Consolidated Financial Report for the Fiscal Year Ended
March 31, 2011

May 10, 2011DISCLAIMER- NAMCO BANDAI Holdings Inc. provides this translation for your reference and convenience only and without any
warranty as to its accuracy or otherwise. In the event of any discrepancy, the original “Kessan Tanshin” in Japanese
shall prevail.
- This document contains forward-looking statements that are based on management’s estimates, assumptions andprojections at the time of publication. A number of factors could cause actual results to differ materially fromexpectations.

Stock Listing: Tokyo Stock Exchange
Code Number: 7832
(URL: http://www.bandainamco.co.jp/)
May 10, 2011

Consolidated Financial Report for the Fiscal Year Ended March 31, 2011 (Japanese GAAP)
Representative:

Shukuo Ishikawa, President and Representative Director

Contact:

Yuji Asako, Director, Division General Manager of the Corporate Planning Division

Date of Ordinary General Meeting of Shareholders:June 20, 2011

Scheduled starting date for dividend payments:

June 21, 2011

Scheduled filing date of the annual security report:

June 21, 2011

The additional materials of the Financial Results:

Yes

The information session of the Financial Results:

Yes (for investors and the press)* Figures are in millions of yen, rounded down

1. Consolidated Results for the Fiscal Year Ended March 31, 2011 (April 1, 2010 to March 31, 2011)(1) Consolidated Operating Results(Percentages indicate year-on-year changes.)
Net sales

Fiscal Year Ended

Operating income

Recurring income¥ million%¥ million%¥ million%

394,178

4.1

16,338767.3

16,399759.6

378,547(11.2)

1,883(91.6)

1,907(92.2)March 31, 2011
Fiscal Year Ended
March 31, 2010
Net income

Fiscal Year Ended

Net income per share

Net income per share(diluted)¥ million

%

¥

¥

1,848

–

7.71

7.71

(29,928)–(123.98)–

March 31, 2011
Fiscal Year Ended
March 31, 2010
(Note)
Comprehensive income: (4,599) million yen [– %] (FY2011.3), (24,959) million yen [– %] (FY2010.3)
ROE(Net income / Net assets)

Fiscal Year Ended

Operating margin(Operating income /Net sales)

ROA(Recurring income /Total assets)

%

%

%

0.8

5.2

4.1

(12.4)

0.6

0.5

March 31, 2011
Fiscal Year Ended
March 31, 2010
(Reference)
Gain or loss from application of equity method: (8) million yen (FY2011.3), 0 million yen (FY2010.3)

(2) Consolidated Financial Position
Total assets

Net assets

Equity ratio

Net assets
per share¥ million¥ million%¥

As of March 31, 2011

308,269

213,69368.8

896.83As of March 31, 2010

325,935

229,01269.5

938.74(Reference)
Equity: 212,102 million yen (as of March 31, 2011), 226,666 million yen (as of March 31, 2010)(3) Consolidated Statements of Cash Flows
Cash flows from

Cash flows from

Cash flows from

Cash and cash

operating activities

investing activities

financing activities

equivalents at endof period

Fiscal Year Ended¥ million¥ million¥ million¥ million

22,561(7,372)(18,825)

89,32910,581(9,863)(15,276)

97,776

March 31, 2011
Fiscal Year Ended
March 31, 2010
2. Cash Dividends
Annual Cash Dividends
End ofFiscal Year Ended

End of

End ofFiscalyear-end

Total

Total

Payout ratio

Dividend /dividend(Consolidated)

Net assets

payment(Consolidated)

firstsecondthird

quarterquarterquarter

¥

¥

¥

¥

¥

¥ million

%

%

–

12.00

–

12.00

24.00

5,797

–

2.4

–

12.00

–

12.00

24.00

5,738

311.3

2.6

–

12.00

–

12.00

24.00

(Full year)

March 31, 2010
Fiscal Year Ended
March 31, 2011
(Projection)

70.9

Fiscal Year Ending
March 31, 2012
Note: The stable portion of the cash dividends is given in the projection for the end of second quarter and the fiscal year-end for the
Fiscal Year Ending March 31, 2012 based on the Company’s basic policy regarding appropriation of profits. Thus, the actual fiscal
year-end dividend will be decided according to the consolidated financial results.

3. Consolidated Projections for the Fiscal Year Ending March 31, 2012 (April 1, 2011 to March 31, 2012)(Percentages indicate year-on-year changes.)
Net sales

Six Months Ending

OperatingRecurringincomeincomeNet income

Net income
per share¥ million%¥ million%¥ million%¥ million%¥

165,000

(5.0)

3,000

(40.8)

3,000(40.1)

500

–

2.11

400,000

1.5

16,5001.0

16,500

0.6

8,000

332.8

33.83

September 30, 2011
Full Year

4. Other Information(1) Changes in Significant Subsidiaries during the Period (Changes in Specified Subsidiaries Resulting in the Change in Scope ofConsolidation): No
Included: – company

Excluded: – company(2) Changes in Accounting Policies, Procedures, and Methods of Presentation
a. Changes due to revisions to accounting standards and other regulations: Yes
b. Changes due to other reasons: No
Note: For more details, please refer to the section of “Changes in Important Information Constituting the Basis for Preparation ofConsolidated Financial Statements” on page 24.
(3) Number of Issued Shares (Common Stock)a. Total number of issued shares at the end of period (including treasury stock)
As of March 31, 2011

240,000,000 shares

As of March 31, 2010

250,000,000 sharesb. Number of shares of treasury stock at the end of the period
As of March 31, 2011

3,497,884 shares

As of March 31, 2010

8,540,776 sharesc. Average number of shares during the period
For the Fiscal Year ended March 31, 2011

239,810,150 shares

For the Fiscal Year ended March 31, 2010

241,402,251 shares

Note: Please refer to the section of “Per Share Data” on page 38 for the number of shares used to calculate “Net income pershare”.
* Implementation status of review
This Consolidated Financial Report was exempt from review which was based on Financial Instruments and Exchange Law of Japan.
As of the fiscal year disclosing, review for the financial statements are under way.
* Explanation on appropriate use of the projections of business results, etc.:
1. Forward-looking statements in this document are based on management’s estimates, assumptions, projections and information available
at the time of its publications. A number of factors could cause actual results to differ materially from expectations. Please refer to thesection of “(1) Analysis on Results of Operations” of “1. Results of Operations” on pages 2-5 for matters pertaining to the earnings
projections.
2. The additional materials of the Financial Results are available on the Company’s web site.

Attached Material
Index
1. Results of Operations............................................................................................................................ 2(1) Analysis on Results of Operations ...................................................................................................................................... 2(2) Analysis of Financial Position ............................................................................................................................................ 5(3) Fundamental Policy on Profit Sharing ................................................................................................................................ 6

2. Management Policies ............................................................................................................................ 8(1) Fundamental Management Policy....................................................................................................................................... 8(2) Targets and Management Performance Indicators .............................................................................................................. 8(3) Medium- to Long-term Business Strategy .......................................................................................................................... 8(4) Issues to be Addressed ........................................................................................................................................................ 9

3. Consolidated Financial Statements ................................................................................................... 12(1) Consolidated Balance Sheets ............................................................................................................................................ 12(2) Consolidated Statements of Operations and Consolidated Statements of Comprehensive Income .................................. 14(Consolidated Statements of Operations).......................................................................................................................... 14(Consolidated Statements of Comprehensive Income) ..................................................................................................... 15(3) Consolidated Statements of Changes in Net Assets .......................................................................................................... 16(4) Consolidated Statements of Cash Flows ........................................................................................................................... 19(5) Notes on Premise of Going Concern................................................................................................................................. 21(6) Important Information Constituting the Basis for Preparation of Consolidated Financial Statements ............................. 21(7) Changes in Important Information Constituting the Basis for Preparation of Consolidated Financial Statements........... 24(8) Change in Method of Presentation.................................................................................................................................... 25(9) Additional Information...................................................................................................................................................... 27(10) Notes to Consolidated Financial Statements................................................................................................................... 29(Consolidated Statements of Comprehensive Income) ..................................................................................................... 29(Segment Information)...................................................................................................................................................... 30(Per Share Data)................................................................................................................................................................ 38(Significant Subsequent Events) ....................................................................................................................................... 39(Disclosure Omissions)..................................................................................................................................................... 39

4. Other .................................................................................................................................................... 40
Changes in Directors and Corporate Auditors ........................................................................................................................ 40-1-

1. Results of Operations(1) Analysis on Results of Operations
a. Summary for the Period (April 1, 2010 to March 31, 2011)
In this fiscal year, signs of a mild recovery were overtaken by the sudden rise in the yen and soaring oil prices in
conjunction with the increasingly tense situation in the Middle East. The economy thus continued to be largely stagnant.
The impact of the Great East Japan Earthquake, which struck on March 11, 2011, has added further uncertainty to theoutlook for the entertainment industry.
In such environment, the BANDAI NAMCO Group (“the Group”) pressed ahead with the development of its global
management foundation based on the three-year Mid-term Business Plan that started in April 2009, and sought to realize its
medium- to long-term Group vision of becoming a “Globally Recognized Entertainment Group.” Moreover, the Group
commenced the “BANDAI NAMCO Group Restart Plan” in April 2010, for the purpose of a more assured implementationof this global management foundation, and it carried out steps to transform itself into a speedy Group, improve its
profitability and strengthen its financial standing.
On the business front, the domestic long-established character toys and card products posted strong performances in the
Toys and Hobby Business. In addition, the Group benefitted from certain achievements, particularly in the Content
Business and the Amusement Facility Business, through a range of measures being implemented according to the Restart
Plan.
Consequently, the Group’s consolidated results at fiscal year-end were net sales of 394,178 million yen (year-on-yearincrease of 4.1%), operating income of 16,338 million yen (year-on-year increase of 767.3%), and recurring income of
16,399 million yen (year-on-year increase of 759.6%). Moreover, in addition to extraordinary loss on valuation of
investment securities and adjustment for changes of accounting standard for asset retirement obligations in the first quarter,
the Group recorded extraordinary loss (472 million yen) related to damage suffered, mainly at its amusement facilities, inthe Great East Japan Earthquake in the fourth quarter. In spite of a deepening deficit of certain subsidiaries, mostly sales
companies overseas, there was also an increase in the payment of income taxes from the initial forecast mainly due toincreased profits from subsidiaries in Japan. As a result, the Group recorded net income of 1,848 million yen (comparedwith net loss of 29,928 million yen in the previous fiscal year).
From this fiscal year, the Company has applied “Accounting Standard for Disclosures about Segments of an Enterpriseand Related Information” (ASBJ Statement No. 17, March 27, 2009) and “Guidance on Accounting Standard forDisclosures about Segments of an Enterprise and Related Information” (ASBJ Guidance No. 20, March 21, 2008). In
accordance with this new accounting standard and guidance, the Company discloses business results by segmentclassification based on management approach. To provide year-on-year comparisons, the results of the previous fiscal year
have been recompiled based on the segment classification existing after the application of the aforesaid accounting
standard and guidance.

