BANDAI NAMCO
Holdings Inc.
Notice of the Thirteenth Ordinary General Meeting of Shareholders
to be held on June 18, 2018
An English translation of the original notice in Japanese

DISCLAIMER
The following is an English translation of the Japanese original “Notice of the Thirteenth Ordinary General Meetingof Shareholders of BANDAI NAMCO Holdings Inc.” which meeting is to be held on June 18, 2018.
The Company provides this translation for your reference and convenience only and does not guarantee its accuracy
or otherwise. In the event of any discrepancies, the Japanese original notice shall prevail.
These documents have been prepared solely in accordance with Japanese law and are offered here for informational
purposes only. In particular, please note that the financial statements included in the following translation have been
prepared in accordance with Japanese GAAP.

1Securities code: 7832
May 28, 2018
5-37-8 Shiba, Minato-ku, Tokyo
BANDAI NAMCO Holdings Inc.
Mitsuaki Taguchi
President and Representative Director
Dear Shareholders,
NOTICE OF THE THIRTEENTH ORDINARY GENERAL MEETINGOF SHAREHOLDERS
You are cordially invited to attend the Thirteenth Ordinary General Meeting of
Shareholders of BANDAI NAMCO Holdings Inc. (“the Company”) to be held as set forth
below.
If you are unable to attend the meeting in person, we ask you to please review theenclosed “Reference Documents for the General Meeting of Shareholders” and exercise yourvoting rights by either of the methods stated on the next page by 5:30 p.m., Saturday, June
16, 2018.
Meeting Details
1.

Date and Time:

June 18, 2018 (Monday) at 10:00 a.m.

2.

Place:“Hiten,” Grand Prince Hotel New Takanawa
3-13-1 Takanawa, Minato-ku, Tokyo

3.

Purpose of the Meeting:
Matters to be Reported:
1.

2.

Report on the Contents of the Business Reports, the Consolidated Financial Statements
and the Results of the Auditing of the Consolidated Financial Statements by the
Accounting Auditor and the Audit & Supervisory Board for the Thirteenth Fiscal Year(from April 1, 2017 to March 31, 2018)
Report on the Contents of the Non-Consolidated Financial Statements for theThirteenth Fiscal Year (from April 1, 2017 to March 31, 2018)

Matters to be Resolved:
Proposal No. 1: Appropriation of Surplus
Proposal No. 2: Election of Eleven Directors
Proposal No. 3: Election of Four Audit & Supervisory Board Members
Proposal No. 4: Revision of Performance-based Stock Compensation Plan for Directors
4.

Information on Exercise of Voting Rights
Please see “Information on Exercise of Voting Rights” on pages 3 to 4 of this document.

2

[Information on Exercise of Voting Rights]
Please exercise your voting rights after reviewing the Reference Documents for the General
Meeting of Shareholders on pages 5 to 26.
You may exercise your voting rights by one of the following three methods.
A: Exercise of Voting Rights via attending the General Meeting of Shareholders:
Please hand in the enclosed Voting Rights Exercise Form at the reception desk at theplace of the shareholders’ meeting.
In addition, please bring this NOTICE OF THE THIRTEENTH ORDINARY
GENERAL MEETING OF SHAREHOLDERS.
B: Exercise of Voting Rights via Postal Mail:
Please indicate, on the enclosed Voting Rights Exercise Form, your approval ordisapproval of each item on the agenda and return the completed form so that it arrives by
5:30 p.m., Saturday, June 16, 2018.
C: Exercise of Voting Rights via the Internet etc.:
Please access the website designated by the Company for the exercise of voting rights(https://evote.tr.mufg.jp/), enter and send your approval or disapproval of each item on theagenda by 5:30 p.m., Saturday, June 16, 2018.
For details, please see the following page.

If you exercise your voting rights more than once via both postal mail and the Internet
etc., then only the vote cast via the Internet etc. shall be deemed valid.
In addition, if you cast your vote via the Internet etc. multiple times, then only the lastvote cast shall be deemed valid. If you cast your vote via the Internet etc. more than once,
using a personal computer, a smartphone and/or a mobile phone, then only the last vote castshall be deemed valid.
If you attend the meeting in person, you do not need to follow the procedures for the
exercise of voting rights via postal mail (sending the Voting Rights Exercise Form) or via theInternet etc.
If revisions to the contents of the “Reference Documents for the General Meeting of Shareholders,” the“Business Reports,” the “Consolidated Financial Statements” and the “Non-Consolidated Financial
Statements” are required, the Company shall publish a notification on the Company website at thefollowing URL:
(https://www.bandainamco.co.jp/ir/stock/meeting.html)

3

[Information on Exercise of Voting Rights via the Internet etc.]
1. The exercise of voting rights via the Internet etc. is available only by gaining access to the Company’s
designated website for the exercise of voting rights (https://evote.tr.mufg.jp/) from a PC, a smartphone,or a mobile phone (i-mode, EZweb or Yahoo! Mobile)*. However, please note that you cannot
exercise your voting rights via the Internet on the designated website between the hours of 2:00 a.m.
and 5:00 a.m.
* “i-mode,” “EZweb” and “Yahoo!” are trademarks or registered trademarks of NTT DOCOMO,
INC., KDDI Corporation, and Yahoo! Inc. in the U.S., respectively.
2. Please note that you may not be able to exercise your voting rights via PC or smartphone on thedesignated website for the exercise of voting rights, depending on the Internet settings configured onyour PC or smartphone, such as firewalls, etc. that are in place to regulate your Internet connections,anti-virus software that has been installed on your PC or smartphone, or the use of a proxy server.
3. When exercising voting rights via mobile phone, you must use one of the following services: i-mode,
EZweb or Yahoo! Mobile. For security reasons, you cannot vote using mobile handsets that cannot
send encrypted information (TLS communications) or that cannot send information of the mobile
phone used.
4. Please note that, in order to prevent unauthorized access to the designated website by individuals otherthan shareholders (persons impersonating shareholders) and to prevent the alteration of votes, werequest that you change your “temporary password” to a permanent password on the designatedwebsite for the exercise of voting rights, when you want to exercise your voting rights via the Internet.
5. All costs associated with accessing the website for the exercise of voting rights (internet access fees,etc.) are to be borne by the shareholder. Also, when voting via smartphone or mobile phone, etc., allpacket communication fees and other costs incurred in the use of a smartphone or a mobile phone arealso to be borne by the shareholder.

For further assistance, regarding the system, etc., please contact:
Transfer Agent Department (Help Desk)
Mitsubishi UFJ Trust and Banking Corporation
Phone: 0120-173-027 (9:00 to 21:00 (Japan Time); toll free only within Japan)[For institutional investors]
Institutional investors may make use of the Electronic Voting Platform operated by ICJ,Inc.

4

Reference Documents for the General Meeting of Shareholders
Proposals and References
Proposal No. 1: Appropriation of Surplus
Appropriation of surplus is as follows:
Fiscal Year-end Dividends
The Company ranks the return of profits to shareholders as one of its highest priorities in its
management. The Company assumes its basic policy is to further strengthen the BANDAI NAMCO
Group (“the Group”)’s competitiveness and, while maintaining a sound financial status, to achieve regular
distributions of dividends and improvement in the Company’s corporate value. As part of starting the new
Mid-term Plan in April 2018, and in light of the Group’s strategy and the environment surrounding its
business, the basic policy for providing returns to shareholders was examined from various angles. As aresult, the Company changed over to a basic policy of providing a return to shareholders that targets a
total return ratio of 50% or more based on stable dividend payments of 2% of DOE (dividends on equity).
Under this policy, the Company strives to maintain long-term and stable dividend levels and be moreaware of capital cost. This basic policy is applied to the distribution of dividends starting with theyear-end dividend for the fiscal year ended March 31, 2018.
By implementing this new policy and in view of the Company’s performance in this fiscal year, theCompany will pay a year-end dividend of ¥111 per share, which consists of a base dividend of ¥20 per
share, a performance-based dividend of ¥66 per share, and an additional special dividend of ¥25 per share
due to achieving the highest ever business performance.
Since the Company paid an interim dividend of ¥12 per share on December 7, 2017, the total annual
dividend for the fiscal year will be ¥123 per share.
(i) Type of dividend assets:Cash(ii) Allocation of dividend assets to be paid to shareholders and total amount of dividend:
Dividend per share of common stock of the Company ············ ¥111
Total amount of dividends ·····························¥24,407,604,408(iii) Effective date of distribution of surplus (dividend):
June 19, 20185

Proposal No. 2: Election of Eleven Directors
Since the terms of office of the ten Directors of the Company will expire as of the close of this
General Meeting of Shareholders, the Company requests the election of eleven Directors. The president
and representative director of each core company responsible for each business segment also serves on
the Company’s Board of Directors, and because of the structural change from the previous three-SBU
structure to a five-Unit structure in accordance with the new Mid-term Plan that started in April 2018, theCompany proposes two additional candidates for concurrently serving Director.
Policy on and process for selecting candidates for Director of the Company
To select candidates for Director of the Company, candidates are nominated on the basis ofsufficiently broad expertise and experience in decision-making for corporate management, background ina business supervisory capacity, or achievements and knowledge from their career to date. The basic
policy laid out in the Articles of Incorporation of the Company is that at least two Directors should be
Outside Directors and both of the Outside Directors should be independent Outside Directors.
To select candidates for Outside Director of the Company, nominations that provide an appropriatebalance of, for example, individuals with extensive experience in corporate management, individuals withprofound scholarly knowledge of corporate strategy, or lawyers who are experts in compliance and otherinternal controls, are considered and a decision is made accordingly.
When selecting candidates for Director of the Company, a Personnel Committee of which a majorityof the members are independent Outside Directors is established on a discretionary basis to act as a forum
for debate and receive recommendations, and the independent Outside Directors conduct interviews,
before a decision is made at a Board of Directors Meeting.

6

The candidates for Director of the Company are as follows:
Positions andCandidate
Name
Responsibilities inNo.
(Date of Birth)
the Company
Apr. 1982:
Apr. 1999:

1

Career Summary

Joined BANDAI CO., LTD.
General Manager, Vending Machine
Business Department of BANDAI CO.,LTD.
Jun. 2003:
Director, Leader of Lifestyle Group andLifestyle Company President of
BANDAI CO., LTD.
Apr. 2006:
Managing Director in charge of new
business policy of BANDAI CO., LTD.
Mitsuaki Taguchi
Apr. 2009:
Senior Managing Director in charge of(June 16, 1958)
media policy and new business policy of
President and
BANDAI CO., LTD.
Representative
Number of theApr. 2010:
Executive Vice President and Director in
Director
Company’s
charge of media policy and new business
Shares Owned
policy of BANDAI CO., LTD.
69,000 Shares
Apr. 2012:
Executive Vice President and COO incharge of global media policy and humanresources policy and in charge of Real B
Voice Business Group, Strategy Projects,
Human Resources of BANDAI CO.,LTD.
Apr. 2015:
Adviser of the Company
Jun. 2015:
President and Representative Director of
the Company (current position)
Reasons for proposing Mr. Mitsuaki Taguchi as a candidate for Director:
Mr. Mitsuaki Taguchi has supervised the business appropriately since he was appointed as
President and Representative Director of the Company in 2015 and he achieved the previous
Mid-term Plan through his leadership skills based on extensive business experience and broad
knowledge. He is proposed as a candidate for Director as the Company considers him capableof ensuring that the Group continues to grow.

7

Candidate
No.

Name
(Date of Birth)

Positions andResponsibilities in
the Company

Career Summary
Mar. 1986:
Dec. 1996:
Jan. 2000:

2

Licensed as a CPA
Partner of Century Audit Corporation
Partner of Century Ota Showa & Co.
(currently Ernst & Young ShinNihon
LLC)
Sep. 2003:
Partner of KPMG AZSA & Co. (currently
KPMG AZSA LLC)
May 2004:
Board Member of KPMG AZSA & Co.
Oct. 2007:
Joined the Company as Adviser
Jun. 2008:
Director in charge of Overseas
Operations, Group Administrative
Headquarters, Corporate Legal Affairs
Department and Internal Auditing
Division of the Company
Jun. 2011:
Director in charge of Overseas Regional
Headquarters Companies and Division
Shuji Ohtsu
General Manager of the Group
Director and(August 6, 1959)
Administrative Headquarters of theDivision
Company
GeneralApr.
2013:
Director and Division General Manager
Manager of the
Number of theof the Group AdministrativeGroup
Company’s
Headquarters of the Company (current
Administrative
Shares Owned
position)
Headquarters
33,200 Shares
President and Representative Director of
NAMCO BANDAI Holdings (USA) Inc.
(currently BANDAI NAMCO Holdings
USA Inc.) (current position)
Apr. 2015:
President and Representative Director of
BANDAI NAMCO Business Arc Inc.
(current position)
Oct. 2017:
President and Representative Director of
BANDAI NAMCO Will Inc. (current
position)(Major concurrent positions)
President and Representative Director of BANDAI
NAMCO Holdings USA Inc.
President and Representative Director of BANDAI
NAMCO Business Arc Inc.
President and Representative Director of BANDAI
NAMCO Will Inc.
Reasons for proposing Mr. Shuji Ohtsu as a candidate for Director:
Mr. Shuji Ohtsu possesses specialist expertise as a CPA, as well as extensive experience andachievements as Division General Manager of the Group Administrative Headquarters of theCompany. He is proposed as a candidate for Director as the Company considers him capable ofstrengthening Group management structures and ensuring highly transparent management.

8

Candidate
No.

Name
(Date of Birth)

Positions andResponsibilities in
the Company

Career Summary
Apr. 1986:
Aug. 2005:

3

Joined BANDAI CO., LTD.
General Manager, Accounting Division of
BANDAI CO., LTD.
Sep. 2005:
Joined the Company, as General Managerof the Corporate Administration
Department in charge of PR and IR, andAccounting and Finance
Apr. 2006:
Director of NAMCO BANDAI Games
Inc. (currently BANDAI NAMCOEntertainment Inc.)
Yuji Asako
Apr. 2008:
Executive Officer, Division General(January 18,
Director andManager of Corporate Planning Division
1966)
Divisionof the Company
GeneralJun. 2010:
Director in charge of Corporate PlanningManager of theand Division General Manager of the
Number of the
Corporate
Corporate Planning Division of theCompany’s
Planning
Company
Shares Owned
Division
Jun. 2011:
Director and Division General Manager
34,300 Sharesof the Corporate Planning Division of theCompany (current position)
Apr. 2014:
Director of NAMCO LIMITED (*)(currently BANDAI NAMCO
Amusement Inc.)* Newly established company throughthe incorporation-type company split of
NAMCO LIMITED (currently BANDAI
NAMCO Entertainment Inc.)
Apr. 2017:
Director of BANDAI NAMCO Holdings
ASIA CO., LTD. (current position)
Reasons for proposing Mr. Yuji Asako as a candidate for Director:
Mr. Yuji Asako possesses extensive experience, achievements, and knowledge relating tomanagement and administration, including business planning and accounting, and also has
experience in roles where he was responsible for internal and external communications, such as
IR, PR and SR. He is proposed as a candidate for Director as the Company considers him
capable of implementing the Group’s management strategies and seeking a sustained increasein corporate value.

9Candidate
No.

Name
(Date of Birth)

Positions andResponsibilities in
the Company

Career Summary
Apr. 1983:
Apr. 2002:

4

Joined BANDAI CO., LTD.
Executive Officer and General Manager,
Vending Machine Business Departmentof BANDAI CO., LTD.
Apr. 2006:
Director in charge of distribution policyof BANDAI CO., LTD.
Apr. 2010:
Managing Director in charge of hobby
business policy and quality assurance
policy of BANDAI CO., LTD.
MasaruApr. 2015:
Senior Managing Director in charge of
Kawaguchi
toy business policy of BANDAI CO.,
(November 2,
LTD.
1960)
Aug. 2015:
President and Representative Director of
Director in
BANDAI CO., LTD. (current position)
charge of Toysand Hobby Unit
Executive Officer of the Company
Number of the
Jun.
2016:
Director in charge of Toys and Hobby
Company’s
SBU of the Company
Shares Owned
Feb.
2018:
President and Representative Director of
39,400 Shares
BANDAI SPIRITS CO., LTD. (current
position)
Apr. 2018:
Director in charge of Toys and Hobby
Unit of the Company (current position)(Major concurrent positions)
President and Representative Director of BANDAI CO.,LTD.
President and Representative Director of BANDAISPIRITS CO., LTD.
Reasons for proposing Mr. Masaru Kawaguchi as a candidate for Director:
Mr. Masaru Kawaguchi possesses extensive experience, achievements, and knowledge in the
Toys and Hobby Business and has driven the business forward as the President andRepresentative Director of BANDAI CO., LTD., which is the core company of Toys and Hobby
Business in the Group, since 2015. He is proposed as a candidate for Director as the Company
considers him capable of building closer ties between the Toys and Hobby Business and Groupmanagement.

10

Candidate
No.

Name
(Date of Birth)

Positions andResponsibilities in
the Company

Career Summary
Mar. 1976:
Apr. 1992:

5

Joined BANDAI CO., LTD.
General Manager, Toy Marketing
Department of BANDAI CO., LTD.
Jun. 1999:
Executive Officer and Deputy Division
Head, Consumer Business Division, andGeneral Manager, SWAN Business
Department of BANDAI CO., LTD.
Jun. 2002:
President and Representative Director ofBandai Networks Co., Ltd.
Jun. 2007:
Director in charge of Network SBU of
the Company
Apr. 2009:Managing Director in charge of CS
business and NE business of NAMCO
BANDAI Games Inc. (currently
Satoshi Oshita
BANDAI NAMCO Entertainment Inc.)(July 3, 1953)
Apr. 2010:
President and Representative Director of
Director in
BANDAI VISUAL CO., LTD. (currently
charge of
BANDAI NAMCO Arts Inc.)
Network
Number of the
President and Representative Director ofEntertainment Apr. 2012:
Company’s
NAMCO BANDAI Games Inc. (current
Unit
Shares Owned
position)
58,800 Shares
Jun. 2012:
Director in charge of Content SBU of theCompany
Jan. 2015:
President of BANDAI NAMCO(SHANGHAI) CO., LTD.
Apr. 2015:
Director in charge of Network
Entertainment SBU of the Company
Oct. 2016:
Chairman and Representative Director of
BANDAI NAMCO Studios Inc.
Apr. 2018:
Director in charge of Network
Entertainment Unit of the Company(current position)(Major concurrent position)
President and Representative Director of BANDAI
NAMCO Entertainment Inc.
Reasons for proposing Mr. Satoshi Oshita as a candidate for Director:
Mr. Satoshi Oshita possesses extensive experience, achievements, and knowledge from his
wide-ranging involvement in the Toys and Hobby, Network Entertainment, and Visual andMusic Production Businesses in the Group. He has driven the business forward as the President
and Representative Director of BANDAI NAMCO Entertainment Inc., which is the corecompany of the Network Entertainment Business in the Group, since 2012. He is proposed as a
candidate for Director as the Company considers him capable of building closer ties between
the Network Entertainment Business and Group management.

11

Candidate
No.

Name
(Date of Birth)

Positions andResponsibilities in
the Company

Career Summary
Apr. 1978:

6

Joined NAMCO LIMITED (currently
BANDAI NAMCO Entertainment Inc.)
May 2002:
Leader of AM Manufacturing Group, AM
Company of NAMCO LIMITED
Apr. 2005:
Executive Officer and Head of AM
Control Division, AM Company of
NAMCO LIMITED
Apr. 2006:
Executive Officer and Vice President of
AM Company and Head of AM Control
Division of NAMCO BANDAI Games
Inc. (currently BANDAI NAMCOEntertainment Inc.)
Apr. 2009:
Senior Executive Officer and Division
Head of AM Business Division andGeneral Manager of AM Promotion andAdvertising Department of NAMCO
BANDAI Games Inc.
Apr. 2011:
Director in charge and General Managerof Amusement Sales Headquarters of
New Candidate
NAMCO BANDAI Games Inc.
for Director
Apr. 2013:
Managing Director in charge of Business
Management and General Manager ofHitoshi Hagiwara
Amusement Machine Business(April 8, 1959)
Management Group of NAMCO–
BANDAI Games Inc.
Apr.
2014:
Executive Officer in charge of
Number of theAmusement Facility SBU of theCompany’s
Company
Shares Owned
President and Representative Director of
16,000 Shares
NAMCO LIMITED (*) (currently
BANDAI NAMCO Amusement Inc.)(current position)* Newly established company throughthe incorporation-type company split of
NAMCO LIMITED (currently BANDAI
NAMCO Entertainment Inc.)
Jun. 2014:
Director in charge of Amusement Facility
SBU of the Company
Apr. 2015:
Vice President and Director of BANDAI
NAMCO Entertainment Inc.
Apr. 2016:
Director of BANDAI NAMCOEntertainment Inc.
Apr. 2018:
Executive Officer in charge of RealEntertainment Unit of the Company(current position)(Major concurrent position)
President and Representative Director of BANDAI
NAMCO Amusement Inc.
Reasons for proposing Mr. Hitoshi Hagiwara as a candidate for Director:
Mr. Hitoshi Hagiwara possesses extensive experience, achievements, and knowledge in theReal Entertainment Business. He has driven the business forward as the President andRepresentative Director of BANDAI NAMCO Amusement Inc., which is the core company ofamusement facility operations in the Group, since 2014. He is proposed as a candidate for
Director as the Company considers him capable of building closer ties between the RealEntertainment Business and Group management.

