[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, 2021
To Shareholders with Voting Rights:
Yoshinobu Nakamura
President
SEIKO HOLDINGS CORPORATION
5-11, Ginza 4-chome, Chuo-ku, TokyoNOTICE OF
THE 160TH 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 160th Ordinary General Meeting of Shareholders of
SEIKO HOLDINGS CORPORATION (the “Company”). The meeting will be held for the purposes
described below.
From the perspective of preventing the spread of the novel coronavirus, we request thatshareholders exercise their voting rights in advance in writing, or via the Internet as much as possible.
Regardless of the condition of your health, we request that you refrain from visiting the venue
on the day of the meeting. In order for shareholders to be able to view the proceedings of the
Meeting, live streaming of the meeting will be made available via the Internet (for details, please referto 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 21), and exercise your voting rights in accordance with the “Notice regarding Exercise of
Voting Rights” (pages 4 through 5) by 6 p.m. on Monday, June 28, 2021, Japan time.
1. Date and Time:

Tuesday, June 29, 2021, 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, 2021 (from April 1, 2020 to March 31, 2021)

Proposals to be resolved: Proposal 1: Distribution of Surplus
Proposal 2: Partial Amendment to the Articles of Incorporation
Proposal 3: Election of Eleven (11) Directors
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 (3) days prior to the date of the General
Meeting of Shareholders.

<Request to Our Shareholders>・ In order to prevent the spread of the novel coronavirus, we request that shareholders exercise
their voting rights in advance in writing, or via the Internet as much as possible, and that theyrefrain from visiting the venue on the day of the meeting. Please review the “Notice regarding
Exercise of Voting Rights” (pages 4 through 5) below for details on exercise of voting rights inadvance.
・ 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/).
・ 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.
Notice regarding the distribution of the Business Report video
In order to shorten the time for the proceedings of the General Meeting of Shareholders on the day ofthe meeting, a video regarding the Business Report will be distributed, prior to the meeting.
Distribution period (scheduled): Monday, June 21, 2021 to Thursday, September 30, 2021
Distribution URL: https://v.srdb.jp/8050/2021soukai_visual/

-3-

Notice 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.
Tuesday, June 29, 2021, 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/8050/2021soukai/

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

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)

Contact time
Tuesday, June 29, 2021, from 9 a.m. to 12
p.m. Japan time

-4-

Regarding 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: Tuesday, June 29, 2021, 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
Monday, June 28, 2021, 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
Monday, June 28, 2021, 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
Monday, June 28, 2021, 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 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.

-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: 1,033,600,900 yen
Note: As the Company has already paid an interim dividend of 12.5 yen per share, the annual
dividend for the 160th fiscal year will be 37.5 yen per share.
(3) Effective date of distribution of surplus
June 30, 2021

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

In order to establish a management structure capable of flexibly responding to changes in the
management environment, as well as to clarify the management responsibility of Directors andincrease opportunities to gain the confidence of the shareholders, the Company proposes toshorten the term of office of Directors, set forth in Article 22 of the Articles of Incorporation,from two (2) years to one (1) year, and delete paragraph 2 of the same Article related to theadjustment of the term of office.

(2)

In order to further strengthen and enhance the management base, the Company proposes tomake an addition that will enable the appointment of a Vice Chairman, as a Director with atitle, as set forth in Article 24 of the Articles of Incorporation.

Current Articles of Incorporation
CHAPTER IV DIRECTORS AND
BOARD OF DIRECTORS(Underlines denote amendments.)
Proposed Amendment
CHAPTER IV DIRECTORS AND
BOARD OF DIRECTORS(Term of Office)
Article 22
1. The term of office of Directors shall
expire at the closing of the ordinary
general meeting of shareholders
concerning the last business year ending
within two (2) years after their election.
2. The term of office of a Director who has
been elected to increase the number of
Directors or to fill a vacancy shall expire
when the term of office of the otherincumbent Directors will expire.

(Term of Office)
Article 22
1. The term of office of Directors shall
expire at the closing of the ordinary
general meeting of shareholders
concerning the last business year ending
within one (1) year after their election.

(Directors with Titles)
Article 24
The Board of Directors may, by its
resolutions, appoint one Chairman, one
President, and a small number each of
Executive Vice Presidents, Senior Executive
Directors, and Executive Directors.

(Directors with Titles)
Article 24
The Board of Directors may, by its
resolutions, appoint one Chairman, one Vice
Chairman, one President, and a small
number each of Executive Vice Presidents,
Senior Executive Directors, and Executive
Directors.

(Deleted)

-8Proposal 3: Election of Eleven (11) Directors
The Company proposes the election of eleven (11) Directors, as the terms of office of all eleven (11)Directors will expire at the closing of this General Meeting of Shareholders.
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)

2

Reappointed

Yoshinobu
Nakamura

Male

President

3

Reappointed

Shuji
Takahashi

Male

Director in charge of Watches
Business and DX Promoting

11 out of 11
meetings(100.0%)11 out of 11
meetings(100.0%)10 out of 10
meetings(100.0%)4

Reappointed

ShimesuTakizawa

Male

Executive Director in charge ofFinance & Corporate Strategy
Planning, ESG & SDGs
Promoting, Accounting, andProcurement Planning
General Manager of the
Finance & Corporate Strategy
Planning Department
General Manager of the
Accounting Department

5

Reappointed

KiyokoNiwasakiFemaleExecutive Director in charge ofCorporate Branding
Director in charge of Legal andReal Estate Management
General Manager of the Real
Estate Management
Department
Director in charge of
Secretariat and General Affairs
Senior General Manager of theBusiness Incubation Center
General Manager of theSecretaries OfficeDirector in charge of Business
Incubation, Research &Development and Production
Engineering

6

Reappointed

Kazuhiko
Sakamoto

Male

7

Reappointed

MakotoIchimura

Male

8

Reappointed

Tetsu
Kobayashi

Male

9

Newly
Appointed

Jun Sekine

Male

―

10

Reappointed

Tsuyoshi
NaganoOutside Director
Male
Independent Director

Outside Director

11

Reappointed

YasukoTerauraOutside Director
FemaleIndependent Director

Outside Director

11 out of 11
meetings(100.0%)11 out of 11
meetings(100.0%)11 out of 11
meetings(100.0%)11 out of 11
meetings(100.0%)11 out of 11
meetings(100.0%)―11 out of 11
meetings(100.0%)11 out of 11
meetings(100.0%)-91.