Toys and Hobby BusinessIn the Toys and Hobby Business, sales of the domestic long-established character toys, particularly the KAMENRIDER OOO (pronounced “O’s”) and HEART CATCH PRETTY CURE !, trended quite strongly. In addition,
GOKAIGER, the new member of the Super Sentai (Power Rangers) series, launched in February 2011, has made astrong start. Digital card games such as DRAGON BALL HEROES and PRO BASEBALL OWNERS LEAGUE card
game, which connects with the online game, also performed well, making a significant contribution to this business’s-2-performance. Candy toys, children’s clothing, and other peripheral toy categories also reported improved performancedue to developing product tie-ups in each category around popular characters in the KAMEN RIDER and other series.
Overseas in North America and Europe, facing a struggling performance from the Power Rangers series due to a
decline in the frequency of TV broadcasts, the Group started to expand into new categories and content in the aim ofachieving growth in the medium- to long-term. However, performance did not reach the level of the previous fiscal year,
which enjoyed strong performance from BEN10.
As a result, net sales in the Toys and Hobby Business were 158,374 million yen (year-on-year increase of 6.4%),
and segment profit was 13,812 million yen (year-on-year increase of 28.1%).

Content BusinessIn the Content Business, Naruto Shippuden: Ultimate Ninja Storm 2, a home video game software for the
PlayStation 3 and Xbox 360, achieved over a million sold worldwide. In domestic sales, speedier response to changing
customer preferences made such titles as GOD EATER BURST and AKB1/48 Idol to Koishitara..., which are games for
the PlayStation Portable, hugely popular. The performance of new titles developed towards creating new franchises,
however, fell below expectations, particularly overseas.
In the arcade game machines area, Mobile Suit Gundam Extreme VS. and prizes for amusement based on popularcharacters such as ONE PIECE trended favorably. In the visual and music content area, in addition to the strong
package sales of Mobile Suit Gundam UC (Unicorn), selecting and focusing on popular titles has led to improved
profitability. In the network content area, the number of monthly subscribers to existing services has declined, but
GUNDAM ROYALE for SNS (social networking services), for which service provision began in December 2010, hasmade a strong start.
With impairment of goodwill related to some subsidiaries in the previous fiscal year, total amortization of goodwill
declined relative to the previous fiscal year, while the implementation of measures to improve efficiency has reduced
fixed costs.
As a result, net sales in the Content Business were 179,917 million yen (year-on-year increase of 7.4%), andsegment profit was 3,092 million yen (compared with segment loss of 7,760 million yen in the previous fiscal year).

Amusement Facility BusinessIn the Amusement Facility Business, amid a perception that this business has bottomed out in the domestic market,
we have carried out the sales strategy to accommodate each specific customer need. Our facilities, having differentiatedthemselves by being able to offer the experience of the distinctive worldviews of such characters as Ultraman, KAMENRIDER, and Tamagotchi, performed well. While this business’s facilities did suffer some damage in the Great East
Japan Earthquake in March 2011, existing domestic amusement facilities’ net sales for the year rose to 101.0% of theprevious fiscal year total. Due to the withdrawal from related businesses with poor profitability, in Japan, net sales
decreased but profitability was improved.
In the challenging environment presented by countries outside Japan, performance continued to be sluggish in theEuropean region, but measures to improve efficiency implemented in the North American region in the previous fiscal
year have borne fruit, with improved profitability.
As a result, net sales in the Amusement Facility Business were 62,337 million yen (year-on-year decrease of 4.6%),
and segment profit was 1,778 million yen (year-on-year increase of 524.4%).
-3-

Facilities as of March 31, 2011
Directly Managed

Revenue-Sharing

Facilities

Facilities

268

831

Others

Total

3

1,102

Other Businesses
Other Businesses consist of companies that conduct operations, such as logistics support and building management
for each of the Group’s strategic business units. During this fiscal year, efforts were made to improve the efficiency ofthese operations related to group support.
As a result, net sales in the Other Businesses were 18,503 million yen (year-on-year increase of 17.2%), andsegment profit was 810 million yen (year-on-year increase of 151.0%).

b. Outlook for the Fiscal Year Ending March 31, 2012
A wide range of factors are expected to have an impact on the economy in the future such as the increasingly tense
situation in the Middle East, and a weakening of consumption in Japan as a result of the Great East Japan Earthquake andanticipated electric power shortages, etc., and a difficult business environment is expected to continue. Such factors arealso expected to have a global impact on the entertainment industry, in which the Group is extensively involved, resulting
in ongoing uncertainty in this business environment.
Facing these circumstances, the Group is working to steadily develop its global management foundation as outlined in
the three-year Mid-term Business Plan that started in April 2009, and expects these efforts will lead to medium- tolong-term growth in the global market.
Specifically, in the Toys and Hobby Business, our plan for Japanese market is to promote long-established character
toys, such as KAMEN RIDER OOO (pronounced “O’s”) and GOKAIGER (Power Rangers series) for boys and SUITE
PRETTY CURE ♪ for girls, and strengthen card product development including digital card games and PRO BASEBALLOWNERS LEAGUE. In addition, while aiming for an overwhelming position of No. 1 in Japan, we will consecutively
launch new products aimed at new targets. Overseas, the Group will strive to improve profitability by focusing on the coreproducts Power Rangers SAMURAI, the first new creation from the Power Rangers series in two years, and the BEN10
character toys, which have now become a long-established character series, while working to expand new categories suchas girls’ toys and pre-school toys.
In the Content Business, the Group aims to improve profitability in home video game software by expanding its market
in Japan and overseas by focusing on popular franchise titles that were developed in Japan such as ACE COMBATASSAULT HORIZON for PlayStation 3 and Xbox 360. The Group will also strengthen its business by the latest machines
for the popular series Tekken and Dragon Ball in arcade game machines and Mobile Suit Gundam UC (Unicorn) in visualand music content. In addition, in network content, the Group will aim to maximize content value by strengthening content
and online games for SNS (social networking services) while interlinking these businesses with other categories.
In the Amusement Facility Business, the operations at four stores in Japan remain suspended due to damage from theGreat East Japan Earthquake. However, while cooperating with electric power conservation activities, we will continue topromote differentiated facilities that offer the experience of the Group’s distinctive worldviews of characters. Overseas, wewill strive to boost profitability by continuing to implement various efficiency measures.
In light of the above considerations, the consolidated projections of the fiscal year ending March 31, 2012 are as-4-

follows: net sales of 400,000 million yen (year-on-year increase of 1.5%), operating income of 16,500 million yen(year-on-year increase of 1.0%), recurring income of 16,500 million yen (year-on-year increase of 0.6%), and net incomeof 8,000 million yen (year-on-year increase of 332.8%).

(2) Analysis of Financial Positiona. Assets, Liabilities, and Net Assets
At the end of the fiscal year ended March 31, 2011, assets stood at 308,269 million yen, a decrease of 17,666 million
yen from the end of the previous fiscal year. The main factors were as follows. There were decreases of 8,521 million yen
in cash and time deposits, 2,263 million yen in finished goods and merchandise, 2,224 million yen in goodwill included inother intangible assets, and 2,105 million yen in investment securities due to the recording of loss on valuation, etc.
Total liabilities amounted to 94,576 million yen, a decrease of 2,347 million yen from the end of the previous fiscal
year. The main factors of this decline were as follows. Although accounts payable-other increased by 6,728 million yen,
there were decreases of 5,447 million yen in short-term borrowings and 3,333 million yen in long-term borrowings due torepayment.
Total net assets stood at 213,693 million yen, a decrease of 15,318 million yen from the end of the previous fiscal year.
The main factors were decreases of 6,875 million yen in foreign currency translation adjustments due to currency
fluctuation and 3,962 million yen in retained earnings due to cash dividends paid etc., and the increase of 4,171 million yen
in treasury stock through the acquisition of the Company’s own shares on the market.
As a result, the equity ratio became 68.8% compared with 69.5% at the end of the previous fiscal year.

b. Cash Flows
As of the end of the fiscal year, cash and cash equivalents (hereafter “funds”) remaining on hand had decreased by
8,446 million yen from the end of the previous fiscal year to 89,329 million yen. Below is the breakdown of cash flows by
activities.
(Cash Flows from Operating Activities)
The amount of funds provided by operating activities totaled 22,561 million yen (up 113.2% compared with theprevious fiscal year). As a main breakdown of funds used, income taxes paid was 10,437 million yen (compared with 8,761
million yen in the previous fiscal year) and an increase in trade receivables was 8,155 million yen (compared with adecrease in trade receivables of 13,478 million yen in the previous fiscal year). However, overall, there was a net increasein funds due to income before income taxes and minority interests of 11,460 million yen (compared with loss before
income taxes and minority interests of 19,294 million yen in the previous fiscal year), depreciation and amortization of
18,000 million yen (compared with 18,988 million yen in the previous fiscal year), and an increase in accounts
payable-other of 7,635 million yen (compared with a decrease in accounts payable-other of 5,955 million yen in theprevious fiscal year).

(Cash Flows from Investing Activities)
The amount of funds used in investing activities totaled 7,372 million yen (down 25.3% compared with the previous
fiscal year). As a main breakdown of funds used, although there was a collection of guarantee money deposited of 1,221
million yen (compared with 2,739 million yen in the previous fiscal year), purchases of property, plant and equipment and-5-intangible assets totaled 9,312 million yen (compared with 10,008 million yen in the previous fiscal year).

(Cash Flows from Financing Activities)
The amount of funds used in financing activities amounted to 18,825 million yen (up 23.2% compared with the previous
fiscal year). The main factors for funds used were repayment of long-term borrowings of 8,657 million yen (compared with
8,761 million yen in the previous fiscal year), cash dividends paid of 5,797 million yen (compared with 5,795 million yen
in the previous fiscal year), and purchase of treasury stock of 4,171 million yen (compared with 9 million yen in theprevious fiscal year).

(Reference) Cash Flow Indices
FY2007.3

FY2008.3

FY2009.3

FY2010.3

FY2011.3

67.1

69.4

70.9

69.5

68.8

116.1

83.1

65.3

67.5

69.6

Cash flows to interest bearing debt ratio (%)

53.8

41.9

95.5

156.2

34.7

Interest coverage ratio (times)

180.1

199.6

113.0

32.9

42.0

Equity ratio (%)
Equity ratio (market capitalization basis)(%)

Equity ratio: Total stockholders’ equity/Total assets
Equity ratio (market capitalization basis): Market capitalization/Total assets
Cash flows to interest bearing debt ratio: Interest-bearing debt/Cash flow
Interest coverage ratio: Cash flow/Interest expenses
Note 1: All calculations are performed using consolidated financial figures.
Note 2: Market capitalization is calculated on the basis of the number of issued shares excluding treasury stock.
Note 3: Operating cash flow is used for cash flow.
Note 4: Interest-bearing debt covers all debt reported in the consolidated balance sheets for which interest is paid.
(3) Fundamental Policy on Profit Sharing
The Company places the return of profits to shareholders as one of its highest priorities in its management. The
Company assumes that its basic policy is to further strengthen the Group’s competitiveness and, while maintaining a soundfinancial status, to achieve regular distributions of dividends and improvement in the Company’s corporate value. In
concrete terms, the Company will provide a return to shareholders that targets a consolidated payout ratio of 30%, based onstable annual dividend payments of 24 yen per share. The Company has decided on the dividend forecasts for this fiscal
year (year ended March 31, 2011) and next fiscal year (year ending March 31, 2012) based on this basic policy. The
Company expects to pay 24 yen per share for the annual dividend for this fiscal year. The Company is also planning toprovide the same amount of 24 yen per share as the dividend forecast for next fiscal year.
In addition, part of any profit, after deduction of dividends, may be used to acquire treasury stock upon comprehensive
consideration of the amount of funds on hand, performance trends, recent share price trends, the existence or nonexistenceof major investment proposals, and other factors. Based on this policy, during this fiscal year, the Company made anacquisition of treasury stock and made the decision to acquire treasury stock as outlined below.

