BANDAI NAMCO
Holdings Inc.
Notice of the Twelfth Ordinary General Meeting of Shareholders
to be held on June 19, 2017
An English translation of the original notice in Japanese

DISCLAIMER
The following is an English translation of the Japanese original “Notice of the Twelfth Ordinary General
Meeting of Shareholders of BANDAI NAMCO Holdings Inc.” which meeting is to be held on June 19, 2017.
The Company provides this translation for your reference and convenience only and does not guarantee its
accuracy or otherwise. In the event of any discrepancies, the Japanese original notice shall prevail.
These documents have been prepared solely in accordance with Japanese law and are offered here for
informational purposes only. In particular, please note that the financial statements included in the following
translation have been prepared in accordance with Japanese GAAP.

1Securities code: 7832
May 29, 2017
5-37-8 Shiba, Minato-ku, Tokyo
BANDAI NAMCO Holdings Inc.
Mitsuaki Taguchi
President and Representative Director
Dear Shareholders,
NOTICE OF THE TWELFTH ORDINARY GENERAL MEETINGOF SHAREHOLDERS
You are cordially invited to attend the Twelfth Ordinary General Meeting of
Shareholders of BANDAI NAMCO Holdings Inc. (“the Company”) to be held as set
forth below.
If you are unable to attend the meeting in person, we ask you to please review theenclosed “Reference Documents for the General Meeting of Shareholders” andexercise your voting rights by either of the methods stated on the next page by 5:30
p.m., Saturday, June 17, 2017.
Meeting Details
1.

Date and Time:

June 19, 2017 (Monday) at 10:00 a.m.

2.

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

3.

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

2.

Report on the Contents of the Business Reports, the Consolidated Financial
Statements and the Results of the Auditing of the Consolidated Financial
Statements by the Accounting Auditor and the Audit & Supervisory Board for the
Twelfth Fiscal Year (from April 1, 2016 to March 31, 2017)
Report on the Contents of the Non-Consolidated Financial Statements for the
Twelfth Fiscal Year (from April 1, 2016 to March 31, 2017)

Matters to be Resolved:
Proposal No. 1: Appropriation of Surplus
Proposal No. 2: Election of Ten Directors
Proposal No. 3: Change in Content of Performance-based Remuneration for Directors(Transition to a Performance-based Stock Compensation Plan)
4.

Information on Exercise of Voting Rights
Please see “Information on Exercise of Voting Rights” on pages 3 to 4 of thisdocument.
2

[Information on Exercise of Voting Rights]
Please exercise your voting rights after reviewing the Reference Documents for the General
Meeting of Shareholders on pages 5 to 21.
You may exercise your voting rights by one of the following three methods.
A: Exercise of Voting Rights via attending the General Meeting of Shareholders:
Please hand in the enclosed Voting Rights Exercise Form at the reception desk at
the place of the shareholders’ meeting.
In addition, please bring this NOTICE OF THE TWELFTH ORDINARY
GENERAL MEETING OF SHAREHOLDERS.
B: Exercise of Voting Rights via Postal Mail:
Please indicate, on the enclosed Voting Rights Exercise Form, your approval ordisapproval of each item on the agenda and return the completed form so that it arrivesby 5:30 p.m., Saturday, June 17, 2017.
C: Exercise of Voting Rights via the Internet etc.:
Please access the website designated by the Company for the exercise of voting
rights (http://www.evote.jp/), enter and send your approval or disapproval of each itemon the agenda by 5:30 p.m., Saturday, June 17, 2017.
For details, please see the following page.

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

3

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

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

4

Reference Documents for the General Meeting of Shareholders
Proposals and References
Proposal No. 1: Appropriation of Surplus
Appropriation of surplus is as follows:
Fiscal Year-end Dividends
The Company places the return of profits to shareholders as one of its highest management
priorities. The Company assumes its basic policy is to further strengthen the Group’s
competitiveness and, while maintaining a sound financial status, to achieve regular distributions ofdividends and improvement in the Company’s corporate value. In concrete terms, the Company’s
basic policy is to provide a return to shareholders that targets a payout ratio of 30% in accordancewith consolidated operational results and based on stable annual dividend payments of ¥24 pershare.
In view of the Company’s performance in this fiscal year, the Company will pay a year-end
dividend of ¥70 per share, which consists of a stable dividend of ¥12 per share, aperformance-based dividend of ¥38 per share, and an additional special dividend of ¥20 per share
due to achieving record-high net sales and profit and surpassing, one year ahead of schedule, ¥600.0
billion in net sales and ¥60.0 billion in operating profit, the final numerical targets of its three-year
Mid-term Plan started in April 2015.
Since the Company paid an interim dividend of ¥12 per share on December 6, 2016, the total
annual dividend for the fiscal year will be ¥82 per share.
(i) Type of dividend assets:Cash(ii) Allocation of dividend assets to be paid to shareholders and total amount of dividend:
Dividend per share of common stock of the Company ·············¥70
Total amount of dividends ····························· ¥15,385,568,940(iii) Effective date of distribution of surplus (dividend):
June 20, 20175

Proposal No. 2: Election of Ten Directors
Since the terms of office of the ten Directors of the Company will expire as of the close of this
General Meeting of Shareholders, the Company requests the election of ten Directors.
Policy on and process for selecting candidates for Director of the Company
To select candidates for Director of the Company, candidates are nominated on the basis ofsufficiently broad expertise and experience in decision-making for corporate management,
background in a business supervisory capacity, or achievements and knowledge from their career todate. The basic policy is to ensure that at least two of the Directors are independent Outside
Directors.
To select candidates for Outside Director of the Company, nominations that provide anappropriate balance of, for example, individuals with extensive experience in corporate
management, individuals with profound scholarly knowledge of corporate strategy, or lawyers whoare experts in compliance and other internal controls, are considered and a decision is madeaccordingly.
When selecting candidates for Director of the Company, a Personnel Committee of which amajority of the members are independent Outside Directors is established on a discretionary basis toact as a forum for debate and receive recommendations, and the independent Outside Directors
conduct interviews, before a decision is made at a Board of Directors Meeting.

6

The candidates for Director of the Company are as follows:
Positions andCandidate
Name
Responsibilities inNo.
(Date of Birth)
the Company
Apr. 1978:
Aug. 1991:
Jun. 1995:

Jun. 1999:
Shukuo Ishikawa(April 15, 1955)

1

Number of theCompany’s
Shares Owned
53,300 Shares

Chairman and
Representative
Director

Apr. 2005:
Apr. 2006:

Jun. 2006:
Apr. 2009:
Apr. 2010:
Apr. 2012:
Jun. 2015:

Career Summary
Joined NAMCO LIMITED (currently
BANDAI NAMCO Entertainment Inc.)
General Manager, EM Development
Department of NAMCO LIMITED
Director in charge of Development
Division II, General Manager, EM
Development Department and VS
Development Department of NAMCO
LIMITEDManaging Director in charge of Research,
Development and Production, andDevelopment Division II of NAMCO
LIMITED
Executive Vice President andRepresentative Director in charge ofcontents business of NAMCO LIMITED
President and Representative Director of
NAMCO BANDAI Games Inc.
(currently BANDAI NAMCOEntertainment Inc.)
Director of the Company
President and Representative Director of
the Company
President and Representative Director of
NAMCO BANDAI Games Inc.
Chairman of the Board of NAMCO
BANDAI Games Inc.
Chairman and Representative Director of
the Company (current position)

Reasons for proposing Mr. Shukuo Ishikawa as a candidate for Director:
Mr. Shukuo Ishikawa has worked as a Representative Director of the Company since 2009 andpossesses extensive experience, achievements, and knowledge as a business manager. He is
proposed as a candidate for Director as the Company considers him capable of promoting
Group management and strengthening corporate governance.

7

Candidate
No.

Name
(Date of Birth)

Positions andResponsibilities in
the Company

Career Summary
Apr. 1982:
Apr. 1999:

2

Joined BANDAI CO., LTD.
General Manager, Vending Machine
Business Department of BANDAI CO.,LTD.
Jun. 2003:
Director, Leader of Lifestyle Group andLifestyle Company President of
BANDAI CO., LTD.
Apr. 2006:
Managing Director in charge of new
business policy of BANDAI CO., LTD.
Mitsuaki Taguchi
Apr. 2009:
Senior Managing Director in charge of(June 16, 1958)
media policy and new business policy of
President and
BANDAI CO., LTD.
Representative
Number of theApr. 2010:
Executive Vice President and Director in
Director
Company’s
charge of media policy and new business
Shares Owned
policy of BANDAI CO., LTD.
62,600 Shares
Apr. 2012:
Executive Vice President and COO incharge of global media policy and humanresources policy and in charge of Real B
Voice Business Group, Strategy Projects,
Human Resources of BANDAI CO.,LTD.
Apr. 2015:
Adviser of the Company
Jun. 2015:
President and Representative Director of
the Company (current position)
Reasons for proposing Mr. Mitsuaki Taguchi as a candidate for Director:
Mr. Mitsuaki Taguchi has exhibited leadership skills based on his extensive experience andbroad knowledge gained through roles at BANDAI CO., LTD., which is the core company of
the Toys and Hobby Business in the Group and where he was responsible for media policy andnew business policy. Furthermore, he also supervised the business appropriately after his
appointment as President and Representative Director of the Company in 2015. He is proposed
as a candidate for Director as the Company considers him capable of achieving the Mid-term
Plan and ensuring that the Group continues to grow.

8

Candidate
No.

Name
(Date of Birth)

Positions andResponsibilities in
the Company

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

3

Licensed as a CPA
Partner in Century Audit Corporation
Partner in Century Ota Showa & Co.
(currently Ernst & Young ShinNihon
LLC)
Sep. 2003:
Partner in KPMG AZSA & Co. (currently
KPMG AZSA LLC)
May 2004:
Board Member of KPMG AZSA & Co.
Oct. 2007:
Joined the Company as Adviser
Jun. 2008:
Director in charge of Overseas
Operations, Group Administrative
Headquarters, Corporate Legal Affairs
Office and Internal Auditing Division of
the Company
Shuji Ohtsu
Director and
Jun. 2011:
Director in charge of Overseas Regional(August 6, 1959)
Division
Headquarters Companies and Division
GeneralGeneral Manager of the Group
Number of theManager of the
Administrative Headquarters of theCompany’sGroup
Company
Administrative Apr. 2013:
Shares Owned
Director and Division General Manager
27,200 Shares
Headquartersof the Group Administrative
Headquarters of the Company (current
position)
President and Representative Director of
NAMCO BANDAI Holdings (USA) Inc.
(currently BANDAI NAMCO Holdings
USA Inc.) (current position)
Apr. 2015:
President and Representative Director of
BANDAI NAMCO Business Arc Inc.
(current position)(Major concurrent positions)
President and Representative Director of BANDAI
NAMCO Holdings USA Inc.
President and Representative Director of BANDAI
NAMCO Business Arc Inc.
Reasons for proposing Mr. Shuji Ohtsu as a candidate for Director:
Mr. Shuji Ohtsu possesses specialist expertise as a CPA, as well as extensive experience andachievements as Division General Manager of the Group Administrative Headquarters of theCompany. He is proposed as a candidate for Director as the Company considers him capable ofstrengthening Group management structures and ensuring highly transparent management.

9

Candidate
No.

Name
(Date of Birth)

Positions andResponsibilities in
the Company

Career Summary
Apr. 1986:
Aug. 2005:

4

Joined BANDAI CO., LTD.
General Manager, Accounting Division of
BANDAI CO., LTD.
Sep. 2005:
Joined the Company, as General Managerof the Corporate Administration
Department
Apr. 2006:
Director of NAMCO BANDAI Games
Inc. (currently BANDAI NAMCOEntertainment Inc.)
Yuji Asako
Apr. 2008:
Executive Officer, Division General(January 18,
Director andManager of Corporate Planning Division
1966)
Divisionof the Company
GeneralJun. 2010:
Director in charge of Corporate PlanningManager of theand Division General Manager of the
Number of the
Corporate
Corporate Planning Division of theCompany’s
Planning
Company
Shares Owned
DivisionJun.
2011:
Director and Division General Manager
28,100 Sharesof the Corporate Planning Division of theCompany (current position)
Apr. 2014:
Director of NAMCO LIMITED (*)* Newly established company throughthe incorporation-type company split of
NAMCO LIMITED (currently BANDAI
NAMCO Entertainment Inc.)
Apr. 2017
Director of BANDAI NAMCO Holdings
ASIA CO., LTD. (current position)
Reasons for proposing Mr. Yuji Asako as a candidate for Director:
Mr. Yuji Asako possesses extensive experience, achievements, and knowledge relating tomanagement and administration, including business planning and accounting, and also has
experience in roles where he was responsible for internal and external communications, such as
IR, PR and SR. He is proposed as a candidate for Director as the Company considers him
capable of implementing the Group’s management strategies and seeking a sustained increasein corporate value.

10

Candidate
No.

Name
(Date of Birth)

Positions andResponsibilities in
the Company

Career Summary
Apr. 1983:
Apr. 2002:

5

Joined BANDAI CO., LTD.
Executive Officer and General Manager,
Vending Machine Business Departmentof BANDAI CO., LTD.
Apr. 2006:
Director in charge of distribution policyof BANDAI CO., LTD.
MasaruApr. 2010:
Managing Director in charge of hobby
Kawaguchi
business policy and quality assurance(November 2,
policy of BANDAI CO., LTD.
1960)
Director in
Apr. 2015:
Senior Managing Director in charge ofcharge of Toys
toy business policy of BANDAI CO.,and Hobby SBU
LTD.
Number of theCompany’s
Aug. 2015:
President and Representative Director of
Shares Owned
BANDAI CO., LTD. (current position)
33,500 Shares
Executive Officer of the Company
Jun. 2016
Director in charge of Toys and Hobby
SBU of the Company (current position)(Major concurrent position)
President and Representative Director of BANDAI CO.,LTD.
Reasons for proposing Mr. Masaru Kawaguchi as a candidate for Director:
Mr. Masaru Kawaguchi possesses extensive experience, achievements, and knowledge in the
Toys and Hobby Business and has driven the business forward as the President andRepresentative Director of BANDAI CO., LTD., which is the core company of Toys and Hobby
Business in the Group, since 2015. He is proposed as a candidate for Director as the Company
considers him capable of building closer ties between the Toys and Hobby Business and Groupmanagement.

