[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 8, 2020
To Shareholders with Voting Rights:
Yoshinobu Nakamura
President
SEIKO HOLDINGS CORPORATION
5-11, Ginza 4-chome, Chuo-ku, TokyoNOTICE OF
THE 159TH 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 159th Ordinary General Meeting of Shareholders of
SEIKO HOLDINGS CORPORATION (the “Company”). The meeting will be held for the purposes
described below.
Recently, the Japanese government and prefectural governors have requested that citizens refrainfrom going out to prevent the spread of the novel coronavirus. As a result of carefully considering our
response to this situation, the Company has decided to hold the meeting upon implementing
appropriate measures to prevent the infection.
In view of the request for the refraining from going out, as well as from the perspective ofpreventing the spread of the infection, we request that shareholders exercise their voting rights inadvance in writing, or via the Internet as much as possible. Regardless of the condition of yourhealth, we request that you refrain from visiting the venue on the day of the meeting.
Shareholders will be able to watch the proceedings of the Meeting via live streaming on the Internet.
Please review the attached Reference Documents for the General Meeting of Shareholders (pages 5
through 11), and exercise your voting rights in accordance with the “Notice regarding Exercise of
Voting Rights” (pages 3 through 4) by 6 p.m. on Thursday, June 25, 2020, Japan time.
1. Date and Time:

Friday, June 26, 2020, 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
This year, the number of seats that we are able to provide will decrease
considerably compared with usual years, as the spacing between seats will
be expanded to prevent the spread of the novel coronavirus infection.
Accordingly, we may have to refuse admission of shareholders to thevenue on the day.

-23. 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, 2020 (from April 1, 2019 to March 31, 2020)

Proposals to be resolved: Proposal 1: Distribution of Surplus
Proposal 2: Election of One (1) Director
Proposal 3: Election of Three (3) Corporate Auditors
4. 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 days prior to the date of the General
Meeting of Shareholders.

<Request to Our Shareholders>
The meeting will be streamed live on the Internet. Please see the enclosed “Notice of Live
Streaming on the Internet.”
・ 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
to the operation of the meeting will be published on the Company’s website.
・ 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. Shareholders who do not wear a mask
may be refused admission and asked to leave.
・ 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/

-3Regarding 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.
<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: Friday, June 26, 2020, 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
Thursday, June 25, 2020, 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
Thursday, June 25, 2020, 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 4 fordetails.

Exercise of voting rights via
the Internet
Deadline: By 6 p.m. on
Thursday, June 25, 2020, 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 4 fordetails.

-4Exercise 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 Saturdays, Sundays, and public 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.

-5[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: 37.5 yen
Total amount of dividends: 1,550,409,450 yen
Note: As the Company has already paid an interim dividend of 37.5 yen per share, the annual
dividend for the 159th fiscal year will be 75 yen per share.
(3) Effective date of distribution of surplus
June 29, 2020

-6Proposal 2: Election of One (1) Director
The Company proposes the election of one (1) Director to replace Ms. Hiromi Kanagawa, Director,
who will retire from office by voluntary resignation at the closing of this General Meeting of
Shareholders.
The term of office of the newly elected Director shall be coterminous with the expiration of theterms of office of other incumbent Directors in accordance with the provisions of the Articles ofIncorporation of the Company.
The candidate for Director is as follows.
Kiyoko Niwasaki (Date of Birth: January 20, 1964) (Newly Appointed)(1)

Number of shares of the Company held: 1,000(2)Length of service as a Director: ―(3)

Attendance at the Board of Directors meetings during the
fiscal year ended March 31, 2020: ―(4)

Career, positions, and responsibilities
April 1986

Joined the Company

April 2013

Senior Vice President and General Manager, Public Relations Department
of SEIKO WATCH CORPORATION

June 2015

Director, Senior Vice President of SEIKO WATCH CORPORATION

June 2018

Director, Executive Vice President of SEIKO WATCH CORPORATION

December 2019(5)

Senior General Manager, Public Relations Department and Sports &Corporate Culture Department, and General Manager, Sports andCorporate Culture Department of the Company (to present)

Significant concurrent positions:―(6)

Reasons for nomination as candidate for director:
The Company nominates Ms. Kiyoko Niwasaki as a candidate for Director, expecting her toperform full functions as a Board member in the decision-making to execute importantbusiness and supervise the other Directors’ execution of duties by utilizing her wealth ofexperience and achievement, including the following: (i) having been engaged mainly inpublic relations and marketing as a member of the Company Group since joining theCompany; and (ii) recently promoting corporate branding and branding strategies of theWatches Business by serving as Senior General Manager, Public Relations Department andSports & Corporate Culture Department of the Company, and Director, Executive Vice
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 Ms. Kiyoko Niwasaki.

-7Proposal 3: Election of Three (3) Corporate Auditors
The Company proposes the election of three (3) Corporate Auditors, as the terms of office of three (3)Corporate Auditors, Mr. Seiichi Mikami, Mr. Haruhiko Takagi and Mr. Tomoyasu Asano, will expire at
the closing of this General Meeting of Shareholders.
The Company has obtained consent from the Board of Corporate Auditors with regard to this proposal.
The candidates for Corporate Auditors are as follows.
1.

Haruhiko Takagi (Date of Birth: January 10, 1959) (Reappointed)(1)

Number of shares of the Company held: 5,600(2)Length of service as a Corporate Auditor: 4 years(3)

Attendance at the Board of Directors meetings during the fiscal
year ended March 31, 2020: 13 out of 13 meetings (100%)
Attendance at the Board of Corporate Auditors meetings during
the fiscal year ended March 31, 2020: 10 out of 10 meetings(100%)(4)

Career and positions
April 1982

Joined the Company

June 2004

General Manager, Finance & Accounting Department of theCompany

June 2007

Director of the Company

November 2009

(5)

General Manager, Corporate Planning & Financial Control
Division, Seiko Optical Products Co., Ltd.

May 2010

Director of Seiko Optical Products Co., Ltd.

April 2014

Standing Corporate Auditor, Seiko Solutions Inc.

June 2016

Standing Corporate Auditor of the Company (to present)

January 2020

Outside Corporate Auditor of OHARA INC. (to present)

Significant concurrent positions:
Outside Corporate Auditor of OHARA INC.

