Providing Dreams and Excitement SEGA SAMMY HOLDINGS INC. SEGA CORPORATION Sammy Corporation Shiodome Sumitomo Building, 21F 1-2-12 Haneda, Ohta-ku, Tokyo 144-8531 Sunshine 60 Building, 29F to People Throughout the World Overview of 1-9-2 Higashi Shimbashi, Minato-ku, Tokyo ●SEGA develops, manufactures and sells 3-1-1 Higashi-Ikebukuro, Toshima-ku, Tokyo Companies 105-0021 game machines for amusement use; 170-6029 ●As the holding company of a group of develops and operates amusement ●Sammy develops, manufactures and sells In October 2004, SEGA CORPORATION and Sammy Corporation merged their business resources in order to maximize their entertainment companies, SEGA SAMMY centers; and develops and home video pachinko and pachislot game machines. HOLDINGS INC. manages the Group and game software. corporate value and establish a solid standing for themselves as world-class entertainment companies. Thus, the SEGA conducts supportive activities. SAMMY Group was born. By improving its relationships of trust with stakeholders, the Group aims to achieve its own and Types of society’s continued development. This year, moreover, it is issuing its first CSR report. Business Amusement Center Operation Business Pachislot and Pachinko Business Development and operation of Development, manufacture and amusement centers. distribution of pachinko machines, Amusement Pachislot and pachislot machines, and peripheral Center Operation Pachinko equipment. Business Business SEGA SAMMY HOLDINGS INC. Sammy Corporation SEGA CORPORATION Amusement ■ SEGA SAMMY Group Companies List Machine Sales Other Businesses Business ●JAPAN ●Overseas SEGA CORPORATION Sega Holdings U.S.A., Inc. Amusement Machine Sales Business Sammy Corporation Sega Amusements U.S.A., Inc. Other Businesses Sammy Networks, Co., Ltd. Sega Amusement Works, LLC Development, manufacture and Planning, design, supervising, and SEGA TOYS CO., LTD. Sega Enterprises, Inc. (U.S.A.) distribution of games machines for construction of commercial facilities, etc. amusement centers. Consumer TMS ENTERTAINMENT, LTD. Sega Entertainment U.S.A., Inc. Business NISSHO INTER LIFE CO., LTD. Sega of America, Inc. IT Communications Co., Ltd. Secret Level, Inc. eAddress Corporation Sega Holdings Europe Ltd. WAVEMASTER, INC. Sega Europe Ltd. Consumer Business SI ELECTRONICS, LTD. Sega Amusements Europe Ltd. OASIS PARK Co., Ltd. Sega Benelux B.V. Design, production and distribution of game GINZA Corporation Sega France S.A. software, toys, animation, and content for mobile phones. GINZAHANBAI Corporation Sega Germany G.m.b.H Sammy Systems Corporation Sega Publishing Europe Ltd. Sammy Design Co., Ltd. Sports Interactive Ltd. Sammy Rental Services Co., Ltd. The Creative Assembly International Ltd. XYZ CINEMAS CO., LTD. The Creative Assembly Ltd. Financial SEGA SAMMY ASSET MANAGEMENT INC. Sega (Shanghai) Software Co., Limited Affairs SEGA SAMMY HOLDINGS INC. (consolidated) (unit: ¥1 mil.) SEGA SAMMY GOLF ENTERTAINMENT INC. Sega Networks (China) Co., Ltd. SEGA SAMMY MEDIA INC. Sega Shanghai Co., Ltd. Period ended 3/05 Period ended 3/06 Period ended 3/07 SEGA TOYS PLUS CO., LTD. Shanghai New World Sega Recreation Co., Ltd. SEGA Bee LINK Co., LTD. Sega Amusements Singapore Pte. Ltd. Net sales 515,668 553,240 528,238 SEGA MUSIC NETWORKS Co., Ltd. Sega Amusements Taiwan Ltd. Ordinary income 104,432 119,500 81,287 SEGA LOGISTICS SERVICE CO., LTD. Sega Korea, Ltd. Total assets 438,991 522,914 549,940 TAIYO CO., LTD SEGA TOYS (HK) CO., LTD. DARTSLIVE Co., Ltd. Sammy NetWorks Asia Pacific Ltd. Equity ratio 59.0 60.6 61.5 Telecom Animation Film Co., Ltd. Sammy NetWorks Beijing Co., Ltd. Number of employees 5,407 6,416 7,734 TOMS PHOTO CO., LTD. Guangzhou Huachuang Information Technology Co., Ltd. TMS MUSIC, CO., LTD. TMS MUSIC (UK) LIMITED ※For the period ended 3/05, the business year was October 1, 2004 - March 31, 2005, but the financial data was considered as starting from April 1, 2004. Japan Multimedia Services Corporation TMS MUSIC (HK) LIMITED ※For details on financial indicators, please see our annual reports or SEGA SAMMY HOLDINGS INC’s Media-Trust Co., Ltd. website (http://www.segasammy.co.jp/english/ir/index.jsp). REALUS INC. (As of July 31st, 2007) RECIPE Ltd. RemArt Co., Ltd. RODEO Co., Ltd. SEGA SAMMY GROUP CSR REPORT 2007 1 CONTENTS Group Management Philosophy By providing entertainment filled with dreams and excitement to people throughout the Message from the Top 4 ■ world, we will strive to enrich our society and culture. Business Activities that Provide Dreams and Excitement ① SEGA ：Entertainment that All Generations Can Enjoy 6 ■ Business Activities that Provide Dreams and Excitement Sammy Giving Pachinko and Pachislot a Friendly Aura 8 CSR Charter ② ： ■ Activities as a Corporate Citizen ①：Edutainment ── Creating a New Type of Education 10 ■ Regarding the Creation of the Group CSR Charter Activities as a Corporate Citizen ②：Providing Dreams and Excitement Through Sports 12 ■ We have established the following CSR Charter as we regard the fulfillment of corporate social responsibility (CSR) as one of our most Corporate Governance 14 ■ important management objectives. As a responsible corporate citizen, we will comply with all relevant laws, regulations and social norms and further deepen the relationship with our stakeholders. Through these efforts, we believe we can provide sound management of our CSR Management 16 ■ Group and fulfill our responsibilities to society. This CSR Charter provides guidelines for our business operations. Relations with Stakeholders ■ With Customers We will bear in mind the current needs and interests of our customers in our effort to provide entertainment filled with dreams and Together with Customers excitement. Improvement of Customer Satisfaction 20 ■ Disclosing Information About Products and Services / Marketing 22 ■ With Partners Business Efforts / Efforts to Protect Personal Information 23 ■ We will maintain fair and impartial relationships with our suppliers and work together as partners in providing entertainment Together with Business Partners filled with dreams and excitement. Fair Selection 24 ■ Equitable Relations 25 ■ With Shareholders and Investors We will view our business with a global perspective in our efforts to ensure sustained growth and to maximize enterprise value. Together with Shareholders and Investors Additionally, we will enhance management transparency and meet the expectations of our shareholders and society through fair and timely Accurate, Fair and Prompt Disclosure of Information 26 ■ disclosure and appropriate returns in profits. Distribution of Profit and Preventing Insider Trading 27 ■ With Employees Our employees bring to us creativity and a spirit of challenge. They are our most cherished assets and the fuel to our growth. Together with Employees We will cultivate a corporate culture which allows them to fully exploit their talents and enables us to grow together with our employees. SEGA Career Paths / Diversity / Health and Safety 28 ■ Sammy Career Paths / Work-Life Balance / Diversity / Health and Safety 30 ■ With Society As corporate citizens, we will contribute to society not only by prospering in business but also by proactively supporting both the Together with Society (Social Contributions) development of cultural activities including art and sport and the preservation of the global environment. Support for Sports, the Arts, and Other Cultural Activities 32 ■ Support for Social Contribution Activities / Social Responsibility (Donation Activities) 34 ■ Social Contribution Activities that Make Use of Our Business Activities / Efforts of Group Companies 35 ■ (Environment) Observance of Environmental Laws and Regulations / Effective Use of Resources and Energy 36 ■ Editorial Policy Conducting of Environmental Education / Support for Environmental Protection Activities 39 ■ Third Party’s Opinion 40 ■ This is the first CSR report to be issued by the SEGA SAMMY In addition, we have used as many photographs and illustrations as Group. In order to make it easy to read and easy to understand for possible and otherwise given importance to the report’s Guidelines Used as Reference for This Report Abbreviations Used in This Report our various stakeholders, in preparing it we carried out the appearance. Furthermore, we kept down the number of pages in 《GRI “Sustainability Reporting Guidelines 2006”》 In this report, SEGA SAMMY HOLDINGS INC. is referred to as “Company”; SEGA ※GRI (Global Reporting Initiative) is a non-profit organization that has created, and is working to CORPORATION, as “SEGA”; and Sammy Corporation, as “Sammy.” measures listed below. The performance information presented is the report and posted the report on our website, thus giving disseminate, sustainability reporting guidelines that can be used worldwide. Relationship to Annual Reports Disclaimer mainly from fiscal 2007. consideration to the environment by not issuing the report on paper. This report contains not only past and current facts about the SEGA SAMMY Group, but Basically, an annual report presents financial information while a CSR report presents non- also forecasts and predictions about social conditions, and business plans and results as financial information. For detailed financial information not presented in this CSR report, please 1. Using the framework of our CSR Charter, we presented In order to continue to reflect the spirit of CSR in its operations, the of the day of issue. These forecasts and predictions are suppositions or judgments based see our annual