11

Candidate
No.

Name
(Date of Birth)

Positions andResponsibilities in
the Company

Career Summary
Mar. 1976:
Apr. 1992:

6

Joined BANDAI CO., LTD.
General Manager, Toy Marketing
Department of BANDAI CO., LTD.
Jun. 1999:
Executive Officer and Deputy Division
Head, Consumer Business Division, andGeneral Manager, SWAN Business
Department of BANDAI CO., LTD.
Mar. 2002:
Joined Bandai Networks Co., Ltd., as
Executive Manager
Jun. 2002:
President and Representative Director ofBandai Networks Co., Ltd.
Jun. 2007:
Director in charge of Network SBU of theCompany
Apr. 2009:Managing Director in charge of CS
business and NE business of NAMCO
Satoshi Oshita
BANDAI Games Inc. (currently(July 3, 1953)
Director in
BANDAI NAMCO Entertainment Inc.)
charge ofApr. 2010:
President and Representative Director of
Network
Number of the
BANDAI VISUAL CO., LTD.
Entertainment
Company’s
Apr.
2012:
Executive Officer in charge of Content
SBU
Shares Owned
SBU of the Company
47,500 Shares
President and Representative Director of
NAMCO BANDAI Games Inc. (current
position)
Jun. 2012:
Director in charge of Content SBU of theCompany
Jan. 2015:
President of BANDAI NAMCO(SHANGHAI) CO., LTD.
Apr. 2015:
Director in charge of Network
Entertainment SBU of the Company(current position)
Oct. 2016
Chairman and Representative Director of
BANDAI NAMCO Studios Inc.
(Major concurrent position)
President and Representative Director of BANDAI
NAMCO Entertainment Inc.
Reasons for proposing Mr. Satoshi Oshita as a candidate for Director:
Mr. Satoshi Oshita possesses extensive experience, achievements, and knowledge from his
wide-ranging involvement in the Toys and Hobby, Network Entertainment, and Visual andMusic Production Businesses in the Group. He has driven the business forward as the President
and Representative Director of BANDAI NAMCO Entertainment Inc., which is the corecompany of the Network Entertainment Business in the Group, since 2012. He is proposed as a
candidate for Director as the Company considers him capable of building closer ties between
the Network Entertainment Business and Group management.

12

Candidate
No.

Name
(Date of Birth)

Positions andResponsibilities in
the Company

Career Summary
Apr. 1982:

Kazumi
Kawashiro(November 4,
1959)

7

Number of theCompany’s
Shares Owned
16,600 Shares

Joined CANYON RECORDS INC.
(currently PONY CANYON INC.)
Jul. 1989:
Joined BANDAI CO., LTD.
Apr. 1994:
Joined BANDAI VISUAL CO., LTD.
Sep. 1997:
General Manager of Production at
Production Headquarters of BANDAIVISUAL CO., LTD.
Mar. 1999:
Deputy Division Head of Visual Business
Division and General Manager of Visual
Planning Department of BANDAIVISUAL CO., LTD.
May 1999:
Director, Deputy Division Head of VisualBusiness Division and General Manager
of Visual Planning Department of
BANDAI VISUAL CO., LTD.
Director in
President and Representative Director of
charge of Visual May 2003:
BANDAI VISUAL CO., LTD.
and Music
Production SBU Jun. 2007:
Director in charge of Visual and Music
Content SBU of the Company
Apr. 2010:
Vice President and Director of BANDAIVISUAL CO., LTD.
Apr. 2012:
President and Representative Director of
BANDAI VISUAL CO., LTD. (current
position)
Apr. 2015:
Executive Officer in charge of Visual andMusic Production SBU of the Company
Jun. 2015:
Director in charge of Visual and Music
Production SBU of the Company (current
position)(Major concurrent position)
President and Representative Director of BANDAIVISUAL CO., LTD.

Reasons for proposing Mr. Kazumi Kawashiro as a candidate for Director:
Mr. Kazumi Kawashiro possesses extensive experience, achievements, and knowledge in the
Visual and Music Production Business. He has driven the business forward as the President andRepresentative Director of BANDAI VISUAL Co., Ltd, which is the core company of the
Visual and Music Production Business in the Group, since 2012. He is proposed as a candidate
for Director as the Company considers him capable of building closer ties between the Visualand Music Production Business and Group management.

13

Candidate
No.

Name
(Date of Birth)

Positions andResponsibilities in
the Company

Career Summary
Apr. 1977:

8

9

Joined Kyowa Hakko Kogyo Co., Ltd.
(currently Kyowa Hakko Kirin Co., Ltd.)
Jun. 2000:
Executive Officer and Head of
Pharmaceutical Research Institute of
Kyowa Hakko Kogyo Co., Ltd.
Jun. 2002:
Managing Director and General Manager
of Comprehensive Planning Office of
Kyowa Hakko Kogyo Co., Ltd.
Jun.
2003:
President and Representative Director of
Outside Director
Kyowa Hakko Kogyo Co., Ltd.
Oct.
2008:
Executive Director of the Board,
Yuzuru Matsuda
President and Chief Executive Officer of(June 25, 1948)
Kyowa Hakko Kirin Co., Ltd.
Director
Mar. 2012:
Advisor of Kyowa Hakko Kirin Co., Ltd.
Number of theJun. 2012:
Head of Kato Memorial Bioscience
Company’s
Foundation (current position)
Shares Owned
Jun. 2014:
Outside Director of KUBOTA--- Shares
Corporation (current position)
Outside Director of the Company (current
position)
Jun. 2015:
Outside Director of JSR Corporation(current position)(Major concurrent positions)
Head of Kato Memorial Bioscience Foundation
Outside Director of KUBOTA Corporation
Outside Director of JSR Corporation
Reasons for proposing Mr. Yuzuru Matsuda as a candidate for Outside Director and his
suitability as Outside Director:
Given his extensive experience in corporate management and his excellent character andinsight, the Company anticipates that he will be able to further strengthen management
oversight and checking functions, and introduce a broader managerial perspective, and thus
believes that he will be able to perform the duties of an Outside Director appropriately.
Outside Director
Apr. 1990:
Admitted to the bar in Japan
Joined Mori Sogo Law Offices (currently
SatokoMori Hamada & Matsumoto)Kuwabara
Jan. 1998
Partner of Mori Hamada & Matsumoto(November 1,(current position)
1964)
Jun.
2016
Outside Director of the Company (current
Directorposition)
Number of the(Major concurrent position)
Company’s
Attorney-at-Law
Shares Owned
Partner of Mori Hamada & Matsumoto--- Shares
Reasons for proposing Ms. Satoko Kuwabara as a candidate for Outside Director and hersuitability as Outside Director:
Although she has not been involved in corporate management other than through serving as an
Outside Director, the Company anticipates, given her many years of experience as an
attorney-at-law, that she will be able to further strengthen management oversight and checking
functions, mainly from a legal risk perspective, and thus believes that she will be able toperform the duties of an Outside Director appropriately.

14

Candidate
No.

Name
(Date of Birth)

Positions andResponsibilities in
the Company

Career Summary
Apr. 2002:
Oct. 2003:

Outside Director
Mikiharu Noma
(November 6,
1974)

Oct. 2004:
Director

10

Number of theCompany’s
Shares Owned--- Shares

Apr. 2007:
Jun. 2016

Lecturer of Faculty of Economics andBusiness Administration of Yokohama
City University
Assistant Professor of Faculty of
Economics and Business Administrationof Yokohama City University
Assistant Professor of Graduate School ofInternational Corporate Strategy (ICS) of
Hitotsubashi University
Associate Professor, Graduate School ofInternational Corporate Strategy (ICS),
Hitotsubashi University (current position)
Outside Director of the Company (current
position)(Major concurrent position)
Associate Professor at Graduate School of International
Corporate Strategy (ICS), Hitotsubashi University
Reasons for proposing Mr. Mikiharu Noma as a candidate for Outside Director and his
suitability as Outside Director:
Although he has not been involved in corporate management other than through serving as an
Outside Director, given his profound scholarly knowledge accumulated throughout his study
and teaching activities in the field of corporate strategy, the Company anticipates that he will beable to further strengthen management oversight and checking functions, and thus believes that
he will be able to perform the duties of an Outside Director appropriately.
(Notes) 1. Each of Mr. Yuzuru Matsuda, Ms. Satoko Kuwabara and Mr. Mikiharu Noma is a candidate for
Outside Director of the Company. Each of the candidates is currently Outside Director of theCompany. As of the close of this General Meeting of Shareholders, Mr. Yuzuru Matsuda will
have served as Outside Director for approximately three years, and Ms. Satoko Kuwabara andMr. Mikiharu Noma will have served for approximately one year.
2. Independence as Outside Director
The Company believes that Mr. Yuzuru Matsuda, Ms. Satoko Kuwabara and Mr. Mikiharu
Noma, who are candidates for Outside Director of the Company, all satisfy the Company’sStandards for the Independence of Outside Directors and Outside Audit & Supervisory Board
Members (please refer to “Standards for the Independence of Outside Directors and Outside
Audit & Supervisory Board Members” on page 16) and thus have no risk of conflicts of interest
with general shareholders and have a high degree of independence. The Company has filed anotification with the Tokyo Stock Exchange that each of the candidates would be Independent
Directors/Audit & Supervisory Board Members as defined in the rules of the Tokyo Stock
Exchange and would be the Independent Directors/Audit & Supervisory Board Members of theCompany after the election at this Ordinary General Meeting of Shareholders.
3. The Company does not intend to conclude a Liability Limitation Agreement under Article 427,
Paragraph 1, of the Companies Act with each of the candidates for Outside Director.
4. There are no special interests between each of the candidates for Director and the Company.

15

Standards for the Independence of Outside Directors and Outside Audit & Supervisory Board
Members (Reference)
The Company has prescribed the following “Standards for the Independence of Outside Directors
and Outside Audit & Supervisory Board Members” and has nominated Outside Directors andOutside Audit & Supervisory Board Members based on such standards.
Standards for the Independenceof Outside Directors and Outside Audit & Supervisory Board Members
In order for the Outside Directors and Outside Audit & Supervisory Board Members of the Company to be
judged as being independent, such Outside Directors and Outside Audit & Supervisory Board Members must
not fall under any of the following items.
1. Any person who purports to be a major business partner of the Company (including group companies of theCompany; the same applies hereinafter)
2. Any Executive Director, Executive Officer, Manager or other employee of a company that purports to be amajor business partner of the Company
3. Any person who is a major business partner of the Company
4. Any Executive Director, Executive Officer, Manager or other employee of a company that is a major
business partner of the Company
5. Any attorney-at-law, certified public accountant, certified public tax accountant, consultant or other expert
who receives monies or other economic benefits above a certain amount from the Company, in addition tohis or her remuneration as a Director or Audit & Supervisory Board Member
6. Any person belonging to a company, association or other organization such as a law firm, auditing firm, tax
accountant corporation and consultancy which receives monies or other economic benefits above a certain
amount from the Company
7. Any person receiving donations or subsidies from the Company above a certain amount
8. Any person who is a Board member or other Executive Officer in a company, association or otherorganization which receives donations or subsidies from the Company above a certain amount
9. If an Executive Director or full-time Audit & Supervisory Board Member for the Company concurrently
holds a position as an Outside Director or Outside Audit & Supervisory Board Member at another company,
any person who is an Executive Director, Executive Officer, Manager or other employee of that company
10. Any person who has come under one of the categories listed in items 1 through 9 above in the past 5 years
11. If a person coming under one of the categories listed in items 1 through 9 above is an important person, that
person’s spouse or relative within the second degree of kinship
12. The spouse or relative within the second degree of kinship of any person who is a Director, Executive
Officer, Manager or other important employee of the Company or its subsidiaries(Notes) 1 In items 1 and 2, where it reads “any person who purports to be a major business partner of theCompany,” this means “any person (or company) who has received a payment from the Company 2%
or more of its annual consolidated net sales for the most recent business year.”
2 In items 3 and 4, where it reads “any person who is a major business partner of the Company,” thismeans “any person (or company) who has paid to the Company an amount 2% or more of theCompany’s annual consolidated net sales for the most recent business year, or any person (orcompany) who has provided the Company with a loan of an amount 2% or greater of the value of theCompany’s consolidated total assets as of the end of the most recent business year.”
3 In items 5, 7 and 8, where it reads “a certain amount,” this means “¥10 million a year.”
4 In item 6, where it reads “a certain amount,” this means “2% or more of the total net sales for thatcompany, association or organization for the most recent business year, or ¥100 million; whichever isgreater.”16

Proposal No. 3: Change in Content of Performance-based Remuneration for Directors(Transition to a Performance-based Stock Compensation Plan)
The Company seeks approval for a transition of its performance-based remuneration for
Directors excluding Outside Directors of the Company (hereinafter “Eligible Directors”) from thecurrent stock compensation-type stock option plan with an upper limit of 160 million yen per year,
for which shareholders’ approval was received, to a plan that provides monetary compensation
claims for granting common stock of the Company and cash (hereinafter “performance-based stockcompensation plan”) with the same upper limit of 160 million yen per year.
Provided this proposal is approved and adopted, the Company will no longer grant stockcompensation-type stock options under the current stock compensation-type stock option plan.
(Reference)

For a visual overview of the Company’s Directors remuneration (excluding Outside
Directors) and points of change under this proposal, please see the figure below.

