Annual Report 2015

PROFILE
KOEI TECMO HOLDINGS CO., LTD. is an entity that was born as a result of a merger between two
companies, Koei and Tecmo. Both companies have roots in different fields of entertainment, with
Koei starting out in PC software development and Tecmo in business related to amusement facilities . Even though both companies have been around for half a century in the same industry, they
have cultivated different cultures and different expertise.
By unifying these differences, Koei Tecmo will vigorously continue its work in the spirit of “Creativity and Contribution” to deliver even newer and higher quality entertainment content that isable to enrich the hearts of users world-wide.

CONTENTS
Profile............................................................. 1
Top Message................................................. 2
Financial Information................................... 3
Corporate Data............................................... 25

1

TOP MESSAGE

ChairmanKeiko Erikawa
President & CEO

Yoichi Erikawa
In the game industry, although the Japanese home video game market has declined from the previous year, the overseas
market has grown and exceeded the previous year driven mainly by the “PlayStation®4” and “Xbox One”. In addition, withthe expansion of digital sales such as downloadable content and the increased popularity of mobile gaming worldwide, alongwith the diversification of gaming platforms, the overall game market can likely expect further growth.
Under these conditions, our group has implemented a variety of measures based on our management policy of “Further IP
Creation and Expansion.”In the game software field, “Hyrule Warriors,” a major collaborative title, and “DRAGON QUEST HEROES: The World
Tree’s Woe and the Blight Below”, which we developed, have both been received extremely well. In online and mobile area,
we have proceeded to expand our major social games across multiple platforms, and “Uncharted Water Ⅴ” expanded further
into the Asian market. In the licensing and media business sector, events and goods are doing well.
As a result, we have achieved increased sales for the second consecutive year and a profit increase for the fifth consecutive year, with the highest profit ever recorded. In terms of dividend, we have delivered the highest dividend ever since themerger of Koei and Tecmo, far surpassing the previous year.
For the coming year, with our management policy set as “IP Creation and Expansion,” we aim to create successful, newIPs, promote major collaborations worldwide, and expand our mobile game business ventures.
One of our representative IPs, “Romance of the Three Kingdoms,” enjoys its 30th anniversary this year. In commemoration of this remarkable anniversary, we plan to release many appealing titles, like the latest in the “Romance of the Three
Kingdoms” series, “Romance of the Three Kingdoms ⅩⅢ”, a collaborative title called “Youkai-Sangokushi,” to name a few.
We thank you for your support and ask for your continued cooperation in our present and future endeavors.

2

KOEI TECMO HOLDINGS CO.,LTD. AND CONSOLIDATED SUBSIDIARIESCONSOLIDATED BALANCE SHEETSAS OF MARCH 31

Millions of yen

ASSETS
Current assets:
Cash and time deposits (Notes 3 and 5)
Notes and accounts receivable (Note 5)
Marketable securities (Notes 3, 5, and 8)
Merchandise and Finished goods
Work in process
Raw materials
Deferred tax assets (Note 11)
Other current assets
Allowance for bad debts (Note 5)
Total current assets
Property and equipment: (Note 4)
Buildings and structures, net (Notes 6 and 12)
Land (Notes 6 and 12)
Other
Total property and equipment
Intangible assets:
Goodwill
Other
Total Intangible assets
Investments and other assets:
Investment securities (Notes 5 and 8)
Lease and guarantee deposits
Asset for retirement benefits (Notes 2 and 10)
Deferred tax assets (Note 11)
Other
Total investments and other assets
Total assets
The accompanying notes are an integral part of these statements.

3

Thousands of U.S. dollars

2015

2014

¥ 11,958
9,734
1,924
180
14
84
839
2,283
(11)
27,007¥ 12,192
8,755
787
183
17
96
826
2,454
(40)
25,274$ 99,512
81,007
16,013
1,501
118
702
6,987
19,000(98)
224,744

13,081
6,345
653
20,080

9,857
5,621
566
16,045

108,857
52,804
5,441
167,103

677
136
813

1,090
275
1,366

5,638
1,134
6,773

65,893
674
271
268
205
67,313¥ 115,216

56,905670
211
148
57,934¥ 100,622

548,332
5,611
2,260
2,236
1,713
560,155$ 958,776

2015

Millions of yen

LIABILITIESCurrent liabilities:
Notes and accounts payable – trade
Accounts payable – other
Income taxes payable
Accrued bonuses to employees
Accrued bonuses to directors
Allowance for sales returns
Allowance for sales discountAllowance for customer‐discount points
Deferred tax liabilities (Note 11)
Other current liabilities
Total current liabilities2014¥ 2,338
1,014
2,849
1,022
258
18
527
15
0
2,902
10,949¥ 1,413
2,837
1,956
822
191
45
660
16
0
2,179
10,122$ 19,462
8,445
23,714
8,511
2,151
151
4,391
127
3
24,155
91,116Long-term liabilities:
Liability for retirement benefits (Notes 2 and 10)
Deferred tax liabilities (Note 11)
Other long-term liabilities
Total long-term liabilities
Total liabilities

2,873
720
3,594
14,543

193
1,037
480
1,710
11,83323,915
5,996
29,911
121,027

15,00015,000124,823

25,69953,955(1,735)25,69948,036(2,200)213,856448,991(14,438)

92,91986,535773,232

7,598(3,099)
2,642
531
7,672

3,322
(3,100)
1,710
267
2,199

63,233(25,796)
21,9884,419
63,844

80
100,672¥ 115,216

53
88,788¥ 100,622

670
837,748$ 958,776

NET ASSETS (Note 13)
Shareholders' equity:
Common stock
Authorized: 350,000,000 shares in 2015 and 2014
Issued: 89,769,479 shares in 2015 and 2014
Capital surplus
Retained earnings
Treasury stock: 2,230,495 shares at March 31, 2015 and2,834,138 shares at March 31, 2014
Total shareholders' equity
Accumulated other comprehensive income:Unrealized gains or losses on securities (Note 8)
Unrealized losses on revaluation of the land (Note 12)
Foreign currency translation adjustments
Accumulated adjustments for retirement benefits (Note 10)
Total accumulated other comprehensive income
Share subscription rights (Note 14):
Total net assets
Total liabilities and net assets
The accompanying notes are an integral part of these statements.

4

Thousands of U.S. dollars

2015

2015

KOEI TECMO HOLDINGS CO.,LTD. AND CONSOLIDATED SUBSIDIARIESCONSOLIDATED STATEMENTS OF INCOME
FOR THE YEARS ENDED MARCH 31

Millions of yen

Thousands of U.S. dollars

2015$ 314,551

Net sales（Note 17）2015¥ 37,799

2014¥ 37,576

Cost of sales (Note 9)
Gross profit

20,697
17,102

21,425
16,150172,231
142,320

Selling, general and administrative expenses (Note 9)
Operating income（Note 17）

7,450
9,652

9,010
7,140

61,99580,324

Other income (expenses):
Interest income
Dividend income
Gain on sales of investment securities (Note 8)
Gain on sales of property and equipment
Loss on valuation of securities (Note 8)
Loss on sales of investment securities (Note 8)
Loss on redemption of securities (Note 8)
Foreign exchange gain, net
Retirement benefit expenses (Notes 2 and 10)
Other, net
Income before income taxes and minority interests

1,811
1,317
2,654
147
(1,042)
(980)
(250)
(52)
457
13,715

1,656
1,159
1,870
(211)
(994)
(571)
348
(37)
330
10,691

15,073
10,96322,086
1,229(8,672)(8,155)(2,083)(434)
3,804
114,136

4,347
(65)
4,281
9,434
9,434

3,176
577
3,754
6,936
6,936

36,174(548)
35,62578,511
78,511

Income taxes (Note 11):
Current
DeferredIncome before minority interests
Net income

Per share:
Net income – Basic– Diluted
Cash dividends
The accompanying notes are an integral part of these statements.

