Director, Executive Vice President of SEIKO

Deputy Chief of Group R&D

Solutions Inc.

Headquarters

Outside Director of OHARA INC.

General Manager of theSecretaries OfficeDirector in charge of Group
Tetsu Kobayashi

R&D Headquarters

President of Seiko Instruments Inc.

Chief of Headquarters
Director in charge of IT
Jun Sekine

Planning and DX BusinessPresident of SEIKO Solutions Inc.

Promotion
Tsuyoshi
NaganoYasuko Teraura

Director

Chairman of the Board of Tokio Marine Holdings, Inc.

Director

Partner Attorney of Endeavour Law Office- 42 -

Outside Director of Neturen Co., Ltd.
Haruhiko Takagi
TakashiStanding Corporate Auditor

Outside Corporate Auditor of OHARA INC.

Standing Corporate Auditor

Nishimoto
Tomoyasu

Corporate Auditor

Asano

Certified public accountant
Outside Director of TOPPAN FORMS CO., LTD.
Hideki Amano

Corporate Auditor

Outside Audit & Supervisory Board Member of Kao
Corporation
Outside Director of Ajinomoto Co., Inc.

Masatoshi Yano

Corporate Auditor

President of Seiwa Sogo Tatemono Co., Ltd.

Note 1: Mr. Tsuyoshi Nagano and Ms. Yasuko Teraura, Directors, are outside directors set forth in Article
2, item 15 of the Companies Act.
Note 2: Mr. Tomoyasu Asano, Mr. Hideki Amano, and Mr. Masatoshi Yano, Corporate Auditors, areoutside company auditors set forth in Article 2, item 16 of the Companies Act.
Note 3: The Company has reported to the Tokyo Stock Exchange Mr. Tsuyoshi Nagano and Ms. Yasuko
Teraura, Directors, and Mr. Tomoyasu Asano, Mr. Hideki Amano, and Mr. Masatoshi Yano,
Corporate Auditors, as independent directors/auditors.
Note 4: Mr. Haruhiko Takagi and Mr. Takashi Nishimoto, Standing Corporate Auditors, have experiencein accounting and have reasonable-degrees of knowledge about finance and accounting. Mr.
Hideki Amano, Corporate Auditor, is a certified public accountant, and has reasonable-degree ofknowledge about finance and accounting.
Note 5: Changes in Directors and Corporate Auditors of the Company during this fiscal year are as
follows:(1)
Mr. Jun Sekine was newly appointed as Director and assumed office at the 160th
Ordinary General Meeting of Shareholders held on June 29, 2021.
(2)

Mr. Akihiro Okuma, Senior Executive Director, retired from office of Director due tothe expiry of his term of office at the close of the 160th Ordinary General Meeting of
Shareholders held on June 29, 2021.

Note 6: Changes in significant concurrent positions at other entities of Directors and Corporate Auditorsof the Company during and after this fiscal year are as follows:(1)
Mr. Shimesu Takizawa, Executive Director, retired from office of Executive Vice
President of Seiko Instruments Inc. as of March 31, 2022, and assumed office of
Director as of April 1, 2022.
(2)

Ms. Kiyoko Niwasaki, Executive Director, retired from office of Executive Vice
President of WAKO Co., Ltd. as of March 31, 2022 in conjunction with thediscontinuation of the system of executive officer (senior vice president) of WAKO Co.,
Ltd. on the same date, and assumed office of Director as of April 1, 2022.

- 43 -

(3)

Mr. Kazuhiko Sakamoto, Director, assumed office of Senior Executive Director(Representative Director) of WAKO Co., Ltd. as of April 1, 2022.

(4)

Mr. Tetsu Kobayashi, Director, assumed office of Chairman of Seiko Instruments Inc. asof April 1, 2022.

(5)

Mr. Tomoyasu Asano, Corporate Auditor, retired from office of Outside Auditor of
Tokyu Fudosan Holdings Corporation as of June 25, 2021.

(6)

Mr. Hideki Amano, Corporate Auditor, retired from office of Audit & Supervisory
Board Members (External) of Ajinomoto Co., Inc. as of June 23, 2021, and assumed
office of Outside Director of Ajinomoto Co., Inc. on the same date.