(6)

Reasons for nomination as candidate for Corporate Auditor:
Mr. Haruhiko Takagi has been engaged mainly in finance and accounting as a memberof the Company Group since joining the Company. After serving as Director of theCompany and its group company, he is currently serving as Standing Corporate
Auditor of the Company since June 2016. The Company nominates Mr. Takagi as a
candidate for Corporate Auditor, expecting him to perform appropriate audit functions
based on his thorough knowledge of the Company Group’s businesses acquired
through the performance of these duties, as well as his reasonable-degrees ofknowledge about finance and accounting.

-8(7)

Special relationship of interest between the Company and the candidate for Corporate
Auditor:There is no special relationship of interest between the Company and Mr. Haruhiko
Takagi.

-92.

Takashi Nishimoto (Date of Birth: September 9, 1962) (Newly Appointed)(1)

Number of shares of the Company held: 1,000(2)Length of service as a Corporate Auditor: ―(3)

Attendance at the Board of Directors meetings during the fiscal
year ended March 31, 2020: ―Attendance at the Board of Corporate Auditors meetings during
the fiscal year ended March 31, 2020: ―(4)

Career and positions(5)

April 1985

Joined the Company

June 2009

General Manager, General Affairs Department of the Company

October 2012

General Manager, Legal & Intellectual Property Department of
the Company

January 2015

Senior Vice President of SEIKO Solutions Inc.

June 2015

Director and Senior Vice President of SEIKO Solutions Inc.

April 2019

Director and Executive Vice President of SEIKO Solutions Inc.

June 2020

Advisor of SEIKO Solutions Inc. (to present)

Significant concurrent positions:―(6)

Reasons for nomination as candidate for Corporate Auditor:
Mr. Takashi Nishimoto has been engaged mainly in legal affairs, general affairs,
finance and accounting as a member of the Company Group since joining theCompany. He has experience in corporate management, serving as Director andExecutive Vice President of SEIKO Solutions Inc. The Company nominates Mr.
Nishimoto as a candidate for Corporate Auditor, expecting him to perform appropriate
audit functions by utilizing his wealth of experience and knowledge, including his
reasonable-degrees of knowledge about legal affairs, finance, and accounting acquired
through the performance of these duties.

(7)

Special relationship of interest between the Company and the candidate for Corporate
Auditor:There is no special relationship of interest between the Company and Mr. Takashi
Nishimoto.

- 10 3.

Tomoyasu Asano (Date of Birth: April 27, 1953)(Reappointed) (Outside Corporate Auditor) (Independent Auditor)(1)

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

Length of service as a Corporate Auditor: 4 years(3)

Attendance at the Board of Directors meetings during the fiscal
year ended March 31, 2020: 13 out of 13 meetings (100%)
Attendance at the Board of Corporate Auditors meetings during
the fiscal year ended March 31, 2020: 10 out of 10 meetings(100%)(4)

Career and positions(5)

April 1978

Joined The Dai-ichi Mutual Life Insurance Co., Ltd.

April 2006

Executive Officer of The Dai-ichi Mutual Life Insurance Co.,Ltd.

April 2009Managing Executive Officer of The Dai-ichi Mutual Life
Insurance Co., Ltd.

June 2009

Director, Managing Executive Officer of The Dai-ichi MutualLife Insurance Co., Ltd.

April 2010

Director, Managing Executive Officer of The Dai-ichi Life
Insurance Co., Ltd.

October 2013

Outside Auditor of Tokyu Fudosan Holdings Corporation (topresent)

April 2014

Director, Senior Managing Executive Officer of The Dai-ichi
Life Insurance Co., Ltd.

June 2016

Outside Corporate Auditor of the Company (to present)

October 2016

Director, Senior Managing Executive Officer of Dai-ichi Life
Holdings, Inc. (retired in March 2017)

June 2017

Chief Director of the Cardiovascular Institute (to present)

Significant concurrent positions:Chief Director of the Cardiovascular InstituteOutside Auditor of Tokyu Fudosan Holdings Corporation(6)

Reasons for nomination as candidate for Outside Corporate Auditor:
The Company nominates Mr. Tomoyasu Asano as a candidate for Outside Corporate
Auditor, expecting him to perform appropriate audit functions based on his knowledge
and experience cultivated in his career as a management member of corporations formany years.

- 11 (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. Tomoyasu
Asano.
Mr. Asano previously worked at Dai-ichi Life Holdings, Inc. However, Mr. Asano has
not been involved in execution of operations at Dai-ichi Life Holdings, Inc. since heretired from office of Director, Senior Managing Executive Officer of the said
company in March 2017. The Dai-ichi Life Group and the Company Group havetransactions related to insurance contracts. However, these transactions constitute lessthan one percent of consolidated ordinary revenues (equivalent to consolidated net
sales) of Dai-ichi Life Holdings, Inc. and the Company’s consolidated net sales, and isthus insignificant. In addition, the Company Group has borrowed funds from the Daiichi Life Group. However, the amount of such borrowings constitutes less than two
percent of consolidated total assets of Dai-ichi Life Holdings, Inc. and the Company,
and is thus insignificant.
Mr. Tomoyasu Asano satisfies the requirements of an independent auditor under therules of the Tokyo Stock Exchange, and has been reported thereto as an independent
auditor. If his appointment is approved at this Ordinary General Meeting of
Shareholders, he will continue to serve as an independent auditor.

Note: The Company entered into an agreement with Mr. Tomoyasu Asano to limit liability
for damages set forth in Article 423, paragraph 1 of the Companies 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 1of the Companies Act. If his appointment is approved, the Company will continue theaforementioned liability limitation agreement with him.

[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 outside officers, as an advisory body for the
Board of Directors.
The nomination of the Director candidate listed in Proposal 2 and the nomination of the Corporate
Auditor candidates listed in Proposal 3 were determined by the Board of Directors after being
deliberated on by that committee.