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: 14 years(3)

Attendance at the Board of Directors meetings during the fiscal
year ended March 31, 2021: 11 out of 11 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.

- 10 2.

Yoshinobu Nakamura (Date of Birth: October 21, 1949) (Reappointed)(1)

Number of shares of the Company held: 20,800(2)Length of service as a Director: 13 years(3)

Attendance at the Board of Directors meetings during the fiscal
year ended March 31, 2021: 11 out of 11 meetings (100.0%)(4)Career, positions, and responsibilities
April 1972

Joined Seikosha Co., Ltd.

June 2001

Director of Seiko Precision Inc.

June 2003

Director of the Company

June 2004

Executive Director & CFO of SEIKO WATCH CORPORATIONMarch 2008

President of Seiko Clock Inc. (currently SEIKO Time Creation
Inc.)

June 2008

Director of the Company

December 2008

(5)

Senior Executive Director of the Company

May 2010

Senior Executive Director (Representative Director) of theCompany

October 2012

President of the Company (to present)

April 2018

Chairman of Seiko Instruments Inc. (to present)

Significant concurrent positions:
Chairman of Seiko Instruments Inc.

(6)

Reasons for nomination as candidate for director:
The Company nominates Mr. Yoshinobu Nakamura 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
by utilizing his wealth of experience and achievement, including the following: (i)having directed the Company Group’s management as President of the Company formany years; and (ii) mainly having promoted the business portfolio restructuring to
improve financial standing and maximize business income.

(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. Yoshinobu
Nakamura.

- 11 3.

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

Number of shares of the Company held: 4,500(2)Length of service as a Director: 8 years(3)

Attendance at the Board of Directors meetings during the fiscal
year ended March 31, 2021: 11 out of 11 meetings (100.0%)(4)Career, positions, and responsibilities(5)

April 1980

Joined the Company

April 2004

General Manager, Merchandising Department II of SEIKO
WATCH CORPORATION

February 2011

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
June 2016

Director, Senior Executive Vice President of SEIKO WATCHCORPORATION
Executive Director of the Company

April 2017

Director of the Company (to present)

April 2017

President & COO & CMO of SEIKO WATCH CORPORATION

June 2020

In charge of Watches Business and DX Promoting of theCompany (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
been engaged mainly in public relations and promotion, marketing, and merchandising
as a member of the Company Group since joining the Company; and (ii) having being
engaged in management direction as President & COO & CMO of SEIKO WATCHCORPORATION.

(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.

- 12 4.

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

Number of shares of the Company held: 2,800(2)Length of service as a Director: 5 years(3)

Attendance at the Board of Directors meetings during the fiscal
year ended March 31, 2021: 11 out of 11 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

March 2017

General Manager, Corporate Strategy & Planning Department(currently Finance & Corporate Strategy Planning Department) of
the Company (to present)

April 2017

Director, Executive Vice President of Seiko Instruments Inc. (topresent)

June 2018

Outside Director of Jedat Inc. (to present)

June 2019

Executive Director of the Company (to present)

June 2019

General Manager, Accounting Department of the Company (topresent)

June 2020

In charge of Finance & Corporate Strategy Planning, ESG & SDGs
Promoting, Accounting, and Procurement Planning of the Company(to present)

Significant concurrent positions:
Director, Executive Vice President of Seiko Instruments Inc.
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 finance & corporate strategy planning, ESG & SDGs promoting, accounting,and procurement planning 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.

- 13 5.

Kiyoko Niwasaki (Date of Birth: January 20, 1964) (Reappointed)(1)

Number of shares of the Company held: 2,700(2)Length of service as a Director: 1 year

(3)

Attendance at the Board of Directors meetings during the fiscal
year ended March 31, 2021: 10 out of 10 meetings (100.0%)(4)Career, positions, and responsibilities(5)

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 WATCHCORPORATION

June 2018

Director, Executive Vice President of SEIKO WATCHCORPORATION

June 2020

Executive Director in charge of Corporate Branding of theCompany (to present)

April 2021

Director, Executive Vice President of WAKO Co., Ltd. (to present)

Significant concurrent positions:
Director, Executive Vice President of WAKO Co., Ltd.

(6)

Reasons for nomination as candidate for director:
The Company nominates Ms. Kiyoko Niwasaki as a candidate for Director, expecting
her to perform full functions as a Board member in the decision-making to execute
important business and supervise the other Directors’ execution of duties by utilizing
her wealth of experience and achievement, including the following: (i) having been
engaged mainly in public relations and marketing as a member of the Company Groupsince joining the Company; and (ii) currently being in charge of corporate branding 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 Ms. Kiyoko
Niwasaki.

- 14 6.

Kazuhiko Sakamoto (Date of Birth: November 6, 1965) (Reappointed)(1)

Number of shares of the Company held: 900(2)

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

Attendance at the Board of Directors meetings during the fiscal
year ended March 31, 2021: 11 out of 11 meetings (100.0%)(4)Career, positions, and responsibilities(5)

April 1988

Joined the Company

June 1994

Seconded to SEIKO Hong Kong Ltd.

April 2007

General Manager, Finance & Accounting Department of WAKO
Co., Ltd.

June 2010

General Manager, Corporate Strategy & Planning Department of
WAKO Co., Ltd.

July 2012

Senior Vice President of WAKO Co., Ltd.