Yen¥ 108.35
107.85
55.00

U.S. dollars¥ 79.86
79.52
40.00

$ 0.900.89
0.45

KOEI TECMO HOLDINGS CO.,LTD. AND CONSOLIDATED SUBSIDIARIESCONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
FOR THE YEARS ENDED MARCH 31

Millions of yen

2014¥ 6,936

Other comprehensive income(Note 16)
Unrealized gains on securities
Unrealized losses on revaluation of the land (Note 12)
Foreign currency translation adjustments
Adjustments for retirement benefits(Notes 2 and 10)
Total other comprehensive income

4,276
0
931
263
5,473

1,248
1,503
2,751

35,588
6
7,754
2,194
45,544Comprehensive income :14,907

9,688

124,055¥ 14,907¥ 9,688$ 124,055

Income before minority interests:

Comprehensive income attribute to:Shareholders of KOEI TECMO HOLDINGS CO.,LTD.
The accompanying notes are an integral part of these statements.

5

Thousands of U.S. dollars

2015¥ 9,4342015$ 78,511

KOEI TECMO HOLDINGS CO.,LTD. AND CONSOLIDATED SUBSIDIARIESCONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETSFOR THE YEARS ENDED MARCH 31

Millions of yen
Commonstock¥ 15,000

Balance at April 1, 2013
Cash dividends paid
Net income
Purchase of treasury stock
Disposal of treasury stock
Transfer of loss on disposal oftreasury stock
Net changes during the year
Balance at March 31,¥ 15,000and April 1, 2014
Cash dividends paid
Net income
Purchase of treasury stock
Disposal of treasury stock
Transfer of loss on disposal oftreasury stock
Net changes during the year
¥ 15,000
Balance at March 31, 2015

Capitalsurplus¥ 25,699(13)
13

Unrealized
gains orRetained Treasury losses on
stock securities
earnings¥ 43,978 (¥ 2,285) ¥ 2,073(2,865)
6,936
(6)
91
(13)
¥ 48,036 (¥ 2,200)(3,477)
9,434

(38)
38
¥ 25,699

Net assets¥ 81,623(2,865)
6,936
(6)
78
-

-

1,503

267

2

3,022

¥ 3,322 (¥ 3,100)¥ 1,710

¥ 267

¥ 53

¥ 88,788

1,248¥ 25,699

Unrealized
Foreign Retirement
losses on
benefits
currency
Sharerevaluation translation
liability subscriptionof the land adjustments adjustments
rights(¥ 3,100)
¥ 207
¥ 50

(3,477)
9,434
(8)
434

(8)
473

(38)

-

¥ 53,955 (¥ 1,735)

0
4,276¥ 7,598 (¥ 3,099)

931¥ 2,642

263
¥ 531

26
5,500
¥ 80 ¥ 100,672

Thousands of U.S. dollars
CommonCapital Retained Treasurystock
earnings
stock
surplus$ 124,823 $ 213,856 $ 399,741 ($ 18,308)(28,937)
78,511
(67)
3,938
(323)

Balance at April 1, 2014
Cash dividends paid
Net income
Purchase of treasury stock
Disposal of treasury stock
Transfer of loss on disposal of
(323)
323
treasury stock
Net changes during the year
Balance at March 31, 2015
$ 124,823 $ 213,856 $ 448,991 ($ 14,438)
The accompanying notes are an integral part of these statements.

6

Unrealized Unrealized
Foreign Retirement
Share
gains or losses oncurrency
benefits
losses on revaluation translation
liability subscription
rights Net assets
securities of the land adjustments adjustments$ 446 $ 738,858$ 27,644 ($ 25,802) $ 14,233$ 2,224(28,937)
78,511(67)
3,614
35,5886$ 63,233 ($ 25,796)

7,754$ 21,988

2,194$ 4,419223
45,768$ 670 $ 837,748

KOEI TECMO HOLDINGS CO.,LTD. AND CONSOLIDATED SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWSFOR THE YEARS ENDED MARCH 31

Millions of yen

Cash flows from operating activities:
Income before income taxes and minority interests
Depreciation and amortization
Amortization of goodwill
Increase (decrease) in allowance for bad debts
Increase in accrued bonuses to directors
Increase in accrued bonuses to employees
Interest and dividend income
Loss on valuation of investment securities
Gain on sales of investment securities
Loss (gain) on redemption of securities
Gain on sales of property and equipment
Foreign exchange losses (gains)
Decrease (increase) in notes and accounts receivable
Decrease in inventories
Increase (decrease) in notes and accounts payableOther
Sub totalInterest and dividend income received
Interest paid
Income taxes refund
Income taxes paid
Net cash provided by operating activities
Cash flows from investing activities:
Payments into time deposits
Proceeds from withdrawal of time deposits
Purchase of short-term and long-term securities
Proceeds from sales and redemption of short-term and longterm securities
Purchase of property and equipment
Purchase of intangible fixed assets
Proceeds from sales of property and equipment
Proceeds from collection of guarantee deposits
Other
Net cash used in investing activities
Cash flows from financing activities:
Proceeds from disposal of treasury stock
Purchase of treasury stock
Cash dividends paid
Net cash used in financing activities
Effect of exchange rate changes on cash andcash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year (Note 3)

The accompanying notes are an integral part of these statements.

7

Thousands of U.S. dollars

2015

2014

2015

¥ 13,715
921
413
(31)
66
187
(3,128)1,042(1,674)
(35)
(142)
59
(785)
14
820
356
11,798
2,437
(0)
595
(4,474)
10,357¥ 10,691
894
1,242
3
100
73
(2,815)
211
(876)
539
(334)
718
273
(2,758)
(25)
7,938
2,416
(0)
1,236
(4,326)
7,265$ 114,136
7,666
3,438
(263)
555
1,557
(26,037)
8,672(13,930)(298)(1,187)491(6,533)
120
6,831
2,967
98,18520,281(1)
4,956(37,233)
86,187(1,308)1,302(23,185)(1,043)597(25,133)(10,885)
10,837(192,936)

19,49018,766

162,190(4,644)
(47)
564
240
8
(7,579)(1,750)
(50)
59
13
(44)
(8,585)(38,652)
(392)
4,698
2,000
67
(63,072)434(8)(3,471)(3,045)78(6)(2,858)(2,787)