Note 7: The Tokio Marine Group, at which Mr. Tsuyoshi Nagano, Outside Director, has a concurrent
position, and the Company Group have transactions related to insurance contracts. However, thesetransactions constitute less than one percent of consolidated ordinary income (equivalent toconsolidated net sales) of Tokio Marine Holdings, Inc. and the Company’s consolidated net sales,
and is thus insignificant.
Note 8: Seiwa Sogo Tatemono Co., Ltd., at which Mr. Masatoshi Yano, Outside Corporate Auditor, has aconcurrent position, and the Company Group have transactions related to real estate management.
However, these transactions constitute less than one percent of net sales of Seiwa Sogo Tatemono
Co., Ltd. and the Company’s consolidated net sales, and is thus insignificant.
Note 9: There is no other special relationship of interest between the Company and the entities at which
Outside Directors or Outside Corporate Auditors hold concurrent positions.
Note 10: Responsibilities of Directors changed as follows as of April 1, 2022.
Position
Name
Responsibility
In charge of Financial Management and Real
Estate Management
Executive Director
Shimesu Takizawa
General Manager of the Financial Management
Department
In charge of Corporate Branding, Public
Executive Director
Kiyoko Niwasaki
Relations & IR, and ESG & SDGs Promoting
In charge of Secretaries, General Affairs,
Corporate Strategy Planning, and Strategy
Director
Makoto Ichimura
Planning
Deputy Chief of Group R&D Headquarters
General Manager of the Secretaries Office(2)

Overview of agreements limiting liability

The Company entered into an agreement with each of Mr. Tsuyoshi Nagano and Ms. Yasuko Teraura, Outside
Directors, and Mr. Tomoyasu Asano, Mr. Hideki Amano, and Mr. Masatoshi Yano, Outside Corporate Auditors, tolimit liability for damages set forth in Article 423, paragraph 1 of the Companies Act, pursuant to Article 427,
paragraph 1 thereof. The upper limit of liability for damages under the agreement shall be the minimum limit ofliability prescribed in Article 425, paragraph 1 of the Companies Act. The limitation on liability is permitted

- 44 -

only when such Outside Directors or Outside Corporate Auditors have acted in good faith and without grossnegligence in performing their duties that caused the liability.
(3)

Overview of directors and officers liability insurance

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

- 45 -

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

classification

etc.

Fixed

Performance-based

compensationcompensation, etc.

(Millions of yen)

Basiccompensation

NumberStockof eligible

Bonusescompensation

officers(Monetary(Non-monetarycompensation)compensation,etc.)

Director(excluding

420

300

76

43

10

Outside Directors

19

19

-

-

2

Total

439

320

76

43

12

37

37

-

-

2

28

28

-

-

3

66

66

-

-

5

Outside Directors)

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

Note 1: The forgoing includes one Director who retired from office at the close of the 160th Ordinary
General Meeting of Shareholders held on June 29, 2021.
Note 2: “Bonuses” and “stock compensation” are paid to Executive Directors as performance-based
compensation, etc. The number of eligible recipients for the current fiscal year is 9. The amountof performance-based compensation, etc. shown in the above table is the amount of expense
recognized and the amount paid for the current fiscal year.
Note 3: Target values and actual results of indicators related to performance-based compensation, etc. forthe current fiscal year are as follows:(Bonuses)
Consolidated net sales

Consolidated operating profit

Target values

235.0 billion yen

5.5 billion yen

Actual results

237.4 billion yen

8.8 billion yen

Performance achievement ratios

101.02%160.00%- 46 -

(Stock compensation)(5)

Consolidated net sales

Consolidated operating profit(accumulated)(accumulated)

Target values

700.0 billion yen

15.2 billion yen

Actual results

679.3 billion yen

17.1 billion yen

Performance achievement ratios

97.04%

112.50%

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

(6)

