NAMCO BANDAI
Holdings Inc.
Notice of the Seventh Ordinary General Meeting of Shareholders
to be held on June 18, 2012
An English translation of the original notice in Japanese

DISCLAIMER
The following is an English translation of the Japanese original “Notice of the Seventh Ordinary General
Meeting of Shareholders of NAMCO BANDAI Holdings Inc.” which meeting is to be held on June 18, 2012.
The Company provides this translation for your reference and convenience only and does not guarantee its
accuracy or otherwise. In the event of any discrepancies, the Japanese original notice shall prevail.
These documents have been prepared solely in accordance with Japanese law and are offered here for
informational purposes only. In particular, please note that the financial statements included in the following
translation have been prepared in accordance with Japanese GAAP.

1Securities code: 7832
May 28, 2012
4-5-15 Higashi-Shinagawa, Shinagawa-ku, Tokyo
NAMCO BANDAI Holdings Inc.
President and Representative Director
Shukuo Ishikawa

Dear Shareholders,
NOTICE OF THE SEVENTH ORDINARY GENERAL MEETINGOF SHAREHOLDERS
You are cordially invited to attend the Seventh Ordinary General Meeting of
Shareholders of NAMCO BANDAI 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 16, 2012.
Meeting Details

1.

Date and Time:

June 18, 2012 (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.

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 Board of Corporate Auditors for theSeventh Fiscal Year (from April 1, 2011 to March 31, 2012)
2. Report on the Contents of the Non-Consolidated Financial Statements for theSeventh Fiscal Year (from April 1, 2011 to March 31, 2012)
Matters to be Resolved:
Proposal No. 1: Appropriation of Surplus
Proposal No. 2: Election of Nine (9) Directors
Proposal No. 3: Decision on Remuneration Amount and Details for Directors’ Stock
Options2

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 the deadline stated on the preceding page.
Exercise of Voting Rights via the Internet:
1) Please access the website designated by the Company for the exercise of voting
rights (http://www.evote.jp/) via the Internet. Using the log-in ID and temporary
password shown on the enclosed Voting Rights Exercise Form, follow the on-screen
instructions and enter your approval or disapproval of each item on the agenda andsend them by the deadline stated on the preceding page.
Institutional investors may make use of the Tokyo Stock Exchange’s Electronic
Voting Platform (commonly known as the TSE Platform).
2) If you exercise your voting rights more than once via both postal mail and theInternet, then only the vote cast via the Internet shall be deemed valid.
In addition, if you cast your vote via the Internet multiple times, then only the lastvote cast shall be deemed valid. If you cast your vote via the Internet more than once,
using a personal computer, a smartphone and/or a mobile phone, then only the last votecast shall be deemed valid.

◎ If you attend the meeting in person, please hand in the enclosed Voting Rights Exercise

Form at the reception desk at the place of the shareholders’ meeting.
◎ If revisions to the contents of the “Reference Documents for the General Meeting of
Shareholders,” the “Business Reports,” the “Non-Consolidated Financial Statements”
and the “Consolidated Financial Statements” are required, the Company shall publish a
notification on the Company website at the following URL:
(http://www.bandainamco.co.jp/ir/stock/meeting/index.html).
◎ When exercising your voting rights via the Internet, please see “Information on Exerciseof Voting Rights via the Internet” on page 4 of this document. If you attend the meetingin person, you do not need to follow the procedures for the exercise of voting rights via
postal mail (sending the Voting Rights Exercise Form) or via the Internet.

3

[Information on Exercise of Voting Rights via the Internet]
1. The exercise of voting rights via the Internet 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 note thatyou cannot exercise your voting rights via the Internet on the designated website between thehours 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, such as firewalls, etc. that are in place to regulate your Internet
connections, anti-virus software that has been installed on your PC, 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 (SSL communications) or that cannot send informationof the mobile phone used.
4. Please note that, in order to prevent unauthorized access to the designated website byindividuals other than shareholders (persons impersonating shareholders) and to prevent thealteration of votes, we request that you change your “temporary password” to a permanent
password on the designated 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 (cost of dial-up
connections, telephone tolls, etc.) are to be borne by the shareholder. Also, when voting via
smartphone or mobile phone, all packet communication fees and other costs incurred in the useof a smartphone or a mobile 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)

4

(Attached Document)
BUSINESS REPORTS(From April 1, 2011 to March 31, 2012)
1. Current Status of the Group(1) Business Status for This Fiscal Year(i)

Business Progress and Results

In this fiscal year, harsh economic conditions continued, due to factors related to the Great
East Japan Earthquake, such as the extensive damage it caused and electric power shortages,
as well as other factors such as the depressed economy in North America and Europe and therapid appreciation of the yen. As for the entertainment industry, weak individual
consumption and other factors have added further uncertainty to the outlook.
In this environment, the BANDAI NAMCO Group (“the Group”) pressed ahead with thedevelopment of its global management foundation, in the final fiscal year of the three-year
Mid-term Plan that started in April 2009, and sought to realize medium- to long-term growth.
On the business front, long-established character toys and peripheral toy category products
such as cards in the Toys and Hobby Business and arcade game machines, network content,
and home video game software in the Content Business contributed to performance. In the
Amusement Facility Business, existing-facility sales in Japan trended favorably.
Consequently, the Group’s consolidated results at fiscal year-end were net sales of 454,210
million yen (year-on-year increase of 15.2%), operating income of 34,606 million yen(year-on-year increase of 111.8%), recurring income of 34,960 million yen (year-on-yearincrease of 113.2%), and net income of 19,303 million yen (year-on-year increase of
944.3%).

5

(ii) Outline of Business by Business Segment(Millions of yen)
Year Ended
March 31,2012

Net SalesYear Ended
March 31,2011

Toys and Hobby

177,994

158,374

Increaseof 19,620

16,112

13,812

Increaseof 2,299

Content

225,503179,917

Increaseof 45,586

17,003

3,092

Increaseof 13,911

Amusement
Facility

61,03262,337

Decreaseof 1,304

2,380

1,778

Increaseof 601

Other

27,482

18,503

Increaseof 8,978

2,050

810

Increaseof 1,240

Eliminations
and Corporate(37,801)(24,953)

Decreaseof 12,848(2,941)(3,156)

Increaseof 214

Consolidated

454,210394,178

Increaseof 60,032

34,606

16,338

Increaseof 18,268

Business
Segment

ChangeOperating Income
Year EndedYear Ended
March 31,
March 31,
2012
2011

ChangeToys and Hobby BusinessIn the Toys and Hobby Business, domestically, products in the KAMEN RIDER series andthe Super Sentai series (POWER RANGERS series) proved extremely popular as a result of
product categories being developed in coordination with each other. Also contributing to thisbusiness’s results was strong performance by card games, including digital card games suchas DRAGON BALL HEROES and trading card games such as Battle Spirits. In new
developments, The Little Battlers plastic models gained popularity, mainly among
elementary-school-age boys, and highly collectable toys for adults also performed well.
Overseas, in the North American region, Power Rangers SAMURAI toys, the first new
creation in the Power Rangers series in two years, proved popular, and sales in the Asian
region, mainly of character products popular in Japan, trended favorably. In the European
region, products were developed in new categories, including toys for girls and forpre-school-aged children, but performance did not reach the level of the previous fiscal year,
when this business’s solid performance centered mainly on popular character toys.
As a result, net sales in the Toys and Hobby Business were 177,994 million yen(year-on-year increase of 12.4%), and operating income was 16,112 million yen (year-on-yearincrease of 16.7%).
Content BusinessIn the Content Business, in the arcade game machines area, in addition to the latest arcade
game machines for popular series such as Wangan Midnight Maximum Tune 4, repeat sales ofwell-established prize machines and sales of prizes and the like contributed to performance. In
home video game software, the popular title in North America and Europe was DARK SOULS,
for PlayStation 3 and Xbox 360. Domestically, games such as TALES OF XILLIA and ONE
PIECE KAIZOKU MUSOU for PlayStation 3 and AKB1/48 Idol to Guam de Koishitara . . . for
PlayStation Portable proved highly popular. In addition, in the network content area, social
games such as the Mobile Suit Gundam series and ONE PIECE Grand Collection performed
extremely well. In the visual and music content areas, visual package software such as Mobile
Suit Gundam UC (Unicorn) and TIGER & BUNNY also proved popular.
As a result, net sales in the Content Business were 225,503 million yen (year-on-yearincrease of 25.3%), and operating income was 17,003 million yen (year-on-year increase of
449.9%).