June 2015

General Manager, Corporate Strategy & Planning Department of
the Company

June 2018

Director of the Company (to present)

April 2019

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

June 2019

In charge of Legal & Intellectual Property (currently Legal) andReal Estate Management, and General Manager, Real EstateManagement Department of the Company (to present)

April 2021

Director, Senior Executive Vice President of WAKO Co., Ltd. (topresent)

Significant concurrent positions:
Director, Senior Executive Vice President of WAKO Co., Ltd.

(6)

Reasons for nomination as candidate for director:
The Company nominates Mr. Kazuhiko Sakamoto 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
by utilizing his wealth of experience and achievement, including the following: (i)having been engaged mainly in finance & accounting, and corporate strategy planning
as a member of the Company Group since joining the Company; and (ii) currently
being in charge of legal and real estate management as 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. Kazuhiko
Sakamoto.

- 15 7.

Makoto Ichimura (Date of Birth: May 12, 1967) (Reappointed)(1)

Number of shares of the Company held: 1,200(2)Length of service as a Director: 2 years(3)

Attendance at the Board of Directors meetings during the fiscal
year ended March 31, 2021: 11 out of 11 meetings (100.0%)(4)Career, positions, and responsibilities
April 1991

Joined the Company

April 2010

General Manager, General Affairs Department of WAKO Co.,Ltd.

May 2013

General Manager, Secretaries Office of the Company

February 2015

General Manager, Public Relations & Secretaries Department of
the Company

June 2016

General Manager, Secretaries Office of the Company (to present)

June 2019

Director in charge of Secretariat and General Affairs of theCompany (to present)

January 2020

Outside Director of OHARA INC. (to present)

April 2020

Director, Executive Vice President of SEIKO Solutions Inc. (topresent)

December 2020

(5)

Senior General Manager, Business Incubation Center of theCompany (to present)

Significant concurrent positions:
Director, Executive Vice President of SEIKO Solutions Inc.
Outside Director of OHARA INC.

(6)

Reasons for nomination as candidate for director:
The Company nominates Mr. Makoto Ichimura 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 secretariat, public relations, and corporate strategy planning
as a member of the Company Group since joining the Company; and (ii) currently incharge of secretariat and general affairs as 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. Makoto
Ichimura.

- 16 8.

Tetsu Kobayashi (Date of Birth: January 17, 1960) (Reappointed)(1)

Number of shares of the Company held: 5,700(2)Length of service as a Director: 3 years(3)

Attendance at the Board of Directors meetings during the fiscal
year ended March 31, 2021: 11 out of 11 meetings (100.0%)(4)Career, positions, and responsibilities
April 1982

Joined Daini Seikosha Co., Ltd. (currently Seiko Instruments
Inc.)

March 2005

Executive General Manager, Corporate Strategy Division of
Seiko Instruments Inc.

June 2007

General Manager, Watch Movement Division of Seiko
Instruments Inc.

March 2008

Senior Vice President of Seiko Instruments Inc.

July 2009

Executive General Manager, Watches Business Headquarters of
Seiko Instruments Inc.

October 2010

Director of Seiko Instruments Inc.

October 2014

President of Seiko Precision Inc.

February 2018

Chief Executive Vice President of Seiko Instruments Inc.

April 2018
June 2018
December 2020

(5)

President of Seiko Instruments Inc. (to present)
Director of the Company (to present)
In charge of Business Incubation, Research & Development andProduction Engineering of the Company (to present)

Significant concurrent positions:
President of Seiko Instruments Inc.

(6)

Reasons for nomination as candidate for director:
The Company nominates Mr. Kobayashi 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 in business planning, development, production, and sales of Seiko
Instruments Inc. as a member of the Company Group since joining the Company andhaving a broad range of knowledge and experience regarding its businesses; and (ii)currently being engaged in management direction as President of Seiko Instruments
Inc., and in charge of business incubation, research & development and productionengineering as 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. Tetsu
Kobayashi.

- 17 9.

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

Number of shares of the Company held: 1,500(2)Length of service as a Director: ―(3)

Attendance at the Board of Directors meetings during the fiscal
year ended March 31, 2021: ―(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
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(5)

President and Director of ESCCO JAPAN K.K.

President of SEIKO Solutions Inc. (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., after taking
office as Director and Executive Vice President of SEIKO Solutions Inc. in December
2015.

(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.

- 18 10.

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

Number of shares of the Company held: 5,700(2)Length of service as a Director: 2 years(3)

Attendance at the Board of Directors meetings during the fiscal
year ended March 31, 2021: 11 out of 11 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
June 2012
June 2013
June 2013
April 2016
June 2019
June 2019(5)

Executive Vice President of Tokio Marine & Nichido Fire
Insurance Co., Ltd.
Executive Vice President of Tokio Marine Holdings, Inc.
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)
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
his extensive experience and high insight cultivated in his career as a management
member of corporations over many years.

- 19 (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 -

11.

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

Number of shares of the Company held: 200(2)

Length of service as a Director: 2 years(3)

Attendance at the Board of Directors meetings during the fiscal
year ended March 31, 2021: 11 out of 11 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.

(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 -

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.
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. The details of the insurance policy are as described in the Business Report(pages through 41 to 42). If the appointment of the candidates is approved, eachcandidate will be included as an insured under the insurance policy. The Company
plans to renew the insurance policy with the same conditions during the term of officeof each candidate.
[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 candidates listed in Proposal 3 were determined by the Board of
Directors after being deliberated on by that committee.

-22-[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".

- 23 Corporate Governance Structure

Stakeholders (investors, customers, partners, employees and communities)
General Meeting of Shareholders
Appointment
Termination

Labormanagement
Round-table
Conference

Board of Auditors

Board of Directors

Corporate GovernanceCommittee

11 directors（Two of whom are extenal）

ReportingCorporate ethics
Committee
Consultation services

Risk Management
Committee

Coordination

Dismissal

Audit

Reporting
Office forexternal
reporting

5 auditors(Three of whom areexternal)

Accounting audit

Nomination

Audit

Discussion

Representative Director,
Chairman and GroupCEO

Coordination

Strategic
Conference
for Management

Representative
Directorand President

Information
Disclosure

Instructions

・・・Supervision
Supervision

ReportingManagement
CouncilInternal
Audit Dept.