1. Introduction of performance-based stock compensation plan (change in content of
performance-based remuneration for the fiscal year ending March 31, 2018)
Remuneration for Eligible Directors of the Company comprises base remuneration as fixed
remuneration, performance-based bonuses as variable remuneration, and stock compensation-type
stock options.
At the Company’s Tenth Ordinary General Meeting of Shareholders held on June 22, 2015,
shareholders’ approval was received for granting stock compensation-type stock options with an
upper limit of 160 million yen per year to Eligible Directors (hereinafter referred to as “the Current
Plan”) by way of responding to the Mid-term Plan of the BANDAI NAMCO Group (from April

17

2015 to March 2018) (hereinafter referred to as “the Mid-term Plan”) (hereinafter, this resolution for
approval is referred to as “the Current Plan approval resolution”).
The Current Plan is designed to have Directors aspire toward achieving performance targets
listed in the Mid-term Plan. Under the Current Plan, the performance requirement (50,000 million
yen or greater of consolidated operating profit for the Company) has been imposed as a condition
for the options being allotted, and the stock compensation-type stock options will not be granted to
Directors in the first place if the requirement is not fulfilled. Whether stock options are granted, andwhat baseline is set, are determined for each fiscal year while the Mid-term Plan is in effect.
Recently, with regard to the stock compensation system for directors in Japan, various
improvements have been made to the system to enable shares to be directly delivered to directors byproviding monetary compensation claims to directors and, in turn, the monetary compensation
claims being paid in by the directors as property contributed in kind. Based on the system
improvements, the Company seeks to revise the remuneration system for Directors from aviewpoint of further deepening shared value with shareholders through Directors’ direct holding ofshares. Consequently, the Company would like to partially change the Current Plan approval
resolution as performance-based remuneration plan, and introduce a performance-based stockcompensation plan (hereinafter referred to as “the Plan”) in the fiscal year ending March 31, 2018,
which is the final fiscal year of the Mid-term Plan, in place of the Current Plan while adhering to
the approach of the Current Plan.
Specifically, the Company, in accordance with this proposal, requests shareholders’ approval forthe provision of monetary compensation claims (to be used as property contributed in kind inpayment for common stock of the Company) and cash as performance-based remuneration for the
fiscal year ending March 31, 2018 to Eligible Directors with an upper limit of 160 million yen peryear, which is equal to the upper limit for remuneration in the Current Plan approval resolution, in
place of the stock compensation-type stock options for the fiscal year ending March 31, 2018 basedon the Current Plan approval resolution.
Since the transition to the Plan enables Directors, etc. to directly hold shares during their termsof office, the Company believes that the Plan will deepen shared value with shareholders beyond
that in the Current Plan. Furthermore, in regard to the common stock of the Company to bedelivered under the Plan, as with the Current Plan, sale of the shares shall be restricted during theterms of office of Directors, etc., and Directors, etc. shall continue to hold the shares until theirretirement in order to continue to ensure shared value with shareholders during the terms of officeof Directors, etc. The number of shares of common stock of the Company to be delivered shall be
no more than 40,000 in each fiscal year. Furthermore, part of the remuneration shall be paid in cash
rather than as monetary compensation claims, so that it may be allocated to pay taxes arising at thetime when shares of common stock of the Company are delivered to the Directors.
Providing Proposal No. 2 is approved and adopted as proposed, the number of Eligible
Directors will be seven.
The content of the Plan is as follows:(1) Overview of the Plan
As with the Current Plan, under the Plan, common stock of the Company(*) and cash
(hereinafter referred to as “the Company’s Shares, Etc.”) shall be delivered or provided to Eligible
Directors according to the amount of consolidated operating profit only if consolidated operating
profit of the Company in the fiscal year ending March 31, 2018, which is the final fiscal year of
the Mid-term Plan, (hereinafter referred to as “the Evaluation Period”) is 50,000 million yen or
greater.
(*) Method of delivering the Company’s common stock under the Plan
The Company shall provide monetary compensation claims as remuneration to Eligible Directors, who shall pay inthe monetary compensation claims as property contributed in kind to receive delivery of the Company’s common
stock.

18

(2) Upper limit on remuneration amount under the Plan
The amount of monetary compensation claims (provided so that Eligible Directors can receive
delivery of the Company’s common stock as described in (1) above) and cash shall be determinedaccording to the amount of consolidated operating profit in the Evaluation Period (*) and with an
upper limit of 160 million yen per year.
(*) Monetary compensation claims and cash shall not be provided if consolidated operating profit does not reach
50,000 million yen. If consolidated operating profit is 50,000 million yen or greater, the amount to be provided
shall vary in a range of up to a maximum of 160 million yen, according to the increase in consolidated operating
profit.

(3) Upper limit on the total number of shares to be delivered to Eligible Directors
The total number of shares to be delivered shall be no greater than 40,000 (0.02% of the total
number of shares issued) during each fiscal year.
The amount to be paid in per share shall be determined by the Board of Directors within arange that would not be considered specially advantageous to Eligible Directors, for example,
based on the closing price of common stock of the Company on the Tokyo Stock Exchange on thebusiness day immediately preceding the date of the resolution at the Board of Directors meetingprescribed in (4) below.
(4) Requirements for delivering the Company’s Shares, Etc. to Eligible Directors
Under the Plan, the Company’s Shares, Etc. shall be delivered or provided when the
Evaluation Period ends and Eligible Directors fulfill the following requirements. The amount of
the Company’s Shares, Etc. to be delivered or provided to each Eligible Director shall be
determined at the Board of Directors meeting held after the expiration of the Evaluation Period.
(i)
The Eligible Director was in office as a Director, etc. during the Evaluation Period.
(ii) The Eligible Director did not engage in any specified misconduct.
(iii) Other requirements deemed necessary that have been set by the Board of Directors
2. Change from remuneration payment method under the current stock compensation-type
stock option plan (change in content of performance-based remuneration for the fiscal
year ended March 31, 2017)
Now, as described in 1. above, the Company seeks to introduce a performance-based stockcompensation plan as performance-based remuneration for the fiscal year ending March 31, 2018.
As this will enable the Company’s common stock to be directly delivered to Directors, in order tofurther promote shared value with shareholders, we request a partial change in the Current Planapproval resolution, so that, with regard to stock compensation-type stock options as
performance-based remuneration for the fiscal year ended March 31, 2017, for which the amount ofconsolidated operating profit that is the indicator for the performance requirements has already been
finalized, shares can also be directly delivered with content similar to the Plan, instead of adopting a
stock compensation-type stock option plan.
Specifically, in accordance with this proposal, instead of the stock compensation-type stock
options for the fiscal year ended March 31, 2017 based on the Current Plan approval resolution, werequest shareholders’ approval for providing monetary compensation claims (to be used as property
contributed in kind in payment for common stock of the Company) and cash to Eligible Directors as
performance-based remuneration for the fiscal year ended March 31, 2017, with the same upper
limit of 160 million yen per year as that under the Current Plan approval resolution.
The intention to deepen shared value with shareholders by having Directors, etc. directly holdshares during their terms of office, the restriction on selling shares during their terms of office inorder to continue to ensure shared value, the limit of 40,000 shares as the number of shares ofcommon stock of the Company that may be delivered per fiscal year, and the reason for payment ofpart of the remuneration in cash are the same as for 1. above. Moreover, other than taking the fiscal

19year ended March 31, 2017 as the Evaluation Period for 1. (1) above, the content is the same as theperformance-based stock compensation plan described in 1. above.
If Proposal No. 2 is approved and adopted as proposed, then the number of Eligible Directors toreceive the monetary compensation claims (to be used as property contributed in kind in payment
for common stock of the Company) and cash as performance-based remuneration for the fiscal year
ended March 31, 2017 will be seven.
3. Change in content of stock compensation-type stock options (stock subscription rights)
granted under the former Plan (change in content of performance-based remuneration
already granted)
At the Seventh Ordinary General Meeting of Shareholders held on June 18, 2012, the Company
introduced the remuneration system for Directors of the Company in which stockcompensation-type stock options are granted as performance-based remuneration for each fiscal
year during the period of the Mid-term Plan of the BANDAI NAMCO Group (from April 2012 toMarch 2015) (hereinafter referred to as “the previous Mid-term Plan”), on the condition thatbusiness performance targets in the previous Mid-term Plan are achieved (This remuneration plan
shall be hereinafter referred to as “the former Plan”). Because the targets have in fact been achieved
for the fiscal years ended March 31, 2013 and March 31, 2015 within the previous Mid-term Plan
period, at Board of Directors meetings held on May 21, 2013 and May 21, 2015 it was resolved toissue stock subscription rights, and the Company has granted stock compensation-type stock
options.
Now, as described in 1. above, the Company seeks to introduce a performance-based stockcompensation plan as a performance-based remuneration plan for the fiscal year ending March 31,
2018. As this will enable the Company’s common stock to be directly delivered to Directors, werequest a partial change to the exercise period and conditions on exercising rights with regard to
stock compensation-type stock options granted under the former Plan and that have not been
exercised, so as to ensure early exercise of the stock options and acquisition of shares and to further
promote shared value with shareholders. Moreover, even after the change, the Company’s common
stock acquired through exercise of the stock compensation-type stock options shall be restrictedfrom being sold during the terms of office of Directors, etc., and shall be held continuously until
their retirement (however, excluding the case where such sale is necessary to secure funding for
payment of taxes arising in relation to the exercise of the stock compensation-type stock options),
so that after the change, just as with the former Plan prior to the change, shared value withshareholders between Directors, etc. and shareholders during their terms of office shall be ensured.
(i)

Stock subscription rights as per resolution made at the Board of Directors meeting held on
May 21, 2013
Before the change• Period during which stock subscription rights can be exercised
From June 5, 2013 to June 4, 2033
• Conditions for exercising stock subscription rights
Those receiving an allotment of stock subscription rights may exercise stock subscription
rights during the above period, limited to 10 days after the day following that on which theholder ceases to have any status as Director, Audit & Supervisory Board Member or
employee at the Company or its subsidiaries.
After the change• Period during which stock subscription rights can be exercised
From June 5, 2013 to June 19, 2018
• Conditions for exercising stock subscription rights(Deleted)

20

(ii) Stock subscription rights as per resolution made at the Board of Directors meeting held on
May 21, 2015
Before the change• Period during which stock subscription rights can be exercised
From June 5, 2015 to June 4, 2035
• Conditions for exercising stock subscription rights
Those receiving an allotment of stock subscription rights may exercise stock subscription
rights during the above period, limited to 10 days after the day following that on which theholder ceases to have any status as Director, Audit & Supervisory Board Member or
employee at the Company or its subsidiaries.
After the change• Period during which stock subscription rights can be exercised
From June 5, 2015 to June 19, 2018
• Conditions for exercising stock subscription rights(Deleted)

21

(Attached Document)
BUSINESS REPORTS(From April 1, 2016 to March 31, 2017)
1. Current Status of the Group(1) Business Status for This Fiscal Year(i)

Business Progress and Results

During the fiscal year ended March 31, 2017, the Japanese economy continued to moderately
recover, supported mainly by a recovery in personal consumption and improved corporate
profitability. However, the outlook for the overall economy remained uncertain. Overseas,
personal consumption was steady, but impacted in some regions by uncertainty due to politicalinstability and other factors.
In this environment, the BANDAI NAMCO Group (“the Group”) is targeting medium- andlong-term growth under the Vision of “NEXT STAGE: Empower, Gain Momentum andAccelerate Evolution” in the three-year Mid-term Plan that started in April 2015. The Grouphas focused on creating and cultivating new IP (Intellectual Property: meaning characters andother intellectual property), expanding target markets, and growing new businesses as part ofefforts to strengthen the “IP Axis Strategy” that aims to maximize IP value through theprovision of the best products and services at the best possible times.
The Group also worked to expand its IP lineup, business fields and areas in overseas including
Asia, North America and Europe.
On the business front, the Company recorded year-on-year increases in the Network
Entertainment Business, which performed well, mainly in network content and overseas home
video games, and in the Visual and Music Production Business, which delivered a strong
performance mainly in its key IP products.
Consequently, the Group’s consolidated results for the fiscal year ended March 31, 2017 were
net sales of 620,061 million yen (year-on-year increase of 7.7%), operating profit of 63,238
million yen (year-on-year increase of 27.4%), recurring profit of 63,290 million yen(year-on-year increase of 24.7%), and profit attributable to owners of parent of 44,159 million
yen (year-on-year increase of 27.7%).

22

(ii) Outline of Business by Business Segment(Millions of yen)
Year Ended
March 31,2016

Net SalesYear Ended
March 31,2017

206,424

193,229

Decreaseof 13,195

16,63910,991

Decrease of
5,647

320,941

380,273

Increaseof 59,331

23,93044,298

Increase of
20,36751,96756,290

Increaseof 4,322

11,665

13,436

Increase of
1,771

Other

27,456

26,797

Decreaseof 6581,123702

Decrease of421

Eliminations
and Corporate(31,285)(36,529)

Decreaseof 5,244(3,717)(6,190)Decrease of
2,473

Consolidated

575,504

620,061

Increaseof 44,556

49,641

63,238

Increase of
13,597

Business
Segment
Toys and Hobby
Network
Entertainment
Visual andMusic
Production

Change23

Operating Profit
Year EndedYear Ended
March 31,
March 31,
2016
2017

ChangeToys and Hobby BusinessIn the Toys and Hobby Business, earnings declined from the previous fiscal year, in whichhighly profitable products grew in popularity in Japan and Asia; however, the Group’s key
long-established IP products sold favorably in each region. In Japan, there were favorable
sales for long-established IP products such as the Mobile Suit Gundam series, KAMEN RIDER
series, Super Sentai series and PRETTY CURE! series. In addition, the Group implemented
measures to strengthen the IP axis strategy by taking steps to expand its target markets for
adults and IP lineup and the like. Overseas, in the Asian region, products of the Mobile Suit
Gundam series and collectable toys for adults became popular. In North America and Europe,
products of the Power Rangers series gained in popularity, and the Group worked tostrengthen its IP lineup by commercializing locally developed IP and the like.
As a result, net sales in the Toys and Hobby Business were 193,229 million yen (year-on-year
decrease of 6.4%), and operating profit was 10,991 million yen (year-on-year decrease of
33.9%).
Description of Business
Manufacturing and marketing toys, confectionery and foods, vending machine capsule toys,
cards, plastic models, apparel, sundries, stationery, and other products

Network Entertainment BusinessFor home video games in the Network Entertainment Business, sales were favorable for the
new titles DARK SOULS III and DRAGON BALL XENOVERSE 2 in North America andEurope. In network content such as game applications for smartphones, key titles released
worldwide such as DRAGON BALL Z DOKKAN BATTLE and ONE PIECE Treasure Cruise
gained in popularity, while key titles in Japan such as The iDOLM@STER Cinderella Girls:
Starlight Stage retained popularity. In amusement facilities, the Group’s existing facilities inJapan performed favorably due to targeting resources on key facilities and other measures, and
the Group also took measures to strengthen stores in new business formats. In the arcade gamemachines, various measures to strengthen its foundations and thereby improve profitability
have generated effects. In addition, in home video games and arcade game machines, theGroup worked proactively to develop products and services incorporating new technologies
such as virtual reality (VR).
As a result, net sales in the Network Entertainment Business were 380,273 million yen(year-on-year increase of 18.5%), and operating profit was 44,298 million yen (year-on-yearincrease of 85.1%).
Description of Business
Developing, marketing, and distributing network content; developing and marketing home
video games, arcade game machines, and prizes for amusement machines; planning andoperating amusement and other facilities

24

Visual and Music Production BusinessIn the Visual and Music Production Business, the LoveLive! series, which is IP for which
visual content was developed in conjunction with music content and live events, retained
popularity. In addition, the GIRLS und PANZER series gained popularity especially for
products themed around a movie release, and sales of visual and music package software, as
well as related products, were favorable. Moreover, in the Mobile Suit Gundam series,
products such as visual package software of the MOBILE SUIT GUNDAM THE ORIGIN
series sold favorably.
As a result, net sales in the Visual and Music Production Business were 56,290 million yen(year-on-year increase of 8.3%), and operating profit was 13,436 million yen (year-on-yearincrease of 15.2%).
Description of Business
Planning, manufacturing and production of animations; planning, manufacturing and sales ofvisual and music software; distributing video on demand content; conducting live
entertainment operations

Other Businesses
Other Businesses consist of companies that conduct businesses such as logistics support,
printing, and other kinds of administration and operational support for each of the Group’s
strategic business units: Toys and Hobby SBU, Network Entertainment SBU, and Visual andMusic Production SBU. We are making efforts to manage such operations related to groupsupport in an efficient manner.
As a result, net sales in the Other Businesses were 26,797 million yen (year-on-year decreaseof 2.4%), and operating profit was 702 million yen (year-on-year decrease of 37.5%).
Description of BusinessTransportation and storage of products, management of real estate, printing, etc.