Policy for determining the content of compensation, etc. for Directors and Corporate Auditors[Policy for determining compensation for Directors]
The Company resolved at the Board of Directors meeting held on March 9, 2021 on a policy for
determining the content of compensation, etc. for individual Directors, as a) to f) below. After being
deliberated on by the Corporate Governance Committee, a majority of the members of which are outside
officers, as an advisory body for the Board of Directors, the said policy was determined at the Board of
Directors based on the deliberations.
a) Basic policy for compensation for Directors
In determining compensation for Directors and Corporate Auditors of the Company, the basic policy is
as follows:- 47 -- The Company shall secure the transparency and objectivity of the compensation and maintain theappropriated level of compensation corresponding to their roles and responsibilities.
- Aiming for sustainable growth and mid- to long-term enhancement of the corporate value of theCompany and the Company Group, the Company shall promote the execution of duties in line withthe corporate philosophy and management strategy, and motivate them to achieve corporate targets.
The level of compensation shall be determined based on results of surveys on compensation for
Directors and Corporate Auditors conducted by a third party that target peer companies similar interms of business activity and scale.
b) Compensation system for Directors
Compensation for Executive Directors comprises of “basic compensation” as fixed compensation,“bonuses” that are linked to performance (short-term incentive compensation), and “stockcompensation” (mid- to long-term incentive compensation). Compensation for non-executive Directors
such as Outside Directors comprises only of “basic compensation.”c) Policy for determining the amount of compensation, etc. for individual Directors regarding basic
compensation (monetary compensation) (including the policy for the timing to provide compensation,etc. or the determination of conditions)
Basic compensation for Directors of the Company shall be monthly fixed compensation. The amountshall be determined by taking into account comprehensive factors, while considering the level of peer
companies and the length of service, etc., according to their roles and responsibilities.
d) Policy for determining performance-based compensation, etc. and the content and amount of nonmonetary compensation, etc., or the calculation method for the number (including the policy for thetiming to provide compensation or the determination of conditions)
Performance-based compensation, etc. shall comprise of “bonuses” as monetary compensation and“stock compensation” as non-monetary compensation, etc.
(Bonuses)
For bonuses, a standard payment shall be the amount obtained by multiplying the basic compensation
by a coefficient determined for each position. The individual payments for Chairman and President
shall be determined by multiplying the standard payment by the payment ratio according to theperformance achievement ratio. The individual payments for Executive Directors other than Chairman
and President shall be determined by adding the amounts obtained by multiplying the standard
payments by the payment ratio according to the performance achievement ratio, to the amounts
obtained by multiplying the standard payments by the payment ratio based on qualitative evaluations.
Bonuses shall fluctuate in the range of 0 to 200% depending on the degree of achievement of the target
values.
(Stock compensation)

- 48 -For stock compensation, points obtained by converting the individual benefits into the number ofshares shall be granted each fiscal year. The individual benefits shall be the amounts determined byadding the standard benefits (fixed portion) obtained by multiplying the basic compensation by acoefficient determined for each position, to the amount obtained by multiplying the standard benefits
by the payment ratio according to the performance achievement ratio (performance-based portion).
The performance-based portion of the stock compensation shall fluctuate in the range of 0 to 200%
depending on the degree of achievement of the target values. The guideline for the ratio of the fixed
portion and the performance-based portion shall be 50%, respectively (when the performanceachievement ratio is 100%).
Performance indicators related to the above performance-based compensation shall be “consolidated
net sales” and “consolidated operating profit,” which are defined as significant management indicators
related to evaluation of corporate performance, in order to function as incentives to achieve corporate
targets of the Company Group.
Bonuses

Performanceindicators

Stock compensation

Consolidated net sales andConsolidated net sales and consolidated

consolidated operating profit

operating profit* Target values shall be earnings* Target values shall be externally publishedforecast values announced invalues in the Mid-Term Management Plan, andfinancial results at theevaluated as accumulative values from the first

beginning of the fiscal year.

fiscal year to the evaluation year.

(Exceptions)
If an unpredictable situation (an event that significantly affects consolidated
business results or corporate value) occurs during the evaluation period, the target
value shall be revised by resolution of the Board of Directors after consulting with
the Corporate Governance Committee.
The points for the current fiscal year shall be

Timing of

The portion for the current fiscal

granted at the end of May in the following year.

payment andyear shall be paid at the end of

At the time of retirement, one point shall be

May in the following year.

converted to one stock, and the Company’s

deliverystocks shall be delivered.

- 49 -

If Executive Director isdismissed or if Executive
Director commits an act that
Clauses for
return ofcompensation

causes serious damage to theCompany or any other nonconformity similar to such act
before his/her retirement, all orpart of the bonus to be paid may
be reduced by resolution of theBoard of Directors.