Monitoring

Audi

Units

Operating companies
OperatingAccounting auditors

RequestReportingAppointment
Termination

Appointment
Termination

- 24 -

[Translation][Attached Documents]
Business Report for the Fiscal Year Ended March 2021 (From April 1, 2020 To March 31, 2021)
1.

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

Business developments and results

During the fiscal year ended March 31, 2021, while the world economy deteriorated significantly due torestrictions on economic activities as a result of the spread of the novel coronavirus, it has recovered graduallyfrom June onward. Subsequently, in the U.S., while the economic recovery slowed temporarily due to theresurgence of infections in the third quarter of the fiscal year ended March 31, 2021, it picked up in the fourth
quarter with the start of vaccinations. In Europe, the economic recovery has stagnated from the third quarter
onward, mainly due to a resurgence of infections and the spread of mutant strains. In China, the trend toward
economic recovery that began at the beginning of the fiscal year was maintained throughout the fiscal year, despite
self-restraint from traveling in some areas in the fourth quarter. Other countries, such as Taiwan, with its favorable
semiconductor exports, and Australia, with its strong housing market, also continued to experience an economic
recovery.
The Japanese economy also shrunk rapidly due to the closure of most of the commercial facilities such as
department stores and retail stores following the government’s declaration of a state of emergency in April. Afterthe state of emergency was lifted, the economy gradually began to recover. Following the reimposition andextension of the declaration of a state of emergency in January of this year, the economy stagnated temporarily,
particularly in terms of personal consumption. However, with the lifting of the declaration of a state of emergency,
there have been signs that the economy is beginning to pick up.

Amid these circumstances, the Company focused its efforts on addressing the coronavirus pandemic, while
promoting the policies of the Seventh Mid-Term Management Plan, looking toward what the Seiko HoldingsGroup aims to be in FY2025. In the Watches Business, the Company launched new products, which are equippedwith new high-end movements and cases made of new materials, restructured the organization, and invested inbranding in order to accelerate the expansion of its overseas business. In the Systems Solutions Business, theCompany made COSMO CO., LTD. a subsidiary as of April 1, 2020, in order to further diversify its business. In
response to changes in the external environment, the Group as a whole has also worked to digitalize its businessand create a variety of work styles.
As a result, although business results began to recover from the end of the first quarter of the fiscal year ended
March 31, 2021, repeated restrictions on economic activities led to the Company reporting consolidated net salesof 202.6 billion yen, a year-on-year decrease of 36.4 billion yen, or 15.3%. On a per-segment basis, while net sales
under the Watches Business and Electronic Devices Business declined year on year, sales under the Systems
Solutions Business increased year on year as a result of successful efforts to diversify business and expand the- 25 -

stock business. On an overall consolidated basis, domestic net sales came to 113.1 billion yen (a year-on-year
decrease of 17.7%), and overseas net sales were 89.5 billion yen (a year-on-year decrease of 11.9%). Overseas net
sales comprised 44.2% of net sales overall.
In line with changes in the external environment, advertising and promotion expenses were reduced byapproximately 20% compared with the previous fiscal year. Other operating expenses also decreased mainly due
to reductions resulting from lower net sales and a transfer of fixed costs during closures, which occurred mainly inthe first quarter of the fiscal year ended March 31, 2021, to extraordinary losses. For the fiscal year ended March
31, 2021, the Company reported operating profit of 2.1 billion yen (a year-on-year decrease of 64.2%), as
operating profit improved steadily each quarter from an operating loss of 2.1 billion yen in the first quarter. With
regard to non-operating income and expenses, ordinary profit decreased by 6.3 billion yen year on year to 0.6
billion yen (a year-on-year decrease of 91.0%), primarily as a result of a deterioration in share of profit of entities
accounted for using equity method due to the transfer of shares of a semiconductor company that was an affiliatedcompany accounted for using equity method, as well as a deterioration in the business results of an affiliatedcompany accounted for using equity method. A gain on transfer of shares of the semiconductor company of 7.6
billion yen, a gain on sales of non-current assets of 1.0 billion yen, and subsidy income of 0.6 billion yen wereposted as extraordinary income. A loss of 3.6 billion yen 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 were 3.4 billion yen (a year-on-year increase of 2.4%).
The average exchange rates for the current fiscal year were 106.1 yen to 1 US dollar and 123.8 yen to 1 euro.

Results for each segment are as follows.

a. Watches BusinessNet sales under the Watches Business came to 105.0 billion yen, a year-on-year decrease of 30.4 billion yen, or
22.5%.
Net sales of completed watches in Japan fell substantially for two months in April and May, mainly due to theclosure of retail stores and commercial facilities following the government’s declaration of a state of emergency.
From June onward, when the state of emergency was lifted, net sales gradually recovered thanks to favorable salesof commemorative models of Grand Seiko, which commemorates the 60th Anniversary of the brand, and of Seiko
Prospex, which commemorates the 55th Anniversary of Seiko’s diver’s watch, as well as models equipped withnew calibers. From November onward, the impact of a third wave of the novel coronavirus infection brought therecovery to a temporary standstill. However, after the second declaration of a state of emergency was lifted,
recovery began again. Net sales of Grand Seiko and Seiko Prospex in March exceeded not only those of the samemonth of the previous fiscal year, which were affected by the pandemic, but also those of the same month two