6

Amusement Facility BusinessIn the Amusement Facility Business, domestically, differentiated facilities located in
shopping centers that offer customers the opportunity to experience the distinctive worldview
of specific characters were particularly popular. Within a market environment that is difficult
to read, existing facilities performed favorably, with net sales rising to 100.1% of the result forthe previous fiscal year. In addition, in implementing the plan to specialize in core businesses
with the objective of increasing profitability, transfers of some businesses were carried out.
In the challenging market environment presented by countries outside Japan, sales declined
in North America and Europe, but profits trended favorably, due to selection and concentrationof stores.
As a result, net sales in the Amusement Facility Business were 61,032 million yen(year-on-year decrease of 2.1%), and operating income was 2,380 million yen (year-on-yearincrease of 33.8%).
Number of Facilities as of March 31, 2012
Directly Managed
Facilities
255

Revenue-Sharing
Facilities
1,008

Others

Total

2

1,265

Other Businesses
Other Businesses consist of companies that conduct businesses such as logistics support,
building management, and printing for each of the Group’s businesses. During this fiscal year,
such businesses related to group support expanded, while efforts were also made to improvethe efficiency of their operations.
As a result, net sales in the Other Businesses were 27,482 million yen (year-on-yearincrease of 48.5%), and operating income was 2,050 million yen (year-on-year increase of
153.0%).
(iii) Capital Expenditures
In this fiscal year, the Group carried out 12,808 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, as well as foracquiring tangible fixed assets for office agglomeration of the Group companies in the Hong
Kong area through Bandai (H.K.) CO., LTD., a subsidiary of the Company.
(iv) Fundraising
In this fiscal year, the Group raised a total of 20,000 million yen in long-term borrowings
from financial institutions, mainly for the purposes of acquiring treasury stock.
(v)

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

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

7

(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
On January 1, 2011, BANDAI KOREA CO., LTD., and CREATIVE B WORKS CO., LTD.,
subsidiaries of the Company, carried out an absorption-type merger in which BANDAIKOREA CO., LTD. was the surviving company.
On January 4, 2011, NAMCO BANDAI Games America Inc. and NAMCO NETWORKSAMERICA INC., subsidiaries of the Company, carried out an absorption-type merger in which
NAMCO BANDAI Games America Inc. was the surviving company.
On April 1, 2011, BANDAI VISUAL CO., LTD., and EMOTION CO., LTD., subsidiariesof the Company, carried out an absorption-type merger in which BANDAI VISUAL CO., LTD.
was the surviving company.
On January 1, 2012, NAMCO BANDAI Games Inc. and NAMCO TALES STUDIO LTD.,
subsidiaries of the Company, carried out an absorption-type merger in which NAMCO
BANDAI Games Inc. was the surviving company.
(viii) Acquisitions and Disposals of Shares, Other Equities, and Stock Subscription Rights in
Other Companies
Not applicable.
(2) Status of Assets and Profits & Losses for the Previous Three Fiscal Years
Fiscal Year

7th Fiscal Year

4th Fiscal Year
(Year Ended
March 31, 2009)

5th Fiscal Year
(Year Ended
March 31, 2010)

6th Fiscal Year
(Year Ended
March 31, 2011)(Year Ended
March 31, 2012)

Net sales(Millions of yen)

426,399

378,547

394,178454,210Recurring income(Millions of yen)

24,513

1,907

16,39934,960Net income (loss)(Millions of yen)

11,830(29,928)

1,848

19,303

Net income (loss)
per share¥47.95(¥123.98)¥7.71¥85.62

Total assets(Millions of yen)

363,444

325,935

308,269

342,171

Net assets(Millions of yen)

260,579

229,012

213,693

213,125

Net assets per share¥1,067.71¥938.74¥896.83¥962.45Classification

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

Status of the Parent Company
Not applicable.

(ii) Important Subsidiaries
Name of Company

Capital

Ownership
Ratio

Description of Principal Business
Manufacturing and sales of toys andapparel, etc.
Planning, development and sales ofhome video game software and arcade
game machines, etc., and distribution
services for network content, etc.

Bandai Co., Ltd.

¥ 24,664 million

100.0%

NAMCO BANDAI
Games Inc.

¥ 15,000 million

100.0%

NAMCO LIMITED¥ 10,000 million

100.0%

Operation of amusement facilities, etc.

NAMCO BANDAI
Holdings (USA) Inc.

US$ 10100.0%

Pure holding company as regional
headquarters in the U.S.

BANDAI S.A.

€ 21,690,000

100.0%

Regional headquarters company inEurope. Import and sales of toys, etc.

NAMCO Holdings
UK LTD.

£ 29,500,000

100.0%

Pure holding company in the U.K.

HK$ 103,000,000

100.0%

Regional headquarters company in Asia.
Import, manufacturing and sales of toys,etc.

BANDAI (H.K.) CO.,LTD.

(Note) NAMCO BANDAI Holdings (USA) Inc. carried out a capital increase of US$ 85,453
thousand on February 29, 2012, for the purpose of strengthening its financial standing. The
full amount of the capital increase has been incorporated into capital reserve.
(4) Issues to be Addressed
The Group and this industry must address many important, long-term issues, including (i) the
increasing diversification of consumer needs, (ii) reacting to changes in the market and theenvironment, 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 Content
The Group is reinforcing its content creation, acquisition, development, and utilization
functions in order to respond to changes in the environment, including the development ofoligopolies in the distribution and media fields and the widespread penetration of networks.
Specifically, the Content Business Strategy Meeting, which crosscuts the entire Group, seeks
to maximize the value of each content asset and aims for more vigorous creation andacquisition of new content.

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. In accordance with these fundamental

9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 consumer 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, while reinforcing its coordinated deploymentof content popular in Japan in the rest of Asia. In the North American and European markets,in addition to improving profitability by reinforcing its existing businesses, it is working to
expand its content lineup, business categories, and regions in which it is operating, with a viewto achieving mid-term growth. In addition, on the development and production side,
improvements in the value chain will enable more speedy and price-competitive productdevelopment.
Content SBU
This unit’s industry is facing issues that include “evolution of platforms and networks” and“increasingly diverse consumer needs.” The Group will review development based on its
existing business categories and promote business strategies revolving around content, thereby
achieving speedy response to changing consumer needs throughout the world while
maximizing the value of its content. Specifically, it will aim to secure the No. 1 position ineach of its main business categories, domestically. Overseas, it will reinforce deployment of its
arcade game machines in developing countries, mainly in Asia, will carry out the world-widelaunch of carefully-selected home video game software titles developed domestically, and willseek to improve profitability. On the development front, NAMCO BANDAI Studios Inc., adevelopment company spun off in April, 2012, from NAMCO BANDAI Games Inc., the corecompany in this SBU, will work to enhance the level of game development while promoting
speedier and more efficient development.