12

Candidate
No.

Name
(Date of Birth)

Positions andResponsibilities in
the Company

Career Summary
Apr. 1982:

7

Joined CANYON RECORDS INC.
(currently PONY CANYON INC.)
Jul. 1989:
Joined BANDAI CO., LTD.
Apr. 1994:
Joined BANDAI VISUAL CO., LTD.
(currently BANDAI NAMCO Arts Inc.)
Sep. 1997:
General Manager of Production at
Production Headquarters of BANDAIVISUAL CO., LTD.
Mar. 1999:
Deputy Division Head of Visual Business
Division and General Manager of Visual
Planning Department of BANDAIVISUAL CO., LTD.
May 1999:
Director, Deputy Division Head of Visual
KazumiBusiness Division and General Manager
Kawashiroof Visual Planning Department of(November 4,
BANDAI VISUAL CO., LTD.
1959)
Director in
May 2003:
President and Representative Director of
charge of Visual
BANDAI VISUAL CO., LTD.
and Music
Jun. 2007:
Director in charge of Visual and Music
Number of the
Production Unit
Content SBU of the Company
Company’s
Apr.
2010:
Vice President and Director of BANDAI
Shares Owned
VISUAL CO., LTD.
21,100 Shares
Apr. 2012:
President and Representative Director of
BANDAI VISUAL CO., LTD. (current
position)
Apr. 2015:
Executive Officer in charge of Visual andMusic Production SBU of the Company
Jun. 2015:
Director in charge of Visual and Music
Production SBU of the Company
Apr. 2018:
Director in charge of Visual and Music
Production Unit of the Company (current
position)(Major concurrent position)
President and Representative Director of BANDAI
NAMCO Arts Inc.
Reasons for proposing Mr. Kazumi Kawashiro as a candidate for Director:
Mr. Kazumi Kawashiro possesses extensive experience, achievements, and knowledge in the
Visual and Music Production Business. He has driven the business forward as the President andRepresentative Director of BANDAI NAMCO Arts Inc., which is the core company of the
Visual and Music Production Business in the Group, since 2012. He is proposed as a candidate
for Director as the Company considers him capable of building closer ties between the Visualand Music Production Business and Group management.

13

Candidate
No.

Name
(Date of Birth)

Positions andResponsibilities in
the Company

Career Summary
Apr. 1981:
Jan. 1996:
Apr. 2000:

8

Joined BANDAI CO., LTD.
Director of Bandai Digital Entertainment
Joined SUNRISE INC., as General
Manager of Network Development
Department
Apr. 2004:
Director of SUNRISE INC.
Apr. 2008:
Managing Director of SUNRISE INC.
New Candidate
Senior Managing Director of SUNRISE
Apr.
2011:
for Director
INC.
Vice President and Director of SUNRISE
Apr.
2013:
Yasuo Miyakawa
INC.
(June 8, 1956)
President and Representative Director of
Apr.
2014:
–
SUNRISE INC. (current position)
President and Representative Director of
Apr. 2015:
Number of the
BANDAI NAMCO Pictures Inc. (current
Company’s
position)
Shares Owned
Executive Officer in charge of IP
Apr. 2018:
11,950 Shares
Creation Unit of the Company (current
position)(Major concurrent positions)
President and Representative Director of SUNRISE
INC.
President and Representative Director of BANDAI
NAMCO Pictures Inc.
Reasons for proposing Mr. Yasuo Miyakawa as a candidate for Director:
Mr. Yasuo Miyakawa possesses extensive experience, achievements, and knowledge in the IP
Creation Business. He has driven the business forward as the President and Representative
Director of SUNRISE INC., which is the core company of the IP Creation Business in theGroup, since 2014. He is proposed as a candidate for Director as the Company considers him
capable of building closer ties between the IP Creation Business and Group management.

14

Candidate
No.

Name
(Date of Birth)

Positions andResponsibilities in
the Company

Career Summary
Apr. 1977:

9

Joined Kyowa Hakko Kogyo Co., Ltd.
(currently Kyowa Hakko Kirin Co., Ltd.)
Jun. 2000:
Executive Officer and Head of
Pharmaceutical Research Institute of
Kyowa Hakko Kogyo Co., Ltd.
Jun. 2002:
Managing Director and General Manager
of Comprehensive Planning Office of
Kyowa Hakko Kogyo Co., Ltd.
Jun.
2003:
President and Representative Director of
Outside Director
Kyowa Hakko Kogyo Co., Ltd.
Oct.
2008:
Executive Director of the Board,
Yuzuru Matsuda
President and Chief Executive Officer of(June 25, 1948)
Kyowa Hakko Kirin Co., Ltd.
Director
Mar. 2012:
Advisor of Kyowa Hakko Kirin Co., Ltd.
Number of theJun. 2012:
Head of Kato Memorial Bioscience
Company’s
Foundation (current position)
Shares Owned
Jun. 2014:
Outside Director of KUBOTA--- Shares
Corporation (current position)
Outside Director of the Company (current
position)
Jun. 2015:
Outside Director of JSR Corporation(current position)(Major concurrent positions)
Head of Kato Memorial Bioscience Foundation
Outside Director of KUBOTA Corporation
Outside Director of JSR Corporation
Reasons for proposing Mr. Yuzuru Matsuda as a candidate for Outside Director and his
suitability as Outside Director:
Given his extensive experience in corporate management and his excellent character andinsight, the Company anticipates that he will be able to further strengthen management
oversight and checking functions, and introduce a broader managerial perspective, and thus
believes that he will be able to perform the duties of an Outside Director appropriately.
Outside Director
SatokoKuwabara(November 1,
1964)

10

Apr. 1990:

Director

Admitted to the bar in Japan
Joined Mori Sogo Law Offices (currently
Mori Hamada & Matsumoto)Jan. 1998:
Partner of Mori Hamada & Matsumoto(current position)
Jun. 2016:
Outside Director of the Company (current
position)(Major concurrent position)
Attorney-at-Law
Partner of Mori Hamada & Matsumoto

Number of theCompany’s
Shares Owned--- Shares
Reasons for proposing Ms. Satoko Kuwabara as a candidate for Outside Director and hersuitability as Outside Director:
Although she has not been involved in corporate management other than through serving as an
Outside Director, the Company anticipates, given her many years of experience as an
attorney-at-law, that she will be able to further strengthen management oversight and checking
functions, mainly from a legal risk perspective, and thus believes that she will be able toperform the duties of an Outside Director appropriately.

15

Candidate
No.

Name
(Date of Birth)

Positions andResponsibilities in
the Company

Career Summary
Apr. 2002:

Lecturer of Faculty of Economics andBusiness Administration of Yokohama
City University
Oct. 2003:
Assistant Professor of Faculty of
Economics and Business Administrationof Yokohama City University
Outside Director
Oct. 2004:
Assistant Professor of Graduate School ofInternational Corporate Strategy (ICS) of
Mikiharu Noma
Hitotsubashi University(November 6,
Apr. 2007:
Associate Professor, Graduate School of
1974)
International Corporate Strategy (ICS),
Director
Hitotsubashi University
Jun. 2016:
Outside Director of the Company (current
Number of theposition)
Company’sApr. 2018:
Associate Professor, Graduate School of
11
Shares Owned
Business Administration, Hitotsubashi--- Shares
University Business School (current
position)(Major concurrent position)
Associate Professor at Graduate School of Business
Administration, Hitotsubashi University Business
SchoolReasons for proposing Mr. Mikiharu Noma as a candidate for Outside Director and his
suitability as Outside Director:
Although he has not been involved in corporate management other than through serving as an
Outside Director, given his profound scholarly knowledge accumulated throughout his study
and teaching activities in the field of corporate strategy, the Company anticipates that he will beable to further strengthen management oversight and checking functions, and thus believes that
he will be able to perform the duties of an Outside Director appropriately.
(Notes) 1. Each of Mr. Yuzuru Matsuda, Ms. Satoko Kuwabara and Mr. Mikiharu Noma is a candidate for
Outside Director of the Company. Each of the candidates is currently Outside Director of theCompany. As of the close of this General Meeting of Shareholders, Mr. Yuzuru Matsuda will have
served as Outside Director for approximately four years, and Ms. Satoko Kuwabara and Mr. Mikiharu
Noma will have served for approximately two years.
2. Independence as Outside Director
The Company believes that Mr. Yuzuru Matsuda, Ms. Satoko Kuwabara and Mr. Mikiharu Noma,
who are candidates for Outside Director of the Company, all satisfy the Company’s Standards for the
Independence of Outside Directors and Outside Audit & Supervisory Board Members (please refer to“Standards for the Independence of Outside Directors and Outside Audit & Supervisory Board
Members” on page 21) and thus have no risk of conflicts of interest with general shareholders andhave a high degree of independence. The Company has filed a notification with the Tokyo Stock
Exchange that each of the candidates would be Independent Directors/Audit & Supervisory Board
Members as defined in the rules of the Tokyo Stock Exchange and would be the Independent
Directors/Audit & Supervisory Board Members of the Company after the election at this Ordinary
General Meeting of Shareholders.
3. The Company does not intend to conclude a Liability Limitation Agreement under Article 427,
Paragraph 1 of the Companies Act with each of the candidates for Outside Director.
4. There are no special interests between each of the candidates for Director and the Company.

16

Proposal No. 3: Election of Four Audit & Supervisory Board Members
Since the terms of office of the four Audit & Supervisory Board Members of the Company will
expire as of the close of this General Meeting of Shareholders, the Company requests the election of four
Audit & Supervisory Board Members.
This Proposal has already been approved by the Audit & Supervisory Board.
The candidates for Audit & Supervisory Board Member of the Company are as follows:
Candidate
Name
Career Summary and Positions in the Company
No.
(Date of Birth)
Nov. 1994:
Joined NAMCO LIMITED (currently BANDAI
NAMCO Entertainment Inc.)New Candidate for
Leader of General Affairs and Compliance Group of
Audit & Supervisory Apr. 2004:
NAMCO LIMITED
Board Member
Sep. 2005:
Joined the Company, as General Manager in charge of
Human Resources and General Affairs of theMasataka Nagaike
Corporate Administration Department(May 15, 1959)
Apr. 2007:
Director of BANDAI CO., LTD.
Apr. 2009:
General Manager of Corporate Legal Affairs
Number of the
Department of the Company
1Company’s Shares
Apr. 2011:
General Manager of Corporate Communications
Owned
Department of the Company
2,700 Shares
Apr. 2015:
Senior Adviser of Corporate Communications
Department of the Company (current position)
Reasons for proposing Mr. Masataka Nagaike as a candidate for Audit & Supervisory Board
Member:Given his many years of experience in engaging in work in the administration divisions, andmastering corporate legal affairs, the Company expects Mr. Masataka Nagaike to utilize hisknowledge and experience for the audit & supervisory system of the Company.
New Candidate forApr. 1986:
Joined Daiwa Securities Co. Ltd.
Audit & Supervisory Oct. 1991:
Joined Showa Ota & Co. (currently Ernst & Young
ShinNihon LLC)
Board Member
Aug. 1995:
Licensed as a CPA
Mar.
2018:
Head of Toru Shinoda CPA Office (current position)
Outside Audit &Supervisory Board
MemberToru Shinoda(December 5, 1963)

2

Number of theCompany’s Shares(Major concurrent position)
Owned
CertifiedPublic Accountant--- Shares
Reasons for proposing Mr. Toru Shinoda as a candidate for Outside Audit & Supervisory Board
Member and his suitability as Outside Audit & Supervisory Board Member:
Given his many years mastering the audit practices, and given he is a certified public
accountant, the Company expects Mr. Toru Shinoda to utilize his wealth of knowledge andexperience in accounting and auditing for the audit & supervisory system of the Company, andthus believes that he will be able to appropriately perform the duties of an Outside Audit &Supervisory Board Member. Although he has not been involved in corporate management otherthan through serving as an outside officer, for the reasons described above, the Company
believes that he will be able to perform the duties of an Outside Audit & Supervisory Board
Member appropriately.

17

Candidate
No.

Name
(Date of Birth)

Career Summary and Positions in the Company
Apr. 1980:
Apr. 1983:
Jun. 1999:
Jun. 2003:

3

Admitted to the bar in Japan
Partner of Tokyo Yaesu Law OfficePartner of Sudoh & Takai Law Offices
Outside Audit & Supervisory Board Member of
NAMCO LIMITED (currently BANDAI NAMCOEntertainment Inc.)
Sep. 2005:
Outside Audit & Supervisory Board Member of theCompany (current position)
Mar. 2006:
Outside Audit & Supervisory Board Member of
NAMCO LIMITED (*) (currently BANDAI NAMCO
Outside Audit &Amusement Inc.)
Supervisory Board* Newly established company through theMemberincorporation-type company split of NAMCO
LIMITED (currently BANDAI NAMCOEntertainment Inc.)
Osamu Sudoh
Jun.
2009:
Outside Director of eBANK Corporation (currently(January 24,
Rakuten Bank, Ltd.)
1952)
Jun. 2011:
Outside Audit & Supervisory Board Member of
MITSUI-SOKO Co., Ltd. (currently MITSUI-SOKO
HOLDINGS Co., Ltd.) (current position)
Number of theJun. 2012:
Outside Director of Accordia Golf Co., Ltd.
Company’s Shares
May 2016:
Partner of Sudoh & Partners (current position)
Owned
Jun. 2016:
Outside Corporate Auditor of Pronexus Inc. (current
position)
9,900 Shares
Jun. 2016:
Statutory Auditor of Keikyu Corporation (current
position)(Major concurrent positions)
Attorney-at-Law
Partner of Sudoh & Partners
Outside Audit & Supervisory Board Member of MITSUI-SOKO
HOLDINGS Co., Ltd.
Outside Corporate Auditor of Pronexus Inc.
Statutory Auditor of Keikyu Corporation
Reasons for proposing Mr. Osamu Sudoh as a candidate for Outside Audit & Supervisory
Board Member and his suitability as Outside Audit & Supervisory Board Member:
Given his many years of experience as an attorney-at-law, the Company expects Mr. Osamu
Sudoh to utilize his wealth of knowledge and experience in legal affairs for the audit &supervisory system of the Company, and thus believes that he will be able to appropriately
perform the duties of an Outside Audit & Supervisory Board Member. Although he has notbeen involved in corporate management other than through serving as an outside officer, for thereasons described above, the Company believes that he will be able to perform the duties of an
Outside Audit & Supervisory Board Member appropriately.

18

Candidate
No.

Name
(Date of Birth)

Career Summary and Positions in the Company
Apr. 1978:
Jul. 1986:
Jul. 2001:

4

Joined National Tax Agency
District Director of Suzuka Tax Office
Manager of Second Taxation Department of Tokyo
Regional Taxation Bureau
Jul. 2005:
Director (Information System Management) of
National Tax Agency
Jul. 2008:
Regional Commissioner of Okinawa Regional
Outside Audit &Taxation Office
Supervisory Board
Jul. 2009:
Commissioner of Nagoya National Tax Tribunal
MemberJul. 2011:Retired from National Tax Agency
Sep. 2011:
Professor at Faculty of Law of Teikyo University
Katsuhiko Kamijo(current position)(September 17, 1951) Jun. 2013:
Outside Audit & Supervisory Board Member of
HASEKO Corporation
Jun. 2014:
Outside Audit & Supervisory Board Member of theCompany (current position)
Number of theJun. 2015:
Company’s Shares
Registered as a Certified Public Tax Accountant
Owned
Jun. 2017:
Outside Audit & Supervisory Board Member of The--- Shares
Resolution and Collection Corporation (current
position)(Major concurrent positions)Certified Public Tax Accountant
Professor at Faculty of Law of Teikyo University
Outside Audit & Supervisory Board Member of The Resolution andCollection Corporation
Reasons for proposing Mr. Katsuhiko Kamijo as a candidate for Outside Audit & Supervisory
Board Member and his suitability as Outside Audit & Supervisory Board Member:
Given his many years mastering tax affairs, and given that he is a certified public tax
accountant, the Company expects Mr. Katsuhiko Kamijo to utilize his wealth of knowledge andexperience in tax affairs for the audit & supervisory system of the Company, and thus believes
that he will be able to appropriately perform the duties of an Outside Audit & Supervisory
Board Member. Although he has not been involved in corporate management other than
through serving as an outside officer, for the reasons described above, the Company believes
that he will be able to perform the duties of an Outside Audit & Supervisory Board Member
appropriately.

19

(Notes) 1. Each of Mr. Toru Shinoda, Mr. Osamu Sudoh and Mr. Katsuhiko Kamijo is a candidate for Outside
Audit & Supervisory Board Member of the Company. Mr. Osamu Sudoh and Mr. Katsuhiko Kamijo
are currently Outside Audit & Supervisory Board Members of the Company. As of the close of this
General Meeting of Shareholders, Mr. Osamu Sudoh will have served as Outside Audit & Supervisory
Board Member for approximately twelve years and nine months, and Mr. Katsuhiko Kamijo will have
served for approximately four years.
2. Independence as Outside Audit & Supervisory Board Member
The Company believes that Mr. Toru Shinoda, Mr. Osamu Sudoh and Mr. Katsuhiko Kamijo, who are
candidates for Outside Audit & Supervisory Board Member of the Company, all satisfy theCompany’s Standards for the Independence of Outside Directors and Outside Audit & Supervisory
Board Members (please refer to “Standards for the Independence of Outside Directors and Outside
Audit & Supervisory Board Members” on page 21) and thus have no risk of conflicts of interest withgeneral shareholders and have a high degree of independence. The Company has filed a notification
with the Tokyo Stock Exchange that each of the candidates would be Independent Directors/Audit &Supervisory Board Members as defined in the rules of the Tokyo Stock Exchange and would be theIndependent Directors/Audit & Supervisory Board Members of the Company after the election at thisOrdinary General Meeting of Shareholders.
3. The Company does not intend to conclude a Liability Limitation Agreement under Article 427,
Paragraph 1 of the Companies Act with each of the candidates for Outside Audit & Supervisory Board
Members.
4. There are no special interests between each of the candidates for Audit & Supervisory Board Member
and the Company.