3,614(68)(28,890)(25,344)377
109
11,764¥ 11,874

764(3,342)
15,107¥ 11,764

3,143
914
97,902$ 98,817

KOEI TECMO HOLDINGS CO.,LTD. AND CONSOLIDATED SUBSIDIARIESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. Summary of significant accounting policies:(1) Basis of presentation of consolidated financial statements The accompanying consolidated financial statements of KOEI TECMO HOLDINGS CO., LTD. (“the Company”) have been prepared inaccordance with the provisions set forth in the Financial Instruments and Exchange Act of Japan and its related accounting regulations, andin conformity with accounting principles generally accepted in Japan (“Japanese GAAP”), which are different in certain respects as toapplication and disclosure requirements of International Financial Reporting Standards.
The accounts of consolidated overseas subsidiaries for the years ended March 31, 2015 and 2014 are prepared in accordance with either
International Financial Reporting Standards or U.S. generally accepted accounting principles, with adjustments for the specified five items asapplicable. The accompanying consolidated financial statements have been restructured and translated into English from the consolidated
financial statements of the Company prepared in accordance with Japanese GAAP and filed with the appropriate Local Finance Bureau of the
Ministry of Finance as required by the Financial Instruments and Exchange Act of Japan. Some supplementary information included in thestatutory Japanese language consolidated financial statements, but not considered necessary for fair presentation, is not presented in theaccompanying consolidated financial statements.
As permitted by the Financial Instruments and Exchange Act of Japan, amounts of less than one million yen have been omitted. Consequently, the totals shown in the accompanying consolidated financial statements (both in yen and U.S. dollars) do not necessarily agree withthe sum of the individual amounts. Certain amounts in the prior year’s financial statements have been reclassified to conform to the current
year’s presentation.
The translations of the Japanese yen amounts into U.S. dollars are included solely for the convenience of readers outside Japan, using theprevailing exchange rate at March 31, 2015, which was ¥120.17 to U.S. $1. The convenience translations should not be construed as
representations that the Japanese yen amounts have been, could have been, or could in the future be, converted into U.S. dollars at this or any
other rate of exchange.
(2) Basis of consolidation and investments in affiliated companies The consolidated financial statements include the accounts of the Company and its subsidiaries, including KOEI TECMO GAMES CO.,LTD., KOEI TECMO NET CO., LTD., KOEI TECMO WAVE CO., LTD., CWS Brains, LTD., KOEI TECMO CAPITAL CO., LTD., KOEITECMO AMERICA Corporation, KOEI TECMO EUROPE LIMITED, KOEI TECMO TAIWAN CO., Ltd., TECMO KOEI CANADA Inc.,
KOEI TECMO TIANJIN SOFTWARE CO., LTD., KOEI TECMO BEIJING SOFTWARE CO., LTD., KOEI TECMO SINGAPORE Pte.
Ltd., and KOEI TECMO LIV CO., LTD. Some subsidiaries whose net income would have no material effect on the financial statements havenot been consolidated. All significant intercompany transactions and accounts have been eliminated in consolidation.
GUST CO., LTD., was absorbed into KOEI TECMO GAMES CO., LTD., (the Company's consolidated subsidiary) in an absorption-typemerger on October 1, 2014
(3) Translation of foreign currency All the assets and liabilities of foreign subsidiaries are translated into Japanese yen at the appropriate year-end rate and all income andexpense accounts are translated at the average rate of exchange for the year. The translation of net assets is made using historical rates. The
resulting translation differences are presented as “Foreign Currency Translation Adjustments” in the accompanying consolidated balance
sheets.
Foreign currency receivables and payables are translated at year-end rates and the resulting translation gains and losses are included inincome currently.
(4) Cash equivalents For the purpose of the consolidated statements of cash flows, the Company and its consolidated subsidiaries have classified time deposits
and other highly liquid investments as cash equivalents if the original maturities of such investments are three months or less.
(5) Financial instruments (a) Derivatives
All derivatives are stated at fair value, with changes in fair value being included in the net profit or loss for the period in which they arise.
(b) Marketable securities and investment securities
Marketable securities and investment securities held by the Company and its consolidated subsidiaries are classified into three categories:
Trading securities, held for the purpose of generating profits on short-term differences in prices, are stated at fair value, with changes infair value being included in the net profit or loss for the period in which they arise.
Held-to-maturity securities are stated at amortized cost method (straight line method).
Investments in equity securities issued by unconsolidated subsidiaries are stated at cost because the effect of application of the equity
method would be immaterial.
Other securities for which market quotations are available are stated at fair value. Net unrealized gains or losses on these securities arereported as a separate component of net assets, net of applicable taxes.
Other securities for which market quotations are not available are stated at cost or at amortized cost, except as stated in the following
paragraph:
In cases where the fair value of equity securities issued by unconsolidated subsidiaries, or other securities has declined significantly andsuch impairment in value is not deemed temporary, those securities are reduced to fair value and the resulting losses are included in the net
profit or loss for the period.
The net amount of equity included in the Company’s financial statements from investment partnerships and similar investments, iscalculated based on the relevant financial statements for the partnership available as of the reporting date.
8(6) Inventories Inventories of the Company and its consolidated subsidiaries are determined using the moving-average method for merchandise,finished goods and raw materials and the specific identification method for work-in-process (unless market value of inventories
declines significantly and is not expected to recover to cost, in such cases costs are reduced to net realizable values).
(7) Property and equipment The property and equipment of the Company and its domestic subsidiaries is being depreciated using the declining balance method, except
for buildings acquired after the year ended March 31, 1998, which are being depreciated by the straight-line basis. The property and equipment held by foreign consolidated subsidiaries is being depreciated by the straight-line basis, based on the estimated useful lives of theassets.
The range of useful lives for “Buildings and structures” is principally from 3 to 50 years.
(8) Intangible assets The cost of software for sale, other than that related to R&D activities, is capitalized and amortized in the proportion of revenue for theperiod to total estimated ultimate revenue. The costs related to R&D activities are expensed as incurred.
Software costs for internal use are capitalized and amortized over their estimated useful lives on a straight-line basis.
Goodwill is amortized over its estimated useful lives on a straight-line basis. When the amounts are immaterial, the goodwill is amortized as
incurred.
(9) Accrued bonuses to employees Accrued bonuses are stated at the estimated amount of the bonuses to be paid to employees based on their services provided during the
fiscal year.
(10) Accrued bonuses to directors Accrued bonuses are stated at the estimated amount of the bonuses to be paid to directors based on their services for the current fiscal year.
The accounting standard requires that directors' bonuses be accounted for as an expense of the accounting period in which such bonuses
were accrued.
(11) Allowance for bad debts An allowance for bad debts is established at an amount considered to be appropriate based primarily on the past credit loss experience of the Company and its consolidated subsidiaries, plus an additional amount deemed necessary to cover possible losses estimatedon an individual account basis.
(12) Allowance for sales returns An allowance for sales returns is provided for losses due to the return of products at an amount calculated based on historical experience.
(13) Allowance for sales discount An allowance for sales discount is provided for the losses incurred on sales discount of the Company’s products.
(14) Allowance for customer-discount points An allowance for customer-discount points is provided for the accumulation of points granted to online shopping users. The amount ofallowance is determined based on the past usage of points.
(15) Finance leases For finance lease transactions other than those which transfer ownership to the lessee, the straight-line method is adopted with a residual
value of zero, with the lease period deemed equal to the service life of the asset. For such transactions originating before the first year of
application of Accounting Standard No.13 (Corporate Accounting Standards for Lease Transactions), accounting methods suitable toordinary lease transactions are applied.
(16) Income taxes Provision is currently made for the income taxes applicable to all revenue and expense items reported in income tax returns on the basis ofwhen such items are taxable or deductible. The asset and liability approach is used to recognize deferred tax assets and liabilities for the
expected future tax consequences of temporary differences between the financial statement carrying amounts and the tax bases of assets andliabilities.
(17) Retirement benefits (a) Method for attributing projected benefits to periods
The retirement benefit obligation is calculated by attributing projected benefits to periods until the end of the current fiscal year on abenefit formula basis.
(b) Amortization of past service cost and actuarial gains/losses
Past service cost is amortized on a straight-line basis over certain periods (from 9 to 12 years), which are shorter than the averageremaining years of service of the eligible employees. Net actuarial gain or loss is amortized from the following year on a straight-line
basis over certain periods (from 9 to 12 years), which are shorter than the average remaining years of service of the eligible employees.
9(18) Practical solution on unification of accounting policies applied to foreign subsidiaries for consolidated financial statements The Company has applied “Practical solution on unification of accounting policies applied to foreign subsidiaries for consolidated financial
statements” (ASBJ Practical Issues Task Force No. 18, February 19, 2010), and necessary modifications have been made for consolidation.
(19) Net income per share Basic net income per share of common stock (“Basic EPS”) is computed based on the weighted average number of shares of common stock
outstanding during each year. Diluted net income per share of common stock (“Diluted EPS”) further assumes the dilutive effect of warrants.
The basic information for net income per share computations for the years ended March 31, 2015 and 2014 was as follows:

For the year ended March 31, 2015
Basic EPS
Income before minority interest
Other
Net income
Effect of Diluted stock shareholders
Warrants
Diluted EPS
Net income

For the year ended March 31, 2014
Basic EPS
Income before minority interest
Other
Net income
Effect of Diluted stock shareholders
Warrants
Diluted EPS
Net income

Millions of yen

Thousands of U.S. dollars

Net income

Thousands of shares
Weighted average number of shares

Yen¥ 108.35$ 0.90¥ 107.85$ 0.89¥ 9,434¥ 9,434$ 78,511$ 78,511

87,076--399¥ 9,434$ 78,511

87,476

Millions of yen

Net income

U.S. dollars

EPS

Thousands of shares
Weighted average number of shares

EPS

86,868¥ 79.86¥ 6,936¥ 6,936-369¥ 6,936

87,237

Yen¥ 79.52

2. Change in accounting policies:

The Company and its consolidated domestic subsidiaries adopted “Accounting Standard for Retirement Benefits” (ASBJ Statement No.26
of May 17, 2012, hereinafter the“Retirement Benefits Accounting Standard”) and “Guidance on Accounting Standard for Retirement
Benefits” (ASBJ Guidance No. 25 of March 26, 2015, hereinafter the “Retirement Benefits Application Guidance”) from the current fiscal
year, in accordance with the provisions of Article 35 of Retirement Benefits Accounting Standard and Article 67 of Retirement Benefits
Application Guidance. As a result, the methods for calculating retirement benefit obligations and service costs have been revised, and accordingly, the method for attributing projected benefits to periods was changed from the straight-line basis to the benefit formula basis, and themethod of determining the discount rate was changed from a method based on the average remaining length of service to a single weighted
average discount rate, reflecting the estimated period of the payment of retirement benefits as well as the amount thereof in the estimatedperiod.
This change has no impact on the retained earnings at the beginning of the current fiscal year and profit-and-loss for the current fiscal year.

3. Cash flow information:

Reconciliation of cash and cash equivalents
Cash and time deposits at March 31, 2015 and 2014 reconciled to cash and cash equivalents were as follows:
Millions of yen

Cash and time deposits
Time deposits with maturity over three months
Short-term invertments in securities
Total cash and cash equivalents

10

2015

¥ 11,958(769)
685¥ 11,8742014¥ 12,192(677)
250¥ 11,764

Thousands of U.S. dollars

2015$ 99,512(6,402)
5,707$ 98,817

4. Accumulated depreciation of property and equipment:

Accumulated depreciation of property and equipment as of March 31, 2015 and 2014 were as follows:
Millions of yen

Accumulated depreciation of property and equipment

2015¥ 10,955

2014¥ 10,799

Thousands of U.S. dollars

2015$ 91,165

5. Financial instruments:(1) Qualitative information on financial instruments(a) Policies for using financial instruments
The Company and its consolidated subsidiaries procure funds that are required for the planning of capital investment, and short-term
operating funds through bank loans. The surplus funds are invested in the compound financial products that build in the stocks, the debenture, and derivatives aiming to operate it by a high yield.
Derivatives that the Company uses are only the compound financial products that build in derivatives.
(b) Details of financial instruments used and the exposures to risk and how they arise
Notes and accounts receivable are exposed to the credit risks in relation to customers. Some of them are denominated in foreign currencies, which consequently expose the Company and its subsidiaries to the risks of exchange rate fluctuations.
Securities and investment securities, which consist of principally equity securities and debt securities, are exposed to the risk of market
price fluctuations.
The investments in the compound financial instruments that build in derivatives have the risk of the bond market price and the exchange
rate fluctuations.
These investments are executed with credit worthy financial institutions. Given their creditworthiness, management does not expect any
counterparty to fail to meet its obligations.
(c) Policies and processes for managing the risk
① Credit risk management (counterparty risk)
The Company and its consolidated subsidiaries have established internal procedures for receivables under which the related divisions
are primarily responsible for periodically monitoring counterparty status. The department manages amounts and settlement dates bycounterparty and works to quickly identify and mitigate payment risk that may result from situations including deterioration of thefinancial condition of counterparties. Consolidated subsidiaries are subject to the same risk management rules.
② Market risk management (risk of exchange rate and interest rate fluctuations)

Any investments to compound financial instruments that include stocks, bonds, and derivatives as their components are managed withthe established policies and within the specified limit on the amounts of investments allowed. In addition, the Company clearly
separates its transaction division and management division in their functions with the view to securely managing its assets. The
Company's management division confirms transactions, manages its current position, and ensures that all derivative transactions are
executed with the established policies so that its internal control functions properly. The Company periodically provides administrative
reports on the status of its position, including market value, to the financial director and treasurer.
Regarding marketable securities and investment securities, the Company periodically examines the financial condition of the issuingentities. The Company also regularly reviews the status of its holdings of bonds, not including those held to maturity, taking into
consideration its relationships with corporate business holders.
③ Management of liquidity risk associated with funds procurement (payment default risk)

The Company and its consolidated subsidiaries manage liquidity risk by creating and updating a capital deployment plan based onreports from each division.
(d) Fair values of financial instruments
Fair values of financial instruments include the values based on market prices, and the values deemed as market prices obtained by
the reasonable estimate when the financial instruments do not have market prices. Since certain assumptions and others are adopted for
calculating such values, they may differ when adopting different assumptions and others.

11(2) Fair values of financial information
Fair values of financial instruments as of March 31, 2015 and 2014 were summarized as follows:
The financial instruments whose fair values were not available were not included below and were summarized in B (b).
(a) Fair values of financial instruments

Cash and deposits
Notes and accounts receivable
Allowance for bad debts*
Marketable and investment securities
Other securities
Assets Total

Cash and deposits
Notes and accounts receivable
Allowance for bad debts*
Marketable and investment securities
Other securities
Assets Total

Cash and deposits
Notes and accounts receivable
Allowance for bad debts*
Marketable and investment securities
Other securities
Assets Total

Acquisition Amount¥ 11,958
9,734
(11)
9,722

Millions of yen
March 31, 2015

Estimated fair value¥ 11,958

Difference
-

9,722

-

64,703¥ 86,385-

64,703¥ 86,385

Acquisition Amount¥ 12,192
8,755
(38)
8,716

Millions of yen
March 31, 2014

Estimated fair value¥ 12,192

Difference
-

8,716

-

55,013¥ 75,923-

55,013¥ 75,923

Acquisition Amount$ 99,512
81,007(98)
80,909Thousands of U.S.dollars
March 31, 2015

Estimated fair value$ 99,512

Difference-

80,909-538,435$ 718,856-

538,435$ 718,856* The amounts for probable losses calculated by applying a percentage based on collection experience to the remaining accounts areincluded.
(Note 1): Fair values of financial instruments, and matters pertaining to securities and derivative transactions
AssetsCash and deposits, and Notes and accounts receivable:
The book values approximate the fair values because of short-term maturities of these instruments.
Marketable and investment securities:
The fair value is based on the market prices or the prices obtained from financial institutions.
See the Notes on "8. Marketable securities and investment securities".
(b) Financial instruments whose fair values were difficult to measure
The financial instruments for which the fair values were not available as of March 31, 2015 and 2014 were summarized as follows:
Millions of yen

Stocks of subsidiaries and affiliates
Non-listed equity securities
Other
Total

2015
¥ 20
53
3,040
¥ 3,113

2014
¥ 20
132
2,526
¥ 2,679

Thousands of U.S. dollars

2015
$ 166
445
25,299$ 25,910

It is difficult to measure the fair value of these financial instruments because there is no market price available and it is not efficient to calculate future
cash flow. Therefore, these financial instruments were not included in the marketable and investment securities described in B (a).