Amusement Facility SBU“Increasingly diverse consumer preferences,” “weak individual consumption,” and“revision of consumption tax rate” are among the issues for this unit’s industry. To addressthese issues, this unit will reinforce its domestic sales by customer segment, increasing added
value by making use of its know-how in character merchandising, and working to differentiate
the Group’s facilities. Overseas, it will promote development of character facilities forelsewhere in Asia and will implement a continuous process of selection and concentration ofbusinesses in North America and Europe.
We ask for our shareholders’ further assistance and guidance.

10(5) Description of the Principal Businesses (As of March 31, 2012)
Business
Segment
Toys and
Hobby
Business

Description of Business
Manufacturing and sales of toys, candy toys, production for vending machines,
cards, plastic models, apparel, sundries, etc.
Planning, development and sales of home video game software, arcade gamemachines, and prizes for amusement machines, distribution services for network
content, planning, production and sales of films, visual and music content
software, and distribution services for on-demand visual content, etc.

Content
Business
Amusement
Facility
Business
Other
Businesses

Operation of amusement facilities, etc.
Transportation and storage of products, management of real estate, printing, etc.

(6) Principal Business Offices of the Group (As of March 31, 2012)(i)

The Company
Head Office

4-5-15 Higashi-Shinagawa, Shinagawa-ku, Tokyo(ii) Principal Subsidiaries
Bandai Co., Ltd.
NAMCO BANDAI Games Inc.
NAMCO LIMITEDNAMCO BANDAI Holdings (USA) Inc.
BANDAI S.A.

Taito-ku, Tokyo
Shinagawa-ku, Tokyo
Ota-ku, Tokyo
California, U.S.A.
Cergy-Pontoise, France

NAMCO Holdings UK LTD.

London, U.K.

BANDAI (H.K.) CO., LTD.

Kowloon, Hong Kong11

(7) Outline of Employees (As of March 31, 2012)(i)

Employees of the Group

Change from the End ofPrevious Fiscal Year
Toys and Hobby Business
2,136(1,507)
Increase of 17(Decrease of 20)
Content Business
2,977
(311)
Decrease of 109(Decrease of 52)
Amusement Facility Business
1,106(3,755)
Increase of 13 (Decrease of 189)
Other Businesses
536
(312)
Increase of 61(Increase of 6)
Corporate (Common)
258(47)
Decrease of 44(Increase of 1)
Total
7,013
(5,932)
Decrease of 62 (Decrease of 254)
(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, NAMCO BANDAI
Holdings (USA) Inc., and NAMCO Holdings UK Ltd.
Business Segment

Number of Employees(ii) Employees of the Company
Change from
Average Years
the End of
Average Ageof Service
Previous Fiscal Year
Decrease of 44
248 (47)
38.6
12.1(Increase of 5)(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, including Bandai Co., Ltd. and NAMCO
BANDAI Games Inc., to the Company, the aggregate number of each employee’s yearsof service at each company is used for calculation.
4. With the closure on March 31, 2011, of the Operational Support Project, which had
been set up to support and carry out clerical work and indirect operations for thebusiness divisions and departments at NAMCO BANDAI Games Inc., the number of
employees has decreased.
Number of
Employees(8) Principal Lenders (As of March 31, 2012)
Lenders

Amount

The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Sumitomo Mitsui Banking Corporation
Mizuho Corporate Bank, Ltd.
Mitsubishi UFJ Trust and Banking Corporation(9) Other Important Matters of the GroupNot applicable.

12¥9,148 million¥7,188 million¥1,816 million¥1,453 million

2. Current Status of the Company(1)(i)

Status of Shares (As of March 31, 2012)
Total Number of Shares Issuable:(ii) Total Number of Issued Shares:

1,000,000,000 shares
222,000,000 shares

Note: Due to the retirement of 10,000,000 shares of treasury stock carried out on July 19, 2011,
and of 8,000,000 shares on February 22, 2012, the total number of issued sharesdeclined by 18,000,000 shares from the end of the previous fiscal year.
(iii) Number of Shareholders: 40,337(increase of 824 from the end of the previous fiscal year)(iv) Major Shareholders (Top 10 Shareholders)Number of
Shares Held

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

Shareholding Ratio

10,646,900

4.84

9,224,700

4.20

MAL Ltd.

7,010,100

3.19

XIL, LTD.

6,000,000

2.73

Masaya Nakamura
5,960,000
2.71
Mellon Bank N.A. as agent for its client, Mellon
4,682,500
2.13
Omnibus US Pension
The Nomura Trust and Banking Co., Ltd.
(Retirement and severance benefits trust.
4,586,100
2.09
The Bank of Tokyo-Mitsubishi UFJ account)
Japan Trustee Services Bank, Ltd. (Trust account4,503,200
2.05
9)Northern Trust Co (AVFC) Sub A/C American
4,183,300
1.90
ClientNintendo Co., Ltd.
3,845,700
1.75(Notes) 1. The shareholding ratio is calculated after reduction of the number of treasury
stocks (2,193,835 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)
8,316,500 shares
8,704,000 shares
Japan Trustee Services Bank, Ltd. (Trust account)
The Nomura Trust and Banking Co., Ltd.
4,586,100 shares(Retirement and severance benefits trust. The Bank ofTokyo-Mitsubishi UFJ account)
Japan Trustee Services Bank, Ltd. (Trust account 9)4,503,200 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
(now The Bank of Tokyo-Mitsubishi UFJ, Ltd.), entrusted for retirement andseverance benefits. Those shares were exchanged with the Company’s sharesthrough the share transfer on September 29, 2005, and The Bank ofTokyo-Mitsubishi UFJ directs the exercise of the voting rights pertaining tothose shares.

13

(2)

Stock Subscription Rights, etc.

(i)

Stock Subscription Rights Held by Company Directors and Corporate Auditors of theCompany That Were Delivered as Consideration for the Execution of Their Duties at theEnd of This Fiscal Year
Not applicable.

(ii) Stock Subscription Rights Delivered to Employees, etc. as Consideration for the
Execution of Their Duties in This Fiscal Year
Not applicable.
(3)

Directors and Corporate Auditors of the Company(i)

Directors and Corporate Auditors (As of March 31, 2012)
Title

Responsibilities in the Company and
Major Concurrent Positions
President and Representative Director of NAMCO
BANDAI Games Inc.

Name

President andShukuo Ishikawa
Representative Director
Director and Senior Advisor Takeo Takasu
Director
Shuji Ohtsu

Director

Yuji Asako

Director

Kazunori Ueno

Director

Masahiro Tachibana

Director
Director

Manabu Tazaki
Nobuo Sayama

Director

Tomohisa Tabuchi

Full Time Corporate
AuditorFull Time Corporate
AuditorCorporate Auditor

Koichiro Honma

Corporate Auditor

Kouji Yanase

Chairman of the Japan Toy Association
Responsible for Overseas Regional Headquarters
Companies and the Division General Manager of
the Group Administrative Headquarters
Division General Manager of the Corporate
Planning Division
Responsible for the Toys and Hobby SBU and
President and Representative Director of Bandai
Co., Ltd.
Responsible for the Amusement Facility SBU and
President and Representative Director of NAMCO
LIMITED
Outside Director of STUDIO ALICE CO., LTD
Professor, Graduate School of International
Corporate Strategy (ICS), Hitotsubashi University
Managing Director of GCA Savvian Group
Corporation
Representative Director of Integral Corporation
Outside Director of Little eArth Corporation Co.,Ltd.
Attorney-at-Law
Partner in STW & Partners
Outside Director of Hitachi Medical Corporation