(iii) Capital Expenditures
In this fiscal year, the Group carried out 19,576 million yen in capital expenditures; thefunds were primarily used for investments in the manufacturing of molds associated with thedevelopment of new products and in amusement facilities and machines.
(iv) Financing
Not applicable.
(v)

Transfers of Business, Absorption-Type Company Splits, or Incorporation-Type
Company Splits

Not applicable.
(vi) Acquisitions of Other Companies’ Businesses
Not applicable.

25

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

The Company acquired a total of 87.4% of the issued shares of WiZ Co., Ltd. by way of
two tender offers, making WiZ Co., Ltd. a consolidated subsidiary on May 31, 2016.
Through a subsequent consolidation of shares, WiZ Co., Ltd. became a wholly owned
subsidiary on November 15, 2016.

•

The Company acquired an additional 63.9% of the issued shares of Anime Consortium
Japan Inc., which was an affiliated company to which the equity method was applied,making Anime Consortium Japan Inc. a wholly owned subsidiary on March 31, 2017.

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

9th Fiscal Year
(Year Ended
March 31, 2014)

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

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

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

Net sales(Millions of yen)

507,679

565,486

575,504

620,061

Operating profit(Millions of yen)

44,67256,32049,641

63,238Recurring profit(Millions of yen)

47,45659,38350,77463,290

Profit attributable toowners of parent(Millions of yen)

25,05437,58834,58344,159Basic earnings per
share¥114.05¥171.10¥157.43¥201.03

Total assets(Millions of yen)

405,092

441,763448,336

488,032

Net assets(Millions of yen)

267,951

303,512317,304

348,784

Net assets per share¥1,217.74¥1,378.77¥1,441.49¥1,584.71

Classification

26(This Fiscal Year)(3) Important Parent Company and Subsidiaries(i)

Status of the Parent Company
Not applicable.

(ii) Important Subsidiaries
Name of Company

Ownership
Ratio

CapitalDescription of Principal Business
Manufacturing and marketing of toys
and apparel, etc.
Distribution of network content, andplanning, development and sales ofhome video games and arcade gamemachines, etc.

BANDAI CO., LTD.

¥10,000 million

100.0%BANDAI NAMCOEntertainment Inc.

¥10,000 million

100.0%BANDAI VISUAL
CO., LTD.

¥2,182 million

100.0%

Planning, production and sales of visualcontent and package software

BANDAI NAMCO
Holdings USA Inc.

US$ 10100.0%

Pure holding company as state andregional headquarters in the Americas€ 21,690,000

100.0%£ 50,500,000

100.0%

HK$ 103,000,000

100.0%BANDAI S.A.S.
BANDAI NAMCO
Holdings UK LTD.
BANDAI NAMCO
Holdings ASIA CO.,LTD.

Regional holding company in Europe
Import and sales of toys, etc.
Pure holding company as regional
headquarters in Europe
Pure holding company as regional
headquarters in Asia

(Notes) 1. BANDAI S.A. changed its corporate form from a joint stock company (S.A.) to asimplified joint stock company (S.A.S.) on July 22, 2016.
Currently, BANDAI S.A.S., has two functions – a Toys and Hobby Business company
and a holding company, and operates as a business holding company responsible for theCompany’s operations in Continental Europe. The Company plans to reorganize
BANDAI S.A.S. in the fiscal year ending March 31, 2018, in order to promote greater
cooperation within the Group and expand operations, by clearly separating its businesscompany and holding company functions and strengthening its governance function inContinental Europe.
2. There are no special wholly owned subsidiaries at the end of this fiscal year.
(4) Issues to be Addressed
The Group and this industry must address many important, long-term issues, including (i) thediversification of customer needs, (ii) reacting to changes in the market and the environment, and(iii) increasingly intense competition on a global scale. The Group is applying the focus
strategies defined in its Mid-term Plan to address these issues swiftly.
(i)Common Issues Faced by All Strategic Business Units (“SBUs”)

Efforts Toward Maximizing the Value of IP
The Group is strengthening its IP creation and development, acquisition, and utilization
functions in order to respond to changes in the environment such as development ofoligopolies in the distribution and media fields, the widespread penetration of networks, andtechnological improvements. Specifically, the Group will seek to maximize the value of its IP

27

through promotion of collaboration among its businesses and cross-functional projects in theGroup while creating IP by its products and services and operating the IP posting system, etc.
by Group employees. Furthermore, to create and develop the Group companies’ IP andstrengthen ties with IPs owned by other companies, we will undertake strategic investments
related to IP. The “IP Strategy Division” established in the Company in April 2016 will be themain driver of efforts to strengthen the IP Axis Strategy over the medium and long term, witha focus on strategic efforts across the Group.

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 boundlessenthusiasm. To ensure that we can continue to provide “Dreams, Fun and Inspiration,” wehave formulated the CSR initiatives, which crosscut the entire Group and include three typesof responsibilities: environmental and social contribution responsibilities, economic
responsibilities, and legal and ethical responsibilities (compliance). In accordance with thesefundamental principles, the “Group CSR Committee” and its sub-committee, the “Group CSR
Subcommittee,” as well as the “Group Risk Compliance Committee,” the “Group Information
Security Committee,” and the “Internal Control Committee” hold meetings and have been
striving to implement a range of measures.
(ii) 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 fallingbirthrate” and “increasingly diverse customer needs.” This unit is addressing these issues byaiming for the position as the overwhelming No. 1 in Japan, working at expanding its target
population segment and creating new businesses. In addition, it is expanding its IP lineup andregions in which it is operating, with the aim of expanding its operations across Asia, which ispredicted to continue to grow. In the North American and European markets, it is aiming for
medium-term growth through establishing foundations and strengthening key IP expansion forimproving profitability. In addition, on the development and production side, improvements inthe value chain will enable more speedy and price-competitive product development.
Network Entertainment SBU
This unit’s industry is facing issues that include “increasingly diverse platforms,”“technological improvements of networks, etc.” and “increasingly diverse customer needs.” To
address these issues, it will endeavor to create new entertainment correspond to technologicalimprovements of networks, etc., over and above the boundaries of existing operations andproducts/services. For network content such as game applications for smartphones, it will
respond to new platforms and expand overseas operations. For home video games, the Groupwill develop titles that respond to technological improvements and satisfy customer needs invarious regions. For its amusement facility operations, it will endeavor to improve its
development of facilities to differentiate the Group and plan new facilities that, among otherthings, provide forms of entertainment by integrating the real and digital worlds. On thedevelopment front, the unit will put in place and improve the development environment, suchas by implementing measures to respond swiftly to technological progress and changes in theenvironment, in order to promote these measures in all business fields.

28

Visual and Music Production SBUThis unit’s industry is facing issues, such as “increasingly diverse customer needs” and“intensification of competition in IP creation.” To address these issues, it will focus on
production-related businesses such as live events and fan clubs, in addition to sales of visualand music packaged products. In addition, in the area of IP creation, it will continue to pursue
improved quality in its creations and stronger collaboration with products/services within theGroup, by dividing its organizations dealing with the planning/development and creation ofanimation products and so on into those aimed towards products for adult customers and those
aimed towards ones for children and families. The Group will also be proactive in forming
tie-ups with partner companies and will strengthen the creation and development of IP.
We ask for our shareholders’ further assistance and guidance.
(5) Principal Business Offices of the Group (As of March 31, 2017)(i)

The Company
Head Office

5-37-8 Shiba, Minato-ku, Tokyo(ii) Principal Subsidiaries
BANDAI CO., LTD.
BANDAI NAMCO Entertainment Inc.
BANDAI VISUAL CO., LTD.
BANDAI NAMCO Holdings USA Inc.
BANDAI S.A.S.
BANDAI NAMCO Holdings UK LTD.
BANDAI NAMCO Holdings ASIA CO., LTD.

Taito-ku, Tokyo
Minato-ku, Tokyo
Shibuya-ku, Tokyo
California, U.S.A.
Puteaux, France
London, U.K.
Hong Kong, China(6) Outline of Employees (As of March 31, 2017)(i)

Employees of the Group
Business Segment

Number of Employees

Change from the End ofPrevious Fiscal Year
Increase of 65(Increase of 477)

Toys and Hobby Business
2,409(2,335)
Network Entertainment
3,948(5,207)
Increase of 36(Increase of 643)
Business
Visual and Music Production
416(13)
Increase of 25(Increase of 1)
Business
Other Businesses
751
(663)
Increase of 43(Increase of 30)
Corporate (Common)
37(–)
Increase of 1
(–)
Total
7,561
(8,218)
Increase of 170 (Increase of 1,151)(Notes) 1. The number of employees refers to the employees actually at work.
2. The average numbers of temporary personnel employed for this fiscal year arepresented separately in parentheses.
3. The number of employees listed for “Corporate (Common)” is the number of
employees in the administration sector, etc. of the Company, BANDAI NAMCO
Holdings USA Inc., BANDAI NAMCO Holdings UK LTD., and BANDAI NAMCO
Holdings ASIA CO., LTD.

29

(ii) Employees of the Company
Change from the End
Average Years ofof Previous Fiscal
Average Age
ServiceYear
24 (–)
Decrease of 1 (–)
46.2
18.25
(Notes) 1. The number of employees refers to the employees actually at work.
2. The average number of temporary personnel employed for this fiscal year is presented
separately in parentheses.
3. In calculating the average years of service, with respect to the employees who havetransferred from other Group companies to the Company, the aggregate number of each
employee’s years of service at each company is used for calculation.
Number of
Employees(7) Principal Lenders (As of March 31, 2017)
Lenders
Mizuho Bank, Ltd.
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Sumitomo Mitsui Banking Corporation(8) Other Important Matters of the GroupNot applicable.

30

Amount¥405 million¥188 million¥100 million

2. Current Status of the Company(1) Status of Shares (As of March 31, 2017)(i)

Total Number of Shares Issuable:

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

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

34,359 (decrease of 7,543 from the end of theprevious fiscal year)(iv) Major Shareholders (Top 10 Shareholders)Name of Shareholders

Number of
Shares Held

Shareholding Ratio(%)

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

12,092,200

5.50

10,467,000

4.76

Kyoko Nakamura

6,403,200

2.91

XIL, LTD.
6,000,000
2.73
The Nomura Trust and Banking Co., Ltd.
(Retirement and severance benefits trust. The
4,586,100
2.09Bank of Tokyo-Mitsubishi UFJ account)
MAL Ltd.
4,400,100
2.00
Japan Trustee Services Bank, Ltd. (Trust account4,052,300
1.84
5)Nintendo Co., Ltd.
3,845,700
1.75
Northern Trust Co. (AVFC) Re U.S. Tax
3,740,757
1.70
Exempted Pension Funds
Japan Trustee Services Bank, Ltd. (Trust account3,479,500
1.58
9)(Notes) 1. The shareholding ratio is calculated after reduction of the number of treasury
stocks (2,206,158 shares).
2. Out of the above number of shares held, the numbers of shares relating to thetrust business are as follows:
The Master Trust Bank of Japan, Ltd. (Trust account)
9,993,900 shares
Japan Trustee Services Bank, Ltd. (Trust account)
10,142,800 shares
The Nomura Trust and Banking Co., Ltd.
(Retirement and severance benefits trust. The
4,586,100 shares
Bank of Tokyo-Mitsubishi UFJ account)
Japan Trustee Services Bank, Ltd. (Trust account 5)
4,052,300 shares
Japan Trustee Services Bank, Ltd. (Trust account 9)3,479,500 shares
3. The 4,586,100 shares owned by The Nomura Trust and Banking Co., Ltd.
(Retirement and severance benefits trust. The Bank of Tokyo-Mitsubishi UFJ
account) were the shares of BANDAI CO., LTD. that were owned by UFJ
Bank (currently The Bank of Tokyo-Mitsubishi UFJ, Ltd.), entrusted for
retirement and severance benefits. Those shares were exchanged with theCompany’s shares through the share transfer on September 29, 2005, and The
Bank of Tokyo-Mitsubishi UFJ, Ltd. directs the exercise of the voting rights
pertaining to those shares.