20

Standards for the Independence of Outside Directors and Outside Audit & Supervisory Board
Members (Reference)
The Company has prescribed the following “Standards for the Independence of Outside Directors andOutside Audit & Supervisory Board Members” and has nominated Outside Directors and Outside Audit& Supervisory Board Members based on these standards.
Standards for the Independenceof Outside Directors and Outside Audit & Supervisory Board Members
In order for the Outside Directors and Outside Audit & Supervisory Board Members of the Company to be
judged as being independent, such Outside Directors and Outside Audit & Supervisory Board Members must
not fall under any of the following items.
1. Any person who purports to be a major business partner of the Company (including group companies of theCompany; the same applies hereinafter)
2. Any Executive Director, Executive Officer, Manager or other employee of a company that purports to be amajor business partner of the Company
3. Any person who is a major business partner of the Company
4. Any Executive Director, Executive Officer, Manager or other employee of a company that is a major
business partner of the Company
5. Any attorney-at-law, certified public accountant, certified public tax accountant, consultant or other expert
who receives monies or other economic benefits above a certain amount from the Company, in addition tohis or her remuneration as a Director or Audit & Supervisory Board Member
6. Any person belonging to a company, association or other organization such as a law firm, auditing firm, tax
accountant corporation and consultancy which receives monies or other economic benefits above a certain
amount from the Company
7. Any person receiving donations or subsidies from the Company above a certain amount
8. Any person who is a Board member or other Executive Officer in a company, association or otherorganization which receives donations or subsidies from the Company above a certain amount
9. If an Executive Director or Full Time Audit & Supervisory Board Member of the Company concurrently
holds a position as an Outside Director or Outside Audit & Supervisory Board Member at another company,
any person who is an Executive Director, Executive Officer, Manager or other employee of that company
10. Any person who has come under one of the categories listed in items 1 through 9 above in the past five years
11. If a person coming under one of the categories listed in items 1 through 9 above is an important person, that
person’s spouse or relative within the second degree of kinship
12. The spouse or relative within the second degree of kinship of any person who is a Director, Executive
Officer, Manager or other important employee of the Company or its subsidiaries(Notes) 1 In items 1 and 2, where it reads “any person who purports to be a major business partner of theCompany,” this means “any person (or company) who has received a payment from the Company 2%
or more of its annual consolidated net sales for the most recent business year.”
2 In items 3 and 4, where it reads “any person who is a major business partner of the Company,” thismeans “any person (or company) who has paid to the Company an amount 2% or more of theCompany’s annual consolidated net sales for the most recent business year, or any person (orcompany) who has provided the Company with a loan of an amount 2% or greater of the value of theCompany’s consolidated total assets as of the end of the most recent business year.”
3 In items 5, 7 and 8, where it reads “a certain amount,” this means “¥10 million a year.”
4 In item 6, where it reads “a certain amount,” this means “2% or more of the total net sales for thatcompany, association or organization for the most recent business year, or ¥100 million; whichever isgreater.”21

Proposal No. 4: Revision of Performance-based Stock Compensation Plan for Directors
The Company seeks approval for a revision of the performance-based stock compensation plan for
Directors excluding Outside Directors of the Company (hereinafter “Eligible Directors”) from the current
plan, which provides monetary compensation claims for delivering common stock of the Company andcash with an approved upper limit of 160 million yen per year (hereinafter “the Current Plan”), to a planthat provides monetary compensation claims for delivering common stock of the Company and cash, withan upper limit that is the amount obtained by multiplying 45,000 shares by the share price at the time ofdelivery (stipulated in (2) (*3) below and is hereinafter referred to as “the Delivery Share Price”) by wayof responding to the “Mid-term Plan of the BANDAI NAMCO Group (From April 2018 to March 2021),”
which started in April 2018 (hereinafter “the Mid-term Plan”) (the stock compensation plan after therevision is hereinafter referred to as “the Plan”).
(Reference)

For a visual overview of the Company’s Directors remuneration (excluding Outside
Directors), please see the figure below.

The Company initially received approval at the Tenth Ordinary General Meeting of Shareholders
held on June 22, 2015 for granting stock compensation-type stock options with an upper limit of 160
million yen per year under a performance requirement by way of responding to the mid-term plan
immediately preceding the current Mid-term Plan (such stock compensation plan is hereinafter referred toas “the Initial Plan”). However, at the Company’s Twelfth Ordinary General Meeting of Shareholders
held on June 19, 2017, approval was received to partially change the resolution for approval related to theInitial Plan in light of various improvements made to stock compensation systems in Japan, and introduce
the Current Plan for the fiscal year ended March 31, 2017 and the fiscal year ended March 31, 2018,
while staying in line with the basic approach of the Initial Plan.
The Company now seeks to change the content of the Current Plan in order to have Directors aspire
toward achieving performance targets listed in the Mid-term Plan, and to further deepen shared value withshareholders and promote continuous improvement in corporate value following the change of the basic
policy for providing returns to shareholders. Accordingly, the Company wishes to set the total amount ofmonetary compensation claims and cash to be provided as performance-based stock compensation towithin the amount obtained by multiplying 45,000 shares by the Delivery Share Price, which isconsidered an appropriate amount based on the abovementioned objectives. Unlike the Current Plan,
under the Plan the upper limit for the total amount of monetary compensation claims and cash to beprovided fluctuates in accordance with the Delivery Share Price.

22

Under the Plan, the Company’s common stock and cash are delivered or provided to Eligible
Directors in accordance with a number of payment share units determined in accordance with the degreeof attainment of the performance target for consolidated operating profit of the Company in each fiscal
year covered by the Mid-term Plan (hereinafter “Evaluation Fiscal Years”), based on a reference numberof share units determined in advance in accordance with the roles and so forth of the Eligible Directors.
The number of payment share units is decided purely based on performance, and payment is made only
when consolidated operating profit is 60,000 million yen or higher, with the number of payment share
units increasing gradually until consolidated operating profit reaches 75,000 million yen (the final fiscal
year target for the Mid-term Plan). Under this design, changes in the share price from that in the firstfiscal year of the Mid-term Plan can be reflected directly in compensation. Furthermore, payment or
non-payment and the number of payment share units are determined each Evaluation Fiscal Year.
In regard to the common stock of the Company to be delivered under the Plan, as with the Current
Plan, sale of the shares shall be restricted during the terms of office of Directors, etc., and Directors, etc.
shall continue to hold the shares until their retirement in order to continue to ensure shared value withshareholders during the terms of office of Directors, etc. Therefore, to enable allocation of funds forpayment of tax arising when the shares of the common stock of the Company are delivered to Eligible
Directors, a cash payment shall be made in the amount obtained by converting a portion of the determined
number of payment share units at the Delivery Share Price.
Providing Proposal No. 2 is approved and adopted as proposed, the number of Eligible Directors will
be eight.
The content of the Plan is as follows:(1) Overview of the Plan
Under the Plan, common stock of the Company (*) and cash (hereinafter “the Company’s Shares,Etc.”) shall be delivered or provided to Eligible Directors according to the degree of attainment of theperformance target for consolidated operating profit for each Evaluation Fiscal Year. The Company’s
Shares, Etc. shall be delivered or provided only when consolidated operating profit is 60,000 million yen
or higher, and the payment ratio shall become 100% when consolidated operating profit reaches the final
fiscal year target for the Mid-term Plan of 75,000 million yen.
(*)

Method of delivering the Company’s common stock under the Plan
The Company shall provide monetary compensation claims as remuneration to Eligible Directors,
who shall pay in the monetary compensation claims as property contributed in kind to receive
delivery of the Company’s common stock.
However, for Eligible Directors who are non-residents of Japan, in place of the delivery of theCompany’s common stock, they shall be provided with cash in the amount obtained by converting
all of the determined number of share units at the Delivery Share Price.

(2) Calculation method of the number of the Company’s Shares, Etc., and the total amount of theCompany’s Shares, Etc., to be delivered or provided to Eligible Directors
Taking the predetermined reference number of share units for Eligible Directors as the basis forcalculation, the number of shares of common stock of the Company and amount of cash to be delivered orprovided are calculated according to the amount of consolidated operating profit of the Company for the
Evaluation Fiscal Year based on the formula below.
(a) The number of shares of common stock of the Company to be delivered to each Eligible Director
Number of payment share units × 50% (with any resulting odd-lots of less than 100 shares roundedup)(Note 1) Number of payment share units = Predetermined reference number of share units (*1) × Ratio
according to the consolidated operating profit of the Company for that Evaluation Fiscal Year
(payment ratio) (*2) (with any resulting odd-lots of less than 100 shares rounded down)(Note 2) As in (1) (*), what is actually provided to Eligible Directors is monetary compensation claims
corresponding to the amount obtained by multiplying the number of the abovementioned
shares of common stock of the Company by the Delivery Share Price. These are for making
payment as property contributed in kind upon delivery of the Company’s common stock.

23

(b) The amount of cash to be provided to each Eligible Director(Number of payment share units – The number calculated in (a) above) × Delivery Share Price(*1) Reference number of share units shall be determined beforehand based on the roles andresponsibilities of each Eligible Director.
(Reference)

If Proposal No. 2 is approved and adopted as proposed, the reference number of share
units for Eligible Directors for the fiscal year ending March 31, 2019 will be as
shown in the table below. For Eligible Directors who serve concurrently as thepresident and representative director of one of the five core companies of the Group’s
Units, namely BANDAI CO., LTD. (“BC”), BANDAI NAMCO Entertainment Inc.
(“BNE”), BANDAI NAMCO Amusement Inc. (“BNAM”), BANDAI NAMCO Arts
Inc. (“ARTS”), and SUNRISE INC. (“SR”), or BANDAI SPIRITS CO., LTD.
(“BSP”), the reference number of share units for the president and representative
director of the respective Unit core company or BSP is applied. Moreover, for
Eligible Directors who serve concurrently as president and representative director of
multiple companies at Unit core companies and BSP, the highest of the correspondingreference numbers of share units for the president and representative director of therespective Unit core company or BSP is applied. If an Eligible Director serves
multiple positions concurrently as described above, the respective Unit core company
and BSP which has the relevant concurrent director will provide the relevant Eligible
Director with monetary compensation claims and cash as remuneration in accordancewith a predetermined rule.

(Reference number of share units)
The Company
President andrepresentative director
Director

BC

BNE

BNAM

ARTS

SR

BSP

6,600

5,300

6,000

3,300

4,600

3,300

5,300

3,300

–

–

–

–

–

–

24

(*2) The Company’s Shares, Etc. shall not be provided if consolidated operating profit does not reach
60,000 million yen. If consolidated operating profit is 75,000 million yen or greater, 100% of theCompany’s Shares, Etc. shall be provided. The specific method for determining the payment ratio
is as follows.
Consolidated operating profit

Payment ratioLess than 60,000 million yen

0%60,000 million yen or more but less than 75,000
million yen[50 + {(Amount of consolidated operating profit (in 100 million yen)
– 60,000 million yen) ÷ 100 million yen} ÷ 3]%

75,000 million yen or more

100%(*3) Delivery Share Price is the closing price of common stock of the Company on the Tokyo Stock
Exchange on the business day immediately preceding the date of the resolution at the Board of
Directors meeting to deliver the Company’s common stock related to the Plan held within twomonths from the date of the Ordinary General Meeting of Shareholders pertaining to each
Evaluation Fiscal Year stipulated in (3) below (if the Company’s shares were not traded on thatday, the closing price on the last day the shares were traded prior to that).
The upper limit of the total amount of monetary compensation claims (to be used as property
contributed in kind in payment for common stock of the Company) and cash for one fiscal year of the
Evaluation Fiscal Years shall be the amount obtained by multiplying 45,000 shares by the Delivery Share
Price. Of this, the upper limit for the total number of shares of common stock of the Company that canactually be delivered to the Eligible Directors shall be 22,500 shares (0.01% of the total number of sharesissued) per fiscal year of the Evaluation Fiscal Years. However, at the close of this Ordinary General
Meeting of Shareholders or thereafter, if the Company carries out a share split (including allotments ofshares without receipt of monetary consideration; the same shall apply hereinafter to share splits
mentioned below) or share consolidation of the common stock of the Company, the abovementioned
number of shares shall be adjusted in accordance with the following formula, with any fractions less than
one share resulting from the adjustment being rounded down.
Number of shares after adjustment = Number of shares before adjustment × Ratio of share split orshare consolidation(3) Requirements for delivering or providing the Company’s Shares, Etc. to Eligible Directors
Under the Plan, the Company’s Shares, Etc. shall be delivered or provided when the Evaluation
Fiscal Year ends and Eligible Directors fulfill the following requirements.
The number of the Company’s Shares, Etc. to be delivered or provided shall be decided at a Boardof Directors meeting for delivering the Company’s common stock related to the Plan held within twomonths from the Ordinary General Meeting of Shareholders for the Evaluation Fiscal Year.
(a) The Eligible Director remained in office as a Director until the end of the Evaluation Fiscal Year.
(b) The Eligible Director did not engage in any specified misconduct.
(c) Other requirements deemed necessary that have been set by the Board of Directors(Reference)

Directors of the five core companies of the Group’s Units, BC, BNE, BNAM, ARTS,
and SR, or BSP, who are not serving concurrently as Directors of the Company(hereinafter “the Eligible Subsidiary Directors”) shall also be eligible for the samekind of performance-based stock compensation plans. Provided this proposal isapproved as proposed, the Company’s Shares, Etc. shall be delivered or provided to
the Eligible Subsidiary Directors with content similar to the proposal.
The upper limit of the total amount of monetary compensation claims (to be used as
property contributed in kind in payment for common stock of the Company) and cashfor one fiscal year of the Evaluation Fiscal Years to be provided to the Eligible
Subsidiary Directors shall be the amount obtained by multiplying 60,000 shares by25

the Delivery Share Price (when combined with the portion provided to Eligible
Directors, the upper limit for the total amount shall be the amount obtained bymultiplying 105,000 shares by the Delivery Share Price). Moreover, the upper limit
for the total number of shares of common stock of the Company that can actually bedelivered to the Eligible Subsidiary Directors shall be 30,000 shares (0.01% of thetotal number of shares issued) per fiscal year of the Evaluation Fiscal Years (whencombined with the portion delivered to Eligible Directors, the upper limit for the total
number of shares delivered shall be 52,500 shares (0.02% of the total number ofshares issued)). However, at the close of this Ordinary General Meeting of
Shareholders or thereafter, if the Company carries out a share split or shareconsolidation of the common stock of the Company, the abovementioned number
shall be adjusted by the same formula in (2) above, etc.
(Reference)“Policy and Procedures for Decisions on Remuneration” of the Company are asstated in “b. Policy and Procedures for Decisions on Remuneration” on pages 39 to
40. Reflecting the change of the Group organization structure from the previous
three-SBU structure to the five-Unit structure, the same policy and procedures as theCompany’s shall be applied to directors of the five core companies of the Units of theGroup, namely BC, BNE, BNAM, ARTS and SR, and BSP.

26

(Attached Document)
BUSINESS REPORTS(From April 1, 2017 to March 31, 2018)
1. Current Status of the Group(1) Business Status for This Fiscal Year(i)

Business Progress and Results

During the fiscal year ended March 31, 2018, the Japanese economy continued to moderately
recover, supported mainly by a recovery in personal consumption and improved corporate
profitability. However, the outlook for the overall economy remained uncertain. Overseas, personal
consumption was impacted by uncertainty in social conditions and other factors.
In this environment, the Group has pushed ahead with the three-year Mid-term Plan that started in
April 2015. Under the Vision of “NEXT STAGE: Empower, Gain Momentum and Accelerate
Evolution,” the Group is targeting medium- and long-term growth and has focused on creating andcultivating new IP (Intellectual Property: meaning characters and other intellectual property),
expanding target markets, and growing new businesses as part of efforts to strengthen the “IP Axis
Strategy” that aims to maximize IP value through the provision of the best products and services atthe best possible times. The Group also worked to expand its IP lineup, business fields and areas inoverseas markets.
During this fiscal year, we pushed ahead with key measures of the Mid-term Plan, where network
content such as game applications for smartphones and home video games performed well in Japanand overseas. In addition, key IP products and services in each business segment also performed
favorably.
Consequently, the Group’s consolidated results for the fiscal year ended March 31, 2018 were net
sales of 678,312 million yen (year-on-year increase of 9.4%), operating profit of 75,024 million yen(year-on-year increase of 18.6%), recurring profit of 75,380 million yen (year-on-year increase of
19.1%), and profit attributable to owners of parent of 54,109 million yen (year-on-year increase of
22.5%). Accordingly, we were able to achieve the highest ever business performance.
(ii) Outline of Business by Business Segment(Millions of yen)
Year Ended
March 31,2017

Net SalesYear Ended
March 31,2018

Toys and Hobby

218,098

222,417

Increase of
4,318

13,33014,476

Increase of
1,145

Network
Entertainment
Visual andMusic
Production

355,585

405,986

Increase of
50,40142,03452,374

Increase of
10,33956,29056,058Decreaseof 231

13,436

12,508Decreaseof 928

Other

26,79727,640

Increase of
842

702

767

Increase of64

Eliminations
and Corporate(36,710)(33,791)

Increase of
2,918(6,266)(5,101)

Increase of
1,164

Consolidated

620,061

678,312

Increase of
58,25063,23875,024

Increase of
11,786

Business
Segment

ChangeOperating Profit
Year EndedYear Ended
March 31,
March 31,
2017
2018

Change(Note) As the Group partially changed the classification of business segments on April 1, 2017, theclassification of business segments for the previous fiscal year have been restatedaccordingly.

27

Toys and Hobby Business
As for Toys and Hobby Business, in Japan, long-established IP products such as the KAMEN RIDER
series, the PRETTY CURE! series, and the Dragon Ball series continued to perform well, while
products of the Mobile Suit Gundam series performed steadily, mainly in plastic models. In addition,
the Group enhanced efforts to expand its target markets for mature fans and implemented measures
to strengthen the IP axis strategy by taking steps to expand IP lineup and the like. Overseas, in the
Asian region, products of the Mobile Suit Gundam series and collectable toys for mature fanscontinued gaining in popularity. In Americas and Europe, we continued with the roll-out of card
products and the like for the mature fan base.
As a result, net sales in the Toys and Hobby Business were 222,417 million yen (year-on-yearincrease of 2.0%), and operating profit was 14,476 million yen (year-on-year increase of 8.6%).
Description of Business
Manufacturing and marketing toys, capsule toys, cards, confectionery and foods, apparel,sundries, plastic models, prizes, stationery, and other products

Network Entertainment Business
As for the Network Entertainment Business, in network content such as game applications for
smartphones, key titles being distributed worldwide such as DRAGON BALL Z DOKKAN BATTLE
and ONE PIECE Treasure Cruise, and, in Japan, key titles such as The iDOLM@STER seriescontinued to perform well and contributed significantly to earnings. In home video games, the newtitle TEKKEN 7 and DRAGONBALL FighterZ became popular mainly in Americas and Europe, andrepeat sales of existing titles were favorable. In the amusement business, the Group’s existing
amusement facilities in Japan performed favorably, and the Group proactively developed machines
and opened new facilities utilizing virtual reality (VR) as a fresh initiative combining newtechnologies.
As a result, net sales in the Network Entertainment Business were 405,986 million yen(year-on-year increase of 14.2%), and operating profit was 52,374 million yen (year-on-yearincrease of 24.6%).
Description of Business
Developing, marketing, and distributing network content; developing and marketing home
video games and arcade games; planning and operating amusement and other facilities

28

Visual and Music Production BusinessIn the Visual and Music Production Business, the Company rolled out videos and products linked to
new and existing key IP products, such as the Mobile Suit Gundam series, the LoveLive! series, and
the GIRLS und PANZER series, and these became popular. Although earnings also made acontribution from license revenue related to products such as the LoveLive! series, differences
mainly in the launch timing for key products resulted in a year-on-year decline in earnings for thebusiness overall.
As a result, net sales in the Visual and Music Production Business were 56,058 million yen(year-on-year decrease of 0.4%), and operating profit was 12,508 million yen (year-on-year decreaseof 6.9%).
Description of Business
Planning, manufacturing and production of animations; planning, manufacturing and sales ofvisual and music software; distributing video on demand content; conducting live
entertainment operations

Other Businesses
Other Businesses consist of companies that conduct businesses such as logistics support, printing,and other kinds of administration and operational support for each of the Group’s strategic business
units: Toys and Hobby SBU, Network Entertainment SBU, and Visual and Music Production SBU.
We made efforts to manage such operations related to group support in an efficient manner.
As a result, net sales in the Other Businesses were 27,640 million yen (year-on-year increase of
3.1%), and operating profit was 767 million yen (year-on-year increase of 9.3%).
Description of BusinessBusinesses supporting respective Units such as distribution, logistics, printing and other kindsof administration and operational work(iii) Capital Expenditures
In this fiscal year, the Group carried out 54,834 million yen in capital expenditures; the funds
were primarily used for acquisition of land for rental facilities mainly for subsidiaries, investmentsin the development of new products and in amusement facilities and machines.
(iv) Financing
Not applicable.
(v)

Transfers of Business, Absorption-Type Company Splits, or Incorporation-Type Company
SplitsBANDAI NAMCO Holdings France S.A.S., a subsidiary of the Company (the name changed
from BANDAI S.A.S. on September 30, 2017), transferred the Toy and Hobby Business in France
through a scheme equivalent to the Japanese absorption-type company split on September 30, 2017,
to its subsidiary, BANDAI S.A.S. (the name changed from BANDAI Toy S.A.S. on September 30,2017).
(vi) Acquisitions of Other Companies’ Businesses
Not applicable.