- 12 -[For reference]
Basic Principles of Corporate Governance
As a company based on the principles to "being a company that is trusted by society, The Company
positions as core business challenges compliance with all laws and regulations, implementation ofmanagement transparency and fairness, and honoring social ethics—and to realize these goals by
striving to apply and reinforce its corporate governance framework. The Company will work to drive
sustainable growth and enhance the corporate value of the Company and the Company Group.
Basic Policy(1) Securing the Rights and Equal Treatment of Shareholders
The Company strives to develop a necessary environment for appropriately and effectively
securing shareholder rights such as voting rights at the general meeting of shareholders and provide
necessary information accurately to ensure that shareholders can appropriately exercise their rights.
The Company is also committed to securing equality between shareholders, including minority
shareholders and foreign shareholders.
(2) Appropriate Cooperation with Stakeholders other than Shareholders
As well as with shareholders, the Company also strive to cooperate with other stakeholders
including customers, employees, business partners and members of the communities where its
facilities are located. The Company believes that it bears a social responsibility to contribute fully tothe realization of a sustainable society and to honor the Group's basic principles of "being acompany that is trusted by society."(3) Ensuring Appropriate Information Disclosure and Transparency
The Company shall appropriately make information disclosure not only in compliance with therelevant laws and regulations, but also strives to provide clear and useful information in a timely
and detailed way beyond that required by law in order to facilitate accurate evaluations by its
shareholders and other stakeholders and to engage in constructive dialogue with them.
(4) Responsibilities of the Board
The Board of Directors is committed to a free, open and constructive style of management. The
Company aims to ensure that it executes its duties timely and decisively and that its actions create
an environment where good decisions can be taken by the senior management to achieve sustainablegrowth and increased corporate value over the mid- to long-term.
(5) Dialogue with Shareholders
The Company promotes constructive dialogue with shareholders so as to support sustainablegrowth and increase corporate value over the mid- to long-term based on "Basic Policy on
Constructive Dialogue with Shareholders."­ 13 ­
Corporate Governance Structure

- 14 -

[Translation][Attached Documents]
Business Report for the Fiscal Year Ended March 2020 (From April 1, 2019 To March 31, 2020)
1.

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

Business developments and results

In the world economy, up to the third quarter of the fiscal year ended March 31, 2020, growth in the U.S. showedsigns of a slowdown, primarily due to sluggish personal consumption, despite a steady U.S. employment
environment. In Europe, while the U.K. economy lacked strength due to uncertainty about the outlook associatedwith the BREXIT issue, an improvement was seen in business sentiment in the Eurozone countries, with the
exception of France, which was affected by large-scale demonstrations. In Asia, growth was sluggish in many
economies, mainly China, due in part to the impact of demonstration activities in Hong Kong and U.S.-China
trade friction. Meanwhile, from the fourth quarter onward, the global outbreak of the novel coronavirus has had amajor impact on the world economy. While a deterioration in company business sentiment began to be observed
from roughly mid-February in the U.S., the infection spread rapidly in Europe from early March, and then in the
U.S. during the middle of that month, leading to a sudden change in the economy. In China, while real GDP
growth from January to March 2020 fell 6.8% year on year, the economy began to move toward normalizationfrom March onward.
In the Japanese economy, while personal consumption remained steady up to the second quarter, mainly due to asurge in demand before the consumption-tax hike, business sentiment deteriorated from October onward due tothe tax hike as well as unusual weather, in addition to continued weak overseas demand. Furthermore, the effectsof the novel coronavirus gradually emerged from the beginning of February, and its effects on economic activities
became more pronounced in March.

Looking toward what the Seiko Holdings Group aims to be in FY2025, the Company has formulated the Seventh
Mid-Term Management Plan, which is positioned as an “aggressive approach,” and is being promoted from thecurrent fiscal year. From the first year of the plan, the Company has worked to strengthen branding investment toaccelerate the expansion of overseas business, expand our business domains through M&A investment, anddevelop high value-added products and services that lead to an enhancement of its brand value.
However, due to the impact of sluggish electronic devices market conditions resulting from U.S.-China trade
friction and the spread of the novel coronavirus, for the fiscal year ended March 31, 2020, the Company reported
consolidated net sales of 239.1 billion yen, a year-on-year decrease of 8.1 billion yen, or 3.3%. On a per-segment
basis, while sales under the Watches Business and Electronic Devices Business declined year on year, sales under
the Systems Solutions Business progressed favorably. On an overall consolidated basis, domestic net sales cameto 137.5 billion yen (a year-on-year decrease of 1.8%), and overseas net sales were 101.6 billion yen (a year-onyear decrease of 5.3%). Overseas net sales comprised 42.5% of net sales overall.

- 15 -In terms of income, operating profit decreased 3.2 billion yen year on year to 6.1 billion yen (a year-on-year
decrease of 34.7%), mainly due to an approximate 11% year-on-year increase in advertising and promotion
expenses along with the strengthening of investment, in addition to the impact of the decline in net sales. Ordinary
profit decreased 4.4 billion yen year on year to become 7.0 billion yen (a year-on-year decrease of 38.6%), due todeterioration in non-operating income and expenses mainly owing to a decrease in share of profit of entities
accounted for using equity method. Gain on sales of non-current assets of 0.3 billion yen was posted as
extraordinary income. Retirement benefit expenses of 0.1 billion yen associated with a revision of the law for
retirement benefits overseas, business restructuring expenses of 0.2 billion yen associated with the termination ofsome businesses, an impairment loss of 0.2 billion yen, as well as loss on the spread of infectious disease of 0.3
billion yen, for a total of 1.1 billion yen as extraordinary losses. As a result, profit attributable to owners of parent
minus income taxes and profit attributable to non-controlling interests were 3.3 billion yen (a year-on-year
decrease of 63.3%).
In addition, with the aim of further strengthening the technological development capabilities of the entire Group,
promoting ESG activities, and accelerating support for the SDGs, the Company has decided to transfer R&D andproduction technology development functions, as well as headquarters functions related to quality control and theenvironment from its subsidiary, Seiko Instruments Inc. to the Company, from April 1, 2020.
The average exchange rates for the current fiscal year were 108.7 yen to 1 US dollar and 120.8 yen to 1 euro.

Results for each segment are as follows.

a. Watches BusinessNet sales under the Watches Business came to 135.4 billion yen, a year-on-year decrease of 6.3 billion yen, or
4.5%.
While the environment in Hong Kong, a significant market for high-end watches, has deteriorated due to theimpact of demonstration activities, the market for high-end watches performed favorably, particularly in the U.S.,
China, Japan, and other areas. Meanwhile, severe market conditions continued in the market for affordable-priced
watches. In addition, from February 2020 onward, the spread of the novel coronavirus has had a major impact on
the watch markets of each country.
Under such circumstances, the Company has promoted the Global Brands strategy set out in the basic policies of
the Seventh Mid-Term Management Plan, and worked to accelerate the expansion of sales in Japan, the U.S., andAsia, such as through the opening of new Grand Seiko Boutiques in Japan and overseas, as well as the opening of
the world’s first Seiko Prospex Boutique in Ginza, Tokyo in August 2019.