Katsuhiko Kohtari

Certified Public Accountant

Osamu Sudoh

Attorney-at-Law
Partner in Sudoh & Takai Law Offices
Outside Director of Rakuten Bank, Ltd.
Outside Corporate Auditor of Mitsui-Soko Co.,Ltd.
Attorney-at-Law
Partner in Marunouchi-Chuo Law Office14

(Notes) 1. Directors Manabu Tazaki, Nobuo Sayama and Tomohisa Tabuchi are Outside Directors.
2.
Full Time Corporate Auditor Katsuhiko Kohtari, Corporate Auditors
Osamu Sudoh and Kouji Yanase are Outside Corporate Auditors.
3. Full Time Corporate Auditor Katsuhiko Kohtari is a certified public accountant and has
considerable knowledge of finance and accounting.
4. Corporate Auditor Osamu Sudoh has considerable experience with bankruptcy issues as
an attorney-at-law and has the deep knowledge of finance and accounting necessary toengage in such bankruptcy issues.
5. President and Representative Director Shukuo Ishikawa stepped down as President andRepresentative Director of NAMCO BANDAI Games Inc. on March 31, 2012, andtook office as Chairman of the Board of that company on April 1, 2012.
6． Director Kazunori Ueno took office as Executive Vice-President and Representative
Director of the Company on April 1, 2012.
7. The Company has appointed Outside Directors Manabu Tazaki, Nobuo Sayama, andTomohisa Tabuchi and Outside Corporate Auditors Katsuhiko Kohtari, Osamu Sudoh,
and Kouji Yanase as Independent Directors/Corporate Auditors as defined in the rulesof the Tokyo Stock Exchange and has filed therewith the notification regarding their
appointments.
(ii) Directors and Corporate Auditors Who Retired or Were Dismissed during This Fiscal
Year
Not applicable.
(iii) Remuneration, etc. Paid to Directors and Corporate Auditors
Total Amount of Remuneration, etc., Paid During This Fiscal Year
Number of People
Amount of Remuneration, etc.
Directors
9¥404 million
Corporate Auditors
4¥67 million
Total
13¥472 million(Outside Directors and Outside(8)(¥88 million)
Corporate Auditors)(Notes) 1. There are no employees serving as Directors.
2. At the 1st Ordinary General Meeting of Shareholders held on June 26, 2006, it was
resolved that the remuneration limit for Directors must be 700 million yen per fiscal
year, of which 350 million yen is the limit for base remuneration and the remaining 350
million yen is the limit for cash bonus.
3. At the Ordinary General Meetings of Shareholders for Bandai Co., Ltd. and NAMCO
LIMITED (currently NAMCO BANDAI Games Inc.) held on June 23, 2005 and on
June 25, 2005 respectively, it was resolved that the remuneration limit for Corporate
Auditors must be 8 million yen per month.
(iv) Matters Concerning Outside Directors and Outside Corporate Auditorsa.

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 Corporate Auditors are asstated in “(i) Directors and Corporate Auditors” on pages 14 to 15.
Moreover, there are no special interests between the Company and the entities withwhich Outside Directors and Outside Corporate Auditors have concurrent positions.

15

b.

Main Activities in This Fiscal Year
• Status of Attendance at Board of Directors Meetings and Board of Corporate Auditors
Meetings
Board of Directors Meetings(Held 18 times)
Number of
Meetings
Attendance Rate
Attended

Director Manabu Tazaki
Director Nobuo Sayama
Director Tomohisa Tabuchi
Corporate Auditor
Katsuhiko Kohtari
Corporate Auditor
Osamu Sudoh
Corporate Auditor
Kouji Yanase

Board of Corporate Auditors
Meetings (Held 10 times)
Number of
Meetings
Attendance Rate
Attended

16
14
14

88.9%
100.0% (Note)
100.0% (Note)

−
−
−

−
−
−

18

100.0%

10

100.0%

15

83.3%

10

100.0%

17

94.4%

10

100.0%(Note) Directors Nobuo Sayama and Tomohisa Tabuchi were elected at the 6th Ordinary General
Meeting of Shareholders held on June 20, 2011, and thus, the number of Board of Directors
Meetings on which their attendance rates is based differs from that of the other Outside
Directors and Outside Corporate Auditors. There have been 14 Board of Directors Meetings
since they assumed the office of Director.
• Statements Made at Board of Directors Meetings and Board of Corporate Auditors
Meetings
Director Manabu Tazaki provides advice and proposals by giving opinions, etc. basedon his wealth of experience and position as a corporate officer to ensure theappropriateness and validity of decisions of the Board of Directors.
Director Nobuo Sayama provides advice and proposals by giving opinions, etc. basedon his wealth of experience and position as a corporate officer and from his profoundscholarly knowledge via his teaching activities in the field of corporate strategy to ensure
the appropriateness and validity of decisions of the Board of Directors.
Director Tomohisa Tabuchi provides advice and proposals by giving opinions, etc.
primarily from his position as an attorney-at-law to ensure the appropriateness andvalidity of decisions of the Board of Directors.
Corporate Auditor Katsuhiko Kohtari provides advice and proposals by giving
opinions, etc. primarily from his position as a certified public accountant to ensure theappropriateness and validity of decisions of the Board of Directors and the Board of
Corporate Auditors.
Corporate Auditors Osamu Sudoh and Kouji Yanase provide advice and proposals bygiving opinions, etc. primarily from their positions as attorneys-at-law to ensure theappropriateness and validity of decisions of the Board of Directors and the Board of
Corporate Auditors.
c.

Summary of Contracts Concerning Limited Liability
Not applicable.

d.

Total Amount of Remuneration, etc. Paid to Directors and Corporate Auditors by the
Parent Company and Subsidiaries, etc.
Not applicable.

16

(4)

Accounting Auditors(i)Name: KPMG AZSA LLC(ii)

Amount of Remuneration, etc.
Amount of Remuneration, etc.

Amount of Remuneration, etc. for Accounting Auditors¥68 million
for This Fiscal Year
Total in Money and Other Financial Benefits to Be Paidby the Company and Its Subsidiaries to Accounting¥241 million
Auditors(Notes) 1. NAMCO BANDAI Holding (USA) Inc., BANDAI S.A., NAMCO Holdings UK LTD.,
and BANDAI (H.K.) 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 the equivalent laws and regulations in other countries)
by audit firms (including entities overseas with qualifications equivalent to those of aJapanese 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 amount of
remuneration, etc., for Accounting Auditors for this fiscal year described above is thetotal amount of remuneration, etc., for these audits.
(iii)

Non-Auditing Operations

The Company delegates and provides remuneration for its Accounting Auditor to carry out
services apart from those defined under Article 2, Paragraph 1 of the Certified Public
Accountants Act, namely, “to provide guidance and advice as a specialist for the purpose of
conversion to the International Financial Reporting Standards.”(iv)

Policy on Removal or Non-Renewal of an Accounting Auditor

In the event that an Accounting Auditor falls under any of the items of Article 340,
Paragraph 1 of the Companies Act, in principle, the Board of Corporate Auditors will remove
such Accounting Auditor with the unanimous approval of the Corporate Auditors.
Additionally, in the event that the Board of Corporate Auditors judges that an Accounting
Auditor’s behavior caused a material impediment to the audit operations of the Company, it
will request the Board of Directors to present a proposal for the removal or non-renewal ofsuch Accounting Auditor at a General Meeting of Shareholders, as prescribed in Article 344,
Paragraph 2 of the Companies Act, even if such Accounting Auditor does not fall under any of
the items of Article 340, Paragraph 1 of the Companies Act.
Under these circumstances, the Board of Directors will be responsible for proposing suchagendum to the General Meeting of Shareholders. Moreover, if the Board of Directors finds it
necessary because of an impediment to the execution of the duties of the Accounting Auditor,
etc., it will, having received the approval of the Board of Corporate Auditors, present the
proposal for removal or non-renewal of such Accounting Auditor at a General Meeting of
Shareholders, as prescribed in Article 344, Paragraph 1 of the Companies Act.
(v)

Summary of Contracts Concerning Limited Liability

Not applicable.