31

(2) Stock Subscription Rights, etc.
(i)

Stock Subscription Rights Held by Company Directors and Audit & Supervisory Board
Members of the Company That Were Delivered as Consideration for the Execution of
Their Duties at the End of This Fiscal Year

Stock Subscription Rights as per Resolution Made at the Board of Directors Meeting
Held on May 21, 2013
a. Number of Stock Subscription Rights
211
b. Type and Number of Shares Underlying Stock Subscription Rights
Common stock: 21,100 shares (100 shares per stock subscription right)
c. Amount Paid for the Issuance of Stock Subscription Rights
No requirement to make payment
d. Value of the Property to Be Contributed at the Time of Exercising Stock
Subscription Rights
100 yen per stock subscription right (1 yen per share)e. Period During Which Stock Subscription Rights Can Be Exercised
From June 5, 2013 to June 4, 2033
f. Conditions for Exercising Stock Subscription Rights
i) The stock subscription rights holders may exercise stock subscription rights
during the “Period During Which Stock Subscription Rights Can Be
Exercised,” limited to 10 days after the day following that on which theposition of the holder as either Director, Audit & Supervisory Board Member
or employee at the Company or a subsidiary of the Company was lost.
ii) If a stock subscription rights holder dies, his or her heir (limited to one
individual) shall exercise those rights.
iii) Any assignment of stock subscription rights requires the approval of theBoard of Directors of the Company.
g. Stock Subscription Rights Held by Company Directors and Audit & Supervisory
Board Members of the Company
Number of Shares
Number of Stock
HolderUnderlying Stock
Number of Holders
Subscription Rights
Subscription Rights
Directors(excluding Outside
182
18,2004
Directors)
Outside Directors–––
Audit & Supervisory–––
Board Members
Stock Subscription Rights as per Resolution Made at the Board of Directors Meeting
Held on May 21, 2015
a. Number of Stock Subscription Rights
150
b. Type and Number of Shares Underlying Stock Subscription Rights
Common stock: 15,000 shares (100 shares per stock subscription right)
c. Amount Paid for the Issuance of Stock Subscription Rights
No requirement to make payment
d. Value of the Property to Be Contributed at the Time of Exercising Stock
Subscription Rights
100 yen per stock subscription right (1 yen per share)32

e. Period During Which Stock Subscription Rights Can Be Exercised
From June 5, 2015 to June 4, 2035
f. Conditions for Exercising Stock Subscription Rights
i) The stock subscription rights holders may exercise stock subscription rights
during the “Period During Which Stock Subscription Rights Can Be
Exercised,” limited to 10 days after the day following that on which theposition of the holder as either Director, Audit & Supervisory Board Member
or employee at the Company or a subsidiary of the Company was lost.
ii) If a stock subscription rights holder dies, his or her heir (limited to one
individual) shall exercise those rights.
iii) Any assignment of stock subscription rights requires the approval of theBoard of Directors of the Company.
g. Stock Subscription Rights Held by Company Directors and Audit & Supervisory
Board Members of the Company
Number of Shares
Number of Stock
HolderUnderlying Stock
Number of Holders
Subscription Rights
Subscription Rights
Directors(excluding Outside
129
12,9004
Directors)
Outside Directors–––
Audit & Supervisory–––
Board Members(ii) Stock Subscription Rights Delivered to Directors of the Subsidiaries of the Company, as
Considerations for the Execution of Their Duties in This Fiscal Year
Not applicable.

33

(Reference)
Stock Subscription Rights Delivered to Directors of the Subsidiaries of the Company Prior
to This Fiscal Year

Date of resolution by the
Board of Directors
Persons receiving rights;
number of persons
Type of stock; number ofstock subscription rights (*)
Date of delivery of stock
subscription rights
Amount paid

Seventh Issuance of Stock
Subscription Rights
May 21, 2013

Eighth Issuance of Stock
Subscription Rights
May 21, 2015

6 Directors of subsidiaries of
the Company
Common stock; 15,000
shares (100 shares per stock
subscription right)
June 5, 2013

7 Directors of subsidiaries of
the Company
Common stock; 12,100
shares (100 shares per stock
subscription right)
June 5, 2015

No requirement to makepayment
100 yen per stock
subscription right (1 yen per
share)

No requirement to makepayment
100 yen per stock
subscription right (1 yen per
share)

Value of the property to becontributed upon exercisingstock subscription rights
Period during which stock
From June 5, 2013 to June 4, From June 5, 2015 to June 4,
subscription rights can be
2033
2035
exercised(*) In the above, the number of stock subscription rights is stated by converting the number
into the number of shares underlying the stock subscription rights.

34

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

Directors and Audit & Supervisory Board Members (As of March 31, 2017)
Title

Responsibilities in the Company and
Major Concurrent Positions

Name

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

Director

Yuji Asako

Director

Masaru Kawaguchi

Director

Satoshi Oshita

Director

Kazumi Kawashiro

Director

Yuzuru Matsuda

Director

Satoko Kuwabara

Director

Mikiharu Noma

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

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

Certified Public Accountant

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

35

2. Full Time Audit & Supervisory Board Member Katsuhiko Kohtari and Audit &Supervisory Board Members Osamu Sudoh and Katsuhiko Kamijo are Outside Audit &Supervisory Board Members.
3. Full Time Audit & Supervisory Board Member Katsuhiko Kohtari is a certified public
accountant and has considerable knowledge of finance and accounting.
4. Audit & Supervisory Board Member Osamu Sudoh has considerable experience withbankruptcy issues as an attorney-at-law and has the deep knowledge of finance andaccounting necessary to engage in such bankruptcy issues.
5. Audit & Supervisory Board Member Katsuhiko Kamijo is a certified tax accountant andhas considerable knowledge of finance and accounting.
6. The Company has appointed Outside Directors Yuzuru Matsuda, Satoko Kuwabara and
Mikiharu Noma and Outside Audit & Supervisory Board Members Katsuhiko Kohtari,
Osamu Sudoh, and Katsuhiko Kamijo as Independent Directors/Audit & Supervisory
Board Members as defined in the rules of the Tokyo Stock Exchange and has filed
therewith the notification regarding their appointments.
(ii) Summary of Contracts Concerning Limited Liability
Not applicable.
(iii) Directors and Audit & Supervisory Board Members Who Retired or Were Dismissed
during This Fiscal Year
Not applicable.
(iv) Remuneration, etc. Paid to Directors and Audit & Supervisory Board Membersa.

Total Amount of Remuneration, etc., Paid During This Fiscal Year
Number of People
11

Amount of Remuneration, etc.
¥779 million

Directors
Audit & Supervisory Board
4¥67 million
Members
Total
15¥847 million(Outside Directors and Outside
Audit & Supervisory Board(7)(¥80 million)
Members)(Notes) 1. There are no employees serving as Directors.
2. At the Tenth Ordinary General Meeting of Shareholders held on June 22, 2015, it was
resolved that the remuneration limit for Directors is 850 million yen per fiscal year (ofwhich 60 million yen is the limit for Outside Directors), and that of the 850-million-yen
remuneration limit, 400 million yen is for the limit for base remuneration and theremaining 450 million yen is the limit for cash bonus. It was also resolved that, in
addition to that remuneration limit, there is a separate upper limit on their stock option
remuneration, which is 160 million yen per year.
3. At the Ordinary General Meetings of Shareholders for BANDAI CO., LTD. and
NAMCO LIMITED (currently BANDAI NAMCO Entertainment Inc.) held on June 23,2005 and on June 25, 2005 respectively, it was resolved that the remuneration limit for
Audit & Supervisory Board Members must be 8 million yen per month.

36

b.
•

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

•

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

•

Structure for performance-based remuneration
Performance-based bonuses shall be paid in principle according to the consolidated
operating profit of the Group for each fiscal year, in an amount determined within a limitof 1.5% of the profit attributable to owners of parent for the period, within a range of 0%
to 200% of the predetermined standard amount.
The stock compensation-type stock options shall only be granted when the
consolidated operating profit of the Group rises above a prescribed level, and whether
the options are granted and what baseline is set shall be determined for each fiscal year
during the period of the Mid-term Plan.

•

Procedures for decisions on remuneration
The policy for remuneration, the remuneration framework, and the structure for
performance-based remuneration for Directors, excluding Outside Directors, shall bedecided at Board of Directors Meetings after receiving opinions from the Personnel
Committee of which a majority of the members are Outside Directors (independent
Outside Directors), in order to elicit Outside Directors’ adequate participation andappropriate advice.

37

In the course of deliberations by the Committee, sufficient information is provided to
the Outside Directors so that they are able to perform their analysis, including for
instance by asking for advice from external specialist organizations where necessary.
•

Policy and procedures for remuneration of Outside Directors and Audit &Supervisory Board Members
Remuneration for Outside Directors comprises base remuneration only, to ensure
their independence from the Company, and the amount of remuneration for each Outside
Director is determined by the Board of Directors Meetings.
Remuneration for Audit & Supervisory Board Members comprises base remuneration
only, with the amount set in accordance with their job positions, considering that they
bear the duty to audit the execution of all businesses across the Group. The amount of
remuneration for each Audit & Supervisory Board Member is determined by the Audit &Supervisory Board Meetings.
Moreover, if Proposal No. 3 “Change in Content of Performance-based Remuneration
for Directors (Transition to a Performance-based Stock Compensation Plan)” isapproved and adopted as proposed at this Ordinary General Meeting of Shareholders, theabovementioned “stock compensation-type stock options” are to be changed to a“performance-based stock compensation.”

38

(v)

Matters Concerning Outside Directors and Outside Audit & Supervisory Board Members

a. Status of Major Concurrent Positions of Other Companies, etc. and Relationships Between
Those Companies, etc. and the Company
Major concurrent positions of Outside Directors and Outside Audit & Supervisory Board
Members are as stated in “(i) Directors and Audit & Supervisory Board Members” on page
35.
Moreover, there are no special relationships between the Company and the entities withwhich Outside Directors and Outside Audit & Supervisory Board Members haveconcurrent positions.
b. Main Activities in This Fiscal Year
(Directors)
Board of Directors Meetings(Held 18 times)
Number of
Meetings
Attendance Rate
Attended

YuzuruMatsudaSatokoKuwabara

Mikiharu
Noma

18

14

14

Statements Made at Board of Directors Meetings

100.0%

Provided advice and proposals by giving opinions,etc. reflecting his broad view on overallmanagement based on his wealth of experience andposition as a corporate officer to ensure theappropriateness and validity of decisions of theBoard of Directors.

100.0%

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

100.0%

Provided advice and proposals by giving opinions,etc. from his profound scholarly knowledge
accumulated throughout his study and teachingactivities in the field of corporate strategy to ensure
the appropriateness and validity of decisions of theBoard of Directors.

(Note) Ms. Satoko Kuwabara and Mr. Mikiharu Noma were elected at the Eleventh Ordinary
General Meeting of Shareholders held on June 20, 2016, and thus, the number ofBoard of Directors Meetings on which their attendance rate is based differs from thatof other Outside Directors. There have been 14 Board of Directors Meetings since they
assumed the office of Directors.

39

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

KatsuhikoKohtari

Osamu
Sudoh

KatsuhikoKamijo18

1718

100.0%

94.4%

100.0%

Audit & Supervisory
Board Meetings(Held 14 times)
Statements Made at Board of Directors
Meetings and Audit & Supervisory
NumberBoard MeetingsofAttendance
Meetings
Rate
Attended
Provided advice and proposals bygiving opinions, etc. primarily fromhis position as a certified public
accountant to ensure the14
100.0%
appropriateness and validity ofdecisions of the Board of Directors andthe Audit & Supervisory Board.

1414100.0%

Provided advice and proposals bygiving opinions, etc. primarily fromhis position as an attorney-at-law toensure the appropriateness and validityof decisions of the Board of Directors
and the Audit & Supervisory Board.

100.0%

Provided advice and proposals bygiving opinions, etc. based on his
wealth of experience dealing with tax
affairs and from his profound scholarly
knowledge via his teaching activities
in tax affairs to ensure theappropriateness and validity ofdecisions of the Board of Directors andthe Audit & Supervisory Board.

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

40(4) Accounting Auditors(i)Name: KPMG AZSA LLC(ii) Amount of Remuneration, etc.
Amount of Remuneration, etc.
Amount of Remuneration, etc. for Accounting Auditors¥82 million
for This Fiscal Year
Total in Money and Other Financial Benefits to Be Paidby the Company and Its Subsidiaries to Accounting¥243 million
Auditors(Notes) 1. BANDAI NAMCO Holdings USA Inc., BANDAI S.A.S., BANDAI NAMCO Holdings
UK LTD., and BANDAI NAMCO Holdings ASIA CO., LTD., among major
subsidiaries of the Company, are audited (within the meaning of being audited as
required by the Companies Act and Financial Instruments and Exchange Act or theequivalent laws and regulations in other countries) by audit firms (including entities
overseas with qualifications equivalent to those of a Japanese audit firm) other than the
Company’s Accounting Auditor.
2. Under the audit agreement between the Company and its Accounting Auditor, there isno clear distinction between the amount of remuneration, etc., for audits under theCompanies Act and that under the Financial Instruments and Exchange Act;furthermore, it is practically impossible to make such distinction. Therefore, the amountof remuneration, etc., for Accounting Auditors for this fiscal year described above is thetotal amount of remuneration, etc., for these audits.
3. The Audit & Supervisory Board of the Company has analyzed and evaluated the audit
report for the previous fiscal year, and reviewed the sufficiency of the audit plan for thisfiscal year as well as the appropriateness of the time for audit planning, the staffing plan,and the hourly rate. As a result, the Audit & Supervisory Board concluded that the
Accounting Auditor remuneration is appropriate and gave its consent to the
remuneration in accordance with Article 399, Paragraph 1 of the Companies Act.
(iii) Non-Auditing Operations
The Company paid remuneration to the Accounting Auditor for providing “internal training,”
which is outside the scope of operations provided for in Article 2, Paragraph 1 of the Certified
Public Accountants Act.
(iv) Policy on Removal or Non-Renewal of an Accounting Auditor
If the Audit & Supervisory Board judges that action is necessary, such as in cases where the
Accounting Auditor’s execution of its duties is impeded, the Audit & Supervisory Board will
determine the contents of a proposal to be submitted to the General Meeting of Shareholders
regarding the removal or non-renewal of the Accounting Auditor.
In addition, if the items stipulated in the matters set forth in Article 340, Paragraph 1 of theCompanies Act are deemed applicable to the Accounting Auditor, the Accounting Auditor will
be removed based on the agreement of all Audit & Supervisory Board members. If this occurs,an Audit & Supervisory Board Member selected by the Audit & Supervisory Board will report
the fact of the Accounting Auditor’s removal and the reason for the removal at the first
General Meeting of Shareholders held after the removal.