-6-

Resolution made by the Board of Directors at the meeting held on November 5, 2010
a. Period of acquisition: From November 11, 2010 to December 24, 2010b. Total number of shares acquired: 5,000,000 sharesc. Total amount for share acquisition: 4,169 million yen

Resolution made by the Board of Directors at the meeting held on February 25, 2011
a. Period of acquisition: From February 28, 2011 to December 31, 2011b. Total number of shares to be acquired: 20,000,000 shares (maximum)c. Total amount for share acquisition: 20,000 million yen (maximum)-7-

2. Management Policies(1) Fundamental Management Policy
Guided by our vision of becoming “The Leading Innovator in Global Entertainment,” the Group mission is to continue
to offer “Dreams, Fun and Inspiration,” through entertainment, to people throughout the world. Moreover, with the sights
set on the medium- to long-term Group vision of becoming a “Globally Recognized Entertainment Group,” the Group willpress ahead with various medium- to long-term strategies for strengthening overseas business, making innovation in ourcontent strategy, and expanding our scale to compete in the global market. Furthermore, for the purpose of a more assured
implementation of these strategies, the Group has been promoting the “BANDAI NAMCO Group Restart Plan” from April
2010 under the new management structure to transform itself into a speedy Group and to improve its profitability andstrengthen its financial standing. It has also begun to formulate the Mid-term Business Plan that will start from April 2012.

(2) Targets and Management Performance Indicators
The Group has adopted ROE (Return on Equity) as management performance indicators. Looking ahead, we aim tofurther expand profits by strengthening investments, particularly in overseas business, as well as effectively utilize
stockholders’ equity to build a strong and stable management base. The Group aims to achieve consolidated ROE of 10%
or higher in the medium- to long-term.

(3) Medium- to Long-term Business Strategy
a. Strategy of Mid-term Business Plan
The three-year Mid-term Business Plan that went into effect in April 2009, promotes two strategies, “Focus,” thebusiness strategy, and “Enhancing the Entertainment-hub,” the functional strategy, to lay the foundation for global growth.

Efforts toward the business strategy “Focus”
Under “Focus,” the business strategy, the Group clarifies the mission of each of the business units on the basis ofmarket environment and competitive superiority. In concrete terms, the Toys and Hobby SBU is making “Continue
aggressive expansion” its watchword to increasingly accelerate positive trends in the domestic market and continue toinvest for improved profitability and future growth overseas. The Content SBU, which is experiencing drastic changes in
its market environment, is making “Change business model” its watchword to respond swiftly to changes in customer
preferences. The Amusement Facility SBU, which has been working to reinforce its revenue base, is making “Strengthenmarket position and launch a fresh start” its watchword to stabilize revenues through a process of selection and focus and is
working to build new growth drivers.

Efforts toward the functional strategy “Enhance the Entertainment-hub”
The functional strategy, “Enhancing the Entertainment-hub,” is directed at further strengthening a series of functions
such as creation and acquisition, development and utilization of contents by adding synergies among the Group as well as
between the Group and external partner companies. The Mid-term Business Plan calls for developing that approach, which
thus far has largely been implemented domestically, into a global model.

-8-

b. Initiatives in Support of Mid-term Business Plan Strategies
Strengthening corporate governance
The president and representative director of each major company responsible for each SBU also serves on the
Company’s Board of Directors, to strengthen the collaborative efforts between the holding company and the operatingcompanies and between the operating companies and to facilitate speedier decision-making as a Group. In addition, theCompany has made three of the nine Directors outside directors, to strengthen management oversight functions.

Promoting efficient management
The Group has put in place rules for restructuring and withdrawing from businesses; it has reinforced systems forcontinuous monitoring in order to discern business trends more swiftly, and has introduced the use of return on invested
capital (ROIC) as one of the indicators used to make rapid decisions about restructuring businesses or withdrawing fromthem. In addition, the Group is working towards cost reductions by standardizing processes across the Group as a wholeand is promoting managerial efficiency.

Reinforcing personnel strategies
Aiming for dynamic growth in overseas markets, the Group is strengthening its global systems for acquiring andtraining personnel. In addition, the Group is driving forward a proactive system for personnel exchanges within the Groupto invigorate its human resources.

Reinforcing CSR (Corporate Social Responsibilities) activities
Strengthening its environmental management, the Group is aiming at a 5.4% reduction in CO2 emissions from each of
our worksites by March 31, 2012 (as compared with the fiscal year ended March 2009 level) as a mid-term Groupenvironmental target.

(4) Issues to be Addressed
The Group and this industry must address many important, long-term issues, including (i) the increasing diversificationof consumer needs, (ii) reacting to changes in the market and the environment, and (iii) increasingly intense competition ona global scale. To address these issues, the Group is using “Focus,” a business strategy called for in its Mid-term Business
Plan, to clarify the mission of each of its business units.
In addition, given the difficult economic environment that now prevails and the Group’s decline in profitability, theGroup, seeking to realize its medium- to long-term Group vision of becoming a “Globally Recognized Entertainment
Group,” has been promoting the “BANDAI NAMCO Group Restart Plan” from April 2010 under the new management
structure, to transform itself into a speedy Group and to improve its profitability and strengthen its financial standing.

Furthermore, with respect to the new issue of the economic impact of the Great East Japan Earthquake, the Group is
implementing support for the speedy recovery of the affected region and is carrying out operations in response to theelectric power shortages.

-9-a. Common Issues Faced by All Strategic Business Units (“SBUs”)
Efforts toward domestic business expansion
The Group will, in order to create new markets and attract new customer segments for the expansion of its domestic
operations, maximize utilization of the managerial resources that it owns and expand its targets and categories throughmaking effective use of synergies between its business units, alliances with external partners, and other approaches. In
addition, in response to the changes in the environment surrounding the entertainment industry, the Group will tackle avariety of tasks with speed without resorting to existing business practices and models.
It will also strive for improved efficiency in the Group as a whole by taking actions such as a review of indirect
operations.

Efforts toward overseas business expansion
Based on the strategies laid out in the Mid-term Business Plan, the Group will proactively invest in ways that are
directed at medium- to long-term growth in the North American and European markets. In particular, it will strengthen its
content line-up, broaden business categories, and expand regions with a view to expanding overseas operations.

Efforts toward changing the content strategy
The Group is reinforcing its content creation, acquisition, development, and utilization functions in order to respond tochanges in the environment, including the development of oligopolies in the distribution and media fields and thewidespread penetration of networks. Specifically, the Content Business Strategy Meeting, which crosscuts the entire Group,
focuses on maximizing the value of each content asset, and aims for more vigorous creation and acquisition of newcontent.

Efforts toward (CSR) Corporate Social Responsibility
The Group’s corporate philosophy is to continue to provide “Dreams, Fun and Inspiration” to people around the world,
through entertainment based on creativity and boundless enthusiasm. To ensure that we can continue to provide “Dreams,
Fun and Inspiration,” we have formulated the CSR initiatives, which are crosscutting the Group and that include three
types of responsibilities: environmental and social contribution responsibilities, economic responsibilities, and legal andethical responsibilities. In accordance with these fundamental principles, a range of measures is being implemented by theGroup CSR Committee and its sub-committee, the Group CSR Subcommittee, as well as by the Group Risk Compliance
Committee, the Group Information Security Committee, and the Internal Control Committee.

b. Issues Specific to Each SBU
Toys and Hobby SBU
This unit’s industry is facing issues, such as a “shrinking domestic market due to the falling birthrate” and “increasingly
diverse consumer needs.” This unit is addressing these issues by aiming for the overwhelming position of No. 1 in Japan,
expanding its target population segment, and creating new businesses, as well as, in the overseas market, improving
profitability by strengthening existing operations, growing content line-up, and expanding business categories and regions,with a view to achieving medium- to long-term growth. For the purpose of a more efficient and effective implementation ofthese actions, this unit will actively devote managerial resources, especially in North America and Europe, with a view tobuilding cooperative relationships with external partners.
- 10 -

Content SBU
This unit’s industry is facing issues, such as the “diversification of both platforms and customer needs.” The Group will
review development based on its existing business categories and promote business strategies revolving around content,
thereby achieving speedy response to changing customer preferences throughout the world. This SBU’s Production Group,
which is responsible for the creation and acquisition of content, will, as an aggregator of smaller organizations, respondrapidly to changing customer preferences through transfer of its authority. With Japan-based leadership in development, theContent SBU will roll out carefully selected home video game software worldwide, develop content and other products fora wide range of outlets, including arcade game machines and SNS (social networking services), to maximize the value of
its content.

Amusement Facility SBU“Increasingly diverse consumer needs,” “weak individual consumption,” and “revision of consumption tax rate” areamong the issues for this unit’s industry. To address these issues, by using its know-how in character merchandizing,
especially in its domestic operations, this unit will drive the operation of more differentiated facilities and provision ofservices with the added value that only the Group can offer. In addition, this unit will carry out the selection andconcentration of operations, in Japan and overseas, on an ongoing basis.