- 26 -

years prior. On a distribution channel basis, while sales of stores at mass retailers suffered throughout the fiscal
year, e-commerce performed steadily.
Net sales of completed watches overseas have also recovered in many countries and regions since July, whenlockdowns were lifted in many areas. In the three months of the third quarter of the fiscal year ended March 31,
2021, net sales increased year on year in all regions. In terms of individual brands, sales of Grand Seiko and Seiko
Prospex grew steadily around the world. In the U.S., net sales recovered steadily, driven by Grand Seiko, partly asa result of the expansion of mid- to high-end stores and a strengthening of online sales promotions. In Europe, thesecond wave of the novel coronavirus infection as well as outbreak of mutant variants of the virus resulted inadditional lockdowns from around November, which led to stagnant sales in the fourth quarter. However, in many
countries, including the U.K., Germany, the Netherlands, France, and Italy, net sales of Global Brands for thecurrent fiscal year grew year on year. In China, net sales for the current fiscal year were significantly higher year
on year due to favorable performance in e-commerce and increased sales of Grand Seiko in physical stores,
including Grand Seiko Boutiques. In Thailand and Australia, net sales of Grand Seiko and Seiko Prospex for thecurrent fiscal year grew and increased year on year, mainly due to the enhancement of digital measures. In Taiwan,
where a Grand Seiko Boutique opened in Taipei in September, the new Boutique has driven sales of Grand Seikofrom September onward, with second-half net sales in Taiwan higher year on year.
The watch movements business saw net sales fall significantly due to partial restrictions of overseas
manufacturing activities based on government requests to prevent the spread of the novel coronavirus in the firstquarter of the fiscal year ended March 31, 2021. While sales recovered from the second quarter onward, therecovery was insufficient to offset the decline in the first quarter.
Operating profit decreased by 4.5 billion yen year on year, resulting in operating profit of 5.6 billion yen (a yearon-year decrease of 44.9%). The decline was despite expenses falling year on year due to such factors as a review
on investments in line with the external environment and a curtailment of expenses following lower net sales.
b. Electronic Devices BusinessNet sales under the Electronic Devices Business came to 50.2 billion yen, a year-on-year decrease of 3.0%.
Operating profit was 1.3 billion yen, a year-on-year increase of 112.2%. In addition to precision turned parts forhigh-capacity servers and automobiles, sales were strong in high-performance metals for semiconductor
production equipment, batteries for medical equipment, and quartz crystals. In the printer-related business in thefirst half of the fiscal year, the business was sluggish for the retail market due to the effects of the novel
coronavirus. However, sales of industrial inkjet print heads recovered from October onward thanks to expanded
sales of water-based inkjet print heads, which were launched last year. Net sales for the three months of the fourth
quarter of the fiscal year ended March 31, 2021 were the highest quarterly net sales in the last three years.
c. Systems Solutions BusinessNet sales under the Systems Solutions Business came to 34.1 billion yen, a year-on-year increase of 1.2 billion
yen, or 3.9%. Operating profit was 3.5 billion yen, a year-on-year increase of 0.5 billion yen, or 17.5%. Demand- 27 -

for mobile products, as well as support systems and services for the food service industry declined due to thecoronavirus pandemic. However, amid growing demand for digitalization, the Company achieved growth in bothrevenue and profits thanks to an expansion of new business utilizing AI and IoT, as well as growth in businesssuch as network products and performance management services that support digitalization, in addition tocontributions from the development of IoT equipment by COSMO CO., LTD., which was made into a subsidiaryin April 2020.
d. Others
Net sales under Others amounted to 24.8 billion yen, a year-on-year decrease of 4.6 billion yen, or 15.9%.
Operating losses were 40 million yen (compared to operating profit of 0.3 billion yen in the previous fiscal year).
Net sales for the first quarter of the fiscal year ended March 31, 2021 fell significantly in the Wako Business,
which closed its stores for about two months following the government’s declaration of a state of emergency inJapan due to the spread of the novel coronavirus, as well as in the Clocks Business, with many of its distribution
channels, such as department stores and mass retailers, having been shut down. Although the businesses began torecover since June, net sales were still down year on year due to the declaration of a state of emergency again, in
the fourth quarter.

- 28 -

(2)

Issues that need to be addressed by the Corporate GroupAs the Company celebrates the 140th Anniversary of its foundation, the Company has clarified its purpose: “As acompany trusted by society, we will constantly pursue innovation, inspiring people everywhere, and creating afuture 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 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, 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 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 realize sustainable growth beyond
the 150th Anniversary in 2031.
Looking toward what the Seiko Holdings Group aims to be in FY2025, the Company is promoting the Seventh
Mid-Term Management Plan, which will end in the fiscal year ending March 31, 2022. 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 excitementwith 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 levels of reliability.
Being expected by the world to create the future.
We will grow with our sophisticated structures and human resources,
as a solid and united group.

- 29 -

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.
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 businessAlthough economic activities in Japan and overseas were severely impacted by the spread of thenovel coronavirus for the fiscal year ended March 31, 2021, the strategies set forth in the Seventh
Mid-Term Management Plan, including the Global Brand strategy for the Watches Business, havebeen showing steady results. Accordingly, the Company will further accelerate the initiatives set
forth in the plan in the fiscal year ending March 31, 2022. In addition, the Company will further
strengthen its Digital Transformation (DX) and ESG initiatives, in order to respond to new needs
arising from changes in the external environment and to solve social issues.

(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 Seikoand Seiko Prospex. Working to further reduce costs also led to steady results in the Watches
Business, including improved profitability.
Based on the results, under the Seventh Mid-Term Management Plan, the Watches Business will
see Seiko grow towards a true 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 becomea major player in the world watch market looking ahead to the year 2025. With the Global Brand
strategy as its growth engine, the Company will further accelerate its strategy to accomplish
revolutionary transformation, while also expanding sales both in Japan and overseas, particularlyin 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 product- 30 -

portfolio 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.

(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. The integration of Seiko Clock Inc. and Seiko Time Systems, Inc. on April 1, 2021 will
generate synergy effects and expand business areas. In addition, each business, including Wako,
will continue to play a role in improving the value of the brand.