17

(5)

Systems for Ensuring the Properness of Operations

The following outlines decisions regarding systems to ensure that the execution of the duties
by Directors complies with the laws and regulations and the Articles of Incorporation, and othersystems to ensure the properness of the Company’s operations.
(i) Systems to Ensure that the Execution of the Duties by Directors Is in Compliance with theLaws and Regulations and the Articles of Incorporationa.

The Group has established the Group’s Corporate Philosophy, the Group Compliance
Charter, and the BANDAI NAMCO Group Rules for Executives so that the Directors of
the Group companies shall always exercise care in carrying out their duties fairly and inaccordance with the law. The president of each Group company has submitted
declarations of intent to comply with the Group Compliance Charter.

b.

The Group has established regulations concerning compliance as a part of Groupmanagement. The Group as a whole has a system to ensure that compliance with laws
and regulations, respect for ethical principles, and compliance with company regulations
are implemented appropriately.

c.

The relevant Director is put in charge of compliance and is responsible for supervision ofcompliance overall. Should violations of compliance or suspicions thereof occur within
the Group, the Risk Compliance Committee is convened immediately to discuss anddecide how the issue should be handled.

d.

Along with the establishment of the regulations concerning compliance, the Company
has put in place the Corporate Auditors hotline by means of which, in case of violationsof laws or regulations or suspicions thereof, such can be reported directly to the
Corporate Auditors.

(ii) Systems for Preserving and Managing Information Related to Directors’ Execution of
Their Dutiesa.

The Company has established regulations concerning information security as a part ofGroup management. These regulations provide for a system to ensure appropriate
safekeeping and preservation of information.

b.

The Company has established regulations concerning document management andensures (i) the centralized collection and management of minutes of several kinds ofmeetings, contracts and other documents, and (ii) appropriate safekeeping and managing
approval documents and other important documents in each department. The Company
has a system to ensure that Directors and Corporate Auditors may peruse those
documents at any time.

(iii) Regulations Concerning Management for Risk of Loss and Other Systemsa.

The Company has established regulations concerning risk management and complianceas a part of Group management. Throughout the Group, we are working to prevent risk
and to discover factors creating risk as rapidly as possible, and aiming to minimize theimpact of risk on our business by responding to risk quickly and in an appropriatemanner when risk arises.
In particular, positing the occurrence of a situation that could cause drastic damage to the
management of the Group through a major disaster or the like, the Group is engaged in
drawing up a Business Continuity Plan (BCP) for the Group and organizing a Business18

Continuity Management (BCM) system to effect rapid recovery and restart of operations.
b.

The Company has put a Group emergency contact network in place and ensured thatshould information concerning risk, including violations of laws and regulations, develop,
it is reported immediately to the Company’s President and Representative Director and ameeting of the Group Risk Compliance Committee is held to discuss and decide theGroup’s response to such risk.

(iv) Systems to Ensure that Directors Execute their Duties Efficientlya.

To promote greater efficiency in Group business operations, subsidiaries are assigned to
SBUs categorized by business segment and a Director is put in charge of each SBU.
Mid-term Plan and annual budgets are determined for each SBU and the Group as awhole, and each Director in charge of each SBU is responsible for the efficient executionof such SBU businesses.

b.

An overseas regional headquarters company is determined for each overseas region, toprovide region-specific management and support for strategies in the Group as a wholeand in each SBU, through which a system that permits efficient execution of duties is
ensured.

c.

The Company has established several meetings, including the SBU Monthly Report
Meeting, the Group Management Meeting, and the Waigaya (Weekly Meeting) at which
Directors and important employees exchange opinions, putting in place a system forreporting inside the Group and decision making. In addition, the Company has
established performance management regulations, organizational regulations, regulations
concerning division of duty, regulations concerning operating authority, regulations
concerning managerial decisions, etc., which define the scope of authority andresponsibility of each Director and design a system to ensure efficient execution of theirrespective work duties.

(v) Systems to Ensure that Employees Execute their Duties in Compliance with Laws andRegulations and the Articles of Incorporationa.

The Group has established the Group’s Corporate Philosophy and the Group Compliance
Charter as the foundations of its compliance system, so that employees shall always
exercise care in carrying out their duties fairly and in accordance with the law.

b.

The Company has established organizational regulations, regulations concerning divisionof duty, regulations concerning operating authority, regulations concerning managerial
decisions, etc., which clarify the responsibilities and authority of employees.

c.

An Internal Auditing Division has been established independently of the executive
sections to work towards the properness of execution of operations through internal
audits, and the Risk Compliance Committee has been established to serve as the overall
compliance body, putting in place a system such that, should violations of laws or
regulations or suspicions thereof occur, the Risk Compliance Committee will
immediately discuss and decide how the issue should be handled.

d.

Along with the establishment of the regulations concerning compliance, the Company
has put in place the Corporate Auditors hotline by means of which, in case of violationsof laws or regulations or suspicions thereof, such can be reported directly to the
Corporate Auditors.

19

(vi) Systems to Ensure Proper Business Behavior by the Groupa.

The Group has established the Group Compliance Charter, with which all officers andemployees of the Group shall comply while conducting business. The president of eachGroup company has submitted declarations of intent to comply with the Group
Compliance Charter. Moreover, the Group Compliance Charter has been revised asneeded in response to revisions in the laws and regulations, etc., or changes in the social
context surrounding the Group, and a guidebook, the Compliance Book, has been issued
and distributed to all officers and employees in the Group in order to ensure thoroughknowledge of the Group Compliance Charter throughout the Group. Furthermore,training on compliance is being carried out by, for example, the Group’s training system,
using its internal network.

b.

The Group management regulations including, among other regulations, regulations
concerning compliance, risk management, performance management and information
security management have been established to ensure proper performance of business
responsibilities throughout the Group.

c.

To promote greater efficiency in Group operations, Group businesses are segmented withseparate SBUs for each category. The Company has put in place a system primarily
headed by the Director in charge of each SBU, to ensure close communication, with eachGroup company and to provide each Group company with appropriate guidance, advice,
etc., as necessary.

d.

A project is underway to make the Group’s internal controls function more effectively,
with the primary focus on greater effectiveness and efficiency in operations, reliability infinancial reporting, and compliance with related laws and regulations.

(vii) Matters Concerning the Systems Related to Employees who Assist the Corporate
Auditors and those Employees’ Independence from the Directorsa.

The Board of Corporate Auditors’ regulations and the audit standards for Corporate
Auditors specify in writing and the Board of Directors has adopted a resolution to theeffect that the Corporate Auditors may request a Representative Director to assign
employees to assist the Corporate Auditors in carrying out their duties and that, to ensure
those employees’ independence from the Board of Directors, the Directors and the
Corporate Auditors are given an opportunity to confer on personnel matters concerning
those employees in advance.

(viii) Systems for Reports to the Corporate Auditors, Including Reports to the Corporate
Auditors Made by Directors and Employeesa.

Directors and employees must promptly report to the Board of Corporate Auditors any
matters prescribed by laws and regulations, matters likely to have a major impact on the
Company and the Group, and matters related to the current status of internal audits andcompliance.

b.