- 11 -

3. Consolidated Financial Statements(1) Consolidated Balance Sheets(¥ million)
Prior Fiscal Year(As of March 31, 2010)

Current Fiscal Year(As of March 31, 2011)

AssetsCurrent assets
Cash and time deposits

96,647

88,126

Trade receivables

52,72657,262

Short-term investments

2,037

－

Finished goods and merchandise

12,817

10,553Work in process

23,80526,741

Raw materials and supplies

4,334

4,406

Deferred tax assets

5,763

6,591

Other current assets

20,76918,072

Allowance for doubtful receivables(1,138)(820)

Total current assets

217,762

210,934

24,671

24,160

Accumulated depreciation(14,173)(14,611)

Buildings and structures, net

10,497

9,548

Amusement facilities and machines

60,826

61,617

Accumulated depreciation(45,499)(47,557)

Amusement facilities and machines, net

Fixed assets
Property, plant and equipment
Buildings and structures

15,327

14,059Land

11,592

10,785

Other property, plant and equipment

71,18068,422(62,582)(60,225)

Accumulated depreciation
Other property, plant and equipment, net

8,597

8,197

46,014

42,591

2,951－

Other intangible assets

9,550

8,536

Total intangible assets

12,501

8,536

23,275

21,169Total property, plant and equipment
Intangible assets
Goodwill

Investments and other assets
Investment securities
Deferred tax assets

5,886

5,759

Other investments and assets

22,302

21,181

Allowance for doubtful receivables(1,807)(1,905)

Total investments and other assets
Total fixed assets
Total assets- 12 -

49,656

46,206108,172

97,334

325,935

308,269(¥ million)
Prior Fiscal Year(As of March 31, 2010)

Current Fiscal Year(As of March 31, 2011)

Liabilities
Current liabilities
Trade payables

35,95636,641

Short-term borrowings

8,876

3,428

Accounts payable-other

13,741

20,470Accrued income taxes

8,239

7,979

Provision for directors’ bonuses

402

878

Provision for losses from business restructuring

767

42

2,034

1,505

Provision for sales returns－

165

Other current liabilities

16,584

14,994

Total current liabilities

86,604

86,105

Provision for loss on disasterLong-term liabilities
3,333

－

Deferred tax liabilities for land revaluation

673

673

Provision for directors’ bonuses

129

237

2,403

2,763

32

－

Other long-term liabilities

3,746

4,795

Total long-term liabilities

10,3198,470

96,923

94,576

10,00010,000Long-term borrowings

Accrued retirement and severance benefits
Accrued directors’ and corporate auditors’ retirement
and severance benefits

Total liabilities
Net assets
Stockholders’ equity
Common stock
Additional paid-in capital

79,96069,923Retained earnings

163,454

159,491

Treasury stock(9,455)(3,496)

Total stockholders’ equity

243,958

235,919

Unrealized gains or losses on other securities, net of tax

19

447

Deferred gains or losses on hedges, net of tax

79

3

Accumulated other comprehensive income

Land revaluation, net of tax(6,491)(6,491)

Foreign currency translation adjustments(10,900)(17,775)

Total accumulated other comprehensive income(17,292)(23,816)810－

Minority interests

1,535

1,590

Total net assets

229,012

213,693

325,935

308,269

Stock subscription rights

Total liabilities and net assets- 13 -

(2) Consolidated Statements of Operations and Consolidated Statements of Comprehensive Income(Consolidated Statements of Operations)(¥ million)
Prior Fiscal Year
(From April 1, 2009
to March 31, 2010)
378,547

Net sales

Current Fiscal Year
(From April 1, 2010
to March 31, 2011)
394,178

Cost of sales

249,793

254,763

Gross profit

128,753

139,414Selling, general and administrative expenses

126,869

123,076

1,883

16,338Interest income

371

170

Dividend income

212

218

Amortization of negative goodwill

124

118

Rent income－

106

Other non-operating income

526

257

Total non-operating income

1,234

870

Operating income
Non-operating income

Non-operating expenses
Interest expense

378

142

Foreign exchange loss

620

487

Other non-operating expenses

212

179

Total non-operating expenses

1,210

809

1,907

16,399Gain on sales of fixed assets

37

247

Gain on sales of investment securities, net

176

252

Gain on transfer of business－

405

Reversal of allowance for doubtful receivables

61

331

Recurring income
Extraordinary income

Reversal of accrued retirement and severance benefits

14－

Gain on reversal of stock subscription rights

402

715

Other extraordinary income

49

404

Total extraordinary income

741

2,356

20

4

Extraordinary loss
Loss on sales of fixed assets
Loss on disposal of fixed assets

321－

Loss on impairment of fixed assets

15,902

996

－

2,059

Loss on valuation of investment securities
Loss on business restructuring

1,865

－

Special retirement expenses

1,899

848

－

1,205

1,933

2,179

Loss on adjustment for changes of accounting standard for
asset retirement obligations
Other extraordinary loss
Total extraordinary loss

21,943

7,295(19,294)

11,460

7,064

10,946

963－

Adjustment for income taxes

2,470(1,474)

Total income taxes

10,498

9,471

－

1,988

Income (loss) before income taxes and minority interests
Corporate income, inhabitant and enterprise taxes
Income taxes for the previous period

Income before minority interests
Minority interests

135

140

Net income (loss)(29,928)

1,848- 14 -

(Consolidated Statements of Comprehensive Income)(¥ million)
Prior Fiscal Year
(From April 1, 2009
to March 31, 2010)

Current Fiscal Year
(From April 1, 2010
to March 31, 2011)
－

1,988

Unrealized gains or losses on other securities, net of tax－

465

Deferred gains or losses on hedges, net of tax

－

(76)

Foreign currency translation adjustments－(6,928)

Share of other comprehensive income of associates
accounted for using equity method

－

(49)

Total other comprehensive income－*2(6,588)－*1(4,599)

Income before minority interests
Other comprehensive income

Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of the parent－(4,675)Comprehensive income attributable to minority interests－75- 15 -

(3) Consolidated Statements of Changes in Net Assets(¥ million)
Prior Fiscal Year
(From April 1, 2009
to March 31, 2010)

Current Fiscal Year
(From April 1, 2010
to March 31, 2011)

Stockholders’ equity
Common stock
Balance as of March 31, 2010

10,00010,000－－10,00010,00079,887

79,960

Disposal of treasury stock

72

41

Retirement of treasury stock－(10,077)

Total changes during the period

72(10,036)

79,96069,923

199,453

163,454

Cash dividends(5,795)(5,797)

Net income (loss)

Changes during the period
Total changes during the period
Balance as of March 31, 2011
Additional paid-in capital
Balance as of March 31, 2010
Changes during the period

Balance as of March 31, 2011
Retained earnings
Balance as of March 31, 2010
Changes during the period(29,928)

1,848

Changes in the scope of consolidation

115

(13)

Changes in the scope of application of equity method

(416)

－

25

－

(35,999)(3,962)

163,454

159,491(9,624)(9,455)Purchase of treasury stock(9)(4,171)

Disposal of treasury stock

184

54

Retirement of treasury stock－

10,077

Changes in treasury stock accompanying changes toholdings in associates accounted for using equity method

(6)

(1)

Total changes during the period

168

5,959

(9,455)(3,496)

Increase due to company split
Total changes during the period
Balance as of March 31, 2011
Treasury stock
Balance as of March 31, 2010
Changes during the period

Balance as of March 31, 2011- 16 -

(¥ million)
Prior Fiscal Year
(From April 1, 2009
to March 31, 2010)

Current Fiscal Year
(From April 1, 2010
to March 31, 2011)

Total stockholders’ equity
Balance as of March 31, 2010

279,717

243,958

Cash dividends(5,795)(5,797)

Net income (loss)

Changes during the period(29,928)

1,848

Purchase of treasury stock(9)(4,171)

Disposal of treasury stock

256

95

Retirement of treasury stock－－

Changes in treasury stock accompanying changes toholdings in associates accounted for using equity method

(6)

(1)

Changes in the scope of consolidation

115

(13)

Changes in the scope of application of equity method

(416)

－

25

－

(35,758)(8,039)243,958

235,919(1,911)19

Net changes in the period other than changes instockholders’ equity

1,930

428

Total changes during the period

1,930

428

19

447

(105)

79

Net changes in the period other than changes instockholders’ equity

185

(76)

Total changes during the period

185

(76)

79

3

(6,299)(6,491)

Net changes in the period other than changes instockholders’ equity

(192)

－

Total changes during the period

(192)

－

(6,491)(6,491)(13,755)(10,900)

2,855(6,875)

Increase due to company split
Total changes during the period
Balance as of March 31, 2011
Accumulated other comprehensive income
Unrealized gains or losses on other securities, net of tax
Balance as of March 31, 2010
Changes during the period

Balance as of March 31, 2011
Deferred gains or losses on hedges, net of tax
Balance as of March 31, 2010
Changes during the period

Balance as of March 31, 2011Land revaluation, net of tax
Balance as of March 31, 2010
Changes during the period

Balance as of March 31, 2011
Foreign currency translation adjustments
Balance as of March 31, 2010
Changes during the period
Net changes in the period other than changes instockholders’ equity
Total changes during the period
Balance as of March 31, 2011- 17 -

2,855(6,875)(10,900)(17,775)(¥ million)
Prior Fiscal Year
(From April 1, 2009
to March 31, 2010)

Current Fiscal Year
(From April 1, 2010
to March 31, 2011)

Total accumulated other comprehensive income
Balance as of March 31, 2010

(22,071)(17,292)

Net changes in the period other than changes instockholders’ equity

4,779(6,524)

Total changes during the period

4,779(6,524)(17,292)(23,816)

1,468

810

Net changes in the period other than changes instockholders’ equity

(657)

(810)

Total changes during the period

(657)

(810)

810

－

1,465

1,535

Net changes in the period other than changes instockholders’ equity

69

54

Total changes during the period

69

54

1,535

1,590

260,579

229,012

Cash dividends(5,795)(5,797)

Net income (loss)

Changes during the period

Balance as of March 31, 2011
Stock subscription rights
Balance as of March 31, 2010
Changes during the period

Balance as of March 31, 2011
Minority interests
Balance as of March 31, 2010
Changes during the period

Balance as of March 31, 2011
Total net assets
Balance as of March 31, 2010
Changes during the period(29,928)

1,848

Purchase of treasury stock(9)(4,171)

Disposal of treasury stock

256

95

Retirement of treasury stock－－

Changes in treasury stock accompanying changes toholdings in associates accounted for using equity method

(6)

(1)

Changes in the scope of consolidation

115

(13)

Changes in the scope of application of equity method

(416)

－

25

－

4,191

(7,279)(31,566)(15,318)

229,012

213,693

Increase due to company split
Net changes in the period other than changes instockholders’ equity
Total changes during the period
Balance as of March 31, 2011- 18 -

(4) Consolidated Statements of Cash Flows(¥ million)
Prior Fiscal Year
(From April 1, 2009
to March 31, 2010)

Current Fiscal Year
(From April 1, 2010
to March 31, 2011)

Cash flows from operating activities
Income (loss) before income taxes and minority interests(19,294)

11,460Depreciation and amortization

18,98818,000－1,205

Loss on adjustment for changes of accounting standard for
asset retirement obligations
Loss on impairment of fixed assets

15,902996

Amortization of goodwill

4,844

2,106

946

(83)

622

(708)

(1,265)

(363)

(102)

584

453

373

Increase (decrease) in allowance for doubtful receivables
Increase (decrease) in provision for losses from businessrestructuring
Increase (decrease) in provision for sales returns
Increase (decrease) in provision for directors’ bonuses
Increase (decrease) in accrued retirement and severance
benefits－

165

Interest and dividend income

(584)

(388)

Interest expense

378

142

Foreign exchange loss (gain)

225

343

Increase (decrease) in provision for loss on disaster

Equity in loss (gain) of affiliated companies(0)8Loss on disposal of fixed assets

321

564

Loss (gain) on sales of fixed assets, net

(16)

(241)

Loss on disposal of amusement facilities and machines

570

425

Loss (gain) on sales of investment securities, net

(151)

(443)

Loss (gain) on valuation of investment securities

141

2,102

Loss (gain) on transfer of business

－

(405)

Decrease (increase) in trade receivables

13,478(8,155)Decrease (increase) in inventories(1,725)(1,849)Acquisition of amusement facilities and machines(4,410)(4,126)

Increase (decrease) in trade payables(6,701)