If the prospective recipient is dismissed or if theprospective recipient commits an act that causes
serious damage to the Company or theCompany Group or any other non-conformity
similar to such act before his/her retirement, allor part of the stocks to be delivered and money
to be paid may be reduced by resolution of theBoard of Directors of the Company or theCompany Group.

e) Policy for determining the ratio of the amount of monetary compensation, the amount of performancebased compensation, etc., or the amount of non-monetary compensation, etc. to the amount ofcompensation, etc. for individual Directors
With regard to the compensation ratio of each type for Executive Directors, the level of peer
companies shall be considered so that it will be an appropriate ratio as an incentive to contribute to theenhancement of the corporate value of the Company. After being deliberated on by the Corporate
Governance Committee, a majority of the members of which are outside officers, as an advisory bodyfor the Board of Directors, the said policy shall be determined at the Board of Directors based on the
deliberations. The guideline for the compensation ratio of each type shall be as follows (when theperformance achievement ratio and the payment ratio based on qualitative evaluations are 100%):
Fixed compensation

Performance-based compensation, etc.

Basic compensation

Bonuses

Stock compensation

Chairman and President

1.0

0.2

0.2

Executive Directors otherthan Chairman andPresident

1.0

0.15

0.15

f) Matters for determining the content of compensation, etc. for individual Directors
With regard to part of compensation for individuals, Chairman and President shall be delegated thespecific contents based on the resolution of the Board of Directors. The content of such authority shallbe the amount of basic compensation for each Director and the qualitative evaluations of bonuses foreach Executive Director.
The Corporate Governance Committee shall deliberate annually on the level of compensation for eachposition of Directors, so that the authority may be properly exercised by Chairman and President.
Chairman and President who have received the said delegation shall be required to make decisions
based on the content of the deliberations.

- 50 -

Performance-based compensation, etc. of individual Executive Directors (excluding the abovementioned delegation) shall be determined in accordance with the rules (the rules which stipulate thecalculating method of performance-based compensation, etc. and non-monetary compensation, etc. inaccordance with the policy d) above) established by resolution of the Board of Directors.
After being deliberated on by the Corporate Governance Committee, a majority of the members ofwhich are outside officers, as an advisory body for the Board of Directors, the said contents of thecompensation, etc. shall be determined by the Board of Directors based on the deliberations.
[Policy for determining compensation for Corporate Auditors]
Basic compensation for Corporate Auditors shall be determined by deliberations of Corporate
Auditors, in the range of aggregate amount of compensation for Corporate Auditors approved at theGeneral Meeting of Shareholders.
(7)

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

(8)

Reasons that the Board of Directors judged that the content of compensation, etc. for individual Directors
for the current fiscal year was in line with the policy
In determining the content of compensation, etc. for individual Directors for the current fiscal year, theCorporate Governance Committee reviewed the compensation level for each position from various
perspectives, including consistency with the policy. Accordingly, the Board of Directors basicallyrespected the report and judged that it is in line with the policy.

- 51 -

(9)

Matters related to outside officers
Main activities of outside officers
Classification

Name

Main activities

Director

Tsuyoshi Nagano

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

Director

Yasuko Teraura

She is expected to provide valuable comments from an objective
perspective based on her insight as an attorney, and to perform
appropriate supervisory functions. She fully demonstrated thesupervisory functions for execution of business, as she attended
all of the 13 Board of Directors meetings held during the current
fiscal year, and made necessary remarks on discussion items anddeliberation items, from an objective perspective. In addition,
she attended the Corporate Governance Committee as a member,and actively expressed opinions on the nomination of the
Director and Corporate Auditor candidates and thecompensation, etc. for Directors and Corporate Auditors.

Corporate Auditor

Tomoyasu Asano

He is expected to perform appropriate audit functions based on
his experience and knowledge cultivated through managing
companies. He fully demonstrated the audit functions, as heattended all of the 13 Board of Directors meetings and all of the
9 Board of Corporate Auditors meetings held during the current
fiscal year, and made necessary remarks on discussion items anddeliberation items, from an objective perspective. In addition, he
attended the Corporate Governance Committee as a member,and actively expressed opinions on the nomination of the
Director and Corporate Auditor candidates and thecompensation, etc. for Directors and Corporate Auditors.

- 52 -

Corporate Auditor

Hideki Amano

He is expected to perform appropriate audit functions based on
his insight as a certified public accountant. He fully
demonstrated the audit functions, as he attended 12 of the 13
Board of Directors meetings and all of the 9 Board of Corporate
Auditors meetings held during the current fiscal year, and madenecessary remarks on discussion items and deliberation items,
from an objective perspective. In addition, he attended the
Corporate Governance Committee as a member, and actively
expressed opinions on the nomination of the Director andCorporate Auditor candidates and the compensation, etc. for
Directors and Corporate Auditors.