Along with the establishment of regulations concerning compliance, the Company has
put in place the Corporate Auditors hotline by means of which, in case of violations oflaws or regulations or suspicions thereof, such can be reported directly to the Corporate
Auditors.

c.

Directors make regular reports to the Board of Directors on the current state ofconstruction and operations of internal control systems.

20

d.

Besides meetings of the Board of Directors, Corporate Auditors also participate inimportant meetings including the SBU Monthly Report Meeting and meetings of theBoards of Directors of principal subsidiary companies, and have regular meetings with
Directors and important employees to confirm the current state of affairs of the Company,
receive reports, exchange opinions, and so on.

(ix) Systems to Ensure the Effectiveness of Audits Conducted by the Corporate Auditorsa.

Besides (i) establishment of the Board of Corporate Auditors’ regulations, audit standards
for Corporate Auditors, standards for audits of internal control systems and audit plans,and (ii) allocation of duties of Corporate Auditors, Corporate Auditors ensure efficient
audits by regularly meeting with Directors and important employees, auditing important
documents, and communicating with the Internal Auditing Division and Accounting
Auditor.

b.

Besides participating in meetings of the Board of Directors, Corporate Auditors also
participate in important meetings including the SBU Monthly Report Meeting andmeetings of the Boards of Directors of principal subsidiary companies, with the aim ofstrengthening audits of the subsidiaries.

c.

The Group Board of Corporate Auditors, which consists of Full Time Corporate Auditors,
holds workshops aimed at improving the quality of audits to provide information aboutaudit policies and other relevant matters, confirm the current status of audits, receive
reports, and discuss. In addition, it provides training in audit procedures for employees
who also serve as part-time Corporate Auditors, with the aim of improving theeffectiveness of audits for the Group as a whole.

(6)
(i)

Basic Policy Concerning Control of the Company
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.

21

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 mid- 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 three-year Mid-term Plan, which started in April 2012, the Group will
“Empower, Gain Momentum, Accelerate Evolution” in every aspect of its businesses,
including products, services, business models, operation, and numerical targets. Specifically,
we will promote five Focus Strategies for implementing the Mid-term Plan. The first three
are Business Area Strategies: the Basic Business Area, the Profit Recovering Area, and the
New Growth Area. The Basic Business Area is the area in which the Group has secured acertain level of stable market share and profit and, as the Group’s basic business, the focus
is on profitability in expanding the business further. In the Profit Recovering Area, thepriority will be on the recovery of profitability and achieving a stable market share andprofit. The New Growth Area is the area in which we expect the region and businesses todevelop as new growth pillars. Crosscutting them are two Functional Strategies that apply
across all business areas: the Group-wide Network Strategy and the Human Resources
Strategy. By implementing these strategies, the Group will work to promote growth in profit
in the domestic and overseas markets, aiming to achieve, in the fiscal year ending March
2015, the final fiscal year of the Mid-term Plan, net sales of 480,000 million yen, operating
income of 42,500 million yen, and a 10% ROE (return on equity).
・Strengthening Corporate Governance
The president and representative director of each major company responsible for each
SBU also serves on the Company’s Board of Directors, to strengthen the collaborative
efforts between the holding company and the operating companies and between theoperating companies and to facilitate speedier decision-making as a Group. In addition, theCompany has made three of the nine Directors outside directors, to strengthen management
oversight functions.

22

・Promoting Efficient Management
The Group has put in place rules for restructuring and withdrawing from businesses; it
has reinforced systems for continuous monitoring in order to discern business trends more
swiftly, and is making swift decisions on restructuring businesses or withdrawing fromthem, based on in-house indicators. In addition, the Group is working towards cost
reductions by standardizing 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.
・ Reinforcing CSR (Corporate Social Responsibilities) Activities
The Group, as an enterprise delivering “Dreams, Fun, and Inspiration,” has defined“Group-wide 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
Our Group discloses information in a timely and appropriate manner in accordance with
the Financial Instruments and Exchange Act and rules prescribed by the Tokyo Stock
Exchange. We aim to be a highly transparent corporation that clearly provides shareholders
with information concerning management strategies and business directions. We thus work toprovide ample opportunities, for instance, company information meetings and financial
information meetings for the president and other executives of the Company to explain
directly to both foreign and Japanese individual investors, institutional investors, stock
analysts, etc.
・Proactive Policy for the Return of Profits to Shareholders
The Company 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 concreteterms, 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, part of any profit, after deduction of dividends, may be used to acquire
treasury stock upon comprehensive consideration of the amount of funds on hand,
performance trends, recent share price trends, the existence or nonexistence of major
investment proposals, and other factors.

23

Takeover Defenses
At present, the Company has taken no specific measures as takeover defenses. We regard
implementing our management and business strategies in accordance with the measures toincrease the corporate value of the Group and aiming to increase the corporate value of theGroup as a whole as a substantial defense against inappropriate takeovers.
That said, since we are 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.

24Consolidated Balance Sheet(As of March 31, 2012)(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

106,958
69,102
12,907
19,417
4,714
8,733
19,763(677)
240,920

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
Deferred tax assets
Other investments and assets
Allowance for doubtful receivables
Total investments and other assets
Total fixed assets
TOTAL ASSETS

10,32813,558
11,3889,224
44,5008,194
22,177
6,426
21,663(1,711)
48,556
101,251
342,17125

(Millions of yen)AmountLIABILITIESCurrent liabilities
Trade payables
Short-term borrowings
Accounts payable-otherAccrued income taxes
Provision for directors’ bonuses
Provision for losses from business restructuring
Provision for sales returns
Provision for loss on disaster
Other current liabilities
Total current liabilities

48,742
6,773
19,191
9,360
1,693
58
1,169
7
20,950107,946

Long-term liabilities
Long-term borrowings
Deferred tax liabilities for land revaluation
Accrued retirement and severance benefits
Other long-term liabilities
Total long-term liabilities
TOTAL LIABILITIES

12,883
590
3,140
4,485
21,099129,046

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

10,00052,245173,250(2,383)
233,112

Accumulated other comprehensive income
Unrealized gains or losses on other securities, net of tax
Deferred gains or losses on hedges, net of tax
Land revaluation, net of tax
Foreign currency translation adjustments
Minority interests
TOTAL NET ASSETSTOTAL LIABILITIES AND NET ASSETS(21,669)2,867
229(6,408)(18,357)
1,682
213,125
342,17126

Consolidated Statements of Operations(From April 1, 2011 to March 31, 2012)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Reversal of allowance for doubtful receivables
Other non-operating income
Non-operating expenses
Interest expense
Foreign exchange loss
Equity in loss of affiliated companies
Commission for purchase of treasury stock
Other non-operating expenses
Recurring income
Extraordinary income
Gain on sales of fixed assets
Gain on sales of investment securities, net
Gain on sales of investments in affiliated companies
Gain on transfer of business
Reversal of provision for loss on disaster
Other extraordinary income
Extraordinary loss
Loss on sales of fixed assets
Loss on disposal of fixed assets
Loss on impairment of fixed assets
Loss on valuation of investment securities
Special retirement expenses
Other extraordinary loss
Income before income taxes and minority interests
Corporate income, inhabitant and enterprise taxes
Adjustment for income taxes
Income before minority interests
Minority interests
Net income

27(Millions of yen)Amount454,210
286,708
167,502132,896
34,606
1,222
214
235
256
515
869
137
162
246
125
196
34,960
297
22
56
84
53
49
31
4,848
9
937
1,105
1,325
541
928
30,40815,583(4,634)
10,94919,459155
19,303