3,668

Increase (decrease) in accounts payable-other(5,955)

7,635

Increase (decrease) in consumption tax payables

(96)

675

Other

2,512

(538)

Subtotal

19,08233,157581

379

Interest and dividends received
Interest paid

(321)

(536)

Income taxes paid

(8,761)(10,437)

Net cash provided by operating activities

10,581

22,561- 19 -

(¥ million)
Prior Fiscal Year
(From April 1, 2009
to March 31, 2010)

Current Fiscal Year
(From April 1, 2010
to March 31, 2011)

Cash flows from investing activities
Payments for deposit in time deposits

(121)

(984)

Proceeds from withdrawal from time deposits

448

275

Purchases of property, plant and equipment(7,177)(6,642)

123

1,110

Sales of property, plant and equipment
Purchases of intangible assets(2,830)(2,670)Purchases of investment securities

(421)

(92)

Sales of investment securities

471

604

Acquisition of shares in consolidated subsidiaries, net ofcash acquired

(81)

－

Acquisition of subsidiary shares affecting the scope of
consolidation(1,760)－－

8

Sales of subsidiary shares affecting the scope of
consolidation－405(1,069)(1,372)

Collection of loans receivable

171

1,160

Payments of guarantee money deposited

(398)

(370)

Collection of guarantee money deposited

2,739

1,221

42

(26)

(9,863)(7,372)

(576)

(105)

Proceeds from transfer of business
Payments of loans receivable

Other
Net cash used in investing activities
Cash flows from financing activities
Increase (decrease) in short-term borrowings, net
Repayment of long-term borrowings(8,761)(8,657)

Payment of lease obligations

(83)

(73)

Purchase of treasury stock(9)(4,171)

Proceeds from disposal of treasury stock
Cash dividends paid
Cash dividends paid to minority interests
Net cash used in financing activities
Effect of exchange rate changes on cash and cash equivalents

00(5,795)(5,797)

(51)

(21)

(15,276)(18,825)

2,010(4,837)

Net increase (decrease) in cash and cash equivalents(12,547)(8,474)

Cash and cash equivalents at beginning of year

110,037

97,776

Increase in cash and cash equivalents due to consolidation of
additional subsidiaries

270

27

Increase in cash and cash equivalents due to merger of
non-consolidated subsidiaries

61－

Decrease in cash and cash equivalents due to company split

(45)

－

97,77689,329Cash and cash equivalents at end of year

- 20 -

(5) Notes on Premise of Going Concern
Not applicable.

(6) Important Information Constituting the Basis for Preparation of Consolidated Financial Statements

1. Information
Concerning the
Scope ofConsolidation

Prior Fiscal Year
(From April 1, 2009 to March 31, 2010)

Current Fiscal Year
(From April 1, 2010 to March 31, 2011)(1) Total Number of Consolidated Subsidiaries:(1) Total Number of Consolidated Subsidiaries:

80 companies

77 companies

Names of Principal Consolidated Subsidiaries:

Names of Principal Consolidated Subsidiaries:

Bandai Co., Ltd., NAMCO BANDAI Games Inc.,BANDAI VISUAL CO., LTD., NAMCO LIMITED,NAMCO BANDAI Holdings (USA) Inc., BANDAI
S.A., NAMCO Holdings UK LTD. and BANDAI(H.K.) CO., LTD.

Bandai Co., Ltd., NAMCO BANDAI Games Inc.,
NAMCO LIMITED, NAMCO BANDAI Holdings(USA) Inc., BANDAI S.A., NAMCO Holdings UK
LTD. and BANDAI (H.K.) CO., LTD.

Since BANDAI (GUANGZHOU) CO., LTD.
gained in importance, that company was added tothe scope of consolidation from this consolidated
fiscal year. Since Bandai Networks Co., Ltd., and
ANIME CHANNEL, CO., LTD., were merged into
consolidated subsidiaries, those companies were
excluded from the scope of consolidation.
NAMCO BANDAI Games Europe S.A.S., aconsolidated subsidiary of the Company,
additionally acquired shares in Distribution Partners
S.A.S., making that company a wholly owned
subsidiary, in conjunction with which Distribution
Partners S.A.S. (which changed its corporate nameto NAMCO BANDAI Partners S.A.S. after
becoming a wholly owned subsidiary) and its 18
subsidiaries were added to the scope of
consolidation.

Since BANDAI Polska sp. zo. o gained inimportance and NAMCO BANDAI Live Creative
Inc. was newly incorporated, those companies wereadded to the scope of consolidation from thisconsolidated fiscal year.
In addition, regarding the companies included
among consolidated subsidiaries in the previous
consolidated fiscal year, (i) D3 Publisher Inc., andEntertainment Software Publishing, Inc., weremerged into a consolidated subsidiary, (ii) NAMCO
TRADING LTD. and NAMCO SPA RESORT LTD.
were liquidated, and (iii) stock of Bowling Station
S.L.U. was sold. Accordingly, those companies were
excluded from the scope of consolidation.

Furthermore, NAMCO BANDAI Online Inc. wasnewly incorporated as a result of anincorporation-type company split of NAMCO
BANDAI Games Inc., a consolidated subsidiary of
the Company, and was added to the scope of
consolidation. Seika Co., Ltd., and NAMCO
ECOLOTECH LTD. were liquidated and thus were
excluded from the scope of consolidation.
(2) Names etc. of the Principal Non-Consolidated
Subsidiaries:
Principal Non-Consolidated Subsidiaries:
SHANGHAI NAMCO LTD.
BANDAI LOGIPAL (H.K.) LTD.
Total assets, net sales, net income or loss andretained earnings, etc. corresponding to theownership held by the Company of each
non-consolidated subsidiary have no material impact
on the consolidated financial statements andtherefore excluded from the scope of consolidation.

- 21 -(2) Names etc. of the Principal Non-Consolidated
Subsidiaries:
Same as left column

2. Information
Concerning
Application of
Equity Method

Prior Fiscal Year
(From April 1, 2009 to March 31, 2010)

Current Fiscal Year
(From April 1, 2010 to March 31, 2011)(1) Number of Non-Consolidated Subsidiaries andAffiliated Companies to Which Equity Method Was
Applied: 7 companies(1) Number of Non-Consolidated Subsidiaries andAffiliated Companies to Which Equity Method Was
Applied: 7 companies

Names of the Principal Non-Consolidated
Subsidiaries and Affiliated Companies to Which
Equity Method Was Applied:

Names of the Principal Non-Consolidated
Subsidiaries and Affiliated Companies to Which
Equity Method Was Applied:

Non-consolidated subsidiary:
SHANGHAI NAMCO LTD.

Non-consolidated subsidiary:
SHANGHAI NAMCO LTD.

Affiliated companies:
Happinet Corporation

Affiliated companies:
Happinet Corporation

Sotsu Co., Ltd.

Sotsu Co., Ltd.

People Co., Ltd.

People Co., Ltd.

In addition, Distribution Partners S.A.S., throughan additional acquisition of its shares, was made awholly owned subsidiary, and thus was excluded
from the scope of application of the equity method
for this consolidated fiscal year. Tsuburaya
Productions Co., Ltd. gained in importance and thus
was treated as an associate accounted for using
equity method.
(2) Non-Consolidated Subsidiaries and AffiliatedCompanies to Which Equity Method Was Not Applied

3. Information
Concerning the
Fiscal Year, etc.
for Consolidated
Subsidiaries(2) Non-Consolidated Subsidiaries and AffiliatedCompanies to Which Equity Method Was Not Applied

The equity method was not applied to
non-consolidated subsidiaries and affiliatedcompanies such as BANDAI LOGIPAL (H.K.)
LTD., because it was deemed that the exclusion ofthese companies from the application of the equity
method would have little, and no material, impact on
the consolidated net income or loss and retained
earnings, etc. and their significance is minimal as awhole.

Same as left column

NAMCO BANDAI Holdings (USA) Inc. and someother consolidated subsidiaries (18 domestic and 26
overseas subsidiaries) have the last day ofDecember, January, or February as closing date.

NAMCO BANDAI Holdings (USA) Inc. and someother consolidated subsidiaries (10 domestic and 25
overseas subsidiaries) have the last day ofDecember, January, or February as closing date.

In the preparation of the consolidated financial
statements, the financial statements of each company
for the relevant fiscal year were used, and necessary
adjustments for consolidation purposes were made in
the case of material transactions conducted prior to
the last day of the consolidated fiscal year for the
consolidated financial statements of the Company.

In the preparation of the consolidated financial
statements, the financial statements of each company
for the relevant fiscal year were used, and necessary
adjustments for consolidation purposes were made in
the case of material transactions conducted prior to
the last day of the consolidated fiscal year for the
consolidated financial statements of the Company.

- 22 -

4. Information
Concerning theBasis forAccounting
Treatment

Prior Fiscal Year
(From April 1, 2009 to March 31, 2010)

Current Fiscal Year
(From April 1, 2010 to March 31, 2011)(1) Basis of Recognition for Significant Provision:(1) Basis of Recognition for Significant Provision:

(i)

(i)

Provision for Directors’ Bonuses:
Domestic consolidated subsidiaries provide
accrued bonuses for directors based on theestimated amounts to be paid in respect of thisconsolidated fiscal year.

Provision for Directors’ Bonuses:
The Company and its domestic consolidated
subsidiaries provide accrued bonuses for directors
based on the estimated amounts to be paid inrespect of this consolidated fiscal year.

(ii) Provision for Loss on Disaster:
Certain domestic consolidated subsidiaries
include the provision for loss on disaster in theestimated amount at the end of this consolidated
fiscal year for expenditures to restore assets
damaged by the Great East Japan Earthquake.
(ii) Accrued Directors’ and Corporate Auditors’
Retirement and Severance Benefits:
To provide for payment of retirement andseverance benefits to directors and corporate
auditors, certain domestic consolidated
subsidiaries record the amount payable at the endof the consolidated fiscal year in accordance withinternal regulations.
Apart from the information contained above and in (7), other important information constituting the basis for preparation of consolidated
financial statements has been omitted as no significant changes have occurred since this information was presented in the most recent
annual security report (filed on June 22, 2010).