12

(c) Maturities of financial instruments
The maturities of the financial instruments at March 31, 2015 and 2014 were as follows:

Within 1 year

Cash and deposits
Notes and accounts receivable
Marketable and investment securities
Other securities(1)Government bonds and local government bonds(2)Bonds(3)Other
Total

¥ 769
9,734
¥ 588
633
¥ 11,726

Within 1 year

Cash and deposits
Notes and accounts receivable
Marketable and investment securities
Other securities(1)Government bonds and local government bonds(2)Bonds(3)Other
Total

¥ 927
8,755
¥ 540
¥ 10,223

Within 1 year

Cash and deposits
Notes and accounts receivable
Marketable and investment securities
Other securities(1)Government bonds and local government bonds(2)Bonds(3)OtherTotal

13$ 6,402
81,007$ 4,898
5,274$ 97,583

Millions of yen
At March 31, 2015
Over 1 year
Over 5 years
within 5 years
within 10 years

Over 10 years

-

-

-

¥ 955
2,993
¥ 3,949¥ 1,933
3,632
1,110¥ 6,676¥ 7,480868¥ 8,348

Millions of yen
At March 31, 2014
Over 1 year
Over 5 years
within 5 years
within 10 years

Over 10 years

-

-

-

¥ 1,4553,728
500¥ 5,684¥ 3,752
2,217
806¥ 6,777¥ 7,119
2,701¥ 9,821

Thousands of U.S. dollars
At March 31, 2015
Over 1 year
Over 5 years
within 5 years
within 10 years

Over 10 years

-

-

-

$ 7,952
24,912$ 32,865$ 16,087
30,2259,241$ 55,554$ 62,247
7,224$ 69,474

6. Rental property:

The Company and its consolidated subsidiaries own office buildings (including land) for leasing in Kanagawa prefecture, other domestic
areas, and foreign countries. The rental income included in net sales was ¥237 million ($1,974 thousand) and ¥151 million for the years
ended March 31, 2015 and March 31, 2014, respectively.
Information about fair value of investment and rental property included in the consolidated financial statement at March 31, 2015 and 2014
was as follows:

Millions of yen
Thousands of U.S dollars

Millions of yen

March 31, 2014
¥ 6,658$ 55,404

March 31, 2013
¥ 4,832

At March 31, 2015
Book value (net of depreciation)

Increase¥ 4,396$ 36,581

March 31, 2015
¥ 11,054$ 91,986

At March 31, 2014
Book value (net of depreciation)

Increase¥ 1,825

March 31, 2014
¥ 6,658

Fair value

March 31, 2015
¥ 11,071$ 92,130

Fair value

March 31, 2014
¥ 6,652

Book values recorded in the consolidated balance sheet present acquisition cost, net of accumulated depreciation and impairment loss.
Note:
1: The amount of increase is mainly attributable to acquisition of land and buildings in Japan (acquisition price: 4,394 millions of yen/36,565
thousands of U.S. dollars).
2: The fair value for domestic rental properties was calculated by the Company and its consolidated subsidiaries based on the Real EstateAppraisal Standard. Locally appraised value was used for the fair value of overseas rental properties.

7. Lease:

The future minimum lease receipts for only non-cancelable operating lease contracts as of March 31, 2015 and 2014 were as follows:
Millions of yen

2015
¥ 259
1,783
¥ 2,043

Due within one year
Due after one year
Total

2014
¥ 249
1,966
¥ 2,216

Thousands of U.S. dollars

2015$ 2,161
14,845$ 17,007

8. Marketable securities and investment securities:

A comparison of the aggregate cost and fair value of “Other securities for which market quotations are available” at March 31, 2015 and 2014
were as follows:

Other securities for which market quotations areavailable (1)Equity securities(2)Debt securities(3)Other
Total

Other securities for which market quotations are available (1)Equity securities(2)Debt securities(3)OtherTotal

14

Millions of yen
At March 31, 2015

Acquisition cost

Gross unrealized gains

Gross unrealized losses

Fair value¥ 23,719
17,425
12,457¥ 53,603¥ 6,819
2,513
3,525¥ 12,858

¥ 405
1,324
27
¥ 1,757¥ 30,133
18,614
15,955¥ 64,703

Millions of yen
At March 31, 2014

Acquisition cost

Gross unrealized gains

Gross unrealized losses

Fair value¥ 22,599
19,0988,231¥ 49,929¥ 3,246
1,830
2,676¥ 7,753

¥ 545
1,854
268
¥ 2,668¥ 25,299
19,075
10,639¥ 55,013

Other securities for which market quotations areavailable (1)Equity securities(2)Debt securities(3)Other
Total

Thousands of U.S. dollars
At March 31, 2015

Acquisition cost

Gross unrealized gains

Gross unrealized losses

Fair value$ 197,386
145,008
103,665$ 446,060$ 56,745
20,91429,338$ 106,998$ 3,376
11,018228$ 14,623$250,755
154,904
132,775$ 538,435

Impairment loss of ¥1,043 million ($8,682 thousand) and ¥198 million was recognized for the years ended March 31, 2015 and 2014,
respectively.
Available-for-sale securities sold for the years ended March 31, 2015 and 2014 were as follows:
Millions of yen

Sales amountGross realized gains
Gross realized losses

2015¥ 14,207
2,654
980

2013
¥ 14,907
1,870
994

Thousands of U.S. dollars

2015$ 118,224
22,0868,155

9. Research and development expenses:

Research and development expenses included in cost of sales and selling, general and administrative expenses for the years ended March 31,
2015 and 2014 was ¥639 million ($5,325 thousand) and ¥550 million, respectively.

10. Retirement benefit plan:

For the year ended March 31, 2015
(1) Outline
The Company and its consolidated domestic subsidiaries have a defined benefit corporate pension plan. One of the foreign consolidated subsidiaries has adopted a defined contribution plan.
(2) Defined benefit plan(a) The adjustments of defined benefit plans are as follows:
Millions of yen

Retirement benefit obligation at the beginning of the period
Service cost
Interest cost
Actuarial loss (gain)
Benefits paid
Adjustment for retirement benefit obligations due to changein accounting method
Retirement benefit obligation at the end of theperiod(b) The adjustments of Plan assets at fair value are as follows:
Plan assets at fair value at the beginning of the period
Expected return on plan assets
Actuarial gainContributions by the employer
Retirement benefits paid
Plan assets at fair value at the end of the period

15

Thousands of U.S. dollars

2015$ 28,907
2,608
375
346
(309)

2015
¥ 3,473
313
45
41
(37)

2014
¥ 3,292
312
42
(105)
(106)

-

37

-

¥ 3,837¥ 3,473$ 31,930

Millions of yen

2015¥ 3,280
114
435
314
(37)
¥ 4,1082014¥ 2,650
92
347
296
(106)
¥ 3,280

Thousands of U.S. dollars

2015$ 27,299
955
3,625
2,619
(309)
$ 34,190

(c) The adjustments of related to Retirement benefit obligation and Plan assets at fair value at the end of the period and defined
benefit liability and defined asset recorded on the consolidated balance sheets are as follows:
Millions of yen

Retirement benefit obligations of the funding plan
Plan assets at fair value
Retirement benefit obligations of the non-funding plan
Net amount of liabilities and assets recognized in the consolidated balance sheets
Liability for retirement benefits
Asset for retirement benefits
Net amount of liabilities and assets recognized in the consolidated balance sheets(d) Retirement benefit expenses and their breakdown:
Service cost
Interest cost
Expected return on plan assets
Amortization of actuarial differences
Amortization of prior service costs
Adjustment for retirement benefit obligations due to change in accounting method
Retirement benefit expenses

2015¥ 3,837(4,108)
(271)
(271)
(271)
¥ (271)2014¥ 3,473(3,280)
193
193
193
¥ 193

Millions of yen

2015
¥ 313
45
(114)
(26)
10
¥ 228

2014
¥ 312
42
(92)
33
10
37
¥ 344

Thousands of U.S. dollars

2015$ 31,930(34,190)(2,260)(2,260)(2,260)$ (2,260)