29

(vii) Successions of Rights or Duties Related to the Businesses of Other Legal Entities, etc. due toAbsorption-Type Mergers or Absorption-Type Company Splits
Not applicable.
(viii) Acquisitions and Disposals of Shares, Other Equities, and Stock Subscription Rights in Other
Companies•

The Company made capital contribution to a wholly-owned subsidiary, BANDAI NAMCO
Holdings CHINA CO., LTD., on January 22, 2018.

•

The Company established BANDAI SPIRITS CO., LTD., a wholly owned subsidiary, on
February 15, 2018.

(2) Status of Assets and Profits & Losses for the Previous Three Fiscal Years
Fiscal Year

10th Fiscal Year
(Year Ended
March 31, 2015)

11th Fiscal Year
(Year Ended
March 31, 2016)

12th Fiscal Year
(Year Ended
March 31, 2017)13th Fiscal Year
(Year Ended
March 31, 2018)

Net sales(Millions of yen)

565,486

575,504

620,061

678,312

Operating profit(Millions of yen)

56,32049,641

63,23875,024

Recurring profit(Millions of yen)

59,38350,77463,29075,380

Profit attributable toowners of parent(Millions of yen)

37,58834,58344,15954,109Basic earnings per
share¥171.10¥157.43¥201.03¥246.29

Total assets(Millions of yen)441,763448,336

488,032

540,490

Net assets(Millions of yen)

303,512317,304

348,784

387,354

Net assets per share¥1,378.77¥1,441.49¥1,584.71¥1,758.99

Classification

30(This Fiscal Year)(3) Important Parent Company and Subsidiaries (As of March 31, 2018)(i)

Status of the Parent Company
Not applicable.

(ii) Important Subsidiaries
Capital

Ownership
Ratio

Description of Principal Business

BANDAI CO., LTD.

¥10,000 million

100.0%

Manufacturing and marketing of toys, etc.

BANDAI NAMCOEntertainment Inc.

¥10,000 million

100.0%

Distribution of network content, andplanning, development and sales of home
video games and arcade games, etc.

BANDAI VISUAL
CO., LTD.

¥2,182 million

100.0%

Planning, production and sales of visualcontent and package software

BANDAI NAMCO
Holdings USA Inc.

US$ 10100.0%

Pure holding company as state and regional
headquarters in the Americas€ 21,690 thousand

100.0%

Pure holding company in Europe£ 50,500 thousand

100.0%

Pure holding company as regional
headquarters in Europe

HK$ 103,000 thousand

100.0%

Pure holding company as regional
headquarters in Asia (excluding China)

RMB 64,112 thousand

100.0%

Pure holding company as regional
headquarters in China

Name of Company

BANDAI NAMCO
Holdings France
S.A.S.
BANDAI NAMCO
Holdings UK LTD.
BANDAI NAMCO
Holdings ASIA CO.,LTD.
BANDAI NAMCO
Holdings CHINA CO.,LTD.

(Notes) 1. BANDAI CO., LTD. conducted an absorption-type company split on April 1, 2018, whereby
part of its Toys and Hobby Business (business for mature fan base such as figures and plastic
models) has been transferred to BANDAI SPIRITS CO., LTD.
2. BANDAI NAMCO Entertainment Inc. conducted an absorption-type company split on April
1, 2018, whereby its business of planning, development and sales of arcade games, etc. has
been transferred to BANDAI NAMCO Amusement Inc. (the name changed from NAMCO
LIMITED on April 1, 2018).
3. BANDAI VISUAL CO., LTD. conducted an absorption-type merger on April 1, 2018, with
BANDAI VISUAL CO., LTD. as the surviving company and Lantis Co., Ltd. as thedisappearing company. BANDAI VISUAL CO., LTD. changed its name to BANDAI
NAMCO Arts Inc. on April 1, 2018.
4. BANDAI S.A.S. changed its name to BANDAI NAMCO Holdings France S.A.S. on
September 30, 2017. BANDAI S.A.S. also transferred the Toys and Hobby Business inFrance through a scheme equivalent to the Japanese absorption-type company split, to
BANDAI S.A.S. (the name changed from BANDAI Toy S.A.S on September 30, 2018).
5. The Company made capital contribution to BANDAI NAMCO Holdings CHINA CO., LTD.,
regional headquarters in China, on January 22, 2018. BANDAI NAMCO Holdings CHINA
CO., LTD. also implemented a capital increase of 125,852 thousand yuan on April 4, 2018,bringing the capital to 189,964 thousand yuan. After the establishment of BANDAI NAMCO
Holdings CHINA CO., LTD., the organizational structure of BANDAI NAMCO Holdings
ASIA CO., LTD. changed in such a way that it operates as headquarters overseeing theregional operations of Asia excluding China.
6. There are no special wholly owned subsidiaries at the end of this fiscal year.
(4) Issues to be Addressed
The Group and this industry must address many important, long-term issues, including (i)intensification of competition in IP creation, (ii) the diversification of customer needs, (iii)31intensification of changes in the environment, and (iv) increasingly intense competition on a global
scale. The Group is applying the main strategies defined in its Mid-term Plan to address these issues
swiftly.
* The Group changed its organizational structure in April 2018, from a three-SBU structure (Toys and Hobby,
Network Entertainment, and Visual and Music Production) to a five-Unit structure (Toys and Hobby,
Network Entertainment, Real Entertainment, Visual and Music Production, and IP Creation).

(i)Common Issues Faced by All Units

To Further Strengthen the IP Axis Strategy
The Group will strive to further strengthen the IP axis strategy in order to respond to changes inthe environment such as development of oligopolies in the distribution and media fields, thewidespread penetration of networks, and technological improvements. Specifically, we will
strengthen new IP creation capability in various ways including product or service-originated IP,
visual product-originated IP, utilization of an internal idea posting system, collaboration with partnercompanies and strategic investments. In addition, to maximize the IP values, we will promotecollaboration among its businesses and cross-functional projects in the Group, create and develop
new businesses and expand the regions for product and service rollout. Furthermore, we will ensurethat the Company’s unit, IP Strategy Division, will be the main driver of efforts to strengthen the IP
axis strategy over the medium and long term, with a focus on strategic efforts across the Group.

To Expand the Business in the Global Market
Guided by our vision of becoming “The Leading Innovator in Global Entertainment,” we believe
it is crucial to achieve business expansion in the global market. In Americas, Europe, and Asia, wewill work to expand the existing businesses according to the characteristics of each region, and at
the same time enhance IP lineup of products and services offered and business categories. The
Group also plans to initiate work for a full-blown entry into the Chinese market and also push ahead
with strengthening foundations through cross-Unit initiatives. To continue business expansion in the
global market, the Group will be united under the regional holding companies in each region,
moving ahead with the above efforts under the ALL BANDAI NAMCO concept.

To Fulfill the Corporate Social Responsibility (CSR)
To ensure that we can continue to provide “Dreams, Fun and Inspiration” through entertainment
to people around the world, the Group has formulated the CSR initiatives, which crosscut the entire
Group and include three types of responsibilities: environmental and social responsibilities,
economic responsibilities, and legal and ethical responsibilities (compliance). In accordance withthese fundamental principles, the “Group CSR Committee” and its task force, the “Group CSR
Subcommittee,” as well as the “Group Risk Compliance Committee,” the “Group Information
Security Committee,” and the “Internal Control Committee” hold meetings and have been striving tocontinuously implement a range of measures, with the aim of raising awareness in the Group.
(ii) Issues Specific to Each Units
Toys and Hobby Unit
This Unit’s industry is facing issues, such as a “shrinking domestic market due to the fallingbirthrate” and “increasingly diverse customer needs.” This Unit is addressing these issues by aiming
to take the position as the dominant No. 1 in Japan, working at expanding its target demographic andcreating new businesses. Overseas, it will continue to aim for medium- and long-term growth by
expanding the business in products for the mature fan base in high demand in respective regions andimplementing initiatives for making a full-blown entry into the Chinese market. In addition, on thedevelopment and production side, improvements in the value chain will enable more speedy andprice-competitive product development.

32

Network Entertainment Unit
This Unit’s industry is facing issues that include “increasingly diverse platforms,” “technologicalimprovements of networks, etc.” and “increasingly diverse customer needs.” To address these issues,
it will endeavor to create new entertainment that responds to technological improvements of
networks, etc., over and above the boundaries of existing operations and products/services. For
network content, it will respond to new platforms and expand overseas operations. For home video
games, the Group will develop titles that respond to technological improvements and satisfy
customer needs in various regions. On the development front, the Unit will put in place and improvethe development environment, such as by implementing measures to respond swiftly totechnological progress and changes in the environment, in order to promote these measures in all
business fields.
Real Entertainment Unit
This Unit’s industry is facing issues, such as “increasingly diverse customer needs” and“intensification of changes in the environment.” To address these issues, it will provide facilities,
services and content that represent the uniqueness of the Group, by making use of its arcade gameplanning and development capabilities, state-of-the-art technological capabilities, and expertise incommercialization leveraging an IP worldview. Leveraging our strength in having a value chain that
extends from machine development to provision to customers, we will aim to achieve efficient
operation and rapidly respond to diversifying customer needs and changes in the environment.
Visual and Music Production Unit
This Unit’s industry is facing issues, such as “increasingly diverse customer needs” and“intensification of competition in IP creation.” To address these issues, it will create newentertainment and IP that fuse visuals and music. Furthermore, to strengthen the live event business,
it will bolster operation of live events in Japan and overseas, integrating visuals, music and live
performance. In addition, it will also construct and produce a multipurpose facility for the Group,
and use it as a venue that has the Group’s unique character.
IP Creation Unit
This Unit’s industry is facing issues, such as “intensification of competition in IP creation” and“development of excellent human resources.” To address these issues, it will strive to create IPs
through collaboration between Group companies by producing IPs that are closely linked to theGroup’s respective businesses. In addition, it will invest aggressively in enhancing our visual
production and production technologies, while strengthening collaboration with external partners
who have various capabilities, and it will also strive to develop and secure excellent creators tomaintain stable product quality.
We ask for our shareholders’ further assistance and guidance.

33

(5) Principal Business Offices of the Group (As of March 31, 2018)(i)

The Company
Head Office

5-37-8 Shiba, Minato-ku, Tokyo(ii) Principal Subsidiaries
BANDAI CO., LTD.
Taito-ku, Tokyo
BANDAI NAMCO Entertainment Inc.
Minato-ku, Tokyo
BANDAI VISUAL CO., LTD.
Shibuya-ku, Tokyo
BANDAI NAMCO Holdings USA Inc.
California, U.S.A.
BANDAI NAMCO Holdings France S.A.S.
Puteaux, France
BANDAI NAMCO Holdings UK LTD.
London, U.K.
BANDAI NAMCO Holdings ASIA CO., LTD.
Hong Kong, China
BANDAI NAMCO Holdings CHINA CO., LTD.
Shanghai, China(Note) BANDAI VISUAL CO., LTD. changed its name to BANDAI NAMCO Arts Inc. on April 1, 2018.
(6) Outline of Employees (As of March 31, 2018)(i)

Employees of the Group
Business Segment

Number of Employees

Change from the End ofPrevious Fiscal Year
Increase of 23(Increase of 33)

Toys and Hobby Business
2,673(2,456)
Network Entertainment
3,938(5,925)
Increase of 231(Increase of 806)
Business
Visual and Music Production
483(15)
Increase of 67(Increase of 2)
Business
Other Businesses
740
(707)
Decrease of 11(Increase of 44)
Corporate (Common)
37
(–)
–
(–)
Total
7,871
(9,103)
Increase of 310(Increase of 885)
(Notes) 1. The number of employees refers to the employees actually at work.
2. The average numbers of temporary personnel employed for this fiscal year are presented
separately in parentheses.
3. As the Group partially changed the classification of reportable segments for this fiscal year,
the change from the end of previous fiscal year accordingly compares the number of
employees in the previous fiscal year with the number of employees reassigned after thechange in classification of segments.
4. The number of employees listed for “Corporate (Common)” is the number of employees in
the administration sector, etc. of the Company, BANDAI NAMCO Holdings USA Inc.,BANDAI NAMCO Holdings France S.A.S., BANDAI NAMCO Holdings UK LTD., andBANDAI NAMCO Holdings ASIA CO., LTD.
(ii) Employees of the Company
Change from the End
Average Years of
Average Ageof Previous Fiscal Year
Service22 (–)
Decrease of 2 (–)
46.6
18.95
(Notes) 1. The number of employees refers to the employees actually at work.
2. The average number of temporary personnel employed for this fiscal year is presented
separately in parentheses.
3. In calculating the average years of service, with respect to the employees who havetransferred from other Group companies to the Company, the aggregate number of each
employee’s years of service at each company is used for calculation.
Number of Employees

34

(7) Principal Lenders (As of March 31, 2018)
Lenders
Mizuho Bank, Ltd.
Drecom Co., Ltd.
The Bank of Tokyo-Mitsubishi UFJ, Ltd.

Amount¥492 million¥490 million¥344 million(8) Other Important Matters of the GroupNot applicable.

352. Current Status of the Company(1) Status of Shares (As of March 31, 2018)(i)

Total Number of Shares Issuable:

1,000,000,000 shares(ii) Total Number of Issued Shares:

222,000,000 shares(iii) Number of Shareholders:

36,449 (increase of 2,090 from the end of the previous
fiscal year)(iv) Major Shareholders (Top 10 Shareholders)Name of Shareholders

Number of
Shares Held

Shareholding Ratio(%)

The Master Trust Bank of Japan, Ltd.
(Trust account)
Japan Trustee Services Bank, Ltd. (Trust account)

12,179,100

5.54

12,126,200

5.51

Kyoko Nakamura

6,203,200

2.82

XIL, LTD.
The Nomura Trust and Banking Co., Ltd.
(Retirement and severance benefits trust. The Bankof Tokyo-Mitsubishi UFJ account)
MAL Ltd.

6,000,000

2.73

4,586,100

2.09

4,400,100

2.00

Japan Trustee Services Bank, Ltd. (Trust account 5)

3,951,000

1.80

Nintendo Co., Ltd.
3,845,700
1.75
STATE STREET BANK WEST CLIENT –3,800,530
1.73
TREATY 505234
GOVERNMENT OF NORWAY
3,451,601
1.57(Notes) 1. The shareholding ratio is calculated after reduction of the number of treasury stocks(2,111,672 shares).
2. Out of the above number of shares held, the numbers of shares relating to the trust
business are as follows:
The Master Trust Bank of Japan, Ltd. (Trust account)
10,182,900 shares
Japan Trustee Services Bank, Ltd. (Trust account)
11,806,700 shares
The Nomura Trust and Banking Co., Ltd.
(Retirement and severance benefits trust. The
4,586,100 shares
Bank of Tokyo-Mitsubishi UFJ account)
Japan Trustee Services Bank, Ltd. (Trust account 5)
3,951,000 shares
3. The 4,586,100 shares owned by The Nomura Trust and Banking Co., Ltd.
(Retirement and severance benefits trust. The Bank of Tokyo-Mitsubishi UFJ
account) were the shares of BANDAI CO., LTD. that were owned by UFJ Bank
(currently MUFG Bank, Ltd.), entrusted for retirement and severance benefits. Thoseshares were exchanged with the Company’s shares through the share transfer on
September 29, 2005, and MUFG Bank, Ltd. directs the exercise of the voting rights
pertaining to those shares.

36

(2) Directors and Audit & Supervisory Board Members of the Company(i)

Directors and Audit & Supervisory Board Members (As of March 31, 2018)
Title

Responsibilities in the Company and
Major Concurrent Positions

Name

Chairman and Representative Shukuo Ishikawa
Director
President and Representative Mitsuaki Taguchi
Director
Director
Shuji Ohtsu

Director

Yuji Asako

Director

Masaru Kawaguchi

Director

Satoshi Oshita

Director

Kazumi Kawashiro

Director

Yuzuru Matsuda

Director

Satoko Kuwabara

Director

Mikiharu Noma

Full Time Audit &Supervisory Board Member
Full Time Audit &Supervisory Board Member
Audit & Supervisory Board
MemberKazuo Asami
Katsuhiko Kohtari

Division General Manager of the Group Administrative
Headquarters
President and Representative Director of BANDAI
NAMCO Holdings USA Inc.
President and Representative Director of BANDAI
NAMCO Business Arc Inc.
President and Representative Director of BANDAI
NAMCO Will Inc.
Division General Manager of the Corporate Planning
Division
Responsible for the Toys and Hobby SBU
President and Representative Director of BANDAI CO.,LTD.
President and Representative Director of BANDAISPIRITS CO., LTD.
Responsible for Network Entertainment SBU
President and Representative Director of BANDAI
NAMCO Entertainment Inc.
Responsible for Visual and Music Production SBU
President and Representative Director of BANDAIVISUAL CO., LTD.
Head of Kato Memorial Bioscience Foundation
Outside Director of KUBOTA Corporation
Outside Director of JSR Corporation
Attorney-at-Law
Partner of Mori Hamada & Matsumoto
Associate Professor at Graduate School of International
Corporate Strategy (ICS), Hitotsubashi University

Certified Public Accountant

Osamu Sudoh

Attorney-at-Law
Partner of Sudoh & Partners
Outside Audit & Supervisory Board Member of
MITSUI-SOKO HOLDINGS Co., Ltd.
Outside Corporate Auditor of Pronexus Inc.
Statutory Auditor of Keikyu Corporation
Audit & Supervisory Board Katsuhiko Kamijo
Certified Public Tax Accountant
MemberProfessor at Faculty of Law of Teikyo University
Outside Audit & Supervisory Board Member of The
Resolution and Collection Corporation(Notes) 1. Directors Yuzuru Matsuda, Satoko Kuwabara and Mikiharu Noma are Outside Directors.
2. Full Time Audit & Supervisory Board Member Katsuhiko Kohtari and Audit & Supervisory
Board Members Osamu Sudoh and Katsuhiko Kamijo are Outside Audit & Supervisory
Board Members.

37

3. Full Time Audit & Supervisory Board Member Katsuhiko Kohtari is a certified public
accountant and has considerable knowledge of finance and accounting.
4. Audit & Supervisory Board Member Osamu Sudoh has considerable experience withbankruptcy issues as an attorney-at-law and has the deep knowledge of finance andaccounting necessary to engage in such bankruptcy issues.
5. Audit & Supervisory Board Member Katsuhiko Kamijo is a certified public tax accountant
and has considerable knowledge of finance and accounting.
6. The Company has appointed Outside Directors Yuzuru Matsuda, Satoko Kuwabara and
Mikiharu Noma and Outside Audit & Supervisory Board Members Katsuhiko Kohtari,
Osamu Sudoh, and Katsuhiko Kamijo as Independent Directors/Audit & Supervisory Board
Members as defined in the rules of the Tokyo Stock Exchange and has filed therewith thenotification regarding their appointments.
7. Chairman and Representative Director Shukuo Ishikawa took office as Chairman of theBoard of the Company on April 1, 2018.
8. BANDAI VISUAL CO., LTD. changed its name to BANDAI NAMCO Arts Inc. on April 1,
2018.
(ii) Summary of Contracts Concerning Limited Liability
Not applicable.
(iii) Directors and Audit & Supervisory Board Members Who Retired or Were Dismissed during
This Fiscal Year
Not applicable.
(iv) Remuneration, etc. Paid to Directors and Audit & Supervisory Board Membersa.

Total Amount of Remuneration, etc., Paid During This Fiscal Year
Number of People
10

Amount of Remuneration, etc.
¥714 million

Directors
Audit & Supervisory Board
4¥67 million
MembersTotal
14¥782 million(Outside Directors and Outside
Audit & Supervisory Board(6)(¥82 million)
Members)(Notes) 1. There are no employees serving as Directors.
2. At the Tenth Ordinary General Meeting of Shareholders held on June 22, 2015, it was
resolved that the remuneration limit for Directors is 850 million yen per fiscal year (of which
60 million yen is the limit for Outside Directors), and that of the 850-million-yen
remuneration limit, 400 million yen is for the limit for base remuneration and the remaining
450 million yen is the limit for cash bonus. It was also resolved that, in addition to that
remuneration limit, there is a separate upper limit on their performance-based stockcompensation, which is 160 million yen per year.
3. At the Ordinary General Meetings of Shareholders for BANDAI CO., LTD. and NAMCO
LIMITED (currently BANDAI NAMCO Entertainment Inc.) held on June 23, 2005 and on
June 25, 2005 respectively, it was resolved that the remuneration limit for Audit &Supervisory Board Members must be 8 million yen per month.