- 23 -

(7) Changes in Important Information Constituting the Basis for Preparation of Consolidated Financial Statements
Prior Fiscal Year
(From April 1, 2009 to March 31, 2010)

Current Fiscal Year
(From April 1, 2010 to March 31, 2011)(Change in Accounting Policies)
Changes in classification of costs for the Amusement Facility
Business
Prior consolidated fiscal years, the costs of backroom support
operations at amusement facilities was treated as cost of sales for
the Amusement Facility Business; however, from this consolidated
fiscal year, such costs are stated as selling, general andadministrative expenses. This change is made to provide a more
appropriate presentation of costs of facilities management
operations from the point of view of the relationship between sales
and cost of sales, in conjunction with reviewing how facilities areoperated and the roles of operating staff, and clarifying the scope of
facilities management operations, given that competition has grown
more intense in the amusement facilities business.
The impact of this change, in comparison with the classification
used until the previous consolidated fiscal year, is a 2,011 million
yen reduction in the cost of sales for this consolidated fiscal yearwith an equivalent increase in gross profit, as well as an increase in
selling, general and administrative expenses by the same amount.
This change has no impact upon operating income, recurringincome and loss before income taxes and minority interests.
(Application of Accounting Standard for Asset Retirement
Obligations)“Accounting Standard for Asset Retirement Obligations” (ASBJ
Statement No. 18, March 31, 2008) and “Guidance on AccountingStandard for Asset Retirement Obligations” (ASBJ Guidance No.
21, March 31, 2008) were applied from this consolidated fiscal
year.
As a result, gross profit, operating income, and recurring income
have each decreased by 83 million yen and income before income
taxes and minority interests decreased by 1,334 million yen.
(Application of Accounting Standard for Business Combinations)“Accounting Standard for Business Combinations” (ASBJ
Statement No. 21, December 26, 2008), “Accounting Standard forConsolidated Financial Statements” (ASBJ Statement No. 22,
December 26, 2008), “Partial Amendments to Accounting Standard
for Research and Development Costs” (ASBJ Statement No. 23,
December 26, 2008), “Accounting Standard for Business
Divestitures” (ASBJ Statement No. 7, December 26, 2008),“Accounting Standard for Equity Method of Accounting forInvestments” (ASBJ Statement No. 16, December 26, 2008), and“Guidance on Accounting Standard for Business Combinations andAccounting Standard for Business Divestitures” (ASBJ GuidanceNo. 10, December 26, 2008) were applied from this fiscal year.

- 24 -

(8) Change in Method of Presentation
Prior Fiscal Year
(From April 1, 2009 to March 31, 2010)

Current Fiscal Year
(From April 1, 2010 to March 31, 2011)(Consolidated Balance Sheets)(Consolidated Balance Sheets)

1. What had been stated separately through the previous
What had been stated separately through the previous
consolidated fiscal year as “Short-term investments” (for which
consolidated fiscal year as “Guarantee money deposited” (forthe balance at the end of this consolidated fiscal year is 2,817
which the balance at the end of this consolidated fiscal year is
million yen) was stated within “Other current assets” under
15,394 million yen) was stated within “Other investments and“Current assets,” since it is at or below 1 percent of total assets.
assets” under “Investments and other assets,” since it is at or below
5 percent of total of assets.
2. What had been stated separately through the previous
consolidated fiscal year as “Goodwill” (for which the balance atthe end of this consolidated fiscal year is 726 million yen) was
stated within “Other intangible assets” under “Intangible assets,”since it is at or below 1 percent of total assets.
(Consolidated Statements of Operations)(Consolidated Statements of Operations)

1. “Rent income,” which had been stated through the previous
1. “Amortization of negative goodwill,” which had been statedconsolidated fiscal year within “Other non-operating income”
through the previous consolidated fiscal year within “Other
under “Non-operating income” was stated separately, since it isnon-operating income” under “Non-operating income” was statedabove 10 percent of the total non-operating income.
separately, since it is above 10 percent of the total non-operating
income.
The total of “Rent income” for the previous consolidated fiscal
year was 115 million yen.

The total of “Amortization of negative goodwill” for theprevious consolidated fiscal year was 116 million yen.

2. What had been stated through the previous consolidated fiscal
year as “Reversal of accrued retirement and severance benefits”
2. What had been stated through the previous consolidated fiscal year
(for which the balance for this consolidated fiscal year is 0
as “Equity in gain of affiliated companies” (for which the balance formillion yen) was stated within “Other extraordinary income”
this consolidated fiscal year is 0 million yen) was stated within
under “Extraordinary income,” since it is at or below 10 percent“Other non-operating income” under “Non-operating income,” sinceof the total extraordinary income.
it is at or below 10 percent of the total non-operating income.
3. “Loss on business restructuring,” which had been stated throughthe previous consolidated fiscal year within “Other extraordinaryloss” under “Extraordinary loss” was stated separately, since its
monetary importance has increased in this consolidated fiscal
year.

3. “Loss on valuation of investment securities,” which had beenstated through the previous consolidated fiscal year within “Other
extraordinary loss” under “Extraordinary loss” was statedseparately, since it is above 10 percent of the total extraordinaryloss.

The total of “Loss on business restructuring” for the previous
consolidated fiscal year was 114 million yen.

The total of “Loss on valuation of investment securities” forthe previous consolidated fiscal year was 122 million yen.

4. What had been stated through the previous consolidated fiscal
4. What had been stated through the previous consolidated fiscal
year as “Loss on disposal of fixed assets” (for which the balanceyear as “Loss on valuation of investment securities” (for which
for this consolidated fiscal year is 564 million yen) and “Loss on
the balance for this consolidated fiscal year is 122 million yen),business restructuring” (for which the balance for this
“Provision for allowance of doubtful receivables” (for which theconsolidated fiscal year is 104 million yen), were stated withinbalance for this consolidated fiscal year is 718 million yen), and“Other extraordinary loss” under “Extraordinary loss,” since each
“Litigation settlement” (for which the balance for thisis at or below 10 percent of the total extraordinary loss.
consolidated fiscal year is 66 million yen) were stated within“Other extraordinary loss” under “Extraordinary loss,” since each 5. What had been stated through the previous consolidated fiscal
is at or below 10 percent of the total extraordinary loss.
year as “Income taxes for the previous period” (for which thebalance for this consolidated fiscal year is 42 million yen) was
stated within “Corporate income, inhabitant and enterprisetaxes,” since its monetary importance has decreased in thisconsolidated fiscal year.
6. With the adoption of “Cabinet Office Ordinance for Partial
Revision of the Regulation for Terminology, Forms andPreparation Methods of Financial Statements, etc.” (Cabinet
Office Ordinance No. 5 of March 24, 2009), based on“Accounting Standard for Consolidated Financial Statements”(ASBJ Statement No. 22, December 26, 2008), from thisconsolidated fiscal year, “Income before minority interests” isstated separately.

- 25 -

Prior Fiscal Year
(From April 1, 2009 to March 31, 2010)

Current Fiscal Year
(From April 1, 2010 to March 31, 2011)(Consolidated Statements of Cash Flows)
What had been stated through the previous consolidated fiscal
year as “Increase (decrease) in accrued directors’ and corporate
auditors’ retirement and severance benefits” (for which the balance
for this consolidated fiscal year is negative 14 million yen) was
stated within “Other” in “Cash flows from operating activities” dueto its diminished monetary importance.

- 26 -

(9) Additional Information
Prior Fiscal Year
(From April 1, 2009 to March 31, 2010)

Current Fiscal Year
(From April 1, 2010 to March 31, 2011)(Additional Investment in NAMCO BANDAI Partners S.A.S.)
On July 7, 2009, NAMCO BANDAI Games Europe S.A.S., aconsolidated subsidiary of the Company, additionally acquired
shares in Distribution Partners S.A.S. (which changed its corporatename to NAMCO BANDAI Partners S.A.S. after becoming awholly owned subsidiary of NAMCO BANDAI Games Europe
S.A.S.), making that company a consolidated subsidiary of theCompany.
1. Name and Business Content of Acquired Company, Main Reason
for the Business Combination, Date of the Business
Combination, Legal Form of the Business Combination andPercentage of Voting Rights Acquired:(1) Name and Business Content of Acquired Company:
Name:
Distribution Partners S.A.S.
(The Acquired Company changed its
corporate name to NAMCO BANDAI
Partners S.A.S. after becoming a wholly
owned subsidiary of NAMCO BANDAI
Games Europe S.A.S.)
Business content: Distribution of electronic products andproducts for PCs and game consoles(2) Main Reason for the Business Combination:
The objective is to build a distribution network for theGroup in European region and strengthen its Game Contents
Business in that region.
(3) Date of the Business Combination:
July 1, 2009(4) Legal Form of the Business Combination:
Acquisition of shares(5) Percentage of Voting Rights Acquired:
66.0% (Total percentage of voting rights after the
additional acquisition of shares: 100.0%)
2. Period of Performance of the Acquired Company Included in theConsolidated Financial Statements:
From July 1, 2009 to March 31, 2010
In addition, during the period from April 1, 2009 to June 30,
2009, the Acquired Company was an affiliated company of theCompany to which the equity method was applied.
3. Acquisition Cost of the Acquired Company and the Breakdownof the Cost:
Consideration paid for the
additional acquisition of shares

3,627 million yen

Direct cost of acquisition

53 million yen

Existing equity

631 million yen

Acquisition cost

4,312 million yen- 27 -

Prior Fiscal Year
(From April 1, 2009 to March 31, 2010)

Current Fiscal Year
(From April 1, 2010 to March 31, 2011)

4. Value of Goodwill or Negative Goodwill Generated, Cause of theGeneration, Amortization Method and Amortization Period:(1) Value of Goodwill:

8,305 million yen(2) Cause of the Generation:
Because the cost of the acquisition exceeded the market
value of the net assets of the company at the time thebusiness combination was carried out, the difference isrecognized as goodwill.
(3) Amortization Method and Amortization Period:
Amortized by the straight-line method over five years.
At the end of this consolidated fiscal year, however, as aresult of reviewing the business plan which was consideredat the time of acquisition of the shares, it was determined thatthe future super-profit initially assumed could not be
expected; thus, the relevant book value was reduced by theentire amount and that reduction is stated as an impairment
loss under extraordinary loss.
5. Value of Assets Acquired and Liabilities Undertaken on the Dateof the Business Combination and their Main Breakdown:
Current assets

17,344 million yen

Fixed assets

484 million yen

Total assets

17,828 million yen

Current liabilities

19,408 million yen

Long-term liabilities

2,413 million yen

Total liabilities

21,822 million yen

6. Contents of the Conditional Payment of Acquisition Price
Stipulated in the Business Combination Agreement and theSubsequent Accounting Processing Policies:
Not applicable.
7. Amount Allocated to Research and Development Expenses, etc.
in the Acquisition Cost, and its Category:Not applicable.
8. Allocation of Acquisition Cost:
There are no distinguishable assets or liabilities that areallocated other than goodwill.

- 28 -

Prior Fiscal Year
(From April 1, 2009 to March 31, 2010)

Current Fiscal Year
(From April 1, 2010 to March 31, 2011)

9. Approximate amounts of impact on consolidated statements ofoperations if the business combination had been completed at the
beginning of this consolidated fiscal year.
Net sales

25,980 million yen

Operating loss

3,926 million yen

Recurring loss

4,396 million yen

Net loss

4,592 million yen

In the above calculation of approximate amounts for net sales
and income/loss, the net sales and income/loss of Distribution
Partners S.A.S. from April 1, 2009 through June 30, 2009 was
added to the calculation.
The above approximate amounts have not undergone
attestation by an auditor.
“Accounting Standard for Presentation of Comprehensive
Income” (ASBJ Statement No. 25, June 30, 2010) is applied
from this consolidated fiscal year. However, the amounts of“Accumulated other comprehensive income” and “Total
accumulated other comprehensive income” for the previous
consolidated fiscal year indicate the amounts of “Valuationdifference and foreign currency translation adjustments” and“Total valuation difference and foreign currency translation
adjustments,” respectively.