Thousands of U.S. dollars

2015$ 2,608
375
(955)
(217)
86
$ 1,898(e) The breakdown of prior service cost and actuarial gain recognized in other comprehensive income before deduction of tax benefit
is as follows:
Millions of yen

Prior service costs
Actuarial gain
Total

2015
¥ 10
367
¥ 378

2014
-

Thousands of U.S. dollars

2015
$ 86
3,061
$ 3,147(f) The breakdown of prior service cost and actuarial gain recognized in accumulated other comprehensive income before deductionof tax benefit is as follows:
Millions of yen

Unrecognized prior service cost
Unrecognized actuarial gain
Total(g) The breakdown of plan assets by major category is as follows:
Bonds
Equities
Other
Total

2015
¥ 163
(956)
¥ (792)

2014
¥ 174
(588)
¥ (414)

2015
39.5%
56.3
4.2
100.0

Thousands of U.S. dollars

2015$ 1,362(7,960)$ (6,598)

2014
30.2%
66.0
3.8
100.0

The expected long-term rate of return on plan assets is determined as a result of consideration of both the portfolio allocation at present andin the future, and long-term rate expected to earn the profit from multiple plan assets at present and in the future.
(h) The assumptions used in accounting for the above plans are as follows:
Discount rate
Expected rate of return on plan assets

2015
1.3%
3.5%

2014
1.3%
3.5%

(3) Defined contribution plan
The required contributions to the defined contribution plans of the some overseas consolidated subsidiaries are ¥2 million ($23
thousand) and ¥2 million for the years ended March 31, 2015 and March 31, 2014, respectively.
1611. Income taxes:
The income taxes applicable to the Company and its consolidated subsidiaries in Japan include corporation tax, enterprise tax and inhabitant
tax which, in aggregate, resulted in a statutory tax rate of approximately 35.6% for the year ended March 31, 2015. The Company’s effective
tax rates for financial reporting purposes differ from the statutory tax rate due to a number of items, including various tax credits, certain
expenses not allowable for income tax purposes, the non-deductibility of the losses of subsidiaries, different tax rates applicable to foreignsubsidiaries and dividends income which is not taxable.
The reconciliation of differences between the statutory tax rate and the effective tax rate for the year ended March 31, 2015 and 2014 wereas follows:
2014
2015
Statutory tax rate
38.0%
35.6%
Increase (decrease) in taxes resulting from:Amortization of goodwill
4.4
1.1
Special tax credit for research and development expenses and other
(6.0)
(4.5)
Tax rate difference in certain subsidiaries
(0.8)
(0.8)
Valuation allowance
0.5
(0.8)
Adjustment on deferred tax assets due to change in income tax rate
0.6
0.4
Other, net
(1.6)
0.2
Effective tax rate
35.1%
31.2%
The significant components of deferred tax assets and liabilities included in the balance sheets were as follows:
Millions of yen

Deferred tax :(1) Current assets
Deficit amountAccrued bonuses
Unrealized loss on inventory valuation
Provision for enterprise tax
Allowance for sales discount
Other
Offset to deferred tax liabilities (current)
Net deferred tax current assets

2014

¥ 16
300
75
238
145
113
(49)
¥ 839

¥ 20
265
68
114
219
186
(48)
¥ 826

$ 136
2,498
625
1,985
1,206
948
(414)
$ 6,987(2) Non-current assets
Loss on investment securities
Deficit amount
Software development expense depreciation denial
Impairment loss on fixed assets
Unrealized loss on investment securities
Net defined benefit liability
Other
Valuation allowance
Offset to deferred tax liabilities (non-current)
Net deferred tax non-current assets

¥ 514
596
207
210
(518)
(741)
¥ 268

¥ 499
493
254
119
4
79
203
(642)
(800)
¥ 211

$ 4,278
4,966
1,730
1,752
(4,317)(6,174)$ 2,236

Millions of yen

Deferred tax :(1) Current liabilities
Unrealized gains on securities
Offset to deferred tax assets (current)
Net deferred tax current liabilities(2) Non-current liabilities
Unrealized gain on investment securities
Asset for retirement benefits
Other
Offset to deferred tax assets (non-current)
Net deferred tax non-current liabilities

17

Thousands of U.S. dollars

2015

2015

Thousands of U.S. dollars

2015

2014

¥ (50)49¥ (0)¥ (49)48¥ (0)$ (418)414$ (3)¥ (3,488)
(96)
(30)
741
¥ (2,873)¥ (1,734)(103)800¥ (1,037)$ (29,032)
(805)
(251)
6,174
$ (23,915)

2015

Note:
According to the promulgation of the “Act on Partial Revision of the Income Tax Act (Law No.9 of 2015)” and the “Act on Partial
Revision of the Local Tax Act (Law No.2 of 2015)” on March 31, 2015, the corporate tax rate was lowered, effective for the fiscal year
starting on April 1, 2015 or after. As a result, the statutory tax rate used for calculating deferred tax assets and deferred tax liabilities
were changed from 35.6% to 33.0%, pertaining to temporary differences that are expected to be eliminated in the fiscal year startingfrom April 1, 2015, and to 32.2%, pertaining to temporary differences that are expected to be eliminated in the fiscal year startingfrom April 1, 2016, respectively.
The impact of this change on deferred tax assets and deferred tax liabilities is immaterial.

12. Assets pledged and revaluation of the land:(1) Assets pledged
Buildings and structures
Land
Total

Millions of yen

2015
¥ 264
306
¥ 570

2014
¥ 270
306
¥ 576

Thousands of U.S. dollars

2015$ 2,201
2,546$ 4,748(2) Revaluation of the land
The Company revalued land for its business in accordance with the Land Revaluation Law. The Company recorded the entire
difference between the carrying amount and revalued amount as unrealized losses on revaluation of the land as a separate componentof net assets.
Revaluation of land was performed by making a reasonable adjustment to the land based on the market value estimated in accordancewith relevant provisions of the Land Revaluation Law.
Date of revaluation: March 31, 2000.
Fair value of the revalued land as of March 31, 2015 is ¥331 million ($2,757 thousand) less than the book value as of March 31,
2015.

13. Net assets:
Under Japanese laws and regulations, the entire amount paid for new shares is required to be designated as common stock. However,a company may, by a resolution of the Board of Directors, designate an amount not exceeding one-half of the price of the new sharesas additional paid-in capital, which is included in capital surplus.
Under the Japanese Corporate Law (“the Law”), in cases where a dividend distribution of surplus is made, the smaller of an amountequal to 10% of the dividend or the excess, if any, of 25% of common stock over the total of additional paid-in capital and legal
earnings reserve must be set aside as additional paid-in capital or legal earnings reserve. Legal earnings reserve is included in retained
earnings in the accompanying consolidated balance sheets.
Under the Law, legal earning reserve and additional paid-in capital could be used to eliminate or reduce a deficit or could be capitalized
by resolution of the shareholders’ meeting.
Additional paid-in capital and legal earnings reserve may not be distributed as dividends. However, all additional paid-in capital andall legal earnings reserve may be transferred to other capital surplus and retained earnings, respectively, which are potentiallyavailable for dividends.
The maximum amount that the Company can distribute as dividends is calculated based on the non-consolidated financial statementsof the Company in accordance with the Law.
At the annual shareholders’ meeting held on June 23, 2015, the shareholders resolved cash dividends amounting to ¥4,814 million($40,065 thousand). Such appropriations have not been accrued in the consolidated financial statements as of March 31, 2015. Suchappropriations will be recognized in the period when they are resolved.