38

b.
•

Policy and Procedures for Decisions on Remuneration
Remuneration policy
The remuneration system for Directors, excluding Outside Directors, has as its basic policy
the creation of a remuneration framework which provides sustainable growth for the Company
and improves the Company’s corporate value in the medium and long term, by bringing out ahealthy sense of entrepreneurship in its Directors while taking into account what level of
remuneration will enable the Company to secure and retain top grade personnel, throughpromoting sharing of value with the shareholders and ensuring an adequate level of objectivity
and transparency to fulfil its accountability obligations.

•

Remuneration framework
The remuneration framework for Directors, excluding Outside Directors, comprises thebase remuneration as fixed remuneration, performance-based bonuses as variable
remuneration, and performance-based stock compensation that are provided to promotesharing of common value with all shareholders, to steadily improve actual businessperformance for each fiscal year, and to support an appropriate level of risk-taking so as toimprove the Company’s corporate value in the medium and long term.
Each Director contributes a fixed proportion of the base remuneration to the shareholding
association for directors and officers to purchase the Company’s shares and continues to holdsuch shares during his or her term of office.
Remuneration standards are determined by utilizing a management remuneration databasewith which data on remunerations are aggregated and analyzed by an external specialist
organization, setting objective benchmarks in light of the scales of the Company’s business
operations and other factors, and comprehensively taking into consideration the proportion of
medium- and long- term performance-based remuneration within annual total remunerationand the level of difficulty of achieving business performance targets.
Where the standard performance for the period of the Mid-term Plan has been achieved, theratio of fixed remuneration to variable remuneration within annual total remuneration shall be
about 50:50, and the ratio of share-type remuneration shall be a little over 20%.

•

Structure for performance-based remuneration
Performance-based bonuses shall be paid in principle according to the consolidated
operating profit of the Group for each fiscal year, in an amount determined within a limit of
1.5% of the profit attributable to owners of parent for the period, within a range of 0% to200% of the predetermined standard amount.
The performance-based stock compensation shall only be granted when the consolidated
operating profit of the Group rises above a prescribed level, and whether compensation is
granted and what baseline is set shall be determined for each fiscal year during the period of
the Mid-term Plan.

•

Procedures for decisions on remuneration
The policy for remuneration, the remuneration framework, and the structure for
performance-based remuneration for Directors, excluding Outside Directors, shall be decided
at Board of Directors Meetings after receiving opinions from the Personnel Committee of
which a majority of the members are Outside Directors (independent Outside Directors), in
order to elicit Outside Directors’ adequate participation and appropriate advice.
In the course of deliberations by the Committee, sufficient information is provided to theOutside Directors so that they are able to perform their analysis, including for instance byasking for advice from external specialist organizations where necessary.

•

Policy and procedures for remuneration of Outside Directors and Audit & Supervisory
Board Members

39Remuneration for Outside Directors comprises base remuneration only, to ensure their
independence from the Company, and the amount of remuneration for each Outside Director isdetermined by the Board of Directors Meetings.
Remuneration for Audit & Supervisory Board Members comprises base remuneration only,with the amount set in accordance with their job positions, considering that they bear the duty
to audit the execution of all businesses across the Group. The amount of remuneration for each
Audit & Supervisory Board Member is determined by the Audit & Supervisory Board
Meetings.
(v)

Matters Concerning Outside Directors and Outside Audit & Supervisory Board Members

a. Status of Major Concurrent Positions of Other Companies, etc. and Relationships Between
Those Companies, etc. and the Company
Major concurrent positions of Outside Directors and Outside Audit & Supervisory Board
Members are as stated in “(i) Directors and Audit & Supervisory Board Members” on page 37.
Moreover, there are no special relationships between the Company and the entities with which
Outside Directors and Outside Audit & Supervisory Board Members have concurrent positions.
b. Main Activities in This Fiscal Year
(Directors)
Board of Directors Meetings(Held 18 times)
Number of
Meetings
Attendance Rate
Attended
YuzuruMatsudaSatokoKuwabara

Mikiharu
Noma

18

18

18

Statements Made at Board of Directors Meetings

100.0%

Provided advice and proposals by giving opinions, etc.
reflecting his broad view on overall management
based on his wealth of experience and position as acorporate officer to ensure the appropriateness andvalidity of decisions of the Board of Directors.

100.0%

Provided advice and proposals by giving opinions, etc.
primarily from her position as an attorney-at-law toensure the appropriateness and validity of decisions of
the Board of Directors.

100.0%

Provided advice and proposals by giving opinions, etc.
from his profound scholarly knowledge accumulated
throughout his study and teaching activities in the fieldof corporate strategy to ensure the appropriateness andvalidity of decisions of the Board of Directors.

40

(Audit & Supervisory Board Members)
Board of Directors
Meetings(Held 18 times)
NumberofAttendance
Meetings
Rate
Attended

KatsuhikoKohtari

Osamu
Sudoh

KatsuhikoKamijo18

18

18

100.0%

100.0%

100.0%

Audit & Supervisory
Board Meetings(Held 14 times)
NumberofAttendance
Meetings
Rate
Attended

14

14

14

Statements Made at Board of Directors
Meetings and Audit & Supervisory Board
Meetings

100.0%

Provided advice and proposals by giving
opinions, etc. primarily from his position
as a certified public accountant to ensure
the appropriateness and validity ofdecisions of the Board of Directors andthe Audit & Supervisory Board.

100.0%

Provided advice and proposals by giving
opinions, etc. primarily from his position
as an attorney-at-law to ensure theappropriateness and validity of decisionsof the Board of Directors and the Audit &Supervisory Board.

100.0%

Provided advice and proposals by giving
opinions, etc. based on his wealth ofexperience dealing with tax affairs andfrom his profound scholarly knowledge
via his teaching activities in tax affairs toensure the appropriateness and validity ofdecisions of the Board of Directors andthe Audit & Supervisory Board.

c. Total Amount of Remuneration, etc. Paid to Directors and Audit & Supervisory Board Membersby the Parent Company and Subsidiaries, etc.
Not applicable.

41

(3) Accounting Auditors(i)Name: KPMG AZSA LLC(ii) Amount of Remuneration, etc.
Amount of Remuneration, etc.
Amount of Remuneration, etc. for Accounting Auditors¥82 million
for This Fiscal Year
Total in Money and Other Financial Benefits to Be Paidby the Company and Its Subsidiaries to Accounting¥247 million
Auditors(Notes) 1. BANDAI NAMCO Holdings USA Inc., BANDAI NAMCO Holdings France S.A.S.,
BANDAI NAMCO Holdings UK LTD., and BANDAI NAMCO Holdings ASIA CO., LTD.,
among major subsidiaries of the Company, are audited (within the meaning of being audited
as required by the Companies Act and Financial Instruments and Exchange Act or theequivalent laws and regulations in other countries) by audit firms (including entities overseas
with qualifications equivalent to those of a Japanese audit firm) other than the Company’s
Accounting Auditor.
2. Under the audit agreement between the Company and its Accounting Auditor, there is noclear distinction between the amount of remuneration, etc., for audits under the Companies
Act and that under the Financial Instruments and Exchange Act; furthermore, it is practically
impossible to make such distinction. Therefore, the amount of remuneration, etc., for
Accounting Auditors for this fiscal year described above is the total amount of remuneration,etc., for these audits.
3. The Audit & Supervisory Board of the Company has analyzed and evaluated the audit reportfor the previous fiscal year, and reviewed the sufficiency of the audit plan for this fiscal year
as well as the appropriateness of the time for audit planning, the staffing plan, and the hourlyrate. As a result, the Audit & Supervisory Board concluded that the Accounting Auditor
remuneration is appropriate and gave its consent to the remuneration in accordance with
Article 399, Paragraph 1 of the Companies Act.
(iii) Non-Auditing Operations
Not applicable.
(iv) Policy on Removal or Non-Renewal of an Accounting Auditor
If the Audit & Supervisory Board judges that action is necessary, such as in cases where the
Accounting Auditor’s execution of its duties is impeded, the Audit & Supervisory Board will
determine the contents of a proposal to be submitted to the General Meeting of Shareholders
regarding the removal or non-renewal of the Accounting Auditor.
In addition, if the items stipulated in the matters set forth in Article 340, Paragraph 1 of theCompanies Act are deemed applicable to the Accounting Auditor, the Accounting Auditor will be
removed based on the agreement of all Audit & Supervisory Board Members. If this occurs, an
Audit & Supervisory Board Member selected by the Audit & Supervisory Board will report the factof the Accounting Auditor’s removal and the reason for the removal at the first General Meeting of
Shareholders held after the removal.
(v)

Summary of Contracts Concerning Limited Liability

Not applicable.

42(4) Systems for Ensuring the Properness of Operations and Operating Status of the Systems(As of March 31, 2018)
Systems for Ensuring the Properness of Operations
The following outlines decisions regarding the basic policy for the structure of internal control
systems.
(i)

Systems to Ensure that the Execution of the Duties by Directors, etc. and Employees of theCompany and Its Subsidiaries Is in Compliance with the Laws and Regulations and the
Articles of Incorporationa. The Company shall set in place the Group’s Corporate Philosophy and Group Compliance
Charter, ensure that Directors and employees of the Company and its subsidiaries are familiar
with them, and always pay due attention to ensure they carry out their duties lawfully and fairly.
b. Directors of the Company shall report periodically to the Board of Directors on the structure
and operating status of internal control systems.
c. The Company shall install a Director in charge of compliance who is responsible forsupervision of compliance overall based on its compliance regulations, and establish a structure
ensuring that the Company and the entire Group abides by the law, behaves ethically, andcomplies with internal regulations.
d. Should violations of compliance or suspicions thereof occur within the Group, the Company
shall immediately convene the Group Risk Compliance Committee with the Company’s
President and Representative Director as its chair to discuss and decide how the issue should be
handled.
e. Overseas, an overseas regional headquarters shall be determined for each region to manage risk
and support compliance.
f. Internal reporting systems including an internal consultation point, an external consultation
point comprising external legal advisors, and the Audit & Supervisory Board Members hotline,
which enables reporting directly delivered to the Audit & Supervisory Board Members, shall be
put in place in the Company and its major subsidiaries.
g. The Internal Auditing Division shall be established independently of the executive sections in
the Company and its major subsidiaries to work towards maintaining the properness of
execution of operations through internal audits.

(ii) Systems for Preserving and Managing Information Related to Directors’ Execution of Their
Dutiesa. The Company shall establish regulations concerning document management and ensure (i) the
centralized collection and management of minutes of several kinds of meetings, contracts andother documents, and (ii) appropriate safekeeping and management of important documents
including documents circulated for approval in each department. The Company shall have asystem to ensure that Directors and Audit & Supervisory Board Members may peruse those
documents at any time.
b. The Company shall establish regulations concerning information security as a part of Groupmanagement. These regulations will provide for a system to ensure appropriate safekeeping andpreservation of information.

43

(iii) Regulations Concerning Management for Risk of Loss of the Company and Its Subsidiaries
and Other Systems
a. The Company shall establish regulations concerning risk management and compliance as a partof Group management. Throughout the Group, we will work to prevent risk and to discover risk
factors as rapidly as possible.
b. When risk arises, the Company shall convene the Group Risk Compliance Committee without
delay to minimize the impact of risk on our business by responding to risk quickly and in an
appropriate manner.
c. Anticipating the occurrence of situations that could cause drastic damage to the management of
the Group through a major disaster or the like, the Group shall define the basic policy for a
Business Continuity Plan (BCP) for the Group, and formulate a BCP for the Group andorganize a Business Continuity Management (BCM) system to achieve rapid recovery andrestart of operations. Directors and employees of the Company and its subsidiaries shall bemade aware of this.

(iv) Systems to Ensure That Directors, etc. of the Company and Its Subsidiaries Execute Their
Duties Efficiently
a. The Company shall assign each subsidiary into strategic business units (SBUs) categorized bybusiness segment, and appoint a Director and core company in charge of each SBU in order toimprove efficiency of business operations based on the division of duties, chain of command
structure, authorities and competencies, decision making frameworks and other regulations
regarding structure within the Group.
b. The Company shall formulate a Mid-term Plan with a period of three business years for theentire Group and each SBU, and determine the budget for each business year based on those
Mid-term Plans.

(v)

Systems Concerning Reporting Matters Regarding Execution of Duties of Directors, etc. of
Subsidiaries to the Company

a. The Company shall establish meetings such as SBU Quarterly Report Meetings and GroupManagement Meetings, and put in place a system for reporting inside the Group and decision
making.

(vi) Other Systems to Ensure Proper Business Behavior by the Company and Its Subsidiaries
a. The Company shall revise the Group Compliance Charter as appropriate in response torevisions to laws and regulations and changes in the social context surrounding the Group, andshall ensure that the contents of the Charter are made thoroughly known to Directors, etc. andemployees of the Company and its subsidiaries through distributing the Compliance Book andthrough training.
b. The Company and its subsidiaries shall endeavor to improve and standardize business processes
considering the importance of effectiveness and efficiency in business operations, and shallevaluate and operate internal controls on financial reporting based on related laws andregulations, etc.

44

(vii) Matters Regarding Employees Required by Audit & Supervisory Board Members to Assist
Their Duties, and Matters Regarding the Independence of Such Employees from the Board of
Directors
a. The Company shall provide a speedy response when Audit & Supervisory Board Members ask
the President and Representative Director to provide employees to assist their duties. Wherethat employee simultaneously works for any other section, his or her business duties pertaining
to the Audit & Supervisory Board Members shall take priority.
b. The Company shall provide an opportunity for Directors and Audit & Supervisory Board
Members to consult in advance regarding personnel matters relating to such employees, so as toensure independence from the Board of Directors.
(viii) Matters Concerning Ensuring the Effectiveness of Instructions to Employees Who Assist the
Audit & Supervisory Board Members
a. The Company shall keep Directors and employees thoroughly informed that employees who
assist the Audit & Supervisory Board Members in their duties are under the command of the
Audit & Supervisory Board Members.

(ix) System for Directors, etc. and Employees of the Company and Its Subsidiaries to Report to theCompany’s Audit & Supervisory Board Members
a. Directors, etc. and employees of the Company and its subsidiaries shall report to the Audit &Supervisory Board promptly with regard to matters prescribed by laws and regulations, othermatters likely to have a major impact on the Company and the Group, and matters related to thecurrent status of internal audits and compliance.
b. Directors, etc. and employees of the Company and its subsidiaries shall report promptly andappropriately when requested to do so by an Audit & Supervisory Board Member of theCompany regarding the performance of their duties.
c. The Company shall put in place an Audit & Supervisory Board Members Hotline to allow
reports to be made directly to the Company’s Audit & Supervisory Board Members as aninternal reporting system.
(x) System for Ensuring That Persons Making Reports to Audit & Supervisory Board Members
Shall Not Be Treated Disadvantageously
a. The Company shall prohibit the disadvantageous treatment of persons who have reported or
consulted with Audit & Supervisory Board Members, and shall state that clearly in the Group
Risk Compliance Regulations and make it thoroughly known to Directors, etc. and employeesof the Company and its subsidiaries.

(xi) Matters Regarding Policies Pertaining to Procedures for Advance Payments or Reimbursementof Expenses Arising in the Performance of Duties by Audit & Supervisory Board Members andOther Payment of Expenses and Liabilities Arising in the Performance of Said Duties
a. The Company shall immediately pay expenses or liabilities where an Audit & Supervisory
Board Member has requested advance payments or reimbursement of expenses arising in theperformance of his or her duties, excluding cases where they were not considered necessary forthe performance of said duties.

45

(xii) Other Systems to Ensure the Effectiveness of Audits Conducted by the Audit & Supervisory
Board Members
a. Directors of the Company shall formulate a system whereby Audit & Supervisory Board
Members can attend important meetings, and ensure that a system exists whereby they can meet
periodically or on an ad hoc basis with Directors and employees, and cooperate with Internal
Audit Division and Accounting Auditors.
b. Subsidiaries of the Company shall install an appropriate number of Audit & Supervisory Board
Members according to their scale, business category, etc., and ensure that there are systems inplace wherein Audit & Supervisory Board Members of subsidiaries report periodically to the
Audit & Supervisory Board Members of the Company.

46

Operating Status of Systems for Ensuring the Properness of Operations
The overview of the operating status of the above-mentioned systems for ensuring the properness ofoperations is as follows:1.

Overall Internal Control Systems
In order to establish and operate overall internal control systems at the Company and its
subsidiaries, an Internal Control Committee established within the Company conducts regularmonitoring and evaluation of internal controls and reports to the Board of Directors as internal
control reports. Improvements are implemented based on these reports. The appropriatenessand reliability of evaluations of internal controls are ensured by having Internal Audit
Divisions established at the Company and its major subsidiaries conduct appropriate internal
audits.

2.

Compliance and Risk Management
The Company conducts regular training, using e-learning tools and other programs, toensure the Company and the entire Group abide by laws, behave ethically, and comply withinternal regulations, with a central role played by the Director in charge of compliance who is
responsible for supervision of compliance overall. The Company has set in place the Group
Compliance Charter to define behavioral guidelines for Directors, etc. and employees of theCompany and its subsidiaries. The Company is working to ensure that Directors, etc. andemployees are familiar with the Charter, through a poster campaign and the distribution of aCompliance Book. The Company has established and been operating at the Company and its
major subsidiaries a whistle-blowing system to provide a point of contact for internal andexternal consultations and an Audit & Supervisory Board Members Hotline to allow direct
reporting to Audit & Supervisory Board Members. The Company and its major subsidiaries
have also included provisions in their internal regulations to ensure the protection ofwhistleblowers.
For risk management, the Company and its subsidiaries have established guidelines on risk
management and have formulated and been operating a Business Continuity Plan (BCP) and a
Business Continuity Management (BCM) system for the Group. The Company is working toensure that Directors, etc. and employees of the Company and its subsidiaries are well awareof these guidelines and systems.
Should violations of compliance occur or risk arise, a meeting of the Group Risk
Compliance Committee, chaired by the President and Representative Director, is convened
immediately to ensure a quick and appropriate response. Every month, the Group Compliance
Committee Secretariat reports to the Board of Directors any information on compliance andrisk and how they have been managed in the Company and its subsidiaries.

3.

Subsidiary Business Management
The Company assigns each subsidiary into strategic business units (SBUs) categorized bybusiness segment, and appoints a Director and core company in charge of each SBU in order toimprove efficiency of business operations based on the division of duties, chain of command
structure, authorities and competencies, decision making frameworks and other regulations
regarding structure within the Group. The SBU Quarterly Report Meeting (held three times
this fiscal year) and the Group Management Meeting (held ten times this fiscal year) areconvened regularly to allow information sharing across the Group and facilitate
decision-making. The Company has also established and controls a business management
system at subsidiaries, with a central role played by the Company’s Business Planning
Division, and monitors progress every month through a review of the Mid-term Plans andbusiness performance across the Group and at each SBU. In addition, the Company’s Internal
Auditing Division efficiently monitors the Group’s internal controls through regular internal
audits of the subsidiaries.

47

4.

Execution of Duties by Directors
The Company has established the Group’s Corporate Philosophy, the Group Compliance
Charter, and the Group Rules for Executives and has disseminated these regulations to ensurethat Directors carry out their duties in a fair and legal manner. The Company has appointed anumber of independent Outside Directors and actively exchanged ideas with them at the Boardof Directors Meetings and executive training sessions in order to strengthen the supervisory
function of the Company. The Independent Directors and Audit & Supervisory Board Members
Committee consisting of only independent Outside Directors and independent Outside Audit &Supervisory Board Members evaluates the effectiveness of the Board of Directors and works
on corporate governance and corporate value improvement. In this fiscal year, the Board of
Directors Meetings were held 18 times and the Independent Directors and Audit & Supervisory
Board Members Committee meeting was held once.

5.

Audits by the Audit & Supervisory Board Members
The Audit & Supervisory Board Members of the Company attend key meetings at theCompany and the major subsidiaries, including the Board of Directors Meeting and the SBU
Quarterly Report Meeting, and audit the execution of duties by Directors and compliance withlaws and regulations and the Articles of Incorporation. The Audit & Supervisory Board
Meetings convened 14 times this fiscal year, allowing the Audit & Supervisory Board
Members to exchange opinions and share information on important matters. The Audit &Supervisory Board Members also meet regularly or as needed with the Directors of theCompany, Internal Auditing Divisions, the Audit & Supervisory Board Members ofsubsidiaries and the Accounting Auditors to ensure the audits conducted by the Audit &Supervisory Board Members are effective and efficient.