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 creating

- 31 -

a 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.

- 32 -

6.

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

ActualActual

FY2019FY2020Management Plan
FY2021

Net sales

239.1

202.6

285.0

Operating profit

6.1

2.1

14.2

Ordinary income

7.0

0.6

16.0

3.3

3.4

12.5

Net income attributable toowners of parent(ii) Net sales by segment

Watches Business(Billions of yen)
Mid-Term

ActualActual

FY2019FY2020Management Plan
FY2021

135.4

105.0

165.0

51.7

50.2

63.0

32.8

34.1

35.0

Others

29.5

24.8

31.0

Consolidated total

239.1

202.6

285.0

Electronic Devices
Business
Systems Solutions
Business(iii) Operating profit by segment

Watches Business(Billions of yen)
Mid-Term

ActualActual

FY2019FY2020Management Plan
FY2021

10.1

5.6

14.5

0.6

1.3

3.0

3.0

3.5

3.0

Others

0.3

-0.0

1.0

Consolidated total

6.1

2.1

14.2

Electronic Devices
Business
Systems Solutions
Business

- 33 -

(iv) Others(Billions of yen)

Equity capital ratio
Net interest-bearing
liabilities(3)

ActualActual

FY2019FY2020

34.4%

34.9%

Mid-Term
Management Plan
FY2021
40.0%
Roughly the

89.1

98.6

same as thecurrent level

Financing
There are no matters of special note.

(4)

Capital expenditures
The Company invested 2,134 million yen in the Watches Business and 2,835 million yen in the Electronic
Devices Business primarily to reinforce and renew manufacturing and other facilities, and 1,002 million
yen in the Systems Solutions Business primarily to acquire software for marketing purposes, respectively.
In addition, the Company has made capital investments of 8,762 million yen primarily to acquire rental
equipment (Chuo-ku, Tokyo and Shizukuishi-cho, Iwate-gun, Iwate Prefecture) for external companies
and subsidiaries.

- 34 -

(5)

Trends in assets and profit/loss
The operating results and assets in the fiscal year ended March 31, 2021 and the past three years are as
follows.
(i) Consolidated
Item(Millions of yen)
FY2017FY2018FY2019FY2020Net sales

268,529

247,293239,150

202,671

Ordinary income

10,911

11,410

7,004

633

11,541

9,249

3,394

3,475

280

224

82

84

Total assets

305,297

303,036

299,990319,671

Net assets

105,170

110,415

104,273

113,082

Net assets per
share
(Yen)

2,524

2,650

2,500

2,709

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

(ii) Non-consolidated
Item
Operatingrevenue
Ordinary
income(Millions of yen)
FY2017FY2018FY2019FY2020

11,237

11,301

12,031

11,301

3,308

2,691

3,027

809

Net income

3,763

3,719

3,124

1,560

Net income per
share
(Yen)

91

90

76

38

Total assets

179,269

176,640

176,961

192,853

Net assets

56,03655,02950,68155,495

Net assets per
share
(Yen)

1,359

1,334

1,229

1,345

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.

- 35 -

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.

- 36 -

(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%

Sales of watches

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 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.

Seiko Clock Inc.

1,000 million yen

100.0%

Manufacturing and sales ofclocksSales of high-end jewelry,

WAKO Co., Ltd.

2,500 million yen

100.0%

apparel, and fashion
accessories

Note 1: Asterisked ratios in the “Capital Contribution Ratio” column include indirect holdings.
Note 2: SEIKO Manufacturing (H.K.) Ltd. changed its corporate name from Seiko Instruments (H.K.) Ltd. on
April 1, 2020.
Note 3: SEIKO Manufacturing (Singapore) Pte. Ltd. changed its corporate name from Seiko Instruments
Singapore Pte. Ltd. on April 1, 2020.
Note 4: Seiko Clock Inc. ceased to exist on April 1, 2021 through an absorption-type merger with theCompany’s consolidated subsidiary, Seiko Time Systems, Inc. as the surviving company. The
surviving company, Seiko Time Systems, Inc. changed its corporate name to SEIKO Time Creation
Inc. on the same date.

- 37 -

(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 12,092 (an increase of 145
from the previous fiscal year-end).

(10)

Major lenders and amounts borrowed
Lenders

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

42,009Sumitomo Mitsui Banking Corporation

23,233

Aozora Bank, Ltd.

13,945

- 38 -

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 60,225 treasury shares)

149,200,000 shares

41,404,261 shares(3)

Number of shareholders at the end of the fiscal year ended March 31, 2021

(4)

Major shareholders (top 10)
Name

15,297

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)

1,951,000

4.7

The Dai-ichi Life Insurance Company, Limited

1,800,000

4.4

Custody Bank of Japan, Ltd. (Trust Account)

1,780,800

4.3

Hideo Hattori

1,622,455

3.9

Custody Bank of Japan, Ltd. (Trust Account 9)898,700

2.2

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.
3.

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

- 39 -

4.

Matters related to officers(1)

Name, etc. of Directors and Corporate Auditors (as of March 31, 2021)
Name

Shinji Hattori
Yoshinobu
Nakamura
Akihiro Okuma

Position and responsibility
at the Company

Significant concurrent positions at other entities

Chairman & Group CEO

Chairman & CEO of SEIKO WATCH

Group Chief Culture Officer

CORPORATION(Group CCO)

Chairman of WAKO Co., Ltd.

President

Chairman of Seiko Instruments Inc.

Senior Executive Director in

Director, Senior Executive Vice President of Seikocharge of Human Resources

Instruments Inc.

and IT Planning
Executive Director in charge ofFinance & Corporate Strategy
Planning, ESG & SDGs
Promoting, Accounting, andShimesu

Procurement Planning

Takizawa

General Manager of the
Finance & Corporate Strategy

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

Planning Department
General Manager of the
Accounting Department
KiyokoExecutive Director in charge ofNiwasaki

Corporate Branding
Director in charge of Legal andKazuhiko
Sakamoto

Real Estate Management
General Manager of the Real
Estate Management

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

Department
Director in charge of
Secretariat and General Affairs
MakotoSenior General Manager of the

Ichimura

Business Incubation Center
General Manager of the

Director, Executive Vice President of SEIKO
Solutions Inc.
Outside Director of OHARA INC.