18

14. Share subscription rights:
The summarized contents of share subscription rights as of March 31, 2015 are as follows:
Date of the annual shareholders' meeting
Position and number of grantee

Date of grantClass and number of stock
Exercised period

Share subscription rights #5
June 23, 2010

Share subscription rights #6
June 26, 2012

Share subscription rights #7
June 25, 2014

5 directors and
19 employees of theCompany and308 executive officer or
employees of thesubsidiaries

6 directors and24 employees of theCompany and349 executive officer or
employees of thesubsidiaries

7 directors and21 employees of theCompany and
380 executive officer or
employees of thesubsidiaries

October 25, 2010

October 22, 2012

September 22, 2014

Common Stock
485,400

Common Stock726,300

Common Stock
800,700

From October 26, 2012
to October 23, 2015

From October 23, 2014 From September 23, 2016
to October 20, 2017
to September 20, 2019

The following table summarizes scale and movement of share subscription rights as of March 31, 2015
Non‐exercisable (number of shares)
Outstanding at April 1, 2014
GrantedForfeited
VestedOutstanding at March 31, 2015
Exercisable (number of shares)
Outstanding at April 1, 2014
VestedExercised
Forfeited
Outstanding at March 31, 2015
Exercise price
Average stock price at exercise
Fair value price at grant date

Share subscription rights #5

Share subscription rights #6

Share subscription rights #7-

700,900
11,700689,200-

800,700
5,700
795,000

197,500
147,400
4,600
45,500¥ 578$ 4.80¥ 1,654$ 13.76¥ 83$ 0.69689,200
461,400
2,200
225,600¥656$5.45¥ 1,737$ 14.45¥ 74$ 0.61¥ 1,761$ 14.65¥ 290$ 2.41

15. Asset retirement obligations:(1) Summary of applicable asset retirement obligations include the duty of restoration arising from contractual requirements set forthin real estate leases for amusement facility arcades.
(2) Instead of posting liabilities for asset retirement obligations, the Company and its consolidated subsidiaries use the method of
estimating the reasonable amount that cannot be finally recovered from the deposit related to a real estate lease contract and posting
the part of that amount belonging to the current term under costs.
(3) Changes to aggregate asset retirement obligations applicable to the fiscal years ended March 31, 2015 and 2014 were as follows:
Millions of yen

Beginning balance
Expense belonging to the burden of thisconsolidated fiscal year
Decrease due to fulfillment of asset retirement
obligations
Ending balance

19

Thousands of U.S. dollars

2015

2015

2014
¥ 85

$ 700

3

3

28

(13)

(5)

(113)

¥ 73

¥ 84

$ 615

¥ 84

16. Comprehensive income:The components of other comprehensive income including reclassification adjustments and income tax effect were as follows.
Millions of yen

Unrealized gains on securities:
Increase during the year
Reclassification adjustments
Amount before income tax effect
Income tax effectTotal unrealized gains on securities
Unrealized losses on revaluation of the land:
Increase during the year
Reclassification adjustments
Amount before income tax effect
Income tax effectTotal unrealized losses on revaluation of the land
Foreign currency translation adjustments:
Increase during the year
Adjustments for retirement benefits:
Increase during the year
Reclassification adjustments
Amount before income tax effect
Income tax effectTotal changes in adjustments for retirement benefits
Total other comprehensive income

20

Thousands of U.S. dollars

2015

2014

2015

¥ 6,704(668)
6,036(1,759)4,276¥ 1,904
(138)
1,765
(516)
1,248

$ 55,793(5,563)50,230(14,641)
35,588

0
0

-

6
6

931

1,503

7,754

394
(15)
378
(114)
263

-

3,278
(130)
3,147
(953)
2,194

¥ 5,473¥ 2,751$ 45,544

17. Segment information:(1) Outline of business segment reported
The business segments the Company reports are the business unit for which the Company is able to obtain individual financial
information separately in order for the board of directors to conduct periodic investigation to determine the distribution ofmanagement resource and evaluate their business performance.
The Company operates principally in the following business segments:(a) Game Software: Design, development, manufacture and sale of game software for personal computers (PCs) and home video
game systems.
(b) Online & Mobile: Design, development, and management of software for online game and mobile phone.
(c) Media & Rights: Design, development, manufacture and sale of game software related products such as books, music CDs
and picture Blue-Ray & DVDs and management of game software product licenses.
(d) SP: Entrusted development of commercial amusement.
(e) Amusement Facilities Operation: management of amusement arcade.
(f) Other: Real estate management, venture capital.
(2)Method of calculating sales and income (loss), and other items by business segment reported
Income of the reporting segments is operating income. Transfers among segments are based on market prices.
(3)Information on sales and income (loss), and other items by business segment reported

21

I. Net sales and operating income:Net sales(1) Net sales to outside customers(2) Inter-segment net sales
Total
Segment income

Game
Software

Online&Mobile¥ 24,525
337
24,863¥ 7,795

II. Other items:
Depreciation and amortization¥ 342

Millions of yen
For the year ended March 31, 2015
Business segment reported

Media&
RightsSP

Amusement
Facilities

Sub
Total

Other

Total

¥ 6,273459
6,733¥ 1,128¥ 2,738
5
2,744
¥ 294

¥ 2,007
12
2,020
¥ 718

¥ 1,584
0
1,584
¥ 5

¥ 37,129
815
37,945¥ 9,942

¥ 669
104
774
¥ 155

¥ 37,799
920
38,719¥ 10,098

¥ 157

¥ 7

¥ 6

¥ 146

¥ 660

¥ 260

¥ 921

I. Net sales and operating income:Net sales(1) Net sales to outside customers(2) Inter-segment net sales
Total
Segment income

Game
Software

Online&Mobile¥ 24,980
460
25,441¥ 6,017

II. Other items:
Depreciation and amortization¥ 285

Millions of yen
For the year ended March 31, 2014
Business segment reported

Media&
RightsSP

Amusement
Facilities

Sub
Total

Other

Total

¥ 6,112310
6,423¥ 1,073¥ 2,063
8
2,071
¥ 202

¥ 2,268
10
2,278
¥ 923

¥ 1,796
1,796¥ 90¥ 37,221790
38,011¥ 8,306

¥ 354
94
448
¥ 76

¥ 37,576
884
38,460¥ 8,382

¥ 176

¥5

¥6

¥ 172

¥ 646

¥ 248

¥ 894

I. Net sales and operating income:Net sales(1) Net sales to outside customers(2) Inter-segment net sales
Total
Segment income
II. Other items:
Depreciation and amortization

Thousands of U.S. dollars
For the year ended March 31, 2015
Business segment reported

Game
Software

Online&MobileMedia&
RightsSP

Amusement
Facilities

Sub
Total

Other

Total

$ 204,092
2,806
206,899$ 64,872$ 52,205
3,825
56,030$ 9,391$ 22,791
46
22,837$ 2,448$ 16,705
104
16,809$ 5,977$ 13,184
013,184$ 47$ 308,978
6,783
315,762$ 82,738$ 5,572873
6,446$ 1,296$ 314,551
7,657
322,208$ 84,034$ 2,852$ 1,306

$ 64

$ 57

$ 1,219$ 5,500$ 2,165$7,666

Note: The Company’s administrative expenses for the Company’s indirect departments which do not belong to the reporting segment areallocated to each reporting segment in accordance with reasonable allocation standards.
(4) The adjustment for segment information above and the reconciliations between net sales and segment income (loss) in the
consolidated statements of income were as follows:(a) Reconciliation of net sales

Millions of yen

2015¥ 37,945
774(920)¥ 37,799

Business segment reported Total
Sales of Other segment
Elimination of intersegment transactions
Total(b) Reconciliation of segment income (loss)

Millions of yen

2015¥ 9,942
155
(413)
(32)
¥ 9,652

Business segment reported Total
Profit of Other segment
Amortization of goodwill
Transfer to non operating profit
Total

Note: For management reporting purposes, goodwill and assets are not allocated to the segments.