41

(v)

Summary of Contracts Concerning Limited Liability

Not applicable.

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

(ii) Systems for Preserving and Managing Information Related to Directors’ Execution of
Their Duties
a. The Company shall establish regulations concerning document management and ensure(i) the centralized collection and management of minutes of several kinds of meetings,
contracts and other documents, and (ii) appropriate safekeeping and management ofimportant documents including documents circulated for approval in each department.
The Company shall have a system to ensure that Directors and Audit & Supervisory
Board Members may peruse those documents at any time.

43

b. The Company shall establish regulations concerning information security as a part ofGroup management. These regulations will provide for a system to ensure appropriate
safekeeping and preservation of information.

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

(iv) Systems to Ensure that Directors, etc. of the Company and its Subsidiaries Execute theirDuties Efficiently
a. The Company shall assign each subsidiary into strategic business units (SBUs)
categorized by business segment, and appoint a Director and lead company in charge ofeach SBU in order to improve efficiency of business operations based on the division ofduties, chain of command structure, authorities and competencies, decision making
frameworks and other regulations regarding structure within the Group.
b. The Company shall formulate a Mid-term Plan with a period of three business years forthe entire Group and each SBU, and determine the budget for each business year based on
those Mid-term Plans.

(v)

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

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

(vi) Other Systems to Ensure Proper Business Behavior by the Company and its Subsidiaries
a. The Company shall revise the Group Compliance Charter as appropriate in response torevisions to laws and regulations and changes in the social context surrounding the Group,and shall ensure that the contents of the Charter are made thoroughly known to Directors,
etc. and employees of the Company and its subsidiaries through distributing theCompliance Book and through training.

44

b. The Company and its subsidiaries shall endeavor to improve and standardize businessprocesses considering the importance of effectiveness and efficiency in business
operations, and shall evaluate and operate internal controls on financial reporting basedon related laws and regulations, etc.

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

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

45

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

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

46

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

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

2.

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

3.

Subsidiary Business Management
The Company assigns each subsidiary into strategic business units (SBUs) categorized
by business segment, and appoints a Director and lead company in charge of each SBU
in order to improve efficiency of business operations based on the division of duties,
chain of command structure, authorities and competencies, decision making frameworks
and other regulations regarding structure within the Group. The SBU Quarterly Report
Meeting (held four times this fiscal year) and the Group Management Meeting (held 11
times this fiscal year) are convened regularly to allow information sharing across the47Group and facilitate decision-making. The Company has also established and controls abusiness management system at subsidiaries, with a central role played by theCompany’s Business Planning Division, and monitors progress every month through areview of the Mid-term Plans and business performance across the Group and at each
SBU. In addition, the Company’s Internal Auditing Division efficiently monitors theGroup’s internal controls through regular internal audits of the subsidiaries.
4.

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

5.

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

48

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

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

Promoting the Mid-term Plan
Under the previous Mid-term Plan implemented from April 2012 to March 2015, theGroup pursued various strategies around the “IP Axis Strategy.” On the business front,
specific measures aimed at the regional characteristics of each market were pursued. Japan,
where the Group has secured a certain level of market share, was set as the “BasicBusiness Area,” and we aimed to further expand our existing share and revenue utilizing
the strengths of each business operation. North America and Europe, set as the “Profit

49

Recovering Area,” had revenue recovery as its first priority, and also aimed towards
stabilizing revenue. In Asia, set as the “New Growth Area,” we focused on strengthening
expansion of each business operation, and aimed to grow around the pillars of new
business operations and regions. Under the three-year Mid-term Plan that started in April
2015 we will further strengthen the “IP Axis Strategy” to expand the value of our IPs
based on the Mid-term Vision of “NEXT STAGE: Empower, Gain Momentum andAccelerate Evolution” taking light of the effects and issues arising in the previous
Mid-term Plan, through taking advantage of the worldview and unique characteristics of
IPs and providing the best products and services at the best possible times. In addition,
aiming towards growing in the global market, we will work to expand IP initiatives,
business fields and areas in the Asian region and in Europe and North America. Throughimplementing these measures based on the Mid-term Plan, the Company is developing
solid business foundations in order to generate stable earnings in this industry that ischaracterized by rapid changes in operating climate and user preferences. The objective is
to move to the next stage as an entertainment corporate group.
Strengthening Corporate Governance
The president and representative director of each core company responsible for each
SBU also serves on the Company’s Board of Directors. This mainly contributes tostrengthening the collaborative efforts between the holding company and the operatingcompanies and between the operating companies and to facilitating speedierdecision-making as a group. In addition, the Company is working to strengthen
management oversight functions by having two or more independent Outside Directors. In
addition, the Company has organized an Independent Directors and Audit & Supervisory
Board Members Committee with the aim of evaluating the appropriate functioning of theBoard of Directors from an objective perspective. The Independent Directors and Audit &Supervisory Board Members Committee comprises three independent Outside Directors
and three independent Outside Audit & Supervisory Board Members only, and its
secretariat functions are entrusted to a third-party specialist organization. In this way, theCompany retains a more highly effective supervisory function over the Board of Directors.

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

Reinforcing Personnel Strategies
Aiming for business growth in overseas markets, the Group is strengthening its global
systems for acquiring and training personnel. In addition, the Group is driving forward a
proactive system for personnel exchanges within the Group to invigorate its humanresources.

50

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



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

Proactive Policy for the Return of Profits to Shareholders
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 theGroup’s competitiveness and, while maintaining a sound financial 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 on stable annual dividend payments of 24 yen per
share.
In addition, its fundamental policy is that part of any profit, after deduction of dividends,
may be used to acquire treasury stock, upon comprehensive consideration of the amount offunds on hand, performance trends, recent share price trends, the existence or nonexistenceof major investment proposals, and other factors.

Takeover Defenses
At present, the Company has taken no specific measures as takeover defenses. The Group
regards implementing our management and business strategies in accordance with themeasures to increase the corporate value of the Group and aiming to increase the corporate
value of the Group as a whole as a substantial defense against inappropriate takeovers.
That said, since the Group is entrusted by shareholders as the management of the Group, we
will study and develop a system of takeover defenses in anticipation of situations in which an
inappropriate entity or person might emerge to have decision-making power over theCompany’s financial and business policies.
In concrete terms, in the event an inappropriate bidder emerges, the management team will
not take steps to guard its own interests against the takeover offer by the bidder, but will
construct a system that enables the Company to judge from the perspective of improving
corporate value first. The Company will continue to study takeover defenses by utilizing stock
subscription rights, etc. with a close eye on legal and social trends.
(Note) In this Business Report, fractional amounts less than the indicated unit amount are rounded
down for sums of money and numbers of shares, while percentages and other values arerounded off to the nearest figure.

51

Consolidated Balance Sheet(As of March 31, 2017)(Millions of yen)AmountASSETS
Current assets
Cash and time deposits
Trade receivables
Finished goods and merchandiseWork in process
Raw materials and supplies
Deferred tax assets
Other current assets
Allowance for doubtful receivables
Total current assets

205,51675,51914,46628,823
3,398
9,240
21,271(453)
357,782

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

15,356
12,098
11,155
13,57552,184
9,686
39,202
71
12,444
18,321(1,662)
68,378130,249
488,03252

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

64,173
8,657
1,822
780
860
49,815
126,110Long-term liabilities
Net defined benefit liability
Deferred tax liabilities for land revaluation
Other long-term liabilities
Total long-term liabilities
TOTAL LIABILITIES

5,766
433
6,938
13,138139,248

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

10,00052,064297,984(2,423)357,626

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

7,884
210
(5,693)(8,725)(3,195)(9,519)99577
348,784
488,03253

Consolidated Statements of Operations(From April 1, 2016 to March 31, 2017)

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

54(Millions of yen)Amount620,061
396,302
223,759
160,520
63,238
318
275
556
1,029
36
1,048
667
375
316
72
67
1,306
545
1,034
17,343
(680)

2,179

2,127
63,290455

2,886
60,86016,662
44,19737
44,159

Consolidated Statement of Changes in Net Assets (From April 1, 2016 to March 31, 2017)(Millions of yen)
Stockholders’ equity
Additional paid-in
capitalCommon stock
Balance at beginning of year

10,000Retained earnings

52,246

Treasury stock

265,231

Total stockholders’equity(2,410)

325,067

Changes during the period
Cash dividends(11,429)(11,429)

Profit attributable to owners ofparent44,15944,159Purchase of treasury stock
Disposal of treasury stock0

Change in treasury shares ofparent arising from transactions
with non-controllingshareholders
Changes in treasury stock
accompanying changes toholdings in companies to which
the equity method is applied
Reversal of revaluation reserve
for land

(4)

(4)

0

0

(182)

(182)

(8)

(8)

22

22

Net changes of items other thanshareholders’ equity
Total changes during the period
Balance at end of year

–

(182)

32,753(12)

32,55810,00052,064297,984(2,423)357,626

Accumulated other comprehensive income
Unrealized gains Deferred gains
Revaluation
or losses onor losses onreserve for land,
other securities,
hedges,net of tax
net of tax
net of tax

Balance at beginning of year

6,907

(706)

(5,670)Foreigncurrencytranslation
adjustments(5,788)

Total
Subscription Non-controlling
Remeasurements
Total net assets
accumulated
rights to sharesinterestsof definedotherbenefit plans,
comprehensive
net of tax
income(3,145)(8,403)99541

317,304

Changes during the period
Cash dividends(11,429)

Profit attributable to owners ofparent44,159Purchase of treasury stock(4)

Disposal of treasury stock0

Change in treasury shares ofparent arising from transactions
with non-controllingshareholders
Changes in treasury stock
accompanying changes toholdings in companies to which
the equity method is applied
Reversal of revaluation reserve
for landNet changes of items other thanshareholders’ equity
Total changes during the period
Balance at end of year

(182)

(8)

(22)

(22)

–

977

916

–

(2,936)(50)(1,092)–36(1,055)

977

916

(22)

(2,936)(50)(1,115)–36

31,4797,884

210(5,693)(8,725)(3,195)(9,519)99577

348,78455

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

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

Status of Consolidated Subsidiaries:(i)

Total Number of Consolidated Subsidiaries:
70 companies(ii)

Names of Principal Consolidated Subsidiaries:
BANDAI CO., LTD., BANDAI NAMCO Entertainment Inc., BANDAIVISUAL CO., LTD., BANDAI NAMCO Holdings USA Inc., BANDAI S.A.S.,
BANDAI NAMCO Holdings UK LTD., BANDAI NAMCO Holdings ASIA
CO., LTD.
BANDAI S.A. has changed its corporate form from a joint stock company (S.A.)
to a simplified joint stock company (S.A.S.).

(iii) Changes in the Scope of Consolidation
Since WiZ Co., Ltd. became a subsidiary through stock acquisition and BANDAI Toy
S.A.S. was newly established in this fiscal year, these companies are now included in thescope of consolidation.
Since Anime Consortium Japan Inc., which was an affiliated company to which theequity method was applied in the fiscal year ended March 31, 2016, became a subsidiarythrough additional stock acquisition, this company is now included in the scope of
consolidation.
Since I WILL Co., Ltd., which was a consolidated subsidiary in the fiscal year ended
March 31, 2016, was merged into a consolidated subsidiary of the Company by anabsorption-type merger, it has been excluded from the scope of consolidation.
(2)

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

(ii)

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

56

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

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

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

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

(iii) Changes in Affiliated Companies to Which the Equity Method Was Applied
Since Anime Consortium Japan Inc. became a subsidiary through additional stockacquisition, this company is excluded from the scope of application of the equity methodfrom this fiscal year.
(2)

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

(ii)

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

(iii) Special Notes Regarding Procedures for Applying the Equity Method
If any of the companies to which the equity method is applied has a closing date thatdiffers from the consolidated closing date, then the financial statements for the fiscal yearof that company are used.
3. Information Concerning the Fiscal Year, etc. for Consolidated Subsidiaries
The fiscal year closing dates for BANDAI (SHENZHEN) CO., LTD. and BANDAI NAMCO(SHANGHAI) CO., LTD. are December 31, and their financial data as of their respective
closing dates are used. The fiscal year closing date for Sun-Star Stationery Co., Ltd. is June
30 and its financial data is based on a provisional closing as of December 31 pursuant toprocedures for the fiscal year-end closing.
Necessary adjustments on a consolidated basis are made when transactions of material
importance occur between the reported closing date and the consolidated closing date.
WiZ Co., Ltd., which newly became a consolidated subsidiary in this fiscal year, has changed
its closing date from May 31 to March 31. In connection with this change, the number ofmonths included in this fiscal year for this company is 10 months.

57

4. Accounting Policies(1)

Valuation Basis and Methods for Significant Assets:(i)

Valuation Basis and Methods for Securities:
Other securities:(ii)

Securities with market values:
Stated using the market price method based on amounts using market
prices, etc. on the closing date. (Valuation differences are reflected
directly in net assets and cost of sales is calculated using the moving
average method.)
Securities without market values:
Stated using the cost method based on the moving average method. With
respect, however, to contributions to limited partnerships for investment
and similar partnerships (deemed to be securities under Article 2,
Paragraph 2 of the Financial Instruments and Exchange Act), these arestated by the net amount corresponding to the Company’s equity share,
based on the most recent available financial reports according to the date
for settlement of accounts provided for in the partnership agreement.
Derivative Transactions: Stated using the market price method.