Secretaries Office
Shuji Takahashi

Director in charge of Watches

President & COO & CMO of SEIKO WATCH

Business and DX Promoting

CORPORATION

- 40 -

Director in charge of Business
Tetsu Kobayashi

Incubation, Research &Development and Production

President of Seiko Instruments Inc.

Engineering
TsuyoshiDirector

NaganoYasuko Teraura

Director

Haruhiko TakagiStanding Corporate Auditor

Takashi

Chairman of the Board of Tokio Marine Holdings, Inc.
Partner Attorney of Endeavour Law OfficeOutside Director of Neturen Co., Ltd.
Outside Corporate Auditor of OHARA INC.

Standing Corporate Auditor

Nishimoto
Tomoyasu

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. 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)
Ms. Kiyoko Niwasaki was newly appointed as Director, Mr. Takashi Nishimoto was
newly appointed as Corporate Auditor, and assumed office at the 159th Ordinary
General Meeting of Shareholders held on June 26, 2020.
(2)

Ms. Hiromi Kanagawa, Director, retired from office of Director by resignation, and Mr.
Seiichi Mikami, Corporate Auditor, retired from office of Corporate Auditor due to the- 41 -

expiry of his term of office at the close of the 159th Ordinary General Meeting of
Shareholders held on June 26, 2020.
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. Shinji Hattori, Chairman & Group CEO, assumed office of Chairman of SEIKO
WATCH CORPORATION as of April 1, 2021.
(2)

Ms. Kiyoko Niwasaki, Executive Director, assumed office of Director, Executive Vice
President of WAKO Co., Ltd. as of April 1, 2021.

(3)

Mr. Kazuhiko Sakamoto, Director, assumed office of Director, Senior Executive Vice
President of WAKO Co., Ltd. as of April 1, 2021.

(4)

Mr. Shuji Takahashi, Director, retired from office of President & COO & CMO of
SEIKO WATCH CORPORATION as of March 31, 2021.

(5)

Mr. Tomoyasu Asano, Corporate Auditor, retired from office of Chief Director of the
Cardiovascular Institute as of October 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.
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.
(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 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.
(3)

Overview of directors and officers liability insurance

The Company has entered into a directors and officers liability insurance (D&O insurance) policy with aninsurance company, with all Directors, Corporate Auditors, and Senior Vice Presidents of the Company and its
subsidiary Seiko Instruments Inc. as the insured. The insurance policy covers the insured against claims fordamages and costs of litigation arising out of acts (including omissions) committed by the insured in the course of
his or her duties as a director or an officer of a company. However, we have taken measures to ensure that the- 42 -

appropriateness of the execution of duties by directors and officers is not compromised by excluding fromcoverage damage caused by criminal or intentionally illegal acts. All insurance premiums are paid by theCompany.
(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

256

242

0

14

10

Outside Directors

19

19

-

-

2

Total

275

261

0

14

12

37

37

-

-

3

28

28

-

-

3

66

66

-

-

6

Outside Directors)

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

Note 1: The forgoing includes one Director and one Corporate Auditor who retired from their offices atthe close of the 159th Ordinary General Meeting of Shareholders held on June 26, 2020.
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 for the current fiscal year.
Note 3: For the current fiscal year, all Executive Directors returned voluntarily all or part of theirperformance-based compensation in view of deterioration in business results due to the impact of
the spread of the novel coronavirus, as follows:
Bonuses: Full amounts were returned.
Stock compensation: Performance-based portion of granted points was returned.

- 43 -

Target values, actual results, and performance achievement ratios of indicators related to performancebased compensation, etc. for the current fiscal year are as follows:(Bonuses)
For the current fiscal year, target values were not set because all Executive Directors returned voluntarily
full amounts of bonuses, as deterioration in business results was expected due to the impact of the spreadof the novel coronavirus.
(Stock compensation)
For the current fiscal year, target values were not set because all Executive Directors returned voluntarily
all the performance-based portion of granted points, as deterioration in business results was expected dueto the impact of the spread of the novel coronavirus.
(5)

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.

- 44 -a) Basic policy for compensation for Directors
In determining compensation for Directors and Corporate Auditors of the Company, the basic policy is
as follows:- 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 President
shall be determined by adding the amounts obtained by multiplying the standard payments by thepayment ratio according to the performance achievement ratio, to the amounts obtained by multiplying

- 45 -

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)
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.

- 46 -

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

President

1.0

0.2

0.2

Executive Directors otherthan President

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.

- 47 -

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 at the Board of
Corporate Auditor, in the range of aggregate amount of compensation for Corporate Auditors approvedat the General 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. Yoshinobu Nakamura, President to determine the specific contents. The
position and responsibility at the Company on the day that such details were determined are the same as(1) above. The delegated authority and the measures to ensure that the authority is properly exercised arestated in (6), f) above.
The reason that the authority is delegated to Chairman and President is that the Board of Directors judgedthat President is the most suitable for evaluating the duties of each Director while taking a bird’s-eye viewof 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.

(9)

Activities at the Board of Directors and the Committee in the process of determining the amounts ofcompensation, etc. for officers for the current fiscal year
The Corporate Governance Committee deliberated on the appropriateness of the compensation level of
Directors and the amount of performance-based compensation paid for the current fiscal year, andreported them to the Board of Directors.

- 48 -

(10)

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 11
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 11 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 11 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.

- 49 -

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 all of the 11
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 11 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.