Consolidated Statement of Changes in Net Assets(From April 1, 2011 to March 31, 2012)(Millions of yen)
Stockholders’ equity
Common stock
Balance as of April 1, 2011
Changes during the period
Total changes during the period
Balance as of March 31, 2012
Additional paid-in capital
Balance as of April 1, 2011
Changes during the period
Disposal of treasury stock
Retirement of treasury stock
Total changes during the period
Balance as of March 31, 2012
Retained earnings
Balance as of April 1, 2011
Changes during the period
Cash dividends
Net income
Total changes during the period
Balance as of March 31, 2012
Treasury stock
Balance as of April 1, 2011
Changes during the period
Purchase of treasury stock
Disposal of treasury stock
Retirement of treasury stock
Changes in treasury stock accompanying
changes to holdings in companies to which theequity method is applied
Total changes during the period
Balance as of March 31, 201228

10,000−10,00069,9230(17,677)(17,677)
52,245
159,491(5,545)
19,303
13,758173,250(3,496)(16,565)
017,677(0)1,112(2,383)

(Millions of yen)
Total stockholders’ equity
Balance as of April 1, 2011
Changes during the period
Cash dividends
Net income
Purchase of treasury stock
Disposal of treasury stock
Retirement of treasury stock
Changes in treasury stock accompanying
changes to holdings in companies to which theequity method is applied
Total changes during the period
Balance as of March 31, 2012
Accumulated other comprehensive income
Unrealized gains or losses on other securities, net oftax
Balance as of April 1, 2011
Changes during the period
Net changes in the period other than changes instockholders’ equity
Total changes during the period
Balance as of March 31, 2012
Deferred gains or losses on hedges, net of tax
Balance as of April 1, 2011
Changes during the period
Net changes in the period other than changes instockholders’ equity
Total changes during the period
Balance as of March 31, 2012Land revaluation, net of tax
Balance as of April 1, 2011
Changes during the period
Net changes in the period other than changes instockholders’ equity
Total changes during the period
Balance as of March 31, 2012
Foreign currency translation adjustments
Balance as of April 1, 2011
Changes during the period
Net changes in the period other than changes instockholders’ equity
Total changes during the period
Balance as of March 31, 201229

235,919(5,545)
19,303(16,565)0−(0)(2,807)233,112

447
2,419
2,419
2,867
3
226
226
229
(6,491)
82
82(6,408)(17,775)
(581)
(581)
(18,357)(Millions of yen)
Total accumulated other comprehensive income
Balance as of April 1, 2011
Changes during the period
Net changes in the period other than changes instockholders’ equity
Total changes during the period
Balance as of March 31, 2012
Minority interests
Balance as of April 1, 2011
Changes during the period
Net changes in the period other than changes instockholders’ equity
Total changes during the period
Balance as of March 31, 2012
Total net assets
Balance as of April 1, 2011
Changes during the period
Cash dividends
Net income
Purchase of treasury stock
Disposal of treasury stock
Retirement of treasury stock
Changes in treasury stock accompanying changes
to holdings in compnies to which the equity method
is applied
Net changes in the period other than changes instockholders’ equity
Total changes during the period
Balance as of March 31, 201230

(23,816)
2,147
2,147
(21,669)
1,590
91
91
1,682
213,693(5,545)
19,303(16,565)
0
−
(0)
2,239
(567)
213,125

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)(i)

Status of Consolidated Subsidiaries:
Total Number of Consolidated Subsidiaries:
72 companies(ii) Names of Principal Consolidated Subsidiaries:
Bandai Co., Ltd., NAMCO BANDAI Games Inc., NAMCO LIMITED,NAMCO BANDAI Holdings (USA) Inc., BANDAI S.A., NAMCO Holdings
UK LTD. and BANDAI (H.K.) CO., LTD.
(iii) Changes in the Scope of Consolidation
Since I WILL Co., Ltd., and BNDeNA inc. were newly incorporated, those companies
have been added to the scope of consolidation for this consolidated fiscal year.
In addition, with respect to companies included among consolidated subsidiaries in theprevious consolidated fiscal year, since CREATIVE B WORKS CO., LTD., NAMCO
NETWORKS AMERICA INC., EMOTION CO., LTD., and NAMCO TALES STUDIO
LTD., were merged into consolidated subsidiaries and since D3DB S.r.l., BEC Co., Ltd.
and D3Publisher of Europe Ltd., were liquidated, those companies were excluded from thescope of consolidation.
(2)(i)

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

(ii) Reason for Exclusion from the Scope of Consolidation:
As the scale of the business conducted by each of the non-consolidated subsidiaries issmall, the total assets, net sales, net income 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.

31

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 Non-Consolidated Subsidiaries and Affiliated Companies to Which the
Equity Method Was Applied:
7 companies(ii) Names of the Principal Non-Consolidated Subsidiaries and Affiliated Companies toWhich the Equity Method Was Applied:(2)

Non-consolidated subsidiary:

SHANGHAI NAMCO LTD.

Affiliated companies:

Happinet Corporation, Sotsu Co., Ltd. andPeople Co., Ltd.

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 net income 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 fiscal year thatdiffers from the consolidated fiscal year, then the financial statements for the latest fiscal
year of that company are used.
3. Information Concerning the Fiscal Year, etc. for Consolidated Subsidiaries
NAMCO BANDAI Holdings (USA) Inc. and some other consolidated subsidiaries (onedomestic and 17 overseas subsidiaries) have the last day of December as their closing date.
In the preparation of the consolidated financial statements, the financial statements of eachcompany for the relevant fiscal year were used, and necessary adjustments for consolidation
purposes were made in the case of material transactions conducted prior to the consolidated
closing date for the consolidated financial statements of the Company.
The closing date has been changed to March 31 from this consolidated fiscal year on for
BANDAI S.A. and five other companies whose closing date had been December 31, for
ARTPRESTO Co., Ltd., whose closing date had been January 31, and for Sunrise Inc. andfive other companies whose closing date had been the last day of February. In connection
with those changes, the number of months included in this consolidated fiscal year for each of
those companies is 15, 14, and 13 months, respectively.

32

4. Information Concerning the Basis for Accounting Treatment(1)(i)

Valuation Basis and Methods for Significant Assets:
Valuation Basis and Methods for Securities:
Other securities:
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 forinvestment and similar partnerships (deemed to be securities under
Article 2, Paragraph 2 of the Financial Instruments and Exchange Act),
these are stated by the net amount corresponding to the Company’s
equity share, based on the most recent available financial reports
according to the date for settlement of accounts provided for in thepartnership agreement.

(ii) Derivative Transactions: Stated using the market price method.
(iii) Valuation Basis and Methods for Inventories:
Work in process, such as game software, etc.:
Stated using the cost method based on the specific-cost method. (The value
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

33Amusement facilities and machines:

3 to 7 years(ii) Intangible Assets (Exclusive of leased assets):
Stated using the straight-line method.
The general useful life of software is as follows:
Software (used internally):
1 to 5 years(iii) Leased Assets:
Stated using the straight-line method, with the useful life set to the lease period,
for a residual value of zero.
However, financing lease transactions other than those in which titles to leased
property are determined to be transferred to lessees, which transactions started
on or before March 31, 2008, are stated by applying the accounting treatment
applicable to ordinary operating lease transactions.
(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 consolidated fiscal year.
(iii) Provision for Losses from Business Restructuring:
Accrued losses on restructuring of operations are provided for estimated losses
on restructuring of operations.
(iv) Provision for Sales Returns:
Accrued losses on returned goods after the end of this consolidated fiscal year
are provided based on historic experience.
(v)

Provision for loss on disaster:
The provision for loss on disaster is included in the estimated amount at the endof this consolidated fiscal year for expenditures to restore assets damaged by theGreat East Japan Earthquake.