(10) Notes to Consolidated Financial Statements(Consolidated Statements of Comprehensive Income)Current Fiscal Year (From April 1, 2010 to March 31, 2011)*1. Comprehensive income for the consolidated fiscal year immediately prior to this consolidated fiscal year(¥ million)
Comprehensive income attributable to owners of the parent(25,149)

Comprehensive income attributable to minority interests

189

Total

(24,959)*2. Other comprehensive income for the consolidated fiscal year immediately prior to this consolidated fiscal year(¥ million)
Unrealized gains or losses on other securities, net of tax

1,879

Deferred gains or losses on hedges, net of tax

185

Land revaluation, net of tax(192)

Foreign currency translation adjustments

2,906

Share of other comprehensive income of associates accounted
53
for using equity method
Total

4,833

- 29 -

(Segment Information)a. By Business Segment
Prior Fiscal Year (From April 1, 2009 to March 31, 2010)(¥ million)
Toys and
Hobby
Business

Game
Contents
Business

Visual andMusic
Content
Business

145,672

132,177

27,90965,112

7,674

378,547–

378,547

3,170

5,350

1,326

250

9,777

19,876(19,876)–

Amusement
Facility
Business

Other
Businesses

Total

Eliminations
Consolidated
and
Total
Corporate

I Net sales andoperating income(loss)Net sales(1) To externalcustomers(2) Inter-segment sales
and transfers
Total

148,843

137,528

29,23665,362

17,452

398,423(19,876)

378,547

Operating expenses

138,057

144,373

30,10765,077

17,093394,710(18,047)

376,663

Operating income(loss)

10,786(6,845)

(871)

284

358

3,712

(1,828)

1,883

II Assets, depreciation
and amortization,
impairment loss, andcapital expenditure
Assets111,992

101,495

19,24038,775

17,578289,082

36,853

325,935

Depreciation andamortization

8,194

5,477

2,266

7,319

482

23,740216

23,956

Impairment loss

146

7,041

6,312

2,351

50

15,902–

15,902

Capital expenditure

6,865

1,870

513

4,496

422

14,168249

14,418Notes: 1.
2.

3.

4.

5.

The industry segments used above are those used for internal management purposes.
Main products in each business segment:(1) Toys and Hobby Business:
Toys, candy toys, products for vending machines, cards, plastic
models, apparel, sundries(2) Game Contents Business:
Home-use video game software, arcade game machines, mobile
contents, prizes for amusement arcade machines(3) Visual and Music Content Business: Video contents, video software, on demand video distribution,
music software(4) Amusement Facility Business:
Amusement facilities operation(5) Other Businesses:
Transportation and storage of products, leases, real estate
management, printing, sales of environmental devices
Unallocatable operating expenses included in the “Eliminations and Corporate” column under “Operating
expenses” were 2,685 million yen. The majority of this cost represents administrative costs incurred by theadministration sector of the Company and NAMCO BANDAI Holdings (USA) Inc.
Unallocatable assets included in the “Eliminations and Corporate” column under “Assets” were 44,168 million
yen. The significant assets included in the amounts were surplus operating funds (cash and time deposits) of theCompany, long-term investment funds (investment securities), and assets held by the administration sector.
Depreciation and amortization includes amortization of goodwill.

- 30 -

6.

Changes in business segments
On April 1, 2009, for the further growth expected in the network-related market, an absorption-type merger
was executed between the Company’s consolidated subsidiary Bandai Networks Co., Ltd. (the extinct company)
and the Company’s consolidated subsidiary NAMCO BANDAI Games Inc. (the surviving company). As aresult of a review of business segments that accompanied this merger, it was decided to merge the Network
Business segment with the Game Contents Business segment from this fiscal year because they had similarbusiness characteristics such as contents of services, content development, and support for multiple media.
The table below presents the results of the previous fiscal year (business segment information) under the new
business segments.
(¥ million)
Toys and
Hobby
Business

Game
Contents
Business

Visual andMusic
Content
Business

Amusement
Facility
Business

Other
Businesses

163,068

144,22133,63376,9178,559

426,399–

426,399

2,656

5,669

1,004

352

10,44920,133(20,133)–

Total

Eliminations
Consolidated
and
Total
Corporate

I Net sales andoperating income(loss)Net sales(1) To externalcustomers(2) Inter-segment sales
and transfers
Total

165,725

149,891

34,63877,26919,009446,533(20,133)

426,399

Operating expenses

154,191

138,281

34,59976,876

18,443422,393(18,341)404,051

Operating income

11,533

11,609

38

393

565

24,140(1,792)

22,348

II Assets, depreciation
and amortization,
impairment loss, andcapital expenditure
Assets130,404

119,604

48,071

54,40019,206371,687(8,242)

363,444

Depreciation andamortization

8,972

4,073

3,113

9,570

926

26,65785

26,742

Impairment loss

63

–

13

776

77

930

22

953

Capital expenditure

6,723

2,609

885

6,712

385

17,316164

17,481- 31 -

b. By Geographic Segment
Prior Fiscal Year (From April 1, 2009 to March 31, 2010)(¥ million)
Japan
I

Americas

Europe

Asia

Total

Eliminations
and Corporate

Consolidated
Total

Net sales and operating
income (loss)

Net sales(1) To external customers

286,20929,26945,955

17,112

378,547–

378,547(2) Inter-segment sales andtransfers

11,7683,582

961

21,57837,891(37,891)–

Total

297,978

32,852

46,916

38,691

416,438(37,891)

378,547

Operating expenses

292,440

36,17747,30535,922411,846(35,182)376,6635,537(3,324)

(388)

2,768

4,592

(2,708)1,883

206,157

28,46540,432

24,888299,942

25,992

325,935

Operating income (loss)
II Assets

Notes: 1.

2.

3.

Definition of geographic segments and main countries and regions in geographic segments:(1) Foreign geographic segments are defined by geographic region, similarity of economic activities, andinterrelation of business activities.
(2) The main countries and regions in each geographic segment are as follows:a.

Americas:

United States and Canadab.

Europe:France, United Kingdom, Spain and Germanyc.

Asia, excluding Japan: Hong Kong, Thailand, Korea, China and Australia

In the fiscal year ended March 31, 2010, due to the new consolidation of NAMCO BANDAI Partners
S.A.S. and its 18 subsidiaries, Germany was added to the Europe geographic segment and Australia to the
Asia geographic segment.
Unallocatable operating expenses included in the “Eliminations and Corporate” column under “Operating
expenses” were 2,685 million yen. The majority of this cost represents administrative costs incurred by theadministration sector of the Company and NAMCO BANDAI Holdings (USA) Inc.
Assets included in the “Eliminations and Corporate” column under “Assets” approximated 44,168 million yen.
The significant assets included in the amounts were surplus operating funds (cash and time deposits) of theCompany, long-term investment funds (investment securities), and assets held by the administration sector.

- 32 -

c. Foreign Sales
Prior Fiscal Year (From April 1, 2009 to March 31, 2010)
Americas

Europe

Asia

Total

I

Foreign sales (¥ million)

31,37046,196

21,72099,286

II

Consolidated sales (¥ million)

–

–

–

378,547

III

Share of sales to customers
outside Japan (%)

8.3

12.2

5.7

26.2

Notes: 1.
2.

Foreign sales are defined as total sales by the Company and its consolidated subsidiaries in countries andregions other than Japan.
Segmentation by country or by region and the main countries and regions in each geographic segment are as
follows:(1) Foreign geographic segments are defined by geographic region, similarity of economic activities, andinterrelation of business activities.
(2) The main countries and regions in each geographic segment are as follows:a.

Americas:

United States, Canada and Latin Americab.

Europe:France, United Kingdom, Spain, Germany, Middle East and Africac.

Asia, excluding Japan: Hong Kong, Singapore, Thailand, Korea, Australia, China and Taiwan

In the fiscal year ended March 31, 2010, due to the new consolidation of NAMCO BANDAI Partners
S.A.S. and its 18 subsidiaries, Germany was added to the Europe geographic segment.
d. Segment Information
Current Fiscal Year (From April 1, 2010 to March 31, 2011)
1. Overview of reportable segments
The reportable segments of the Company are components of the Group whose separate financial information isavailable. These segments are periodically evaluated by the Board of Directors in deciding how to allocate management
resources and in assessing the performance.
The Group is made up of (1) three strategic business units, one for each business domain, namely the Toys and Hobby
SBU, the Content SBU, and the Amusement Facility SBU, and (2) the affiliated business companies that mainly serve a
supporting role for these strategic business units. The major company of each strategic business unit leads the planningand promotion of the business strategies of the strategic business unit for Japan and overseas.
Accordingly, the Group has the following three reportable segments: Toys and Hobby Business, Content Business, andAmusement Facility Business.
The Toys and Hobby Business conducts manufacturing and sales of toys, candy toys and products for vending
machines. The Content Business conducts production and sales of home-use video game software and video related
products, and the manufacturing and sales of arcade game machines. The Amusement Facility Business conducts theoperation of amusement facilities.

2. Method for calculating the amounts of net sales, profit/loss, assets, liabilities and others by reportable segment
The accounting method used for the business segments reported is the same as the accounting method stated in“Important Information Constituting the Basis for Preparation of Consolidated Financial Statements.”
The profit of reportable segments is measured by operating income.
The inter-segment transactions are based on prevailing market prices.

- 33 -

3. Information regarding the amounts of net sales, profit/loss, assets, liabilities and others by reportable segment
Prior Fiscal Year (From April 1, 2009 to March 31, 2010)(¥ million)
Reportable Segments
Toys and
Hobby
Business

To external customers
Inter-segment sales andtransfers

Other
Businesses

Adjustments

Consolidated
Total

Content
Business

Amusement
Facility
Business

Total(Note 1)

145,672

161,644

65,112

372,429

6,117

378,547–

378,547

3,170

5,827

250

9,248

9,672

18,921(18,921)–

Total

148,843

167,471

65,362

381,678

15,790397,468(18,921)378,547

Segment profit (loss)

10,786(7,760)

284

3,310

322

3,633

(1,749)1,883

Segment assets

111,992

120,335

38,775271,103

17,278288,382

37,553

325,935

Depreciation andamortization

8,194

7,747

7,319

23,261478

23,740216

23,956

Impairment loss

146

13,3542,351

15,85250

15,902–

15,902

6,865

2,384

4,496

13,747421

14,168249

14,418

Total(Note 2)

(Note 3)

Net sales

OthersIncrease in property,
plant and equipment
and intangible assets

Notes: 1.

2.

3.