Note: In addition to the above number of Board of Directors meetings, there were two resolutions in writingthat were deemed to have been passed by the Board of Directors in accordance with Article 370 of theCompanies Act and Article 29 of the Articles of Incorporation of the Company.
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: 209 million yen

- 50 -

(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:

212 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.
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, 2020,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, 2021; 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.

- 51 [Translation]
Consolidated Balance Sheet
As of March 31, 2021
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
Retirement benefit asset
Deferred tax assets
Other
Allowance for doubtful accounts

Total assets

AmountItem

Millions of yen
Amount(Liabilities)(150,039) Current liabilities:
32,611
Notes and accounts payable - trade
Electronically recorded obligations 37,185
operating
42,365
Short-term borrowings
13,878Current portion of bonds payable
12,180Current portion of long-term
4,932
borrowings
8,306
Accounts payable - other-1,421
Income taxes payable
Provision for bonuses
Provision for goods warranties
Provision for loss on lease contracts
Other provisions
Asset retirement obligations
Other(169,632) Non-current liabilities:(103,177)
Bonds payable
74,459Long-term borrowings
79,098
Lease obligations
34,183
Deferred tax liabilities
8,831
Deferred tax liabilities for land
-150,227
revaluation
54,409Provision for loss on lease contracts
2,422
Provision for stock benefits
Provision for gift certificate exchange
lossesProvision for long-term goods
warranties
Provision for retirement benefits for(15,830)
directors (and other officers)
7,336
Other provisions
8,493
Retirement benefit liability
Asset retirement obligations
Other
Total liabilities(50,625) (Net assets)
41,463 Shareholders' equity:
391
Share capital
2,273
Capital surplus
6,605
Retained earnings-109
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
319,671 Total liabilities and net assets(145,679)
19,3106,048
72,611
350
17,315
9,266
1,478
3,634
367
348
414
6
14,528(60,909)450
35,263
4,499
3,346
3,614
785
161
152
86
35
21
9,402
729
2,361
206,589(92,839)
10,0007,245
75,909-315(18,856)
10,431
-133
8,190
1,055
-687
(1,387)113,082319,671

- 52 [Translation]
Consolidated Statements of Income
From April 1, 2020
to March 31, 2021
Item
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit
Non-operating income
Interest income
Dividend income
House rent and other rental revenues
Royalty income
Foreign exchange gains
Other
Non-operating expenses
Interest expenses
Share of loss of entities accounted for using equity method
Other
Ordinary profit
Extraordinary income
Gain on sale of investment securities
Gain on sales of non-current assets
Subsidy income
Gain on liquidation of subsidiaries and associates
Extraordinary losses
Loss on the spread of infectious disease
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
Amount202,671
122,804
79,866
77,672
2,194(2,315)
55
771
350
324
278
534
(3,876)
899
1,826
1,149
633
(9,406)
7,603
1,043
618
140
(3,614)
3,614
6,424
1,682
1,088
3,653
177
3,475

- 53 [Translation]
Non-Consolidated Balance Sheet
As of March 31, 2021
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)
73,569 Current liabilities:
8,197
Short-term borrowings
749
Current portion of long-term
58,206borrowings
5,803
Lease obligations (current)
611
Accounts payable - otherAccrued expenses
Income taxes payable
Deposits received
Unearned revenue
119,283
Provision for bonuses
32,635 Non-current liabilities:
5,530
Long-term borrowings
280
Lease obligations (non-current)
1,757
Deferred tax liabilities
24,043
Deferred tax liabilities for land32
revaluation
991
Provision for loss of subsidiaries andassociates
2,479
Provision for stock benefits
1,952
Asset retirement obligations (non6current)
500
Guarantee deposits
20
Other
Total liabilities(Net assets)
84,168 Shareholders' equity:
22,082
Share capital
Capital surplus
60,106
Legal capital surplus
0
Other capital surplus
Retained earnings
12,340Legal retained earnings
Other retained earnings
23
Retained earnings brought
forward37
Treasury shares
1,724 Valuation and translation adjustments:
266
Valuation difference on available-for-12,412
sale securities
Deferred gains or losses on hedges
Revaluation reserve for land
Total net assets
192,853 Total liabilities and net assets

89,464
63,912
17,240
20
2,693
394
13
4,662
238
288
47,89235,043
11
3,654
3,614
1,960
161
123
3,086
237
137,357
37,646
10,000
6,625
2,378
4,246
21,310121
21,189-288
17,849
9,792
-133
8,190
55,495
192,853

- 54 [Translation]
Non-Consolidated Statements of Income
From April 1, 2020
to March 31, 2021

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
Subsidy income
Gain from forgiveness of consolidated tax payable
Extraordinary losses
Provision of allowance for investment loss of subsidiaries and affiliates
Loss on the spread of infectious disease
Profit before income taxes
Income taxes - current
Income taxes - deferred
ProfitMillions of yen
Amount11,301
7,054
2,136
2,110
10,864
436
1,982
692
745
544
1,609
716
671
222
809
516
506
9
0
1,252
990
262
73
-1,608120
1,560

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

Independent Auditor’s Report

May 10, 2021
KPMG AZSA LLC
Tokyo Office
Akihiro Ohtani [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, 2020 through March 31, 2021.
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.

- 56 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.
・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

- 57 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.

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

May 10, 2021
KPMG AZSA LLC
Tokyo Office
Akihiro Ohtani [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 160th fiscal year from April 1, 2020 through March 31, 2021.
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,
2021, 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.

- 59 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

- 60 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.

- 61 [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, 2021 (from April 1, 2020 to March 31, 2021).
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.

- 62 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, 2021.
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 11, 2021
Board of Corporate Auditors
Seiko Holdings Corporation
Haruhiko Takagi [seal]
Standing Corporate Auditor
Takashi Nishimoto [seal]
Standing Corporate Auditor
Tomoyasu Asano [seal]
Outside Corporate Auditor
Hideki Amano [seal]
Outside Corporate Auditor
Masatoshi Yano [seal]
Outside Corporate Auditor