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

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

58

(ii)

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

Basis of Recognition for Significant Provision:(i)

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

(ii)

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

(iii) Provision for Sales Returns:
To provide for losses on returned goods after the last day of this fiscal year, theestimated amount of losses on returned goods is provided based on the historicalrate of returned goods.
(4)

Accounting Standards for Significant Income and Expense:(i)Video Game Software Revenue Recognition:(ii)

Consolidated subsidiaries operating in the United States recognized revenue inaccordance with “Software Revenue Recognition” of FASB AccountingStandards Codification No. 985-605, treating video game software with online
functions as software products with multiple-element arrangements. Unless thevendor can objectively and reasonably prove the fair value of undelivered
elements specified by the vendor, recording of any revenue attributable to video
game software is deferred until all the elements are delivered.
Video Game Software Production Costs:
A distinctive characteristic of video game software is the process through which
the software is highly combined with the content that cannot be separated into
identifiable components.
The content is considered to be an important component of each video game title,
which includes the game content and visual / music data.
Once management makes a decision to go forward in distributing a title, theCompany records the software and content development costs as work inprocess.
The capitalized production costs are amortized to cost of sales based on
projected sales volumes.

59

(5)

Significant Accounting Policies for Hedging:(i)

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

(ii)

Hedging Instruments and Hedged Items:
Hedging instruments:

Forward exchange contracts and currency option
contracts

Hedged items:

Foreign-currency-denominated assets and liabilities
and scheduled transactions(iii) Hedging Policies:
Hedging is implemented for the purpose of reducing risks arising fromfluctuations in exchange rates involved in operational and financing activities.
(iv) Method of Assessing the Effectiveness of Hedging:
The Company assesses the effectiveness of hedging transactions, in principle,
from the start of the transaction to the point at which effectiveness is assessed bycomparing the cumulative changes in the fair value or the cumulative changes in
the cash flows of the hedged item with the cumulative changes in the fair valueor the cumulative changes in the cash flows of the hedging instrument.
In the event that critical terms are the same for the hedging instrument and thehedged assets, liabilities, or scheduled transaction, it is assumed that the hedge is100% effective, so the assessment of effectiveness is not performed.
(6)

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

(7)
(i)

Other Important Information Constituting the Basis of Preparation of Consolidated Financial
Statements
Method of accounting for retirement benefits
a. Method of attributing expected retirement benefits to periods
In calculating the retirement benefit obligations, the benefit formula basis is mainly
used in determining the amount of the expected retirement benefit obligations
attributed to the period up to the end of this fiscal year.
b. Method of recognizing actuarial gains and losses and past service costs
Actuarial gains and losses are recognized in gain or loss in the year following the year
in which a respective gain or loss arises, and are amortized proportionally on astraight-line basis over a certain period (9 to 19 years) that is within the averageremaining period of service of the eligible employees.
The entire amount of past service costs is recognized in gain or loss in the fiscal year
during which it arises, and is amortized on a straight-line basis over a period (10 years),
which is within the average remaining years of service of the eligible employees.
c. The Company and certain consolidated subsidiaries use a simplified method in
calculating net defined benefit asset, net defined benefit liability, and periodic pension

60

cost under which retirement benefit obligations are principally based on accrued
benefits at the end of the year.
(ii)

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

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

II.

Notes to Changes in Method of Presentation(Consolidated Balance Sheet)“Accrued income taxes,” which had been included in “Other current liabilities” under “Current
liabilities” until the previous fiscal year, is stated separately since it is above 1 percent of thetotal liabilities and net assets for this fiscal year, while “Other provision” has been statedseparately in this fiscal year as the displayed items were revised to enhance clarity. “Accrued
income taxes” and “Other provision” for the previous fiscal year were 2,747 million yen and644 million yen, respectively.
(Consolidated Statements of Operations)(1) “Gain on sales of investment securities,” which had been included in “Other extraordinary
income” under “Extraordinary income” until the previous fiscal year, is stated separately
since it is above 10 percent of the total extraordinary income for this fiscal year. The total of“Gain on sales of investment securities” for the previous fiscal year was 0 million yen.
(2) “Loss on disposal of fixed assets,” which had been included in “Other extraordinary loss”
under “Extraordinary loss” until the previous fiscal year, is stated separately since it isabove 10 percent of the total extraordinary loss for this fiscal year. The total of “Loss on
disposal of fixed assets,” for the previous fiscal year was 93 million yen.

III. Notes to Consolidated Balance Sheet
1. Assets pledged as collateral
Cash and time deposits
There are no liabilities associated with this collateral.

¥78 million

In addition to the above, the assets deposited as a security deposit for issuance under the
Payment Services Act, are as follows:“Other investments assets” under “Investments and other assets”¥738 million
2. Amount of Accumulated Depreciation of Property, Plant and Equipment:¥165,844 million

3. Guarantee Obligation:(1) The Company has guarantee obligations concerning borrowings from financial institutions
by companies other than consolidated companies.
ISHIMORI PRODUCTION INC.

¥137 million

SUN-STAR STATIONERY KOREA CO., LTD.

¥100 million

Total¥237 million

61(2) The Company has guarantee obligations concerning obligations in leasing contracts ofcompanies other than consolidated companies.
¥42 million

BANDAI NAMCO WILL INC.
4. Land revaluation

A revaluation of land for business-use was implemented pursuant to the “Law Concerning
Land revaluation” (Law No. 34, March 31, 1998) and the revalued difference was recorded
under net assets.
Revaluation Method:
The fair value of land is determined based on official notice prices that arecalculated by the method assessed and published by the Commissioner of the
National Tax Agency. The Commissioner assesses and publishes the method to
calculate land value that forms the foundation for calculating taxable value for land
value tax prescribed in “Article 16 of Land Value Tax Law (Law No. 69, May 2,1991),” as stipulated in “Article 2-4 of the Ordinance Implementing the Law
Concerning Land revaluation (Cabinet Order No. 119, March 31, 1998).”
Reasonable adjustments are made to the official notice prices.
Revaluation Date: March 31, 2002
Difference between the market value of the revalued land at the end of this consolidated
fiscal year and the revaluated book value after the revaluation: negative 903 million yen.
IV. Notes to Consolidated Statement of Changes in Net Assets
1. Type and Total Number of Shares Issued
Common stock

222,000,000 shares

2. Matters Concerning Distribution of Surplus(1)

Paid Dividend Amounts, etc.

Date of Resolution

June 20, 2016,
Ordinary General
Meeting of
Shareholders
November 8, 2016,
Board of Directors
MeetingType ofsharesTotalamount ofdividends(millions ofyen)

Dividend pershare (yen)Date ofrecordEffective
date

Common
stock

8,791

40

March 31,2016

June 21,2016

Common
stock

2,637

12

September
30, 2016

December 6,
2016

62

(2)

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

Date of Scheduled
Resolution

Type ofsharesTotalamount ofdividends(millionsof yen)Source ofdividends

Dividend
per share(yen)

Date ofrecordEffective
date

June 19, 2017,
Ordinary General
CommonRetained
March 31,
June 20,
15,38570
Meeting ofstock
earnings
2017
2017
Shareholders
3. Type and Number of Shares to be Issued upon the Exercise of Subscription Rights to Shares(excluding those whose exercise period has not yet commenced) as of March 31, 2017
Common stock

63,200 shares

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

63

2. Market Values of Financial Instruments
The book values of financial instruments as stated in the consolidated balance sheet, theirmarket value as of March 31, 2017, and the difference between book value and market
value are as stated below. This table does not include assets for which it was judged
extremely difficult to assess the market value.
Book value
stated in theMarket value
Difference
consolidated(Millions of yen) (Millions of yen)balance sheet(Millions of yen)
(1) Cash and time deposits
205,516
205,516—(2) Trade receivables
75,51975,519—(3) Short-term investments andinvestment securities
1. Other Securities
22,21922,219—2. Stock of affiliated companies
12,65018,928
6,278
Total assets
315,905
322,184
6,278(1) Trade payables
64,17364,173—(2) Accrued income taxes
8,657
8,657
—
Total liabilities
72,83072,830—Derivative transactions (*)
446
446
—
(*) Debts and credits derived from derivative transactions are stated on a net basis. Items to berecorded as net debts in the total are enclosed in brackets.
(Notes) 1. Relevant matters of method of calculating the market value of financial instruments andsecurities and derivative transactions
Assets(1) Cash and time deposits
Since these are readily convertible into cash, their market value is almost identical withthe book value, and thus these are stated at the book value.
(2) Trade receivables
Since trade receivables that are settled in a short period of time are readily convertible into
cash, their market value is almost identical with the book value, and thus these are statedat the book value. For trade receivables that are settled after a long period of time, the fairvalues are measured based on the present values calculated by discounting receivableamounts classified by certain periods of time at a rate for which time to maturity andcredit risk has been taken into account.
(3) Short-term investments and investment securities
Since MMF is readily convertible into cash, their market value is almost identical with thebook value; and these are stated at the book value. Stocks and others are stated at the priceon the stock exchange or the price as presented by counterparty financial institutions andothers.
Liabilities(1) Trade payables, (2) Accrued income taxes
Since these are readily convertible into cash, their market value is almost identical withthe book value; and thus these are stated at the book value.
Derivative transactions
The market value of derivative transactions is stated at the price as presented bycounterparty financial institutions and others.

64

2. Unlisted stocks (stated as 2,736 million yen in the consolidated balance sheet), stocks ofaffiliated companies (unlisted stocks) (stated as 2,730 million yen in the consolidatedbalance sheet), convertible bond-type bonds with subscription rights to shares (stated as
50 million yen in the consolidated balance sheet), and contributions to investment
partnerships (stated as 456 million yen in the consolidated balance sheet) have nomarket price and it is extremely difficult to assess their market value, so they are notincluded in “(3) Short-term investments and investment securities.”
VI. Notes Concerning Per-Share Data
1. Net assets per share¥1,584.71¥201.03

2. Basic earnings per shareVII. Other Notes(Additional Information)(Application of ASBJ Implementation Guidance on Recoverability of Deferred Tax Assets)
Effective from this fiscal year, the Company has applied the Implementation Guidance on
Recoverability of Deferred Tax Assets (ASBJ Guidance No. 26, March 28, 2016).
(Organizational restructuring in Europe)
The Company established BANDAI Toy S.A.S. (“BToy”) as a subsidiary of BANDAI S.A.S.
(“Current BSAS”), a subsidiary of the Company, on February 28, 2017 based on the resolutions of
the Board of Directors meeting held on December 16, 2016.
In September 2017, BANDAI NAMCO Holdings France S.A.S. (“BNHFR”) (name to be changed
from Current BSAS) will transfer its Toys and Hobby Business to BANDAI S.A.S. (“NewBSAS”) (name to be changed from BToy) and transition to a pure holding company.
1.

Objective
Currently in Europe, Current BSAS, a subsidiary of the Company based in France under theregional headquarters in the U.K., has two functions – a Toys and Hobby Business company
and a holding company. Current BSAS is a business holding company responsible for theCompany’s operations in Continental Europe. The Company has decided to reorganize Current
BSAS in order to promote greater cooperation within the Group and expand operations, byclearly separating Current BSAS’s business company and holding company functions andstrengthening governance function in Continental Europe.

2.

Transactions conducted by commonly controlled entities(1) Overview of transaction(i)Name and content of business to be transferred
Toys and Hobby Business in France of BNHFR(ii) Date of business combination
September 2017 (scheduled)(iii) Legal form of business combination
A method corresponding to a Japanese absorption-type company split (BNHFR willtransfer the assets and liabilities related to the Toys and Hobby Business at the bookvalue, and New BSAS will issue shares to BNHFR as consideration for the transaction)65

(2) Overview of accounting process
The accounting process for the consolidated financial statements is to be carried out astransactions conducted by commonly controlled entities, in accordance with the AccountingStandard for Business Combinations (ASBJ Statement No. 21, September 13, 2013), the
Accounting Standard for Business Divestitures (ASBJ Statement No. 7, September 13, 2013)
and Guidance on the Accounting Standard for Business Combinations and the AccountingStandard for Business Divestitures (ASBJ Guidance No. 10, September 13, 2013).

66

Non-Consolidated Balance Sheet(As of March 31, 2017)(Millions of yen)AmountASSETS
Current assets
Cash and time deposits
Trade receivables
Prepaid expenses
Deferred tax assets
Accounts receivable-other
Other current assets
Total current assets

85,788
431
330
86
9,052
502
96,192

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

1,435
49
626
1
2,113
1,005
771
1,776
22,373
230,355
1,885
254,614
258,504
354,697

67

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

68

90,677
1,734
3,872
347
270
411
97,314
2,551
30
1,582
1,472
487
6,125
103,439

10,000174,284
2,500
171,784
61,371
1,645
59,726
26,10433,621(2,326)
243,328

7,829
7,829
99
251,257
354,697

Non-Consolidated Statements of Operations(From April 1, 2016 to March 31, 2017)(Millions of yen)AmountOperating revenue
Dividend income from affiliatedcompanies
Business management income fromaffiliated companies
Operating expenses
General and administrative expenses
Operating profit
Non-operating income
Interest income
Dividend income
Rent income
Other non-operating income
Non-operating expenses
Interest expense
Expenses related to rental assets
Other non-operating expenses
Recurring profit
Extraordinary income
Gain on sales of fixed assets
Gain on sales of investment securities
Extraordinary loss
Loss on valuation of stocks of affiliatedcompanies
Other extraordinary loss
Profit before income taxes
Corporate income, inhabitant and enterprise
taxes
Adjustment for income taxes
Profit21,151
3,157

24,3095,205
19,103

12
183
1,760
112
28
1,760
151

0
0

2,069

1,939
19,233

0

6,962
89

7,051
12,182

(146)
(71)

69

(217)
12,399Non-Consolidated Statement of Changes in Net Assets (From April 1, 2016 to March 31, 2017)(Millions of yen)
Stockholders’ equity
Additional paid-in capital
Commonstock

Retained earnings
Other retained earnings

Capitalreserve

Other
capitalsurplus

Total
additional
paid-in
capitalLegalreserve

2,500

171,784

174,284

1,645

Total
retainedearnings

Treasury
stock

Total
stockholders’equity(2,322)

242,363

Generalreserve

Retainedearnings
carriedforward26,10432,65160,401

Cash dividends(11,429)(11,429)(11,429)

Profit12,39912,39912,399Balance at beginning of year

10,000Changes during the period

Purchase of treasury stock

(4)

(4)

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

–

–

–

–

–

–

969

969

(4)

965

10,0002,500

171,784

174,284

1,645

26,10433,621

61,371(2,326)

243,328

Valuation difference and foreign currency translation
adjustments
Unrealized gains or losses
on other securities,
net of tax
Balance at beginning of year

Total valuation difference
and foreign currencytranslation adjustments

6,941

6,941

Subscription rights
to shares

99

Total net assets

249,403

Changes during the period
Cash dividends(11,429)

Profit12,399Purchase of treasury stock(4)

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

888

888

–

888

888

888

–

1,854

7,829

7,829

99

251,25770

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

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

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

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

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

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

71

(4)

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

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

(ii) Application of consolidated taxation system
The Company has applied the consolidated taxation system.
2. Notes to Changes in Method of Presentation
Non-Consolidated Balance Sheet(1)“Structures” (the balance of which at the end of this fiscal year is 0 million yen) and “Construction inprogress” (the balance of which at the end of this fiscal year is 0 million yen), which had been statedseparately until the previous fiscal year, are included in “Other property, plant and equipment” under“Property, plant and equipment” from this fiscal year due to the immateriality of the amount.