Corporate Auditor

Masatoshi Yano

He is expected to perform appropriate audit functions based on
his experience and knowledge cultivated through managing
companies. He fully demonstrated the audit functions, as heattended all of the 13 Board of Directors meetings and all of the
9 Board of Corporate Auditors meetings held during the current
fiscal year, and made necessary remarks on discussion items anddeliberation items, from an objective perspective. In addition, he
attended the Corporate Governance Committee as a member,and actively expressed opinions on the nomination of the
Director and Corporate Auditor candidates and thecompensation, etc. for Directors and Corporate Auditors.

5.

Matters related to the Accounting Auditor(1)

Name of the accounting auditor
KPMG AZSA LLC(2)Amount of compensation, etc. for the accounting auditor for the current fiscal year(i) Total amount of compensation, etc. for the services (auditing and attesting financial documents) set forthin Article 2, paragraph 1 of the “Certified Public Accountants Act (Act No. 103 of 1948)” payable by theCompany and its subsidiaries to the accounting auditor: 214 million yen(ii) Amount of compensation, etc. (out of (i) above) payable by the Company to the accounting auditor:
71 million yen(iii) Total amount of monies and other financial benefits payable by the Company and its subsidiaries to theaccounting auditor:

214 million yen

- 53 -

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

Reasons for the Board of Corporate Auditors’ agreement to the amount of compensation, etc. for theaccounting auditor
The Board of Corporate Auditors evaluated audit records during the fiscal year ended March 31, 2021,
and confirmed the content of the audit plan, the performance status of the auditing auditor, and rationaleof the estimate compensation during the fiscal year ended March 31, 2022; as a result, the Board of
Corporate Auditors agreed to the amount of compensation, etc. for the accounting auditor as set forth in
Article 399, paragraphs 1 and 2 of the Companies Act.

(4)

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

(5)

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

- 54 [Translation]
Consolidated Balance Sheet
As of March 31, 2022
Item
(Assets)
Current assets:
Cash and deposits
Notes receivable - trade
Accounts receivable - trade
Contract assets
Merchandise and finished goods
Work in process
Raw materials and supplies
Accounts receivable - other
Other
Allowance for doubtful accounts

Non-current assets:
Property, plant and equipment
Buildings and structures
Machinery, equipment and vehicles
Tools, furniture and fixtures
Other
Accumulated depreciation
Land
Construction in progress

Intangible assets
Goodwill
Other

Investments and other assets
Investment securities
Retirement benefit asset
Deferred tax assets
Other
Allowance for doubtful accounts

Total assets

AmountItem

Millions of yen
Amount(Liabilities)(154,786) Current liabilities:
30,740Notes and accounts payable - trade
Electronically recorded obligations 2,730
operating
35,694
Short-term borrowings
343
Current portion of bonds payable
42,847
Current portion of long-term
16,376borrowings
13,823
Accounts payable - other
4,437
Income taxes payable
9,102
Contract liabilities-1,310
Provision for bonuses
Provision for goods warranties
Provision for loss on lease contracts
Provision for business restructuring
Other provisions(172,747)
Other(105,100) Non-current liabilities:
77,046
Bonds payable
82,590Long-term borrowings
35,782
Lease obligations
9,909
Deferred tax liabilities
Deferred tax liabilities for land
-156,227
revaluation
54,056
Provision for loss on lease contracts
1,942
Provision for stock benefits
Provision for long-term goods
warranties
Provision for retirement benefits for(14,844)
directors (and other officers)
6,453
Other provisions
8,391
Retirement benefit liability
Asset retirement obligations
Other
Total liabilities(52,802) (Net assets)
43,536 Shareholders' equity:
773
Share capital
2,200
Capital surplus
6,397
Retained earnings-106
Treasury shares
Accumulated other comprehensive income:
Valuation difference on available-forsale securities
Deferred gains or losses on hedges
Revaluation reserve for land
Foreign currency translation adjustment
Remeasurements of defined benefit
plans
Non-controlling interests
Total net assets
327,533 Total liabilities and net assets(154,413)
21,027
7,138
63,709150
23,71911,359
1,546
6,574
4,174
409
348
169
212
13,873(51,494)300
28,752
4,096
3,069
3,614
436
232
90
19
29
7,617
1,070
2,166
205,908(96,028)
10,0007,245
79,075-292(24,038)
10,942
-331
8,190
5,116
120
(1,557)
121,624
327,533