- 16 -Net sales in the watches business in Japan grew steadily up to the second quarter. However, personal consumption
fell due to a suspension or shortening of opening hours across a wide range of industries, as well as self-restraint
regarding going out on weekends associated with the spread of the novel coronavirus, in addition to the effects ofsluggish personal consumption following the consumption-tax hike and natural disasters. Inbound demand fromforeign tourists to Japan decreased due to tightened immigration regulations, as well as prohibition of overseas
travel and self-restraint in other countries. Accordingly, net sales fell year on year. In terms of individual brands,
sales of Grand Seiko increased, mainly for the Spring Drive models, which marked the 20th Anniversary of its
launch, and the Quartz models, which marked its 50th Anniversary. While sales of Seiko Prospex, one of our
Global Brands, were also sluggish in the fourth quarter, the Company was able to maintain net sales for the fullyear at the same level as the previous fiscal year. On a distribution channel basis, while sales at mass retailers weresluggish due to a decrease in the number of tourists visiting Japan, net sales at department stores, which grewsteadily up to the second quarter due to a surge in demand before the consumption-tax hike, exceeded the previous
fiscal year for the full year.
Overseas, Global Brands continued to grow, mainly for Grand Seiko and Seiko Prospex, and net sales in thewatches business increased year on year, excluding the impact of changes in the distribution of some products andexchange rates. In the U.S., Grand Seiko performed steadily, while sales expanded in Europe, mainly in high-end
distribution channels in Germany and other countries. In Asia, sales in China grew significantly year on year,
while sales in Taiwan and Australia also increased year on year on a local currency basis.
The watch movements business enjoyed favorable sales of mechanical movements, while demand for analogue
quartz movements continued to be stagnant.
Operating profit was 10.1 billion yen, a decrease of 0.2 billion yen, or 2.2%, mainly due to the decrease in net
sales. In addition, operating profit increased by 0.9 billion yen, as a result of a change in the allocation method of
expenses related to headquarters for some consolidated subsidiaries.
b. Electronic Devices BusinessNet sales under the Electronic Devices Business came to 51.7 billion yen, a year-on-year decrease of 3.7 billion
yen, or 6.8%. Operating profit was 0.6 billion yen, a year-on-year decrease of 0.8 billion yen, or 56.6%. Net salesof thermal printer mechanism products, printer-related products such as inkjet print heads, and integrated circuits
for crystal oscillators were sluggish due to a slowdown in the Chinese economy. Meanwhile, sales of micro
batteries and quartz crystals grew as we worked to shift our portfolio to key products in our areas of strength andgrowth markets in line with the basic policies of the Seventh Mid-Term Management Plan. In addition, a change
in the allocation method of expenses related to headquarters for some consolidated subsidiaries resulted in an
increase of 1.0 billion yen in operating profit.
c. Systems Solutions BusinessNet sales under the Systems Solutions Business came to 32.8 billion yen, a year-on-year increase of 2.0 billion
yen, or 6.6%. Operating profit was 3.0 billion yen, a year-on-year increase of 0.6 billion yen, or 25.4%. The IT-

- 17 -

related and telecommunications-related markets performed strongly against a backdrop of severe labor shortages,
as well as a shift to cashless transactions associated with the consumption-tax hike. Under these circumstances, inaddition to favorable sales of digital contract solutions, application performance management software, andmobile payment devices and services, net sales of products for individuals also grew. In terms of income, profit
increased year on year by continuing to improve profits for each product.
d. Others
Net sales under Others amounted to 29.5 billion yen, a year-on-year increase of 1.2 billion yen, or 4.3%.
Operating profit was 0.3 billion yen, a year-on-year decrease of 0.3 billion yen, or 53.2%. Despite the impact of
the spread of the novel coronavirus in the fourth quarter, in addition to reaction following the consumption-tax
hike in the Clocks Business and the Wako Business, net sales for the full year increased year on year. However,operating profit fell year on year due to changes in the business mix.

- 18 -

(2)

Issues that need to be addressed by the Corporate GroupThe Company has established an individual philosophy and a long-term vision and formulated various basic
policies, etc., including its fundamental philosophy of corporate ethics, in addition to practicing risk management,
guided by its corporate philosophy of being “A Company that is Trusted by Society” and founded on corporate
governance. On this basis, the Company will engage in business activities with targets that are shared throughout
the entire Group. The Company believes that its corporate social responsibility (CSR) is to contribute to thesustainable development of society and pursue enhancement of corporate value through these business activities.
As part of these efforts for CSR, the Company is actively working toward environmental considerations (E),contributing to solving social issues (S), and creating systems that maintain the trust of society (G), and is aiming
to further enhance our corporate value. In addition, the Company has formulated and is promoting the Seventh
Mid-Term Management Plan, which begins in the fiscal year ended March 31, 2020. The contents are as follows.

Seventh Mid-Term Management Plan (from the fiscal year ended March 31, 2020 through the fiscal year ending
March 31, 2022)
1.

Long-term vision
The Seiko Holdings Group will continue the long-term vision also in the Seventh Mid-Term
Management Plan, established when the Sixth Mid-Term Management Plan was formulated,based on the Group slogan, “SEIKO Moving Ahead, Touching Hearts”.
We aim to be a trend-setting and innovative global group that shares excitement with all our
stakeholders around the world by providing products and services that exceed the highest
expectations of our customers.

2.

What the Seiko Holdings Group aims to be in FY2025
The Company has set out a more detailed image of what the Seiko Holdings Group aims to be in
FY2025 based on the long-term vision.
Being a leading global player, SEIKO continues to strive beyond all expectations.
Growing our fields of expertise and meeting challenges in new areas with the highest levelsof reliability.
Being expected by the world to create the future.
We will grow with our sophisticated structures and human resources, as a solid and unitedgroup.

3.

Basic policies of the Seventh Mid-Term Management Plan
Looking toward FY2025, the Company has set the following basic policies for this three-year
period with the aim of achieving the Seventh Mid-Term Management Plan.

- 19 -

With everyone fully committed and focused,
We will invest aggressively in scenarios for the future.
Backed by the strength of the SEIKO brand, our precision technologies and ability to propose
solutions
Will provide us with sustained growth.
4.