2014¥ 38,011
448(884)¥ 37,576

2014¥ 8,30676(1,242)¥ 7,140

Thousands of U.S. dollars

2015$ 315,762
6,446(7,657)$ 314,551

Thousands of U.S. dollars

2015$ 82,738
1,296(3,438)(270)$ 80,324(Segment related information)
Information by country or region
The following tables present sales and assets information by geographic area for the years ended March 31, 2015 and 2014.
(1) Sales

Millions of yen
For the year ended March 31, 2015

Japan
Net sales to outside customers:¥ 29,876

North
America¥ 3,728

EuropeOthers¥ 2,431¥ 1,763

Millions of yen
For the year ended March 31, 2014

Japan
Net sales to outside customers:¥ 31,309

North
America¥ 2,610EuropeOthers¥ 1,726¥ 1,929

Thousands of U.S. dollars
For the year ended March 31, 2015

Japan
Net sales to outside customers:$ 248,622

North
America$ 31,023

Note: The sales amounts are classified by country or region where customers are located.
22

EuropeOthers$ 20,234$ 14,671

Consolidated
Total¥ 37,799

Consolidated
Total¥ 37,576

Consolidated
Total$ 314,551

(2) Tangible fixed assets
Millions of yen
For the year ended March 31, 2015

Japan

Asia

UK

Other

¥ 14,622¥ 1,837¥ 3,617¥ 3

Millions of yen
For the year ended March 31, 2014

Japan

Asia

UK

Other

¥ 10,782¥ 1,659¥ 3,598¥5

Thousands of U.S. dollars
For the year ended March 31, 2015

Japan

Asia

UK

Other

$ 121,685$ 15,286$ 30,105$ 25

Consolidated
Total¥ 20,080

Consolidated
Total¥ 16,045

Consolidated
Total$ 167,103

18. Subsequent events:

At the meeting of the Board of Directors held on July 27, 2015, the Company resolved to conduct a stock split. The details are as
follows:(1) Purpose of Stock Split
The stock split will be conducted with the aim of increasing the liquidity of the Company's stock and expanding its investor base by
reducing the price of share-trading units.
(2) Outline of Stock Split(a) Method of stock split
The stock split shall have a record date of September 30, 2015 and shall involve the splitting of common stocks held by shareholders whose names are recorded in the latest Registry of Shareholders on the record date at a ratio of 1:1.2. If, as a result of thestock split, a fraction of less than one share of the common stock of the Company arises, the Company will pay the shareholders
the amount corresponding to such fraction.
(b) Number of increase in shares by stock split①Total number of issued shares before stock split
89,769,479 shares②Number of increase in shares by stock split
17,953,895 shares③Total number of issued shares after stock split
107,723,374 shares④Total number of authorized shares before stock split 350,000,000 shares
Note: Total number of authorized shares after stock split is equal to total number of authorized shares before stock split.
The article of incorporation is not amended upon stock split.
(3) Schedule of stock split(a) Public notice date of the record date September 15, 2015(b) Record date
September 30, 2015(c) Effective date
October 1, 2015(4) Information on the impact to the net income per share
Net income per share information on the assumption that stock split was executed at the beginning of the previous consolidated
fiscal year is as follows:
Basic EPS
Net income
Diluted EPS
Net income

23

2015

Yen

2014

U.S. dollars

2015¥ 90.2966.54$ 0.75¥ 89.87

66.26$ 0.74

24

BOARD OF DIRECTORS AND
AUDIT & SUPERVISORY
BOARD MEMBERSCORPORATE DATA

Chairman

KOEI TECMO HOLDINGS CO., LTD.

Keiko Erikawa*
President & CEO

Yoichi Erikawa*Director

Hisashi Koinuma
Director

Kazuyoshi Sakaguchi
Director

Shintaro Kobayashi
Director

Mei Erikawa
Director & Advisor

Yasuharu Kakihara
Director(Outside)

Masao Tejima
Director(Outside)

Hiroshi Kobayashi
AUDIT & SUPERVISORY BOARD MEMBER(Full-time)

Satoru Morishima
AUDIT & SUPERVISORY BOARD MEMBER(Full-time, Outside)

Masaki Kimura
AUDIT & SUPERVISORY BOARD MEMBER(Outside)

Chiomi Yamamoto
AUDIT & SUPERVISORY BOARD MEMBER(Outside)

Toshikazu Kitamura
Senior Executive Officer & CFO

Kenjiro Asano
Executive Officers

Takeshi Hara
Masatoshi Hosaka
Hidenori Taniguchi*Representative Director（As of June 23, 2015）25

Head Office
1-18-12 Minowa-cho, Kouhoku-ku,
Yokohama, Kanagawa 223-8503 Japan
Tel : +81-45-562-8111
http://www.koeitecmo.co.jp/

Date Established :April 1, 2009

Paid-in Capital :¥15 Billion ( As of March 31, 2015)

Number of Employees :1,497(As of March 31, 2015: Consolidated Basis)

Account Settlement :March 31Transfer Agent of Common Stock :Sumitomo Mitsui Trust Bank, Limited
1-4-1, Marunouchi, Chiyoda-ku, Tokyo
100-8233 Japan

Independent Auditor :KPMG AZSA LLC

MAJOR SUBSIDIARIESKOEI TECMO GAMES CO., LTD.
1-18-12 Minowa-cho, Kouhoku-ku,
Yokohama, Kanagawa 223-8503 Japan
Tel : +81-45-561-6888

KOEI TECMO WAVE CO., LTD.
KUDANMEIZENDO Bldg.
4-1-34 Kudankita, Chiyoda-ku,
Tokyo 102-0073 Japan
Tel : +81-3-3222-8333

KOEI TECMO NET CO., LTD.
1-23-3 Minowa-cho, Kouhoku-ku,
Yokohama, Kanagawa 223-8527 Japan
Tel : +81-45-565-3123

CWS Brains, LTD.
KUDANMEIZENDO Bldg.
4-1-34 Kudankita, Chiyoda-ku,
Tokyo 102-8230 Japan
Tel : +81-3-3222-7605
http://www.cwsbrains.co.jp/cws/

KOEI TECMOAMERICA Corporation1818 GILBRETH RD. Suite 211,BURLINGAME, California 94010 U.S.A
Tel : +1-650-692-9080
http://www.koeitecmoamerica.com/

KOEI TECMO EUROPE LIMITED
Unit 209A The Spirella Building, Bridge
Road, Letchworth Garden City,
Hertfordshire, SG6 4ET, UK
Tel : +44-1462-476130
http://www.koeitecmoeurope.com/

KOEI TECMO TAIWAN CO., LTD.
11F, No.323, Fu-Hsing S.Road, Sec. 1,
Daan Chiu, Taipei 106, Taiwan
Tel : +886-2-2325-0111
http://www.gamecity.com.tw/

KOEI TECMO BEIJINGSOFTWARE CO., LTD.
RM.701 Beijing Inn
No.6 South ZhuGan HuTong,
Chaoyang men Nei, Dongcheng District,
Beijing China
Tel :+86-10-6588-3571

KOEI TECMO TIANJINSOFTWARE CO., LTD.
21〜22F, Global Center, No.309 Nanjin Road,
Nankai District, Tianjin , P.R.China
Tel : +86-22-8328-0781

KOEI TECMO SINGAPORE Pte. Ltd.
8 Kallang Avenue, Aperia tower1, #12-01/04,
Singapore 3395093
Tel : +65-6220-7581

KOEI TECMO SOFTWAREVIETNAM CO., LTD.
12th Floor, Ladeco Building, No.266, Doi Can
Street, Lieu Giai Ward, Ba Dinh District,Hanoi, Vietnam
Tel : +84-4-3232-1287