- 55 [Translation]
Consolidated Statements of Income
From April 1, 2021
to March 31, 2022
Item
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit
Non-operating income
Interest income
Dividend income
Share of profit of entities accounted for using equity method
Foreign exchange gains
Royalty income
Other
Non-operating expenses
Interest expenses
Other
Ordinary profit
Extraordinary income
Subsidy income
Extraordinary losses
Loss on the spread of infectious disease
Business restructuring expenses
Profit before income taxes
Income taxes - current
Income taxes - deferred
ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent

Millions of yen
Amount237,382
138,203
99,17890,4088,770(3,557)
67
774
898
699
420
696
(2,388)
896
1,492
9,939
(133)
133
(1,196)
974
221
8,876
2,138
125
6,611
196
6,415

- 56 [Translation]
Non-Consolidated Balance Sheet
As of March 31, 2022
Item
(Assets)
Current assets:
Cash and deposits
Prepaid expenses
Short-term loans receivable
Accounts receivable - other
Other

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

Total assets

AmountItem

Millions of yen
Amount(Liabilities)
66,972 Current liabilities:
8,230
Short-term borrowings
741
Current portion of long-term
51,423borrowings
6,106
Lease obligations (current)
469
Accounts payable - otherAccrued expenses
Income taxes payable
Deposits received
120,672
Unearned revenue
32,659Provision for bonuses
6,712
Other
280 Non-current liabilities:
1,593
Long-term borrowings
24,043
Lease obligations (non-current)
22
Deferred tax liabilities
6
Deferred tax liabilities for land
revaluation
2,448
Provision for stock benefits
1,952
Asset retirement obligations (non3current)
471
Guarantee deposits
20
Other
Total liabilities(Net assets)
85,564 Shareholders' equity:
22,541
Share capital
Capital surplus
61,023
Legal capital surplus
0
Other capital surplus
Retained earnings
5,760
Legal retained earnings
Other retained earnings
24
Retained earnings brought
forward29
Treasury shares
1,720 Valuation and translation adjustments:
298
Valuation difference on available-for-5,833
sale securities
Deferred gains or losses on hedges
Revaluation reserve for land
Total net assets
187,644 Total liabilities and net assets

90,88556,77723,719
9
2,593
443
59
6,600
232
391
57
39,63928,752
12
3,685
3,614
226
123
3,142
82
130,524
38,86010,000
6,625
2,378
4,246
22,500121
22,379-265
18,260
10,134-64
8,190
57,120187,644

- 57 [Translation]
Non-Consolidated Statements of Income
From April 1, 2021
to March 31, 2022
Item
Operating revenue
Dividend from subsidiaries and associates
Management fee income
Royalty income
Operating expenses
Operating loss
Non-operating income
Interest income
Dividend income
Other
Non-operating expenses
Interest expenses
Rental expenses on real estate
Other
Ordinary loss
Extraordinary income
Reversal of allowance for investment loss of subsidiaries and affiliates
Extraordinary losses
Loss on the spread of infectious disease
Profit before income taxes
Income taxes - current
Income taxes - deferred
ProfitMillions of yen
Amount12,043
6,996
2,510
2,536
12,332
288
1,770
478
745
546
1,956
702
923
329
473
1,682
1,682
53
53
1,155
-1,958-143
3,257

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

Independent Auditor’s Report

May 9, 2022
KPMG AZSA LLC
Tokyo Office
Akihiro Ohtani
Designated Limited Partner
Engagement Partner
Certified Public Accountant
Toshiyuki Nishida
Designated Limited Partner
Engagement Partner
Certified Public Accountant
Kenji Ueda
Designated Limited Partner
Engagement Partner
Certified Public Accountant
The Board of Directors
SEIKO HOLDINGS CORPORATION

OpinionPursuant to Article 444, Paragraph 4 of the Companies Act, we have audited the accompanying
consolidated financial statements, which comprise the consolidated balance sheet, the consolidated
statements of income, the consolidated statements of changes in equity and the notes to consolidated
financial statements of SEIKO HOLDINGS CORPORATION (the “Company”) for the fiscal year
from April 1, 2021 through March 31, 2022.
In our opinion, the consolidated financial statements referred to above present fairly, in all material
respects, the financial position and results of operations of SEIKO HOLDINGS CORPORATION,
which consists of the Company and its consolidated subsidiaries, for the period covered by the
consolidated financial statements in conformity with accounting principles generally accepted inJapan.
Basis for the Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our
responsibility under the auditing standards is stated in “Auditor’s Responsibility for the Audit of theConsolidated Financial Statements.” We are independent of the Company and its consolidated
subsidiaries in accordance with the provisions related to professional ethics in Japan, and are fulfillingother ethical responsibilities as an auditor. We believe that we have obtained sufficient and appropriate
audit evidence to provide a basis for our audit opinion.