Initiatives for the environment and issues surrounding business(i)

Watches Business
The Company started the Global Brand strategy from the first fiscal year of the previous mid-term
management plan, and Global Brands grew greatly in those three years, particularly Grand Seiko,luxury watches and Seiko Prospex, sports watches. Working to further reduce costs also led tosteady results in the Watches Business, including improved profitability.
Based on the results, in the next three years, the Watches Business will see Seiko grow towards atrue global brand that is ahead of the rest with cutting-edge technologies, expert craftsmanship,
and a uniquely Japanese sense of beauty, and is set to become a major player in the world watch
market looking ahead to the year 2025. With the Global Brand strategy as its growth engine, theCompany will further accelerate its strategy to accomplish revolutionary transformation, while
also expanding sales both in Japan and overseas, particularly in the United States and Asia.

(ii)

Electronic Devices Business
The Electronic Devices Business saw slower growth in some products due to a slowdown in the
Chinese market, but the profitability remained stable as a result of expanded sales in fields ofexpertise, improvement of unprofitable businesses, and cost reductions. In the Seventh Mid-Term
Management Plan, the Company will further evolve “Craftsmanship, Miniaturization andEfficiency” technologies and promote selection and concentration in order to shift key productportfolio to areas of strength and growth markets.

(iii)

Systems Solutions Business
The Systems Solutions Business saw the addition of IIM Corporation, a company that deploys
security solutions and performance management for IT systems, to its subsidiary, as well as steady
growth during the previous mid-term management plan via increased sales in new fields ofbusiness and expansion in stock business. The Company will continue expansion of stockbusiness while also aiming to expand business and build a business structure that is resilient toenvironmental changes, via diversification including the utilization of M&A. In addition, theCompany will reform behavioral patterns and both power up and shape up its organization.

- 20 -

(iv)

The Clocks/Wako/Time Systems Business
The Clocks/Wako/Time Systems Business has a long history of supporting the development of
Seiko, and still retains links with many of its stakeholders, making it truly positioned as a legacy
business. This business will continue to play a role in improving the value of the brand and theTokyo Olympics/Paralympics will be an opportunity to pursue further globalization.

5.

Initiatives for other issues(i)New research and development
The Company will strive to develop new high-end movements, new materials, and connected
modules via active investment, in order to achieve a shift to high-end, high-added value products.
Furthermore, the Company will focus on the research and development of new products, newmaterials, and new technologies for growth markets in not only the Watches Business, but also theElectronic Devices Business and the Systems Solutions Business.

(ii)

Enhancing management foundation
The Company will enhance its branding, human resources, and financial strategies in order tostrengthen its management foundation.
Branding strategy involves further boosting image as a dynamic company by strengthening its
fields of sports and music while actively promoting digital communications and events foryounger generations, as well as continuing to invest in enhancing corporate brand value from themid- to long-term viewpoint.
Human resources strategy involves preparing an environment where personnel with diverse
senses of value can work enthusiastically, aiming for sustainable growth of the Group by creatinga virtuous cycle of “recruiting,” “cultivating,” and “leveraging” human resources.
Financial strategy involves aiming to thoroughly implementing investment management toachieve “wins” through the generation of operating cash flow to support the “aggressive
approach” period, well-balanced investing cash flow, and cost-controlled financing cash flow. The
Company will also aim for continuously improving equity capital ratio by accumulating profit,and maintaining stable dividends.

- 21 -

6.

Target figures under the Seventh Mid-Term Management Plan(i) Consolidated income forecast(Billions of yen)
Actual
FY2019Budgets

Mid-Term(Note 1)

Management Plan

FY2020

FY2021

Net sales

239.1

-

285.0

Operating profit

6.1

-

14.2

Ordinary income

7.0

-

16.0

3.3

-

12.5

Net income attributable toowners of parent(ii)Net sales by segment(Billions of yen)
Actual
FY2019Watches Business

Budgets

Mid-Term(Note 1)

Management Plan

FY2020

FY2021

135.4

-

165.0

51.7

-

63.0

32.8

-

35.0

Others

29.5

-

31.0

Consolidated total

239.1

-

285.0

Electronic Devices
Business
Systems Solutions
Business(iii) Operating profit by segment(Billions of yen)
Actual
FY2019Watches Business

Budgets

Mid-Term(Note 1)

Management Plan

FY2020

FY2021

10.1

-

14.5

0.6

-

3.0

3.0

-

3.0

Others

0.3

-

1.0

Consolidated total

6.1

-

14.2

Electronic Devices
Business
Systems Solutions
Business

- 22 -

(iv) Others(Billions of yen)
Actual
FY2019Equity capital ratio
Net interest-bearing
liabilities

34.4%

Mid-Term
Management Plan
FY2021
40.0%
Roughly the

89.1

same as thecurrent level

Note 1: Previously, the budgets of the new fiscal year were stated as reference. However, thebudgets for FY2020 will remain undetermined (-), as it is difficult to reasonably estimate
the impact of the spread of the novel coronavirus on the business activities and financial
results at this moment.
(3)

Financing
There are no matters of special note.

(4)

Capital expenditures
The Company invested 2,069 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 1,229 million
yen in the Systems Solutions Business primarily to acquire software for marketing purposes, respectively.
In addition, the Company has made capital investments of 1,307 million yen primarily to acquire rental
equipment (Chuo-ku, Tokyo and Shizukuishi-cho, Iwate-gun, Iwate Prefecture) for external companies
and subsidiaries.

- 23 -

(5)

Trends in assets and profit/loss
The operating results and assets in the fiscal year ended March 31, 2020 and the past three years are as
follows.
(i) Consolidated
Item(Millions of yen)
FY2016FY2017FY2018FY2019Net sales

257,115

268,529

247,293239,150

Ordinary income

6,671

10,911

11,410

7,004

5,392

11,541

9,249

3,394

26

280

224

82

Total assets

328,857

305,297

303,036

299,990

Net assets

107,161

105,170

110,415

104,273

476

2,524

2,650

2,500

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

Net assets per
share
(Yen)

(ii) Non-consolidated
Item
Operatingrevenue
Ordinary
income(Millions of yen)
FY2016FY2017FY2018FY201910,361

11,237

11,301

12,031

2,324

3,308

2,691

3,027

Net income

3,271

3,763

3,719

3,124

Net income per
share
(Yen)

16

91

90

76

Total assets

161,853

179,269

176,640

176,961

Net assets

59,34656,03655,02950,681

Net assets per
share
(Yen)

288

1,359

1,334

1,229

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.