48

(5) Basic Policy Concerning Control of the Company(i)Content of Basic Policy

The Corporate Value of the Group
Guided by our vision of becoming “The Leading Innovator in Global Entertainment,” the Groupmission is to continue to offer “Dreams, Fun and Inspiration,” through entertainment, to people
throughout the world.
Emerging victoriously in the global competition of the fast-changing world of entertainment
requires not only construction of a solid management foundation but also the creation ofentertainment constantly predicting the changes of times and environments. Such creation is closely
linked to raising the corporate value of the Company.
Therefore, in determining what and how a person or entity controlling decisions on the financial
and business policies should be, the Company should take the enhancement of the corporate value
into account.
What and How a Person or Entity Controlling Decisions on the Financial and Business Policies
Should Be
We believe that a person or entity controlling decisions on financial and business policies shouldbe the one who sufficiently understands the importance of the above kind of managerial vision andmission of the Group, the managing resources, such as content, that support the accomplishment ofthat vision and mission, and the importance of various stakeholders related to the Company, andwho maximizes the corporate value of the Company and its shareholders’ common interests over the
medium to long term.
Therefore, we believe that, in the event that any person or entity that attempts to acquire large
quantities of the Company’s shares falls under any of the following and would harm the Company’s
corporate value for such reason, such person or entity is inappropriate to control the decisions of theCompany’s financial and business policies:
 Any person or entity who could clearly harm the Company’s corporate value, Any person or entity who forces shareholders to sell their shares in a hurry by creating a
disadvantageous situation if they do not accept a takeover proposal, or Any person or entity that does not provide the Company with the information or the timerequired for making decisions.
(ii) Details of Engagement
The Board of Directors of the Company, to whom the shareholders have entrusted the
management of the Company, is engaged in the following efforts to implement the Group’s basic
policy.
Steps to Increase the Corporate Value of the Group

Promoting the Mid-term Plan
Under the Mid-term Plan started in April 2018, the Group will aim to evolve the IP axis
strategy further and achieve penetration and expansion in global markets. At the same time, wewill also pursue various strategies in order to strengthen development in regions and businesses
with high growth potential. The Group is committed to moving to the next stage as anentertainment corporate group and improving the corporate value, by pushing forward thesestrategies.
In conjunction with the start of the Mid-term Plan, the Group has changed its organizational
structure from the previous three-SBU structure to a five-Unit structure to enable swifteradvancement of the main strategies for each mission.

49Strengthening Corporate Governance
The president and representative director of each core company responsible for each Unit also
serves on the Company’s Board of Directors. This contributes to strengthening the collaborative
efforts between the holding company and the operating companies and between the operatingcompanies and to facilitating speedier decision-making as a group. In addition, the Company isworking to strengthen management oversight functions by stipulating in the Articles ofIncorporation of the Company that the Company should appoint at least two Outside Directors
and also making sure that all of the Outside Directors are independent Outside Directors. In
addition, the Company has organized an Independent Directors and Audit & Supervisory Board
Members Committee with the aim of evaluating the appropriate functioning of the Board of
Directors from an objective perspective. The Independent Directors and Audit & Supervisory
Board Members Committee comprises three independent Outside Directors and three
independent Outside Audit & Supervisory Board Members only, and its secretariat functions are
entrusted to a third-party specialist organization. In this way, the Company retains a more highly
effective supervisory function over the Board of Directors.

Promoting Efficient Management
The Group has put in place standards for business reconstruction; it has reinforced systems forcontinuous monitoring in order to discern business trends more swiftly, and is making swift
decisions on restructuring businesses or withdrawing from them, based on in-house indicators.
In addition, the Group is working towards cost reductions by standardizing processes across theGroup as a whole and is promoting managerial efficiency.

Reinforcing Personnel Strategies
The Group is implementing a variety of initiatives including making various programs inplace for employees to be able to work while remaining healthy in body and mind. Also aiming
for rolling out a broad range of businesses in global market, the Group is strengthening its global
systems for acquiring and training personnel as well as proactive personnel exchanges between
regions and businesses. In addition, the Group is working to invigorate its human resources bystrengthening systems for receiving proposals for employees to take on new challenges and for
the Company to support their challenges.



Reinforcing CSR (Corporate Social Responsibilities) Activities
The Group, as an enterprise delivering “Dreams, Fun, and Inspiration,” has defined theGroupwide “CSR Initiatives” that include three types of responsibilities; “Environmental andSocial Responsibilities,” “Economic Responsibilities,” and “Legal and Ethical Responsibilities(compliance),” and is promoting a variety of CSR activities.



Proactive IR Activities
The Company discloses information in a timely and appropriate manner in accordance with
the Financial Instruments and Exchange Act and rules prescribed by the Tokyo Stock Exchange.
We aim to be a highly transparent corporation that clearly provides shareholders withinformation concerning management strategies and business directions. The Group thus works toprovide ample opportunities, for instance, company information meetings and financial
information meetings for the president and representative director and other executives of theCompany to explain directly to both foreign and Japanese individual investors, institutional
investors, stock analysts, etc.

Proactive Policy for the Return of Profits to Shareholders
The Company ranks the return of profits to shareholders as one of its highest priorities in its
management. The Company assumes its basic policy is to further strengthen the Group’s
competitiveness and, while maintaining a sound financial status, to achieve regular distributions50

of dividends and improvement in the Company’s corporate value. As part of starting the new
Mid-term Plan in April 2018, and in light of the Group’s strategy and the environment
surrounding its business, the basic policy for providing returns to shareholders was examinedfrom various angles. As a result, the Company changed over to a basic policy of providing a
return to shareholders that targets a total return ratio of 50% or more based on stable dividend
payments of 2% of DOE (dividends on equity). Under this policy, the Company strives tomaintain long-term and stable dividend levels and be more aware of capital cost.
Takeover Defense Measures
At present, the Company has not introduced any specific takeover defense measures. The Group
regards implementing our management and business strategies in accordance with the measures toincrease the corporate value of the Group and aiming to increase the corporate value of the Group asa whole as a substantial defense against inappropriate takeovers. That said, since the Group is
entrusted by shareholders as the management of the Group, we will work on studying anddeveloping a system for takeover defense, with a close eye on legal and social trends, in anticipationof situations in which an inappropriate entity or person might emerge to have decision-making
power over the Company’s financial and business policies. In concrete terms, in the event an
inappropriate bidder emerges, the management team will not take steps to guard its own interests
against the takeover offer by the bidder, but will sufficiently deliberate the matter at the Board of
Directors Meetings after referring the matter to the Independent Directors and Audit & Supervisory
Board Members Committee for their review from objective viewpoints, to enable the Company tomake a judgment from the perspective of improving corporate value first. The Company will also
work to collect sufficient information and secure necessary time, so as to be conducive toappropriate judgment by the shareholders.
(Note) In this Business Report, fractional amounts less than the indicated unit amount are rounded down
for sums of money and numbers of shares, while percentages and other values are rounded off tothe nearest figure.

51

Consolidated Balance Sheet(As of March 31, 2018)(Millions of yen)AmountASSETS
Current assets
Cash and time deposits
Trade receivables
Finished goods and merchandiseWork in process
Raw materials and supplies
Deferred tax assets
Other current assets
Allowance for doubtful receivables
Total current assets

185,51788,061
14,78037,684
3,216
8,995
22,529(1,172)359,613

Fixed assets
Property, plant and equipment
Buildings and structures
Amusement facilities and machines
Land
Other property, plant and equipment
Total property, plant and equipment
Intangible assets
Investments and other assets
Investment securities
Net defined benefit asset
Deferred tax assets
Other investments and assets
Allowance for doubtful receivables
Total investments and other assets
Total fixed assets
TOTAL ASSETS

15,116
15,66643,42011,90086,104
9,475
56,495
117
13,251
16,827(1,394)85,297
180,877
540,49052

(Millions of yen)AmountLIABILITIESCurrent liabilities
Trade payables
Accrued income taxes
Provision for directors’ bonuses
Provision for sales returns
Provision for contract loss
Other provision
Other current liabilities
Total current liabilities

69,555
8,597
1,803
1,024
629
629
54,034
136,273

Long-term liabilities
Net defined benefit liability
Deferred tax liabilities for land revaluation
Other long-term liabilities
Total long-term liabilities
TOTAL LIABILITIES

8,485
348
8,028
16,862
153,135

NET ASSETSStockholders’ equity
Common stock
Additional paid-in capital
Retained earnings
Treasury stock
Total stockholders’ equity

10,00052,196334,264(2,326)394,133

Accumulated other comprehensive income
Valuation difference on available-for-sale securities, net of tax
Deferred gains or losses on hedges, net of tax
Revaluation reserve for land, net of tax
Foreign currency translation adjustments
Remeasurements of defined benefit plans, net of tax
Total accumulated other comprehensive income
Non-controlling interests
TOTAL NET ASSETSTOTAL LIABILITIES AND NET ASSETS

11,696(300)(5,887)(8,330)(4,756)(7,577)797
387,354
540,49053

Consolidated Statements of Operations(From April 1, 2017 to March 31, 2018)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit
Non-operating income
Interest income
Dividend income
Equity in gain of affiliated companies
Rent income
Other non-operating income
Non-operating expenses
Interest expense
Loss on valuation of derivatives
Provision of allowance for doubtful accounts
Other non-operating expenses
Recurring profit
Extraordinary income
Gain on sales of fixed assets
Other extraordinary income
Extraordinary loss
Loss on impairment of fixed assets
Loss on disposal of fixed assets
Loss on valuation of stocks of affiliated companies
Other extraordinary loss
Profit before income taxes
Corporate income, inhabitant and enterprise taxes
Adjustment for income taxes
ProfitLoss attributable to non-controlling interests
Profit attributable to owners of parent

54(Millions of yen)Amount678,312436,730
241,581
166,557
75,024
269
334
930
338
566
37
817
945
282
72
6
1,463
766
479
251
19,867(1,258)

2,438

2,083
75,38079

2,961
72,497
18,60953,888(220)
54,109

Consolidated Statement of Changes in Net Assets (From April 1, 2017 to March 31, 2018)(Millions of yen)
Stockholders’ equity
Additional paid-in
capitalCommon stock
Balance at beginning of year

10,000Retained earnings

52,064

Treasury stock

297,984

Total stockholders’equity(2,423)357,626

Changes during the period
Cash dividends
Profit attributable to owners ofparentChange of scope of
consolidation
Change of scope of
consolidation - foreign
currency translation adjustment(18,023)(18,023)

54,10954,109(0)(0)–

Purchase of treasury stock
Disposal of treasury stock

131

Changes in treasury stock
accompanying changes toholdings in companies to which
the equity method is applied
Reversal of revaluation reserve
for landNet changes of items other thanshareholders’ equity

(4)

(4)

100

232

0

0

193

Total changes during the period
Balance at end of year

193

–

131

36,27996

36,507

10,00052,196334,264(2,326)394,133

Accumulated other comprehensive income
Valuation
Deferred gains
difference on
Revaluation
or losses onavailable-for-salereserve for land,
hedges,securities, net of
net of tax
net of tax
tax

Balance at beginning of year

7,884

210

(5,693)Foreigncurrencytranslation
adjustments(8,725)

Total
Remeasurements
accumulatedof definedotherbenefit plans,
comprehensive
net of tax
income(3,195)(9,519)Shareacquisitionrights99

Non-controlling
Total net assetsinterests

577

348,784

Changes during the period
Cash dividends(18,023)

Profit attributable to owners ofparentChange of scope of
consolidation
Change of scope of
consolidation - foreign
currency translation adjustment

54,109
(0)
(7)

(7)

(7)

Purchase of treasury stock(4)

Disposal of treasury stock

232

Changes in treasury stock
accompanying changes toholdings in companies to which
the equity method is applied
Reversal of revaluation reserve
for landNet changes of items other thanshareholders’ equity

0

(193)

(193)

–

3,811

(510)

–

403

(1,560)

2,144

(99)

220

2,264

Total changes during the period

3,811

(510)

(193)

395

(1,560)

1,942

(99)

220

38,570

Balance at end of year

11,696(300)(5,887)(8,330)(4,756)(7,577)–797

387,354

55

Notes to Consolidated Financial Statements
All sums are shown in millions of yen and have been rounded down.
I.

Notes to Important Information Constituting the Basis for Preparation of Consolidated Financial
Statements
1. Information Concerning the Scope of Consolidation(1)

Status of Consolidated Subsidiaries:(i)

Total Number of Consolidated Subsidiaries:
76 companies(ii)

Names of Principal Consolidated Subsidiaries:
BANDAI CO., LTD., BANDAI NAMCO Entertainment Inc., BANDAI VISUAL CO.,LTD., BANDAI NAMCO Holdings USA Inc., BANDAI NAMCO Holdings France
S.A.S., BANDAI NAMCO Holdings UK LTD., BANDAI NAMCO Holdings ASIA
CO., LTD., BANDAI NAMCO Holdings CHINA CO., LTD.
BANDAI S.A.S. has changed its name to BANDAI NAMCO Holdings France S.A.S.

(iii) Changes in the Scope of Consolidation:
Because BANDAI NAMCO Studios Singapore Pte. Ltd. changed from a non-consolidated
subsidiary to a consolidated subsidiary in the fiscal year ended March 31, 2018; BANDAI
NAMCO Technica Inc., BXD Inc., and BANDAI SPIRITS CO., LTD. were newly establishedin the fiscal year ended March 31, 2018; Actas Inc. became a subsidiary as a result of theacquisition of its shares in the fiscal year ended March 31, 2018; and capital contributions
were made to BANDAI NAMCO Holdings CHINA CO., LTD. and BANDAI NAMCOEntertainment SHANGHAI CO., LTD. in the fiscal year ended March 31, 2018, thesecompanies are now included in the scope of consolidation.
Since Anime Consortium Japan Inc., which was a consolidated subsidiary in the fiscal year
ended March 31, 2017, was merged into a consolidated subsidiary of the Company by anabsorption-type merger, it has been excluded from the scope of consolidation.
(2)

Status of Non-Consolidated Subsidiaries:(i)Names of the Principal Non-Consolidated Subsidiaries:
BANDAI LOGIPAL (H.K.) LTD.

(ii)

Reason for Exclusion from the Scope of Consolidation:
Non-consolidated subsidiaries have been excluded from the scope of consolidation. As thescale of the business conducted by each of those companies is small and the total assets, net
sales, profit or loss and retained earnings, etc. corresponding to the ownership held by theCompany of each non-consolidated subsidiary have no material impact on the consolidated
financial statements.

2. Information Concerning Application of the Equity Method(1)

Status of Non-Consolidated Subsidiaries and Affiliated Companies to Which the Equity Method Was
Applied:(i)

Number of Affiliated Companies to Which the Equity Method Was Applied:
5 companies(ii)

Names of the Principal Affiliated Companies to Which the Equity Method Was Applied:
Happinet Corporation, Sotsu Co., Ltd. and People Co., Ltd.

56

(2)

Status of Non-Consolidated Subsidiaries and Affiliated Companies to Which the Equity Method Was
Not Applied:(i)Name of the Principal Companies, etc.:
BANDAI LOGIPAL (H.K.) LTD.

(ii)

Reason the Equity Method Was Not Applied to the Company:
The equity method was not applied to this company, because it was deemed that the exclusionof the company from the application of the equity method would have little, and no material
impact on the consolidated financial statements of the Company and it seemed unimportant as
a whole in consideration of the company’s profit or loss and retained earnings, etc.
corresponding to the Company’s equity share in it.

(iii) Special Notes Regarding Procedures for Applying the Equity Method:
If any of the companies to which the equity method is applied has a closing date that differsfrom the consolidated closing date, then the financial statements for the fiscal year of thatcompany are used.
3. Information Concerning the Fiscal Year, etc. for Consolidated Subsidiaries
The fiscal year closing dates for BANDAI (SHENZHEN) CO., LTD., BANDAI NAMCO(SHANGHAI) CO., LTD., BANDAI NAMCO Holdings CHINA CO., LTD., and BANDAI
NAMCO Entertainment SHANGHAI CO., LTD. are December 31, and their financial data as of
their respective closing dates are used. The fiscal year closing date for Sun-Star Stationery Co., Ltd.
is June 30 and its financial data is based on a provisional closing as of December 31 pursuant toprocedures for the fiscal year-end closing.
Necessary adjustments on a consolidated basis are made when transactions of material importanceoccur between the reported closing date and the consolidated closing date.
Actas Inc., which newly became a consolidated subsidiary in this fiscal year, has changed its
closing date from February 28 to March 31. In connection with this change, the number of months
included in this fiscal year for this company is seven months.
4. Accounting Policies(1)(i)

Valuation Basis and Methods for Significant Assets:
Valuation Basis and Methods for Securities:
Available-for-sale securities:
Securities with market quotations:
Stated using the market price method based on amounts using market prices,
etc. on the closing date. (Valuation differences are reflected directly in net
assets and cost of sales is calculated using the moving average method.)
Securities without market quotations:
Stated using the cost method based on the moving average method. With
respect, however, to contributions to limited partnerships for investment andsimilar partnerships (deemed to be securities under Article 2, Paragraph 2 of
the Financial Instruments and Exchange Act), these are stated by the net
amount corresponding to the Company’s equity share, based on the mostrecent available financial reports according to the date for settlement ofaccounts provided for in the partnership agreement.

57

(ii)

Derivative Transactions: Stated using the market price method.

(iii) Valuation Basis and Methods for Inventories:
Work in process, such as game software, etc.:
Stated using the cost method based on the specific-cost method. (The value statedon the balance sheet was calculated by writing down the book value based on
declining profitability.)
Others:Domestic consolidated subsidiaries:
Generally, stated using the cost method based on the average method. (Thevalue stated on the balance sheet was calculated by writing down the bookvalue based on declining profitability.)
Overseas consolidated subsidiaries:
Generally, stated using the lower of cost or market method based on the
average method.
(2)

Depreciation Methods for Significant Depreciable Assets:(i)

Property, Plant and Equipment (Exclusive of leased assets):
The Company and domestic consolidated subsidiaries:
Generally stated using the declining-balance method.
However, for buildings (excluding equipment attached thereto) acquired on or after
April 1, 1998 and for part of the amusement facilities and machines, etc., thestraight-line method was used.
The general useful life of property, plant and equipment is as follows:
Buildings and structures:
3 to 50 years
Amusement facilities and machines:
3 to 15 years
Overseas consolidated subsidiaries:
Stated using the straight-line method.
The general useful life of property, plant and equipment is as follows:
Buildings and structures:
5 to 50 years
Amusement facilities and machines:
3 to 7 years(ii)

Intangible Assets (Exclusive of leased assets):
Stated using the straight-line method.
The general useful life of software is as follows:
Software (used internally):
1 to 5 years(iii) Leased Assets:
Stated using the straight-line method, with the useful life set to the lease period, for aresidual value of zero.
(3)

Basis of Recognition for Significant Provision:(i)

Allowance for Doubtful Receivables:
The allowance for doubtful receivables is provided for possible losses on
unrecoverable receivables. For ordinary receivables, the amount of the allowance isbased on the historical rate of loss. For receivables from debtors at risk of bankruptcy
and receivables from debtors in bankruptcy or under reorganization, etc., the amountof the allowance is based on individually estimated unrecoverable amounts.

(ii)

Provision for Directors’ Bonuses:
Accrued bonuses for directors are provided based on the estimated amounts to be paidin respect of this fiscal year.

58

(iii) Provision for Sales Returns:
To provide for losses on returned goods after the last day of this fiscal year, theestimated amount of losses on returned goods is provided based on the historical rateof returned goods.
(iv) Provision for Contract Loss:
To provide for losses that are expected to arise in connection with performances ofcontracts after the last day of this fiscal year, a reasonably estimated amount of losses
is provided.
(4)

Accounting Standards for Significant Income and Expense:(i)Video Game Software Revenue Recognition:
Consolidated subsidiaries operating in the United States recognized revenue inaccordance with “Software Revenue Recognition” of FASB Accounting Standards
Codification No. 985-605, treating video game software with online functions assoftware products with multiple-element arrangements. Unless the vendor canobjectively and reasonably prove the fair value of undelivered elements specified by
the vendor, recording of any revenue attributable to video game software is deferred
until all the elements are delivered.