(2)“Accrued expenses” (the balance of which at the end of this fiscal year is 232 million yen) and“Unearned revenue” (the balance of which at the end of this fiscal year is 162 million yen), which had
been stated separately until the previous fiscal year, are included in “Other current liabilities” under“Current liabilities” from this fiscal year due to the immateriality of the amount.

(3)“Asset retirement obligations” (the balance of which at the end of this fiscal year is 487 million yen),which had been stated separately until the previous fiscal year, are included in “Other long-term
liabilities” under “Long-term liabilities” from this fiscal year due to the immateriality of the amount.

Non-Consolidated Statements of Operations“Loss on disposal of fixed assets” (the balance of which at the end of this fiscal year is 84 million yen)and “Loss on impairment of fixed assets” (the balance of which at the end of this fiscal year is 4
million yen), which had been stated separately until the previous fiscal year, are included in “Other
extraordinary loss” under “Extraordinary loss” from this fiscal year due to the immateriality of theamount.
3. Notes to Non-Consolidated Balance Sheet(1)

Amount of accumulated depreciation of property, plant and equipment: ¥1,969 million(2)

Guarantee Obligations
The Company has made guarantees in respect of obligations in connection with leasing contracts of anaffiliated company.
¥42 million

BANDAI NAMCO WILL INC.
(3)

Monetary claims and obligations with respect to affiliated companies (excluding amounts given in
specific categories)
Short-term monetary claims on affiliated companies:
Short-term monetary obligations to affiliated companies:
Long-term monetary obligations to affiliated companies:¥9,484 million¥718 million¥1,582 million

4. Notes to Non-Consolidated Statements of Operations
Transactions with affiliated companies (excluding amounts given in specific categories)
Operating Transactions:
Service commission fees
¥519 million
Non-operating Transactions:Non-operating income¥1,774 million
Non-operating expenses¥25 million

72

5. Notes to Non-Consolidated Statement of Changes in Net Assets
The total number and type of treasury stock as of the end of this fiscal year
2,206,158 shares
Common stock
6. Notes Concerning Tax Effect Accounting
The main factors in the occurrence of deferred tax assets are denial of loss on valuation of stocks ofaffiliated companies and losses carried forward, and they were recorded net of valuation allowance.
The main factor in the occurrence of deferred tax liabilities is unrealized gains or losses on othersecurities, net of tax.
7. Notes Concerning Transactions with Related Parties
Subsidiaries and Affiliated Companies, etc.
(Millions of yen)Type

Subsidiary

CompanyBANDAI CO.,LTD.

Ratio ofvoting rights
ownership

Relationshipwith relatedpartiesContent

Borrowings
Holding directly Interlocking (Note 1)
100.0%
directorate
Payment ofinterest
Borrowings(Note 1)BANDAI
NAMCO
SubsidiaryEntertainmentInc.

BANDAI
Subsidiary VISUAL CO.,LTD.

Subsidiary

Subsidiary

NAMCO
LIMITEDBANPRESTO
CO., LTD.

Payment ofinterest
Holding directly Interlocking Loans (Note 2)
100.0%
directorate Receipt ofinterest
Receipt ofproperty
dividends(Note 3)
Borrowings
Holding directly Interlocking (Note 1)
100.0%
directorate
Payment ofinterest
Borrowings
Holding directly Interlocking (Note 1)
100.0%
directorate
Payment ofinterest
Holding directly
100.0%

Holding directly
Subsidiary SUNRISE INC.
100.0%BANDAI
Subsidiary NAMCO
Studios Inc.

Holdingindirectly
100.0%––

AmountAccount items

Balance asof March
31, 2017

28,459

Short-termborrowings fromaffiliated companies

30,607

Short-termborrowings fromaffiliated companies

19,992

8
14,998
4

–

5,000

–

–

11

–

–

10,442

–

–

6,848

Short-termborrowings fromaffiliated companies

2
3,821
1

Borrowings(Note 1)

6,956

Payment ofinterest

2

Borrowings(Note 1)

12,293

Payment ofinterest

3

Borrowings
Interlocking (Note 1)
directorate
Payment ofinterest

7,465
2

–
Short-termborrowings fromaffiliated companies–
Short-termborrowings fromaffiliated companies–
Short-termborrowings fromaffiliated companies–
Short-termborrowings fromaffiliated companies
–

6,850
–
4,344
–
7,260
–
12,291–
5,887–

Conditions of transactions and policies for determining the conditions of transactions(Notes) 1. The borrowings are transactions made by the cash management system (CMS); the amountstated is the average balance during this fiscal year. To clearly disclose the actual conditionsof CMS transactions, the transaction net amount is shown. The interest rate on theseborrowings is, based on intra-Group regulations, determined reasonably, taking into accountmarket interest rates.

73

2. The interest rate on these loans is, based on intra-Group regulations, determined reasonably,
taking into account market interest rates.
3. The receipt of property dividends is the acquisition of shares of affiliated companies due toreorganization within the Group on March 31, 2017, and the acquisition price is decided
based on the amount of net assets of the companies subject to reorganization.
8. Notes Concerning Per-Share Data
(1) Net assets per share:¥1,142.70(2) Basic earnings per share:¥56.41

9. Other Notes(Additional Information)(Application of ASBJ Implementation Guidance on Recoverability of Deferred Tax Assets)
Effective from this fiscal year, the Company has applied the Implementation Guidance on
Recoverability of Deferred Tax Assets (ASBJ Guidance No. 26, March 28, 2016).
(Organizational restructuring in Europe)
This note is omitted because the information is provided in “VII. Other Notes” of the Notes toConsolidated Financial Statements.

74Independent Auditor’s Report
May 18, 2017
The Board of Directors
BANDAI NAMCO Holdings Inc.
KPMG AZSA LLC
Toshihiro Otsuka (Seal)
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
Hiroo Iwaide (Seal)
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
Terukazu Nagamine (Seal)
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant

We have audited the consolidated financial statements, comprising the consolidated balance
sheet, the consolidated statements of operations, the consolidated statement of changes in net
assets and the related notes of BANDAI NAMCO Holdings Inc. as at March 31, 2017 and for theyear from April 1, 2016 to March 31, 2017 in accordance with Article 444-4 of the Companies
Act.
Management’s Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial
statements in accordance with accounting principles generally accepted in Japan, and for suchinternal control as management determines is necessary to enable the preparation of consolidated
financial statements that are free from material misstatements, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on the consolidated financial statements based on our
audit as independent auditor. We conducted our audit in accordance with auditing standards
generally accepted in Japan. Those standards require that we plan and perform the audit to obtainreasonable assurance about whether the consolidated financial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the consolidated financial statements. The procedures selected depend on our
judgment, including the assessment of the risks of material misstatement of the consolidated
financial statements, whether due to fraud or error. In making those risk assessments, weconsider internal control relevant to the entity’s preparation and fair presentation of theconsolidated financial statements in order to design audit procedures that are appropriate in thecircumstances, while the objective of the financial statement audit is not for the purpose of
expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes
evaluating the appropriateness of accounting policies used and the reasonableness of accounting
75

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

76

Independent Auditor’s Report
May 18, 2017
The Board of Directors
BANDAI NAMCO Holdings Inc.
KPMG AZSA LLC
Toshihiro Otsuka (Seal)
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
Hiroo Iwaide (Seal)
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
Terukazu Nagamine (Seal)
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant

We have audited the non-consolidated financial statements, comprising the non-consolidatedbalance sheet, the non-consolidated statements of operations, the non-consolidated statement ofchanges in net assets and the related notes, and the supplementary schedules of BANDAI
NAMCO Holdings Inc. as at March 31, 2017 and for the year from April 1, 2016 to March 31,2017 in accordance with Article 436-2-1 of the Companies Act.
Management’s Responsibility for the Financial Statements and Others
Management is responsible for the preparation and fair presentation of the non-consolidated
financial statements and the supplementary schedules in accordance with accounting principles
generally accepted in Japan, and for such internal control as management determines is necessary
to enable the preparation of financial statements and the supplementary schedules that are freefrom material misstatements, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on the financial statements and the supplementaryschedules based on our audit as independent auditor. We conducted our audit in accordance withauditing standards generally accepted in Japan. Those standards require that we plan and performthe audit to obtain reasonable assurance about whether the non-consolidated financial statements
and the supplementary schedules are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the non-consolidated financial statements and the supplementary schedules. The
procedures selected depend on our judgment, including the assessment of the risks of material
misstatement of the non-consolidated financial statements and the supplementary schedules,
whether due to fraud or error. In making those risk assessments, we consider internal control
relevant to the entity’s preparation and fair presentation of the non-consolidated financial
statements and the supplementary schedules in order to design audit procedures that areappropriate in the circumstances, while the objective of the financial statement audit is not forthe purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit
77

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

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Audit & Supervisory Board’s Report
Audit Report
We, the Audit & Supervisory Board, prepared this audit report on the execution of duties byDirectors during the 12th fiscal year from April 1, 2016 to March 31, 2017, following deliberations
based on audit reports prepared by each Audit & Supervisory Board Member.

1. Method and Content of Audits by Audit & Supervisory Board Members and the Audit &Supervisory Board(1) We devised the 12th auditing plan (auditing policies, duties assigned to each Audit &Supervisory Board Member and auditing methods), received reports on the progress on, andresults of, audits from each Audit & Supervisory Board Member, as well as reports on theexecution of their duties from Directors, etc. and the Accounting Auditor, and requested
explanations as necessary.
(2) Each Audit & Supervisory Board Member communicated with the Directors, the internal
auditing division, and other employees, etc., in accordance with the internal regulations
established by the Audit & Supervisory Board, and the above-mentioned auditing plan, tocollect information and improve the auditing environment and conducted the audits in thefollowing methods.
(i) We attended the meetings of the Board of Directors and other significant meetings,
received reports on the execution of duties from Directors and employees, etc.,
obtained explanations thereof as necessary, viewed documents concerning important
decisions, and investigated the conditions of operations and assets of the Company.
Regarding the Company’s subsidiaries, we communicated and shared information with
the Directors and the Audit & Supervisory Board Members, etc. of the subsidiaries,
and received reports on their business as necessary from them.
(ii) We also periodically received reports from Directors and employees, etc., requested
explanations as necessary, and expressed opinion, regarding the development andoperation of internal control systems that were organized based on decisions by the
Board of Directors in relation to the development of a system to ensure that theexecution of duties by Directors and other operations of the corporate group consistingof the Company and its subsidiaries as described in the business reports were inconformity with applicable laws and regulations and the Company’s Articles ofIncorporation, and a system stipulated in Article 100, Paragraphs 1 and 3 of the
Enforcement Ordinance of the Companies Act.
(iii) We further examined the content of basic policies (Article 118, Item 3-(a) of the
Enforcement Ordinance of the Companies Act) and actions (Article 118, Item 3-(b) of
the Enforcement Ordinance of the Companies Act) described in business reports basedon the meetings of the Board of Directors and other discussions.
(iv) We monitored and verified that the Accounting Auditor remained independent andperformed audits appropriately, received reports on the execution of its duties from the
Accounting Auditor and requested explanations as necessary. We were also notified
that a “system for ensuring the proper execution of duties” (as per Article 131 of the
Corporate Accounting Rules) was organized in accordance with “Quality Control
Standards for Auditing” (October 28, 2005, Business Accounting Council), andrequested explanations as necessary.
Using the aforementioned method, we examined the Business Report and the supplementaryschedules, non-consolidated financial statements (non-consolidated balance sheet, non-consolidated
statements of operations, non-consolidated statement of changes in net assets, and notes thereto), their
supplementary statements and consolidated financial statements (consolidated balance sheet,consolidated statements of operations, consolidated statement of changes in net assets, and notes
thereto) for this fiscal year under review.

792. Results of the Audit(1) Audit Results of business reports, etc.
(i) We confirm that the business reports and its supplementary statements fairly represent
the condition of the Company and are in conformity with the applicable laws andregulations and the Articles of Incorporation of the Company.
(ii) We confirm that, with respect to the execution of duties by Directors, there are no
fraudulent acts, or material facts that violate applicable laws and regulations or the
Articles of Incorporation.
(iii) We confirm that the decisions made by the Board of Directors with regard to internal
control systems are proper. We recognize that there is nothing to be cited with respect tothe description of those internal control systems in the business reports and theexecution of duties by Directors.
(iv) We confirm that there is nothing to be cited in respect of the basic policy described in
the business reports concerning what and how a person or entity controlling decisions
on the financial and business policies of the Company should be. We confirm that
actions (Article 118, Item 3-(b) of the Enforcement Ordinance of the Companies Act)
described in the business reports are in accordance with this basic policy and that theseactions do not damage our Group’s value and shareholders’ common interest, nor serve
to maintain the position of the directors of the Company.
(2) Audit Result of non-consolidated financial statements and their supplementary statements.
We confirm that the methods and the results of the audit by KPMG AZSA LLC, the
Accounting Auditor of the Company, are appropriate.
(3) Audit Result of consolidated financial statements
We confirm that the methods and the results of the audit by KPMG AZSA LLC, the
Accounting Auditor of the Company, are appropriate.
May 18, 2017
Audit & Supervisory Board
BANDAI NAMCO Holdings Inc.
Full Time Audit & Supervisory
Kazuo Asami
Board Member(Seal)

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

Katsuhiko Kohtari(Seal)

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

Osamu Sudoh(Seal)

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

Katsuhiko Kamijo(Seal)

END

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