- 24 -

Note 3 The Company conducted a share consolidation by which five common shares have been
consolidated into one share as of October 1, 2017. Net income per share and net assets per
share for FY2017 are calculated as if said share consolidation was performed at the beginningof the fiscal year.
Note 4 The Company has applied “Partial Amendments to Accounting Standard for Tax EffectAccounting” (Accounting Standards Board of Japan (ASBJ) Statement No. 28, February 16,2018) and relevant guidance from the beginning of FY2018. Accordingly, the figure for total
assets for FY2017 has been retrospectively adjusted to reflect the application of said accounting
standard and relevant guidance.

(6)

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

- 25 -

(ii) Status of major subsidiaries
Company NameSEIKO WATCHCORPORATIONCRONOS INC.
Grand Seiko Corporation ofAmerica
Seiko Watch of America
LLC
SEIKO Hong Kong Ltd.

Paid-in Capital

CapitalDetails of Major BusinessContribution Ratio

Activities

5,000 million yen

100.0%

Sales of watches

200 million yen

100.0%(*)

US$2,000

100.0%(*)

Sales of watches

US$112,000

100.0%(*)

Sales of watches

HK$129,300,000

100.0%(*)

Sales of watches and otherproducts

Sales of watches and otherproducts
Manufacturing and sales of

Seiko Instruments Inc.

9,756 million yen

100.0%

precision instruments,
electronic devices, and otherproducts

Morioka Seiko Instruments
Inc.
Seiko Instruments (H.K.)
Ltd.

1,000 million yen

100.0%(*)

Manufacturing watches
Sales of precision

HK$128,700,000

100.0%(*)

instruments, electronic
devices, and other products
Manufacturing and sales of

Seiko Instruments
Singapore Pte. Ltd.

S$32,288,000

100.0%(*)

precision instruments,
electronic devices, and otherproducts
Development, sales, etc. of

SEIKO Solutions Inc.

500 million yen

100.0%

information andtelecommunication systems,
etc.

Note 1: Asterisked ratios in the “Capital Contribution Ratio” column include indirect holdings.
Note 2: On April 1, 2020, Seiko Instruments (H.K.) Ltd. changed its corporate name to SEIKO
Manufacturing (H.K.) Ltd.
Note 3: On April 1, 2020, Seiko Instruments Singapore Pte. Ltd. changed its corporate name to SEIKO
Manufacturing (Singapore) Pte. Ltd.

- 26 -

(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 components
Wireless communication equipment,

Systems Solutions Business

Manufacturing and sales

information network systems, dataservices, computer-performance
management software

Manufacturing, sales andOthers(8)other 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

OthersChuo-ku, Tokyo

Status of employees of the Corporate GroupThe number of employees of the Company and its consolidated subsidiaries is 11,947 (a decrease of 73
from the previous fiscal year-end).

(10)

Major lenders and amounts borrowed
Lenders

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

37,175

Sumitomo Mitsui Banking Corporation

20,572

Aozora Bank, Ltd.

12,828

- 27 -

2.

Matters related to the Company shares(1)

Total number of shares authorized to be issued(2)

Total number of shares issued and outstanding (including 60,009 treasury shares)

149,200,000 shares

41,404,261 shares(3)

Number of shareholders at the end of the fiscal year ended March 31, 2020

(4)

Major shareholders (top 10)
Name

12,098

Number of shares

Percentage ofheldshares held
shares%Sanko Kigyo K.K.

4,436,500

10.7

Etsuko Hattori

3,613,908

8.7

Shinji Hattori

2,279,289

5.5

The Master Trust Bank of Japan, Ltd. (Trust Account)

1,992,200

4.8

The Dai-ichi Life Insurance Company, Limited

1,800,000

4.4

Hideo Hattori

1,620,855

3.9Japan Trustee Services Bank, Ltd. (Trust Account)

1,318,500

3.2

809,800

2.0

SHIMIZU CORPORATION

744,200

1.8

FUJI BUILDING Co., Ltd.

671,400

1.6

JPMC GOLDMAN SACHS TRUST JASDEC LENDING
ACCOUNT

Note 1: Percentages of shares held have been calculated with treasury shares excluded and rounded to
one decimal place.
Note 2: The foregoing was stated based on the shareholders’ registry as of March 31, 2020.
The following Large Shareholding Report is available for public inspection; however, theCompany has not yet confirmed the number of shares substantially held by them as of March
31, 2020 and did not include them in the above.
Filer: Mizuho Bank, Ltd. and two joint holders
Filing date: November 8, 2019
Number of share certificates held: 1,647,927 shares
Percentage of share certificates held: 3.98%
Filer: Goldman Sachs Japan Co., Ltd. and four joint holders
Filing date: January 21, 2020
Number of share certificates held: 1,804,404 shares
Percentage of share certificates held: 4.36%

- 28 -

3.

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

4.

Matters related to officers(1)

Name, etc. of Directors and Corporate Auditors (as of March 31, 2020)
Name
Shinji Hattori
Yoshinobu
Nakamura

Position and responsibility
at the Company
Chairman & Group CEO
President
Senior Executive Director in

Akihiro Okuma

charge of Human Resources
and IT Planning

Significant concurrent positions at other entities
Chairman & CEO of SEIKO WATCHCORPORATION
Chairman of Seiko Instruments Inc.
Director, Executive Vice President of Seiko
Instruments Inc.
Director, Senior Executive Vice President of SEIKO
Solutions Inc.

Executive Director in charge ofFinance & Corporate Strategy
Planning and Accounting
Shimesu

General Manager of the

Takizawa

Finance & Corporate Strategy
Planning Department

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

General Manager of the
Accounting Department
Director in charge of Legal &Intellectual Property and Real
Kazuhiko

Estate Management

Director, Executive Vice President of WAKO Co.,

Sakamoto

General Manager of the RealLtd.

Estate Management
Department
Director in charge ofMakotoSecretariat and General Affairs

Ichimura

General Manager of theOutside Director of OHARA INC.

Secretaries OfficeDirector in charge of Watches
Shuji Takahashi

Business, Public Relations,Sports and Corporate Culture

President & COO & CMO of SEIKO WATCHCORPORATION

- 29 -

Hiromi

Director

Kanagawa
Tetsu Kobayashi
Tsuyoshi
NaganoDirector, Executive Vice President of SEIKO
WATCH CORPORATION

Director

President of Seiko Instruments Inc.

Director

Chairman of the Board of Tokio Marine Holdings, Inc.