The “Other Businesses” category is a business segment not included in reportable segments under which
operations such as logistics support and building management for each of the Group’s strategic business units
are classified.
The details of adjustment amounts are as follows:(1) Included in the 1,749 million yen deducted from segment profit or loss as adjustment are an addition of 935
million yen in inter-segment eliminations, and a deduction of 2,685 million yen in corporate expenses thatcannot be allocated to any reportable segment. The corporate expenses are mainly costs related to theadministration sector that has not been attributed to a reportable segment.
(2) Included in the 37,553 million yen added to segment assets as adjustment are a deduction of 6,614 million
yen in inter-segment eliminations, and an addition of 44,168 million yen in corporate assets that cannot beallocated to any reportable segment. The corporate assets are mainly cash and time deposits, investment
securities, and assets etc. related to the administration sector that has not been attributed to a reportablesegment.
(3) Included in the 216 million yen added to depreciation and amortization as adjustment are a deduction of
152 million yen in inter-segment eliminations, and an addition of 368 million yen in depreciation andamortization related to the administration sector that has not been attributed to a reportable segment. The
amount of depreciation and amortization includes the amount of amortization of goodwill.
(4) Included in the 249 million yen added to increase in property, plant and equipment and intangible assets as
adjustment is the amount of corporate assets that cannot be allocated to any reportable segment.
Segment profit is adjusted with operating income in the consolidated statements of operations.

- 34 -

Current Fiscal Year (From April 1, 2010 to March 31, 2011)(¥ million)
Reportable Segments
Toys and
Hobby
Business

To external customers
Inter-segment sales andtransfers

Other
Businesses

Adjustments

Consolidated
Total

Content
Business

Amusement
Facility
Business

Total(Note 1)

154,706

170,653

62,268387,6276,550

394,178–

394,178

3,667

9,263

69

13,001

11,952

24,953(24,953)–

Total

158,374

179,91762,337400,629

18,503419,132(24,953)

394,178

Segment profit

13,812

3,092

1,778

18,684810

19,494(3,156)

16,338Segment assets

99,385

119,044

34,153

252,583

17,979270,563

37,705308,269

Depreciation andamortization

9,475

2,434

6,183

18,094

470

18,565(564)

18,000

Amortization of
goodwill

2

1,792

147

1,943

–

1,943

281

2,224

Impairment loss

324

83

587

995

1

996

–

996

Investment inassociates accounted
for using equity
method

1,097

–

137

1,235

7,343

8,578

–

8,578

Increase in property,
plant and equipment
and intangible assets

7,075

1,688

4,185

12,948220

13,168270

13,438

Total(Note 2)

(Note 3)

Net sales

Others

Notes: 1.

2.

3.

The “Other Businesses” category is a business segment not included in reportable segments under which
operations such as logistics support and building management for each of the Group’s strategic business units
are classified.
The details of adjustment amounts are as follows:(1) Included in the 3,156 million yen deducted from segment profit as adjustment are a deduction of 254
million yen in inter-segment eliminations, and a deduction of 2,901 million yen in corporate expenses thatcannot be allocated to any reportable segment. The corporate expenses are mainly costs related to theadministration sector that has not been attributed to a reportable segment.
(2) Included in the 37,705 million yen added to segment assets as adjustment are a deduction of 7,327 million
yen in inter-segment eliminations, and an addition of 45,033 million yen in corporate assets that cannot beallocated to any reportable segment. The corporate assets are mainly cash and time deposits, investment
securities, and assets etc. related to the administration sector that has not been attributed to a reportablesegment.
(3) Included in the 564 million yen deducted from depreciation and amortization as adjustment are a deductionof 811 million yen in inter-segment eliminations, and an addition of 246 million yen in depreciation andamortization related to the administration sector that has not been attributed to a reportable segment.
(4) Included in the 281 million yen added to amortization of goodwill as adjustment is amortization related togoodwill that cannot be allocated to any reportable segment.
(5) Included in the 270 million yen added to increase in property, plant and equipment and intangible assets as
adjustment is the amount of corporate assets that cannot be allocated to any reportable segment.
Segment profit is adjusted with operating income in the consolidated statements of operations.

- 35 -

(Additional information)“Accounting Standard for Disclosures about Segments of an Enterprise and Related Information” (ASBJ Statement No.
17, March 27, 2009) and “Guidance on Accounting Standard for Disclosures about Segments of an Enterprise andRelated Information” (ASBJ Guidance No. 20, March 21, 2008) were applied from this fiscal year.
e. Related Information
Current Fiscal Year (From April 1, 2010 to March 31, 2011)
1. Information by product and service
This information is omitted because the same information has been presented in Segment Information.

2. Information by region(1) Net sales(¥ million)
Japan

Americas307,660

Europe29,690Asia

37,274

Total

19,553394,178

Note: Net sales are classified by country and region based on customer location.
(2) Property, plant and equipment(¥ million)
Japan

Americas37,244

Europe

1,673

Asia

1,953

Total

1,719

42,591

3. Information by major customer(¥ million)
Name of customer
Happinet Corporation

Net sales

Names of related segments

43,046

Toys and Hobby Business and Content Businessf. Information Regarding Loss on Impairment of Fixed Assets by Reportable Segment
Current Fiscal Year (From April 1, 2010 to March 31, 2011)(¥ million)
Toys and
Hobby
Business
Loss onimpairment of
fixed assets

324

Amusement
Facility
Business

Content
Business

83

587

Other
Businesses(Note)

Eliminations
and Corporate

1

–

Total

996

Note: The amount of “Other Businesses” is the amount belonging to the logistics support business for each of theGroup’s strategic business units.

- 36 -

g. Information Regarding Amortized Amounts and Unamortized Balance of Goodwill by Reportable Segment
Current Fiscal Year (From April 1, 2010 to March 31, 2011)(¥ million)
Toys and
Hobby
Business

Amusement
Facility
Business

Content
Business

Eliminations
and Corporate(Note)

Other
Businesses

Total

Amortized
amount

2

1,792

147

–

281

2,224

Unamortizedbalance

–

384

0

–

341

726

Note: The amount of “Eliminations and Corporate” is the amount for investment securities etc. that were transferredfrom subsidiaries to the Company as a result of business combinations.
Note that the amortized amounts and unamortized balance of negative goodwill that were recognized as a result of
business combinations conducted before April 1, 2010 are as follows.
(¥ million)
Toys and
Hobby
Business

Amusement
Facility
Business

Content
Business

Other
Businesses(Note)

Eliminations
and Corporate

Total

Amortized
amount

–

4

–

114

–

118

Unamortizedbalance

–

9

–

–

–

9

Note: The amount of “Other Businesses” is the amount belonging to the logistics support business for each of theGroup’s strategic business units.
h. Information Regarding Gain on Negative Goodwill by Reportable Segment
Current Fiscal Year (From April 1, 2010 to March 31, 2011)
Not applicable.

- 37 -

(Per Share Data)
Prior Fiscal Year

Current Fiscal Year

(From April 1, 2009 to March 31, 2010)(From April 1, 2010 to March 31, 2011)

Net assets per share

938.74 yen

Net assets per share

896.83 yen

Net loss per share

123.98 yen

Net income per share

7.71 yen

Diluted net income per share

7.71 yen

Although potential shares exist, diluted net income pershare is not disclosed due to the recording of a net loss per
share.

Note: The basis of calculating net income (loss) per share figure and the diluted net income per share figure is as follows:

Prior Fiscal Year

Current Fiscal Year

(From April 1, 2009 to March 31, 2010)(From April 1, 2010 to March 31, 2011)

Net income (loss) per share
Net income (loss) (¥ million)(29,928)

1,848

–

–

(29,928)

1,848

241,402,251

239,810,150

Net income adjustment (¥ million)––

Increase in number of common
stock (shares)–

31,487[Stock subscription rights]–(31,487)

Amount not applicable to common
stockholders (¥ million)
Net income (loss) available tocommon stock (¥ million)
Average number of common stock
outstanding (shares)
Diluted net income per share

Summary of potential shares notincluded in the calculation of diluted
net income per share as they do nothave a diluting effect.

(the Company):
Stock subscription rights pursuant toresolution of the Ordinary General Meetingof Shareholders of June 26, 2006:
Series 3 stock subscription rights for
1,753,000 shares of common stock
Series 4 stock subscription rights for
562,000 shares of common stock
Stock subscription rights pursuant toresolution of the Ordinary General Meetingof Shareholders of June 25, 2007:
Series 2–1 stock subscription rights for
92,600 shares of common stock
Series 2–2 stock subscription rights for
49,700 shares of common stock- 38 -

(Significant Subsequent Events)
Prior Fiscal Year

Current Fiscal Year

(From April 1, 2009 to March 31, 2010)(From April 1, 2010 to March 31, 2011)(Method of treasury stock acquisition)
Concerning a resolution made by the Board of Directors
meeting held on February 25, 2011 on the acquisition of treasury
stock, the Company, at a Board of Directors meeting held on
May 10, 2011, resolved the concrete acquisition method set forth
below in accordance with the provision of Article 156, Paragraph
1 of the Companies Act as applied by replacing the relevantterms pursuant to Article 165, Paragraph 3 of the Companies Act
and the Company’s Articles of Incorporation.
(1) Reason for acquisition
To improve capital efficiency by effectively utilizing assets
held and to execute capital policy with the flexibility torespond to change in the business environment.
(2) Acquisition method
Acquisition from market, etc.
The Company will acquire shares from the market up to thetotal number and amount not exceeding those calculated after
deducting the number and amount of the shares acquired bytender offer from February 28 to March 28, 2011.
(3) Period of acquisition
From May 11, 2011 to December 31, 2011
(4) OtherContents of resolution at Board of Directors meeting held
on February 25, 2011
a. Type of shares to be acquired
Common stockb. Total number of shares to be acquired
20,000,000 shares (maximum)c. Total amount for share acquisition
20,000 million yen (maximum)d. Period of share acquisition
From February 28, 2011 to December 31, 2011
e. Status of shares acquired after above Board of Directors
resolution
Total number of acquired shares: 5,005,364 shares
Total amount paid for acquired shares: 4,434 million yen(Disclosure Omissions)Disclosure of the following is omitted because the necessity of disclosure in this financial report is deemed immaterial:
lease transactions, transactions with related parties, tax effect accounting; financial instruments, short-term investments,
derivative transactions, retirement and severance benefits, stock options etc., and matters concerning asset retirement
obligations.

- 39 -

4. Other
Changes in Directors and Corporate Auditors(1) Change in Representative
Not applicable.
(2) Other Changes in Directors and Corporate Auditors (Effective June 20, 2011)
New candidates for Directors
Director (Outside)

Nobuo Sayama (current position: Professor, Graduate School of International
Corporate Strategy (ICS), Hitotsubashi University, Director of GCA Savvian
Group Corporation)

Director (Outside)

Tomohisa Tabuchi (current position: Partner of STW & Partners, Corporate
Auditor (Outside) of NAMCO BANDAI Games Inc.)

Retiring Directors
Director (Outside)

Masatake Yone

Director (Outside)

Kazuo Ichijo(3) Responsible Area of Directors (Effective June 20, 2011)
Shukuo Ishikawa

President and Representative Director

Takeo Takasu

Director and Senior Advisor

Shuji Ohtsu

Director in charge of Overseas Operations and Division General Manager of Group
Administrative Headquarters

Yuji Asako

Director and Division General Manager of the Corporate Planning Division

Kazunori Ueno

Director (Part-time) in charge of Toys and Hobby SBU

Masahiro Tachibana

Director (Part-time) in charge of Amusement Facility SBU

Manabu Tazaki

Director (Outside)

Nobuo Sayama

Director (Outside)

Tomohisa Tabuchi

Director (Outside)- 40 -