(ii)

Video Game Software Production Costs:
A distinctive characteristic of video game software is the process through which thesoftware is highly combined with the content that cannot be separated into identifiable
components.
The content is considered to be an important component of each video game title,
which includes the game content and visual/music data.
Once management makes a decision to go forward in distributing a title, the Company
records the software and content development costs as work in process.
The capitalized production costs are amortized to cost of sales based on projected sales
volumes.

(5)Significant Accounting Policies for Hedging:(i)

Accounting for Hedging:
The Company used deferred hedge accounting.
In cases where forward foreign exchange contracts and currency option contracts meetcertain hedging criteria, they are accounted for under the allocation method.

(ii)

Hedging Instruments and Hedged Items:
Hedging instruments:

Forward exchange contracts and currency option
contracts

Hedged items:

Foreign-currency-denominated assets and liabilities andscheduled transactions(iii) Hedging Policies:
Hedging is implemented for the purpose of reducing risks arising from fluctuations in
exchange rates involved in operational and financing activities.
(iv) Method of Assessing the Effectiveness of Hedging:
The Company assesses the effectiveness of hedging transactions, in principle, from thestart of the transaction to the point at which effectiveness is assessed by comparing the
cumulative changes in the fair value or the cumulative changes in the cash flows of the59

hedged item with the cumulative changes in the fair value or the cumulative changes
in the cash flows of the hedging instrument.
In the event that critical terms are the same for the hedging instrument and the hedged
assets, liabilities, or scheduled transaction, it is assumed that the hedge is 100%
effective, so the assessment of effectiveness is not performed.
(6)

Amortization of Goodwill
Goodwill is amortized over a five-year period using the straight-line method.

(7)

Other Important Information Constituting the Basis of Preparation of Consolidated Financial
Statements(i)

Method of Accounting for Retirement Benefits
a. Method of attributing expected retirement benefits to periods
In calculating the retirement benefit obligations, the benefit formula basis is mainly used indetermining the amount of the expected retirement benefit obligations attributed to the period
up to the end of this fiscal year.
b. Method of recognizing actuarial gains and losses and past service costs
Actuarial gains and losses are recognized in gain or loss in the year following the year inwhich a respective gain or loss arises, and are amortized proportionally on a straight-line
basis over a certain period (9 to 19 years) that is within the average remaining period ofservice of the eligible employees.
The entire amount of past service costs is recognized in gain or loss in the fiscal year during
which it arises, and is amortized on a straight-line basis over a period (10 years), which iswithin the average remaining years of service of the eligible employees.
c. The Company and certain consolidated subsidiaries use a simplified method in calculating
net defined benefit asset, net defined benefit liability, and periodic pension cost under which
retirement benefit obligations are principally based on accrued benefits at the end of the
year.

(ii)

Accounting Treatment of Consumption Tax:
Consumption tax is accounted for separately and is not figured into each listed item.

(iii) Application of Consolidated Taxation System:
The Company has applied the consolidated taxation system.

II.

Notes to Changes in Method of Presentation(Consolidated Balance Sheet)“Provision for contract loss,” which had been included in “Other provision” until the previous
fiscal year, is stated separately due to the increased materiality for this fiscal year. The total of“Provision for contract loss” for the previous fiscal year was 113 million yen.
(Consolidated Statements of Operations)(1) “Rent income,” which had been included in “Other non-operating income” under “Non-operating
income” until the previous fiscal year, is stated separately since it is above 10 percent of the total
non-operating income for this fiscal year. The total of “Rent income” for the previous fiscal year
was 211 million yen.
(2) “Foreign exchange losses” (the balance of which at the end of this fiscal year is 138 million yen),which had been stated separately until the previous fiscal year, are included in “Other
non-operating expenses” under “Non-operating expenses” in this fiscal year since it is at or below
10 percent of the total non-operating expenses.
(3) “Gain on sales of investment securities” (the balance of which at the end of this fiscal year is 1
million yen), which had been stated separately until the previous fiscal year, is included in “Other60

extraordinary income” under “Extraordinary income” in this fiscal year since it is at or below 10
percent of the total extraordinary income.
(4) “Loss on valuation of stocks of affiliated companies,” which had been included in “Other
extraordinary loss” under “Extraordinary loss” until the previous fiscal year, is stated separately
since it is above 10 percent of the total extraordinary loss for this fiscal year. The total of “Losson valuation of stocks of affiliated companies” for the previous fiscal year was 221 million yen.
III. Notes to Consolidated Balance Sheet
1. Assets Pledged as Collateral
Cash and time deposits
There are no liabilities associated with this collateral.

¥74 million

In addition to the above, the assets deposited as a security deposit for issuance under the
Payment Services Act, are as follows:“Other investments assets” under “Investments and other assets”¥1,175 million
2. Amount of Accumulated Depreciation of Property, Plant and Equipment:¥169,314 million

3. Guarantee Obligation:(1) The Company has guarantee obligations concerning borrowings from financial institutions bycompanies other than consolidated companies.
¥67 million

ISHIMORI PRODUCTION INC.

(2) The Company has guarantee obligations concerning obligations in leasing contracts of companies
other than consolidated companies.
¥24 million

BANDAI NAMCO Will Inc.
4. Land Revaluation

A revaluation of land for business-use was implemented pursuant to the “Law Concerning Landrevaluation” (Law No. 34, March 31, 1998) and the revalued difference was recorded under net
assets.
Revaluation Method:
The fair value of land is determined based on official notice prices that are calculated by
the method assessed and published by the Commissioner of the National Tax Agency.
The Commissioner assesses and publishes the method to calculate land value that forms
the foundation for calculating taxable value for land value tax prescribed in “Article 16
of Land Value Tax Law (Law No. 69, May 2, 1991),” as stipulated in “Article 2-4 of theOrdinance Implementing the Law Concerning Land revaluation (Cabinet Order No. 119,March 31, 1998).” Reasonable adjustments are made to the official notice prices.
Revaluation Date: March 31, 2002
Difference between the fair value of the revalued land at the end of this fiscal year and therevaluated book value after the revaluation: negative 706 million yen.
5. Bills Maturing on the Last Day of the Fiscal Year
Bills maturing on the last day of the fiscal year are settled as of a bill clearing day. However, since
the last day of this fiscal year was a holiday for financial institutions, the following bills maturingon the last day of the fiscal year are included in the balance at the end of the fiscal year.
Notes receivable¥79 million

Notes payable¥676 million

61

IV. Notes to Consolidated Statement of Changes in Net Assets
1. Type and Total Number of Shares Issued
Common stock

222,000,000 shares

2. Matters Concerning Distribution of Surplus(1)

Paid Dividend Amounts, etc.

Date of Resolution
June 19, 2017,
Ordinary General
Meeting of
Shareholders
November 7, 2017,
Board of Directors
Meeting(2)

Type ofsharesTotal amountof dividends(millions ofyen)

Dividend pershare (yen)Commonstock

15,385

Common
stock

2,637

Date of record

Effective date70

March 31,2017

June 20, 201712

September 30,
2017

December 7,
2017

Dividends with a Date of Record in This Fiscal Year But an Effective Date in the Following Fiscal
Year

Date of Scheduled
Resolution

Type ofsharesTotal amountof dividends(millions ofyen)June 18, 2018,
Ordinary General
Meeting of
Shareholders

Commonstock

24,407

Source ofdividends

Dividend
per share(yen)

Date ofrecordEffective
date

Retainedearnings

111

March 31,2018

June 19,
2018

V. Notes Concerning Financial Instruments
1. Financial Instruments
The Group manages funds by means of highly secure financial instruments only and procures
funds through borrowing from banks and other financial institutions.
With regard to credit risk posed by customers with respect to trade receivables, which areoperating receivables, credit information on major customers is updated at least once a year, tominimize such credit risk. Hedging is implemented as necessary through the use of forward
exchange contracts for the purpose of reducing risks arising from fluctuations in exchange rates
for foreign-currency-denominated operating receivables.
Shares, which are investment securities, are exposed to the risk of market price fluctuations; theirfair values are checked once a quarter.
Part of trade payables, which are operating liabilities, is denominated in foreign currencies.
Hedging is implemented as necessary through the use of forward exchange contracts andcurrency option contracts for the purpose of reducing risks arising from fluctuations in exchange
rates for foreign-currency-denominated operating liabilities.
Derivative transactions are executed and managed according to internal rules that determine
trading authority and limits on amounts traded; derivatives are used in ways that minimize credit
risk, and thus transactions are carried out only with highly creditworthy financial institutions.

62

2. Fair Values of Financial Instruments
The book values of financial instruments as stated in the consolidated balance sheet, their fairvalue as of March 31, 2018, and the difference between book value and fair value are as statedbelow. This table does not include assets for which it was judged extremely difficult to assess thefair value.
Book value stated in
the consolidated
Fair value
Difference
balance sheet(Millions of yen)
(Millions of yen)
(Millions of yen)
(1) Cash and time deposits
185,517
185,517—(2) Trade receivables
88,061
88,061—(3) Short-term investments andinvestment securities
1. Available-for-sale Securities
38,24938,249—2. Stock of affiliated companies
13,527
18,8285,301
Total assets
325,355
330,656
5,301(1) Trade payables
69,55569,555—(2) Accrued income taxes
8,597
8,597
—
Total liabilities
78,15278,152—Derivative transactions (*)(1,264)(1,264)—(*) Debts and credits derived from derivative transactions are stated on a net basis. Items to be recorded
as net debts in the total are enclosed in brackets.
(Notes) 1. Relevant matters of method of calculating the fair value of financial instruments andsecurities and derivative transactions
Assets(1) Cash and time deposits
Since these are readily convertible into cash, their fair value is almost identical with the bookvalue, and thus these are stated at the book value.
(2) Trade receivables
Since trade receivables that are settled in a short period of time are readily convertible into cash,
their fair value is almost identical with the book value, and thus these are stated at the bookvalue. For trade receivables that are settled after a long period of time, the fair values aremeasured based on the present values calculated by discounting receivable amounts classified
by certain periods of time at a rate for which time to maturity and credit risk has been taken into
account.
(3) Short-term investments and investment securities
Since MMF is readily convertible into cash, their fair value is almost identical with the bookvalue; and these are stated at the book value. Stocks and others are stated at the price on thestock exchange or the price as presented by counterparty financial institutions and others.
Liabilities(1) Trade payables, (2) Accrued income taxes
Since these are readily convertible into cash, their fair value is almost identical with the bookvalue; and thus these are stated at the book value.
Derivative transactions
The fair value of derivative transactions is stated at the price as presented by counterparty
financial institutions and others.
2. Unlisted stocks (stated as 2,829 million yen in the consolidated balance sheet), stocks ofaffiliated companies (unlisted stocks) (stated as 2,264 million yen in the consolidated balance
sheet), and contributions to investment partnerships (stated as 397 million yen in the
consolidated balance sheet) have no market price and it is extremely difficult to assess theirfair value, so they are not included in “(3) Short-term investments and investment securities.”

63

VI. Notes Concerning Real Estate for Lease, etc.
1. Real Estate for Lease, etc.
The Company and some of its consolidated subsidiaries own real estate for lease, etc. (includingland) in Tokyo and other regions.
2. Fair Value of Real Estate for Lease, etc.
Book value stated in the consolidatedbalance sheet (Millions of yen)
35,347

Fair value(Millions of yen)
36,083(Notes) 1. The book value stated in the consolidated balance sheet is calculated by deducting
accumulated depreciation and accumulated impairment loss from acquisition cost.
2. The fair value at the end of this fiscal year is the amount calculated by the Company
primarily based on the Real Estate Appraisal Standards (including that adjusted using relevant
indices, etc.). For those newly acquired real estate for lease, etc. during this fiscal year, thefair value is the book value stated in the consolidated balance sheet because it is believed thatthe change in the fair value of the real estate is negligible.
VII. Notes Concerning Per-Share Data
1. Net assets per share¥1,758.99¥246.29

2. Basic earnings per share

VIII. Notes Concerning Significant Subsequent Events(Reorganization of Subsidiaries)
At the Board of Directors Meeting held on February 9, 2018, the Company passed a resolution toreorganize its subsidiaries and carried out the reorganization on April 1, 2018.
1.

Absorption-type company split between subsidiaries(1) Purpose
In the Toys and Hobby Unit, a wholly-owned subsidiary of the Company, BANDAI SPIRITS CO.,LTD. was established on February 15, 2018 as a split preparation company to strengthen thebusiness in products for mature fan base in Japan and overseas. From the effective date of April 1,
2018, the business divisions of BANDAI CO., LTD. that deal with products for the mature fanbase such as figures and plastic models and the business divisions that deal with prizes forconvenience stores, etc. within BANPRESTO CO., LTD. have been transferred in a company
split to BANDAI SPIRITS CO., LTD.

64

(2) Transactions conducted by commonly controlled entities(i)

Overview of transaction
a. Name and description of business to be transferred
BANDAI CO., LTD.’s planning, development, manufacture and sales of figures and plastic
models for the mature fan base
BANPRESTO CO., LTD.’s planning, development, and sales of prizes for convenience
stores, etc.
b. Date of business combination
April 1, 2018c. Legal form of business combination
Absorption-type company split with BANDAI CO., LTD. and BANPRESTO CO., LTD. as
the splitting companies and BANDAI SPIRITS CO., LTD. as the successor company
d. Company name after combination
No change.

(ii)

Overview of accounting process
The accounting process has been carried out as transactions conducted by commonly
controlled entities, in accordance with the Accounting Standard for Business Combinationsand Guidance on the Accounting Standard for Business Combinations and the AccountingStandard for Business Divestitures.

2.

Absorption-type company split between subsidiaries and change in trade name of subsidiary(1) Purpose
To strengthen the Real Entertainment Business, which provides content for real-world based
facilities, services, and equipment, etc., unique to the Group, on the effective date of April 1, 2018,the amusement machine business division of BANDAI NAMCO Entertainment Inc. wastransferred in an absorption-type company split to NAMCO LIMITED, which conducts theplanning and operation of amusement facilities. Furthermore, on the effective date, the trade nameof NAMCO LIMITED was changed to BANDAI NAMCO Amusement Inc.
(2) Transactions conducted by commonly controlled entities(i)

Overview of transaction
a. Name and description of business to be transferred
BANDAI NAMCO Entertainment Inc.’s planning, production, and sales of amusement
machinesb. Date of business combination
April 1, 2018c. Legal form of business combination
Absorption-type company split with BANDAI NAMCO Entertainment Inc. as the splitting
company and NAMCO LIMITED as the successor company
d. Company name after combination
BANDAI NAMCO Amusement Inc.

(ii)

Overview of accounting process
The accounting process has been carried out as transactions conducted by commonly
controlled entities, in accordance with the Accounting Standard for Business Combinationsand Guidance on the Accounting Standard for Business Combinations and the AccountingStandard for Business Divestitures.

65

3.

Absorption-type merger between subsidiaries and change in trade name of subsidiary(1) Purpose
To enable more integrated development of visual products, music, and live events, on theeffective date of April 1, 2018, the visual business operating company BANDAI VISUAL CO.,LTD. has merged as the surviving company with the music business operating company Lantis
Co., Ltd. Furthermore, on the effective date, the trade name of BANDAI VISUAL CO., LTD. has
been changed to BANDAI NAMCO Arts Inc.
(2) Transactions conducted by commonly controlled entities(i)

Overview of transaction
a. Name and description of business of the company involved in combination
Merging company (surviving company)
Name:

BANDAI VISUAL CO., LTD.

Description of business:

Planning, production, and sales of visual software

Merged company (disappearing company)
Name:

Lantis Co., Ltd.

Description of business:

Planning, production, and sales of music software

b. Date of business combination
April 1, 2018c. Legal form of business combination
Absorption-type merger with BANDAI VISUAL CO., LTD. as the surviving company and
Lantis Co., Ltd. as the disappearing company
d. Company name after combination
BANDAI NAMCO Arts Inc.
(ii)

Overview of accounting process
The accounting process has been carried out as transactions conducted by commonly
controlled entities, in accordance with the Accounting Standard for Business Combinationsand Guidance on the Accounting Standard for Business Combinations and the AccountingStandard for Business Divestitures.

66

Non-Consolidated Balance Sheet(As of March 31, 2018)(Millions of yen)AmountASSETS
Current assets
Cash and time deposits
Trade receivables
Prepaid expenses
Deferred tax assets
Accounts receivable-other
Other current assets
Total current assets

45,598283
354
42
12,412432
59,124

Fixed assets
Property, plant and equipment
Buildings
Structures
Machinery and equipment
Tools, furniture and fixtures
Land
Other property, plant and equipment
Total property, plant and equipment
Intangible assets
Software
Other intangible assets
Total intangible assets
Investments and other assets
Investment securities
Investments in affiliated companies
Other investments and assets
Total investments and other assets
Total fixed assets
TOTAL ASSETS

1,226
252
37
454
32,914
5
34,890
852
903
1,756
39,204230,0463,476
272,726
309,373
368,497

67

(Millions of yen)AmountLIABILITIESCurrent liabilities
Short-term borrowings from affiliated companies
Accounts payable-otherAccrued income taxes
Provision for directors’ bonuses
Provision for stock-based compensation
Other current liabilities
Total current liabilities
Long-term liabilities
Deferred tax liabilities
Accrued retirement and severance benefits
Long-term accounts payable-other
Guarantee deposits of affiliated companies
Other long-term liabilities
Total long-term liabilities
TOTAL LIABILITIESNET ASSETSStockholders’ equity
Common stock
Additional paid-in capital
Capital reserve
Other capital surplus
Retained earnings
Legal reserve
Other retained earnings
General reserve
Retained earnings carried forward
Treasury stock
Total stockholders’ equity
Valuation difference and foreign currency translation
adjustments
Valuation difference on available-for-salesecurities, net of tax
Total valuation difference and foreign currencytranslation adjustments
TOTAL NET ASSETSTOTAL LIABILITIES AND NET ASSETS

68

99,289
1,732
4,706
347
69
442
106,588
4,463
22
1,785
1,974
488
8,734
115,322

10,000174,4152,500
171,915
59,552
1,645
57,907
26,10431,802(2,230)241,738

11,437
11,437
253,175
368,497

Non-Consolidated Statements of Operations(From April 1, 2017 to March 31, 2018)(Millions of yen)AmountOperating revenue
Dividend income from affiliatedcompanies
Business management income fromaffiliated companies
Other operating revenue
Operating expenses
General and administrative expenses
Operating profit
Non-operating income
Rent income
Other non-operating income
Non-operating expenses
Interest expense
Expenses related to rental assets
Other non-operating expenses
Recurring profit
Extraordinary income
Gain on sales of investment securities
Gain on reversal of share acquisition rights
Extraordinary loss
Loss on valuation of stocks of affiliatedcompanies
Loss on disposal of fixed assets
Loss on impairment of fixed assets
Profit before income taxes
Corporate income, inhabitant and enterprise
taxes
Adjustment for income taxes
Profit17,761
3,202
112

21,0755,220
15,855

1,943
290
28
1,795
34

1
5

2,233

1,858
16,230

6

57
37
8

104
16,132

(119)
47

69

(72)
16,204

Non-Consolidated Statement of Changes in Net Assets (From April 1, 2017 to March 31, 2018)(Millions of yen)
Stockholders’ equity
Additional paid-in capital
Commonstock

Retained earnings
Other retained earnings

Capitalreserve

Other
capitalsurplus

Total
additional
paid-in
capitalLegalreserve

2,500

171,784

174,284

1,645

Total
retainedearnings

Treasury
stock

Total
stockholders’equity(2,326)

243,328

Generalreserve

Retainedearnings
carriedforward26,10433,621

61,371

Cash dividends(18,023)(18,023)(18,023)

Profit16,204

16,204

16,204

Balance at beginning of year

10,000Changes during the period

Purchase of treasury stock
Disposal of treasury stock
Net changes of items
other than shareholders’equityTotal changes during theperiodBalance at end of year

131

131

(4)

(4)

100

232

–

–

131

131

–

–

(1,818)(1,818)96(1,590)10,0002,500

171,915

174,415

1,645

26,10431,80259,552(2,230)241,738

Valuation difference and foreign currency translation
adjustments
Total valuation difference
Valuation difference on
and foreign currency
available-for-sale securities,
translation adjustments
net of tax
Balance at beginning of year

7,829

7,829

Share acquisition rights

99

Total net assets

251,257

Changes during the period
Cash dividends(18,023)

Profit16,204Purchase of treasury stock(4)

Disposal of treasury stock232

Net changes of items
other than shareholders’equityTotal changes during theperiodBalance at end of year

3,607

3,607

(99)

3,508

3,607

3,607

(99)

1,917

11,437

11,437–

253,17570

Notes to Non-Consolidated Financial Statements
All sums are shown in millions of yen and have been rounded down.
1. Notes Concerning Significant Accounting Policies(1)(i)

Valuation Basis and Methods for Assets:
Valuation basis and methods for securities:
Shares of Subsidiaries and Affiliated Companies:
Stated using cost method based on the moving average method.