Yasuko Teraura

Director

Seiichi MikamiStanding Corporate Auditor

Haruhiko TakagiStanding Corporate Auditor

Partner Attorney of Endeavour Law OfficeOutside Director of Neturen Co., Ltd.
Outside Corporate Auditor of OHARA INC.
Chief Director of the Cardiovascular InstituteTomoyasu

Corporate Auditor

Asano

Outside Auditor of Tokyu Fudosan Holdings
Corporation
Certified public accountant
Outside Director of TOPPAN FORMS CO., LTD.

Hideki Amano

Corporate Auditor

Outside Audit & Supervisory Board Member of Kao
Corporation
Audit & Supervisory Board Members (External) 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. Seiichi Mikami and Mr. Haruhiko Takagi, Standing Corporate Auditors, have experience as
officers in charge of Finance & Accounting in group companies and have reasonable-degrees ofknowledge about finance and accounting. Mr. Hideki Amano, Corporate Auditor, is a certified
public accountant, and has reasonable-degree of knowledge about finance and accounting.
Note 5: Changes in Directors and Corporate Auditors of the Company during this fiscal year are as
follows:(1)
Mr. Makoto Ichimura, Mr. Tsuyoshi Nagano, and Ms. Yasuko Teraura were newly
appointed as Directors, Mr. Hideki Amano and Mr. Masatoshi Yano were newly
appointed as Corporate Auditors, and assumed office at the 158th Ordinary General
Meeting of Shareholders held on June 27, 2019.
(2)

Mr. Shuntaro Ishii, Executive Director, Mr. Carsten Fischer and Mr. Nobuhiro Endo,
Directors, and Mr. Yoshiaki Yamauchi and Mr. Yoshiro Aoki, Corporate Auditors,

- 30 -

resigned from office of Director and Corporate Auditor at the close of the 158th
Ordinary General Meeting of Shareholders held on June 27, 2019.
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. Akihiro Okuma, Senior Executive Director, retired from office of Director, Senior
Executive Vice President of SEIKO Solutions Inc. as of March 31, 2020.
(2)

Mr. Makoto Ichimura, Director, assumed office of Director and Managing Executive
Officer of SEIKO Solutions Inc. as of April 1, 2020.

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. In addition, the Company Group has borrowed funds from the Tokio
Marine Group. However, the amount of such borrowings constitutes less than one percent ofconsolidated total assets of Tokio Marine Holdings, Inc. and the Company, 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: On April 1, 2020, Directors’ positions and responsibilities at the Company have changed asfollows.
Position
Name
Responsibility at the Company
In charge of Finance & Corporate Strategy Planning,
Executive

Shimesu

Director

Takizawa

Accounting, and Procurement Planning
General Manager of the Finance & Corporate Strategy Planning
Department
General Manager of the Accounting Department

Director(2)

Tetsu Kobayashi

In charge of Research & Development and Production
Engineering

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 that stipulated bylaws. The limitation on liability is permitted only when such Outside Directors or Outside Corporate Auditors
have acted in good faith and without gross negligence in performing their duties that caused the liability.

- 31 -

(3)

Amount of compensation, etc. for Directors and Corporate Auditors

Classification

Aggregate amount

Aggregate amount by type of compensation,of compensation,etc. (Millions of yen)

Number of
eligible

etc.

Basic

(Millions of yen)compensation

309

274

18

16

14

[19]

[19]

[-]

[-]

[4]

[Of which,

68

68

-

-

7

Outside Corporate

[28]

[28]

[-]

[-]

[5]

377

342

18

16

21

[48]

[48]

[-]

[-]

[9]

Director[Of which,Outside Directors]

Bonuses

Stockcompensation

officers

Corporate Auditor

Auditors]
Total[Of which, outside
officers]

Note 1: The forgoing includes three Directors and two Corporate Auditors who retired from their offices atthe close of the 158th Ordinary General Meeting of Shareholders held on June 27, 2019.
Note 2: Bonuses and stock compensation above are performance-based compensation (eligible recipients:
8 Executive Directors), and the amount shown in the above table is the amount of expense
recognized and paid for the current fiscal year.
Note 3: Other than the above, one Outside Director is paid 1 million yen as advisory fee from theCompany’s subsidiary.

(4)

Matters related to outside officers
Main activities of outside officers
Classification

Name

Main activities

Director

Tsuyoshi Nagano

He attended all of the 10 Board of Directors meetings held
following his appointment as Director in June 2019, and madenecessary remarks on discussion items and deliberation items,
mainly based on his broad experience through managing
companies.

Director

Yasuko Teraura

She attended all of the 10 Board of Directors meetings held
following her appointment as Director in June 2019, and madenecessary remarks on discussion items and deliberation items,
mainly from the expert viewpoint of an attorney.

- 32 -

Corporate Auditor

Tomoyasu Asano

He attended all of the 13 Board of Directors meetings and all of
the 10 Board of Corporate Auditors meetings held during the
fiscal year ended March 31, 2020, and made remarks, asnecessary, mainly based on his broad experience throughmanaging insurance companies.

Corporate Auditor

Hideki Amano

He attended all of the 10 Board of Directors meetings and all of
the 7 Board of Corporate Auditors meetings held following his
appointment as Corporate Auditor in June 2019, and maderemarks, as necessary, mainly from the expert viewpoint of acertified public accountant.

Corporate Auditor

Masatoshi Yano

He attended all of the 10 Board of Directors meetings and all of
the 7 Board of Corporate Auditors meetings held following his
appointment as Corporate Auditor in June 2019, and maderemarks, as necessary, mainly based on his broad experiencethrough managing companies.

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: 206 million yen(ii) Amount of compensation, etc. (out of (i) above) payable by the Company to the accounting auditor:
73 million yen(iii) Total amount of monies and other financial benefits payable by the Company and its subsidiaries to theaccounting auditor:

215 million yen

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.

- 33 -

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
Instruments (H.K.) Ltd., and Seiko Instruments Singapore Pte. Ltd. were audited by certified
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, 2019,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, 2020; 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, paragraph 1 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.