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

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

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

May 9, 2022
KPMG AZSA LLC
Tokyo Office
Akihiro Ohtani
Designated Limited Partner
Engagement Partner
Certified Public Accountant
Toshiyuki Nishida
Designated Limited Partner
Engagement Partner
Certified Public Accountant
Kenji Ueda
Designated Limited Partner
Engagement Partner
Certified Public Accountant
The Board of Directors
SEIKO HOLDINGS CORPORATION

OpinionPursuant to Article 436, Paragraph 2, Item 1 of the Companies Act, we have audited the accompanying
financial statements, which comprise the non-consolidated balance sheet, the non-consolidated
statements of income, the non-consolidated statements of changes in equity and the related notes, andthe accompanying supplementary schedules of SEIKO HOLDINGS CORPORATION (the“Company”) for the 161st fiscal year from April 1, 2021 through March 31, 2022.
In our opinion, the financial statements and the accompanying supplementary schedules referred toabove present fairly, in all material respects, the financial position of the Company as of March 31,
2022, and the results of its operations for the year then ended in conformity with accounting principles
generally accepted in Japan.
Basis for the Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our
responsibility under the auditing standards is stated in “Auditor’s Responsibility for the Audit of the
Financial Statements and the Accompanying Supplementary Schedules.” We are independent of theCompany in accordance with the provisions related to professional ethics in Japan, and are fulfillingother ethical responsibilities as an auditor. We believe that we have obtained sufficient and appropriate
audit evidence to provide a basis for our audit opinion.

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

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

- 64 [Translation]
Certified copy of audit report by the Board of Corporate Auditors
Audit Report
The Board of Corporate Auditors has deliberated on, prepared and submitted this Audit Report as
below, based on the audit reports made by the Corporate Auditors concerning the execution of duties
by Directors for the fiscal year ended March 31, 2022 (from April 1, 2021 to March 31, 2022).
1.

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

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

(2)

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

Attending Board of Directors meetings and other important meetings to receive
reports regarding the execution of duties from Directors and employees, and requested
explanations as necessary. Each Corporate Auditor also inspected important decisionmaking documents and other materials, and examined the status of operations and thecondition of the assets of the Company. With regard to subsidiaries, the Corporate
Auditors communicated and exchanged information with directors and corporate
auditors thereof, and received reports on business from those subsidiaries asnecessary.

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

(iii)

The Corporate Auditors monitored and examined whether the Accounting Auditor wasmaintaining an independent position and conducting audits appropriately, obtained
reports on the execution of duties from the Accounting Auditor, and requested
explanations as necessary. In addition, the Corporate Auditors were informed by the
Accounting Auditor that a “system to ensure the duties are performed properly” (thematters stipulated in the respective items of Article 131 of Corporate Accounting
Rules) had been implemented in accordance with the “quality management standards
concerning audits” (Business Accounting Deliberation Council, October 28, 2005),
and requested explanations as necessary.

- 65 In accordance with the aforementioned procedures, the Corporate Auditors reviewed thebusiness report and accompanying schedules thereto, and the financial statements (nonconsolidated balance sheets, non-consolidated statements of income, non-consolidated
statements of changes in shareholders’ equity, and notes to non-consolidated financial
statements) and accompanying schedules thereto, and consolidated financial statements(consolidated balance sheets, consolidated statements of income, consolidated statements ofchanges in shareholders’ equity, and notes to consolidated financial statements) for the fiscal
year ended March 31, 2022.
2.

Results of audits(1)

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

(ii)

(iii)

(2)

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

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

(3)

Results of the audit of the consolidated financial statements
The methods and results of the audit by KPMG AZSA LLC, Accounting Auditor, are fair andreasonable.

May 10, 2022
Board of Corporate Auditors
Seiko Holdings Corporation
Haruhiko TakagiStanding Corporate Auditor
Takashi Nishimoto
Standing Corporate Auditor
Tomoyasu Asano
Outside Corporate Auditor
Hideki Amano
Outside Corporate Auditor
Masatoshi Yano
Outside Corporate Auditor