(ii) Available-for-sale Securities:
Securities with market quotations:
Stated using the market price method based on amounts using market prices, etc. on theclosing date. (Valuation differences are reflected directly in net assets and cost of sales iscalculated using the moving average method.)
Securities without market quotations:
Stated using the cost method based on the moving average method.
With respect, however, to contributions to limited partnerships for investment andsimilar partnerships (deemed to be securities under Article 2, Paragraph 2 of the
Financial Instruments and Exchange Act), these are stated by the net amountcorresponding to the Company’s equity share, based on the most recent available
financial reports according to the date for settlement of accounts provided for in thepartnership agreement.
(2)

Depreciation Methods for Fixed Assets:(i)

Property, Plant and Equipment:
Stated using the declining-balance method.
The general useful life of property, plant and equipment is as follows:
Buildings
3 to 18 years
Structures
10 years
Machinery and equipment
8 years
Tools, furniture and fixtures
2 to 15 years(ii) Intangible Assets:
Stated using the straight-line method.
The general useful life of software is as follows:
Software (used internally)
5 years(3)(i)

Basis of Recognition for Provision:
Provision for Directors’ Bonuses:
The Company provides for directors’ bonuses based on estimated bonus payments inthis fiscal year.

(ii) Provision for Stock-based Compensation:
The Company provides for expenses arising in stock remuneration to Officers basedon the amount estimated to arise in this fiscal year.
(iii) Accrued Retirement and Severance Benefits:
The Company provides for retirement and severance benefits for employees based on
estimated retirement benefit obligations and pension plan assets as of the end of thisfiscal year.
In calculating accrued retirement and severance benefits and periodic pension cost, theCompany uses a simplified method under which retirement benefit obligations are
principally based on accrued benefits at the end of the year.

71

(4)

Other Important Information Constituting the Basis of Preparation of Non-Consolidated Financial
Statements:(i)

Accounting Treatment of Consumption Tax:
Consumption tax is accounted for separately and is not figured into each listed item.

(ii) Application of Consolidated Taxation System
The Company has applied the consolidated taxation system.
2. Notes to Changes in Method of Presentation(Non-Consolidated Balance Sheet)“Structures,” which had been included in “Other property, plant and equipment” under “Property,
plant and equipment” until the previous fiscal year, is stated separately due to the increasedmateriality for this fiscal year. The total of “Structures” for the previous fiscal year was 0 million
yen.
(Non-Consolidated Statements of Operations)(1) “Interest income” (the balance of which at the end of this fiscal year is 0 million yen) and“Dividend income” (the balance of which at the end of this fiscal year is 211 million yen), which
had been stated separately until the previous fiscal year, are included in “Other non-operating
expenses” under “Non-operating expenses” due to the immateriality for this fiscal year.
(2) “Loss on disposal of fixed assets” and “Loss on impairment of fixed assets,” which had been
included in “Other extraordinary loss” under “Extraordinary loss” until the previous fiscal year,
are stated separately due to the increased materiality for this fiscal year. “Loss on disposal of
fixed assets” and “Loss on impairment of fixed assets” for the previous fiscal year were 84
million yen and 4 million yen, respectively.
3. Notes to Non-Consolidated Balance Sheet(1)

Amount of Accumulated Depreciation of Property, Plant and Equipment:(2)

Guarantee Obligations¥1,890 million

The Company has made guarantees in respect of obligations in connection with leasing contractsof an affiliated company.
¥24 million

BANDAI NAMCO Will Inc.
(3)

Monetary Claims and Obligations with respect to Affiliated Companies (excluding Amounts Given inSpecific Categories)
Short-term monetary claims on affiliated companies:
Short-term monetary obligations to affiliated companies:
Long-term monetary obligations to affiliated companies:¥12,336 million¥655 million¥1,785 million

4. Notes to Non-Consolidated Statements of Operations
Transactions with affiliated companies (excluding amounts given in specific categories)
Operating Transactions:
Other operating revenue¥112 million
Advertising expenses¥1,035 million
Administrative services fees
¥615 million
Non-operating Transactions:Non-operating income¥1,913 million
Non-operating expenses¥43 million
5. Notes to Non-Consolidated Statement of Changes in Net Assets
The total number and type of treasury stock as of the end of this fiscal year
2,111,672 shares
Common stock72

6. Notes Concerning Tax Effect Accounting
The main factors in the occurrence of deferred tax assets are denial of loss on valuation of stocks ofaffiliated companies and losses carried forward, and they were recorded net of valuation allowance.
The main factor in the occurrence of deferred tax liabilities is valuation difference on
available-for-sale securities, net of tax.
7. Notes Concerning Transactions with Related Parties(1) Subsidiaries and Affiliated Companies, etc.
(Millions of yen)Type

Subsidiary

CompanyBANDAI CO.,LTD.

Ratio ofvoting rights
ownership

Relationshipwith relatedpartiesContent

AmountAccount items

Balance asof March
31, 2018

Borrowings(Note 1)

27,797

Short-termborrowings fromaffiliated companies

29,726

Payment of
Holding directly Interlocking
interest
100.0%
directorate
Payment ofadvertisingexpenses(Note 2)
Borrowings(Note 1)BANDAI
NAMCO
SubsidiaryEntertainmentInc.

BANDAI
Subsidiary VISUAL CO.,LTD.

Subsidiary

Subsidiary

NAMCO
LIMITEDBANPRESTO
CO., LTD.

Subsidiary SUNRISE INC.

BANDAI
Subsidiary NAMCO
Studios Inc.

Subsidiary

BANDAI
NAMCO
Business
Arc Inc.

Payment of
Holding directly Interlocking interest
100.0%
directorate Amountcollected due toapplication of
consolidated
taxation system
Borrowings
Holding directly Interlocking (Note 1)
100.0%
directorate
Payment ofinterest
Holding directly
100.0%

Holding directly
100.0%

Holding directly
100.0%

–

–

–

8

847

26,712
8

Short-termborrowings fromaffiliated companies–

74

33,436–

Accounts
receivable-other

3,803

6,852

Short-termborrowings fromaffiliated companies

6,854

2
3,955

Payment ofinterest

1

Borrowings(Note 1)

7,343

Payment ofinterest

2

Borrowings(Note 1)

12,289Payment ofinterest

3

Borrowings
Interlocking (Note 1)
directorate
Payment ofinterest
Payment of
Holding directly Interlocking administrative
100.0%
directorate services fees
(Note 3)

Accounts
payable-other

–

1,380

Borrowings(Note 1)

Holdingindirectly
100.0%

–

5,319
1

615

–
Short-termborrowings fromaffiliated companies–
Short-termborrowings fromaffiliated companies–
Short-termborrowings fromaffiliated companies–
Short-termborrowings fromaffiliated companies–
Accounts
payable-other

–
3,213
–
8,417
–
12,287
–
3,192
–

51

Conditions of transactions and policies for determining the conditions of transactions(Notes) 1. The borrowings are transactions made by the cash management system (CMS); the amountstated is the average balance during this fiscal year. To clearly disclose the actual conditionsof CMS transactions, the transaction net amount is shown. The interest rate on these73

borrowings is, based on intra-Group regulations, determined reasonably, taking into accountmarket interest rates.
2. The advertising expenses paid to BANDAI CO., LTD. are decided through cooperative
discussion with that company, giving consideration to the total cost related to advertising
operations and the like.
3. The administrative services fees paid to BANDAI NAMCO Business Arc Inc. are decided
through cooperative discussion with that company, giving consideration to the total cost
pertaining to the performed services and the like.
(2) Officers and Major Individual Shareholders, etc.
(Millions of yen)

Type

Officer

Officer

Officer

Officer

Officer

Officer

Name

Shukuo Ishikawa

Mitsuaki Taguchi

Shuji Ohtsu

Yuji Asako

Masaru Kawaguchi

Satoshi Oshita

Ratio ofvoting rights
ownership

Ownership
directly
0.0%

Ownership
directly
0.0%

Ownership
directly
0.0%

Ownership
directly
0.0%

Ownership
directly
0.0%

Ownership
directly
0.0%

Relationshipwith relatedparties

Chairman and
Representative
Director of theCompany

President andRepresentative
Director of theCompany

Director of theCompany

Director of theCompany

Director of theCompany

Director of theCompany

74

Content
Disposal of treasury
stock accompanying
exercise of stock
options (Note 1)
Disposal of treasury
stock accompanying
contribution in kindof the monetarycompensation
claims (Note 2)
Disposal of treasury
stock accompanying
contribution in kindof the monetarycompensation
claims (Note 2)
Disposal of treasury
stock accompanying
exercise of stock
options (Note 1)
Disposal of treasury
stock accompanying
contribution in kindof the monetarycompensation
claims (Note 2)
Disposal of treasury
stock accompanying
exercise of stock
options (Note 1)
Disposal of treasury
stock accompanying
contribution in kindof the monetarycompensation
claims (Note 2)
Disposal of treasury
stock accompanying
contribution in kindof the monetarycompensation
claims (Note 2)
Disposal of treasury
stock accompanying
exercise of stock
options (Note 1)
Disposal of treasury
stock accompanying
contribution in kindof the monetarycompensation
claims (Note 2)

AmountAccount
items

Balance asof March
31, 2018

17

–

–

12

–

–

12

–

–

8

–

–

6

–

–

6

–

–

6

–

–

11

–

–

15

–

–

11

–

–

(Notes) 1. The disposal price of treasury stock is determined based on the stock options (shareacquisition rights) exercise price set by the resolution at the seventh and eighth Ordinary
General Meetings of Shareholders of the Company.
2. These items are due to contribution in kind of monetary compensation claims accompanying
the performance-based stock compensation plan. The disposal price of treasury stock is
determined based on the closing price of common stock of the Company on the First Sectionof the Tokyo Stock Exchange on June 16, 2017 (the business day immediately preceding thedate of the resolution at the Board of Directors Meeting).
8. Notes Concerning Per-Share Data
(1) Net assets per share:¥1,151.38(2) Basic earnings per share:¥73.7275

Independent Auditor’s Report
May 18, 2018
The Board of Directors
BANDAI NAMCO Holdings Inc.
KPMG AZSA LLC
Toshihiro Otsuka (Seal)
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
Hiroo Iwaide (Seal)
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
Terukazu Nagamine (Seal)
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant

We have audited the consolidated financial statements, comprising the consolidated balance
sheet, the consolidated statements of operations, the consolidated statement of changes in net
assets and the related notes of BANDAI NAMCO Holdings Inc. as at March 31, 2018 and for theyear from April 1, 2017 to March 31, 2018 in accordance with Article 444-4 of the Companies
Act.
Management’s Responsibility for the Consolidated 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 suchinternal control as management determines is necessary to enable the preparation of consolidated
financial statements that are free from material misstatements, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on the consolidated financial statements based on our
audit as independent auditor. We conducted our audit in accordance with auditing standards
generally accepted in Japan. Those standards require that we plan and perform the audit to obtainreasonable assurance about whether the consolidated financial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the consolidated financial statements. The procedures selected depend on our
judgment, including the assessment of the risks of material misstatement of the consolidated
financial statements, whether due to fraud or error. In making those risk assessments, weconsider internal control relevant to the entity’s preparation and fair presentation of theconsolidated financial statements in order to design audit procedures that are appropriate in thecircumstances, while the objective of the financial statement audit is not for the purpose of
expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes
evaluating the appropriateness of accounting policies used and the reasonableness of accounting
76

estimates made by management, as well as evaluating the overall presentation of theconsolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide abasis for our audit opinion.
OpinionIn our opinion, the consolidated financial statements referred to above present fairly, in allmaterial respects, the financial position and the results of operations of BANDAI NAMCO
Holdings Inc. and its consolidated subsidiaries for the period, for which the consolidated
financial statements were prepared, in accordance with accounting principles generally acceptedin Japan.
Other Matter
Our firm and engagement partners have no interest in the Company which should be disclosed
pursuant to the provisions of the Certified Public Accountants Law of Japan.
Notes to the Reader of Independent Auditor’s Report:
The Independent Auditor’s Report herein is the English translation of the Independent Auditor’sReport as required by the Companies Act.

77

Independent Auditor’s Report
May 18, 2018
The Board of Directors
BANDAI NAMCO Holdings Inc.
KPMG AZSA LLC
Toshihiro Otsuka (Seal)
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
Hiroo Iwaide (Seal)
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
Terukazu Nagamine (Seal)
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant

We have audited the non-consolidated financial statements, comprising the non-consolidatedbalance sheet, the non-consolidated statements of operations, the non-consolidated statement ofchanges in net assets and the related notes, and the supplementary schedules of BANDAI
NAMCO Holdings Inc. as at March 31, 2018 and for the year from April 1, 2017 to March 31,2018 in accordance with Article 436-2-1 of the Companies Act.
Management’s Responsibility for the Financial Statements and Others
Management is responsible for the preparation and fair presentation of the non-consolidated
financial statements and the supplementary schedules in accordance with accounting principles
generally accepted in Japan, and for such internal control as management determines is necessary
to enable the preparation of financial statements and the supplementary schedules that are freefrom material misstatements, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on the financial statements and the supplementaryschedules based on our audit as independent auditor. We conducted our audit in accordance withauditing standards generally accepted in Japan. Those standards require that we plan and performthe audit to obtain reasonable assurance about whether the non-consolidated financial statements
and the supplementary schedules are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the non-consolidated financial statements and the supplementary schedules. The
procedures selected depend on our judgment, including the assessment of the risks of material
misstatement of the non-consolidated financial statements and the supplementary schedules,
whether due to fraud or error. In making those risk assessments, we consider internal control
relevant to the entity’s preparation and fair presentation of the non-consolidated financial
statements and the supplementary schedules in order to design audit procedures that areappropriate in the circumstances, while the objective of the financial statement audit is not forthe purpose of expressing an opinion on the effectiveness of the entity’s internal control. An
78

audit also includes evaluating the appropriateness of accounting policies used and thereasonableness of accounting estimates made by management, as well as evaluating the overall
presentation of the non-consolidated financial statements and the supplementary schedules.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide abasis for our audit opinion.
OpinionIn our opinion, the non-consolidated financial statements and the supplementary schedules
referred to above present fairly, in all material respects, the financial position and the results ofoperations of BANDAI NAMCO Holdings Inc. for the period, for which the non-consolidated
financial statements and the supplementary schedules were prepared, in accordance withaccounting principles generally accepted in Japan.
Other Matter
Our firm and engagement partners have no interest in the Company which should be disclosed
pursuant to the provisions of the Certified Public Accountants Law of Japan.
Notes to the Reader of Independent Auditor’s Report:
The Independent Auditor’s Report herein is the English translation of the Independent Auditor’sReport as required by the Companies Act.

79

Audit & Supervisory Board’s Report
Audit Report
We, the Audit & Supervisory Board, prepared this audit report on the execution of duties byDirectors during the 13th fiscal year from April 1, 2017 to March 31, 2018, following deliberations
based on audit reports prepared by each Audit & Supervisory Board Member.

1. Method and Content of Audits by Audit & Supervisory Board Members and the Audit &Supervisory Board(1) We devised the 13th auditing plan (auditing policies, duties assigned to each Audit &Supervisory Board Member and auditing methods), received reports on the progress on, andresults of, audits from each Audit & Supervisory Board Member, as well as reports on theexecution of their duties from Directors, etc. and the Accounting Auditor, and requested
explanations as necessary.
(2) Each Audit & Supervisory Board Member communicated with the Directors, the internal
auditing division, and other employees, etc., in accordance with the internal regulations
established by the Audit & Supervisory Board, and the above-mentioned auditing plan, tocollect information and improve the auditing environment and conducted the audits in thefollowing methods.
(i) We attended the meetings of the Board of Directors and other significant meetings,
received reports on the execution of duties from Directors and employees, etc.,
obtained explanations thereof as necessary, viewed documents concerning important
decisions, and investigated the conditions of operations and assets of the Company.
Regarding the Company’s subsidiaries, we communicated and shared information with
the Directors and the Audit & Supervisory Board Members, etc. of the subsidiaries,
and received reports on their business as necessary from them.
(ii) We also periodically received reports from Directors and employees, etc., requested
explanations as necessary, and expressed opinion, regarding the development andoperation of internal control systems that were organized based on decisions by the
Board of Directors in relation to the development of a system to ensure that theexecution of duties by Directors and other operations of the corporate group consistingof the Company and its subsidiaries as described in the business reports were inconformity with applicable laws and regulations and the Company’s Articles ofIncorporation, and a system stipulated in Article 100, Paragraphs 1 and 3 of the
Enforcement Ordinance of the Companies Act.
(iii) We further examined the content of basic policies (Article 118, Item 3-(a) of the
Enforcement Ordinance of the Companies Act) and actions (Article 118, Item 3-(b) of
the Enforcement Ordinance of the Companies Act) described in business reports basedon the meetings of the Board of Directors and other discussions.
(iv) We monitored and verified that the Accounting Auditor remained independent andperformed audits appropriately, received reports on the execution of its duties from the
Accounting Auditor and requested explanations as necessary. We were also notified
that a “system for ensuring the proper execution of duties” (as per Article 131 of the
Corporate Accounting Rules) was organized in accordance with “Quality Control
Standards for Auditing” (October 28, 2005, Business Accounting Council), andrequested explanations as necessary.
Using the aforementioned method, we examined the Business Report and the supplementaryschedules, non-consolidated financial statements (non-consolidated balance sheet, non-consolidated
statements of operations, non-consolidated statement of changes in net assets, and notes thereto), their
supplementary statements and consolidated financial statements (consolidated balance sheet,consolidated statements of operations, consolidated statement of changes in net assets, and notes
thereto) for this fiscal year under review.

802. Results of the Audit(1) Audit Results of business reports, etc.
(i) We confirm that the business reports and its supplementary statements fairly represent
the condition of the Company and are in conformity with the applicable laws andregulations and the Articles of Incorporation of the Company.
(ii) We confirm that, with respect to the execution of duties by Directors, there are no
fraudulent acts, or material facts that violate applicable laws and regulations or the
Articles of Incorporation.
(iii) We confirm that the decisions made by the Board of Directors with regard to internal
control systems are proper. We recognize that there is nothing to be cited with respect tothe description of those internal control systems in the business reports and theexecution of duties by Directors.
(iv) We confirm that there is nothing to be cited in respect of the basic policy described in
the business reports concerning what and how a person or entity controlling decisions
on the financial and business policies of the Company should be. We confirm that
actions (Article 118, Item 3-(b) of the Enforcement Ordinance of the Companies Act)
described in the business reports are in accordance with this basic policy and that theseactions do not damage our Group’s value and shareholders’ common interest, nor serve
to maintain the position of the directors of the Company.
(2) Audit Result of non-consolidated financial statements and their supplementary statements.
We confirm that the methods and the results of the audit by KPMG AZSA LLC, the
Accounting Auditor of the Company, are appropriate.
(3) Audit Result of consolidated financial statements
We confirm that the methods and the results of the audit by KPMG AZSA LLC, the
Accounting Auditor of the Company, are appropriate.
May 18, 2018
Audit & Supervisory Board
BANDAI NAMCO Holdings Inc.
Full Time Audit & Supervisory
Kazuo Asami
Board Member(Seal)

Full Time Audit & Supervisory
Board Member(Outside Audit & Supervisory
Board Member)

Katsuhiko Kohtari(Seal)

Audit & Supervisory Board
Member(Outside Audit & Supervisory
Board Member)

Osamu Sudoh(Seal)

Audit & Supervisory Board
Member(Outside Audit & Supervisory
Board Member)

Katsuhiko Kamijo(Seal)

END

81