- 34 [Translation]
Consolidated Balance Sheet
As of March 31, 2020
Item
(Assets)
Current assets:
Cash and deposits
Notes and accounts receivable - trade
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
Deferred tax assets
Other
Allowance for doubtful accounts

Total assets

AmountItem

Millions of yen
Amount(Liabilities)(138,123) Current liabilities:
26,112
Notes and accounts payable - trade
Electronically recorded obligations 34,397
operating
42,964
Short-term borrowings
12,161
Current portion of long-term
10,608borrowings
5,406
Accounts payable - other
7,790
Income taxes payable-1,317
Provision for bonuses
Provision for goods warranties
Provision for loss on lease contracts
Other provisions
Asset retirement obligations
Other(161,867) Non-current liabilities:(94,044)
Long-term borrowings
72,189Lease obligations
78,307
Deferred tax liabilities
32,278Deferred tax liabilities for land
7,183
revaluation-146,873
Provision for loss on lease contracts
48,522
Provision for gift certificate exchange
2,434
lossesProvision for stock benefits
Provision for long-term goods
warranties
Provision for retirement benefits for(16,003)
directors (and other officers)
7,430
Provision for loss on business
8,572
withdrawal
Provision for environmental
measures
Other provisions
Retirement benefit liability(51,820)
Asset retirement obligations
38,759Other
4,441 Total liabilities
8,734 (Net assets)-115 Shareholders' equity:
Share capital
Capital surplus
Retained earnings
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
299,990 Total liabilities and net assets(136,158)
21,8696,495
59,14016,843
11,739
1,282
3,477
462
348
555
13
13,929(59,558)
33,637
4,288
1,929
3,614
1,134
148
133
84
35
10
1
7
10,453
908
3,171
195,717(91,335)
10,0007,245
74,418-328(11,714)
5,486
11
8,190
-804
-1,169(1,223)
104,273
299,990

- 35 [Translation]
Consolidated Statements of Income
From April 1, 2019
to March 31, 2020
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
Other
Non-operating expenses
Interest expenses
Foreign exchange losses
Other
Ordinary profit
Extraordinary income
Gain on sales of non-current assets
Extraordinary losses
Loss on the spread of infectious disease
Business restructuring expenses
Impairment loss
Loss on retirement of non-current assets
Retirement benefit 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
Amount239,150
144,22194,92888,794
6,134(3,585)
171
763
1,313
1,336
(2,715)
982
291
1,441
7,004
(346)
346
(1,148)
305
264
240
179
158
6,201
1,745
974
3,481
86
3,394

- 36 [Translation]
Non-Consolidated Balance Sheet
As of March 31, 2020
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
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)
73,370 Current liabilities:
8,302
Short-term borrowings
688
Current portion of long-term
57,168borrowings
6,510
Lease obligations (current)
700
Accounts payable - otherAccrued expenses
Income taxes payable
Deposits received
Unearned revenue
103,590
Provision for bonuses
24,087 Non-current liabilities:
3,724
Long-term borrowings
766
Lease obligations (non-current)
18,282
Deferred tax liabilities
6
Deferred tax liabilities for land
1,307
revaluation
Provision for loss of subsidiaries andassociates
2,515
Provision for stock benefits
1,952
Provision for environmental measures
8
Asset retirement obligations (non533
current)
20
Guarantee deposits
Other
Total liabilities(Net assets)
76,987 Shareholders' equity:
14,352
Share capital
Capital surplus
59,899Legal capital surplus
0
Other capital surplus
Retained earnings
11,917
Legal retained earnings
Other retained earnings
28
Retained earnings brought
forward29
Treasury shares
2,465 Valuation and translation adjustments:
289
Valuation difference on available-for-11,994
sale securities
Deferred gains or losses on hedges
Revaluation reserve for land
Total net assets
176,961 Total liabilities and net assets

82,02756,79916,552
1
4,509
408
3
3,398
274
80
44,25233,562
5
1,196
3,614
1,393
134
1
319
3,706
319
126,280
38,14010,000
6,625
2,378
4,246
21,817
121
21,695-301
12,541
4,547
-196
8,190
50,681
176,961

- 37 [Translation]
Non-Consolidated Statements of Income
From April 1, 2019
to March 31, 2020
Item
Operating revenue
Dividend from subsidiaries and associates
Management fee income
Royalty income
Operating expenses
Operating profit
Non-operating income
Interest income
Dividend income
Other
Non-operating expenses
Interest expenses
Rental expenses on real estate
Other
Ordinary profit
Extraordinary income
Gain on sales of non-current assets
Gain from forgiveness of consolidated tax payable
Extraordinary losses
Provision of allowance for investment loss of subsidiaries and affiliates
Loss on retirement of non-current assets
Profit before income taxes
Income taxes - current
Income taxes - deferred
ProfitMillions of yen
Amount12,031
7,251
2,032
2,746
9,629
2,401
1,943
686
745
511
1,317
785
415
117
3,027
115
112
3
939
760
179
2,203
-1,136215
3,124

- 38 [Translation]
Certified copy of audit report on the consolidated financial statements by the Accounting Auditor
Independent Auditor’s Report
May 11, 2020
KPMG AZSA LLC
Tokyo OfficeJunichi Obi [seal]
Designated Limited Partner
Engagement Partner
Certified Public Accountant
Akira Nishino [seal]
Designated Limited Partner
Engagement Partner
Certified Public Accountant
Kenji Ueda [seal]
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, 2019 through March 31, 2020.
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.

- 39 Emphasis of Matter
As described in Notes to Significant Post-Balance Sheet Events in the Notes to Consolidated Financial
Statements, Seiko Instruments Inc., a consolidated subsidiary of the Company, transferred all shares of
ABLIC Inc., an equity method affiliate, on April 30, 2020.
Our opinion is not modified in respect of this matter.
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.
・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.

- 40 ・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.

- 41 [Translation]
Certified copy of audit report (on the non-consolidated financial statements) by the Accounting
AuditorIndependent Auditor’s Report
May 11, 2020
KPMG AZSA LLC
Tokyo OfficeJunichi Obi [seal]
Designated Limited Partner
Engagement Partner
Certified Public Accountant
Akira Nishino [seal]
Designated Limited Partner
Engagement Partner
Certified Public Accountant
Kenji Ueda [seal]
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 159th fiscal year from April 1, 2019 through March 31, 2020.
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,
2020, 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.

- 42 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.
・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

- 43 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.

- 44 [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, 2020 (from April 1, 2019 to March 31, 2020).
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.

- 45 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, 2020.
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 12, 2020
Board of Corporate Auditors
Seiko Holdings Corporation
Seiichi Mikami [seal]
Standing Corporate Auditor
Haruhiko Takagi [seal]
Standing Corporate Auditor
Tomoyasu Asano [seal]
Outside Corporate Auditor
Hideki Amano [seal]
Outside Corporate Auditor
Masatoshi Yano [seal]
Outside Corporate Auditor