(vi) Accrued Retirement and Severance Benefits:
Accrued retirement and severance benefits for employees in respect of defined
benefit plans are provided for based on the estimated values of projected benefit
obligations and pension plan assets at the end of the consolidated fiscal year.
Unrecognized actuarial gain or loss is amortized, beginning from theconsolidated fiscal year following the year in which it is incurred, using thestraight-line method over a fixed period (9 to 19 years) that does not exceed theaverage remaining years of service of employees as of the end of the fiscal year
in which it is incurred. Certain domestic consolidated subsidiaries amortize priorservice costs over a fixed period (10 to 11 years) that does not exceed the34average remaining years of service of employees at the point when the costs are
incurred.
(4)

Accounting Standards for Significant Income and Expense:(i)Video Game Software Revenue Recognition:
Consolidated subsidiaries operating in the United States recognized revenue inaccordance with “Software Revenue Recognition” of FASB 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.

(ii) 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, the Company records thesoftware and content development costs as work in process.
The capitalized production costs are amortized to cost of sales based on
projected sales volumes.
(5)(i)

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

(ii) Hedging Instruments and Hedged Items:
Hedging instruments:
Hedged items:

Forward exchange contracts
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 theevent that critical terms are the same for the hedging instrument and the hedged
assets, liabilities, or scheduled transaction, it is assumed that the hedge is 100%
effective, so the assessment of effectiveness is not performed.

35

(6)

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

(7)

Other Important Information Constituting the Basis of Preparation of Consolidated Financial
Statements
Accounting treatment of consumption tax:
Consumption tax is accounted for separately and is not figured into each listed
item.

II.

Notes to Changes in Method of Presentation(Consolidated Statements of Operations)(1) “Amortization of negative goodwill” ( the balance of which at the end of this consolidated
fiscal year is 3 million yen), which had been stated separately until the previous
consolidated fiscal year, is included in “Other non-operating income” under “Non-operating
income” since it is at or below 10 percent of the total non-operating income.
(2) “Rental income” (the balance of which at the end of this consolidated fiscal year is 101
million yen), which had been stated separately until the previous consolidated fiscal year, is
included in “Other non-operating income” under “Non-operating income” since it is at or
below 10 percent of the total non-operating income.
(3) “Equity in loss of affiliated companies,” which had been included in “Other non-operating
expenses” under “Non-operating expenses” until the previous consolidated fiscal year, isstated separately since it is above 10 percent of the total non-operating expenses for thisconsolidated fiscal year.
(4) “Commission for purchase of treasury stock,” which had been included in “Other
non-operating expenses” under “Non-operating expenses” until the previous consolidated
fiscal year, is stated separately since it is above 10 percent of the total non-operating
expenses for this consolidated fiscal year.
(5) “Gain on sales of investments in affiliated companies,” which had been included in “Other
extraordinary income” under “Extraordinary income” until the previous consolidated fiscal
year, is stated separately since it is above 10 percent of the total extraordinary income forthis consolidated fiscal year.
(6) “Loss on disposal of fixed assets,” which had been included in “Other extraordinary loss”
under “Extraordinary loss” until the previous consolidated fiscal year, is stated separately
since it is above 10 percent of the total extraordinary loss for this consolidated fiscal year.

III. Notes to Consolidated Balance Sheet
1. Assets pledged as collateral and debts on collateral:
Time deposits: ¥2 million
Pledged for bank transaction guarantees. There are no debts on collateral.
2. Amount of Accumulated Depreciation of Property, Plant and Equipment:¥127,604 million
3. Guarantee Obligation: ¥172 million
Pledged for guarantees for liabilities arising from lease agreements executed by affiliatedcompanies.

36

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 959 million yen.
5. Bills maturing on the last day of the consolidated fiscal year
Bills maturing on the last day of the consolidated fiscal year are settled as of a bill clearing
day. However, since the last day of this consolidated fiscal year was a holiday for financial
institutions, the following bills maturing on the last day of the consolidated fiscal year are
included in the balance at the end of the consolidated fiscal year.
Notes receivable
Notes payable

400 million yen
541 million yen

6. Restrictive financial covenants
The Company raised funds by means of long-term borrowings from a financial institution
as of August 5, 2011. The terms of those borrowings include the following restrictive
financial covenants:(1) The Company shall maintain the amount of net assets on the consolidated balance sheet as of
the closing dates of the interim and end of each fiscal year (the “Interim or End of Fiscal
Year”) at 75% or above of whichever is greater: (i) the amount of net assets on the
consolidated balance sheet as of the closing date of the immediately preceding Interim or End
of Fiscal Year or (ii) the amount of the net assets on the consolidated balance sheet as of theclosing date of the fiscal year ended March 2011.
(2) With respect to the recurring income or loss on the consolidated statements of operations foreach fiscal year end, the Company shall not record recurring losses for two consecutive fiscal
years.
(3) From the date of this loan agreement and until all obligations to the lender and its agents
under the terms of this agreement have been fulfilled, the Company shall maintain theownership ratio (direct or indirect) at 100% with respect to Bandai Co., Ltd., NAMCO
BANDAI Games Inc., and NAMCO LIMITED.

37

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, 2011
Ordinary General
Meeting of
Shareholders
November 2, 2011,
Board of Directors
Meeting(2)

Type ofsharesTotalamount ofdividends(millions ofyen)

Dividend pershare (yen)Date ofrecordEffective
date

Common
stock

2,839

12

March 31,2011

June 21,2011

Common
stock

2,706

12

September
30, 2011

December 5,
2011

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

Date of Scheduled
Resolution

Type ofsharesTotalamount ofdividends(millionsof yen)June 18, 2012,
Ordinary General
Meeting of
Shareholders

Common
stock

3,077

Source ofdividends

Dividend
per share(yen)

Date ofrecordEffective
date

Retainedearnings

14

March 31,2012

June 19,
2012

38

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 for the purpose of reducing risks arising from fluctuations in exchange rates forforeign-currency-denominated operating liabilities.
Borrowings are used mainly to procure funds needed for capital expenditures and forinvestment financing. Hedging is implemented as necessary for variable rate borrowings
through the use of interest rate swaps for the purpose of reducing risks arising fromfluctuations in interest rates.
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.
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, 2012, 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
106,958
106,958−(2) Trade receivables
69,102
69,102−(3) Short-term investments andinvestment securities
1. Other securities
13,841
13,841
−
8,755
1,410
2. Stock of affiliated companies
7,345
Total assets
197,247
198,658
1,410(1) Trade payables
48,742
48,742−(2) Short-term borrowings
6,773
6,773
−
(3) Accounts payable-other
19,191
19,191−(4) Accrued income taxes
9,360
9,360
−
(5) Long-term borrowings
12,883
12,883−
Total liabilities
96,95096,950−Derivative transactions (*)
269
269
−
(*) 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.

39

(Notes) 1. Relevant matters of method of calculating the market value of financial instruments andsecurities and derivative transactions
Assets(1) Cash and time deposits, (2) Trade receivables
Since these are readily convertible into cash, their market value is almost identical withthe book value; and these are stated at the book value.
(3) Short-term investments and investment securities
The market value of these is stated at the price on the stock exchange or the price aspresented by counterparty financial institutions and others.
Liabilities(1) Trade payables, (2) Short-term borrowings, (3) Accounts payable-other, (4) Accrued income
taxes
Since these are readily convertible into cash, their market value is almost identical withthe book value; and these are stated at the book value.
(5) The market value of long-term borrowings is calculated by discounting the total amount ofprincipal and interest, using the interest rate assumed to apply if the similar new borrowings
are made.
Derivative transactions
The market value of derivative transactions is stated at the price as presented bycounterparty financial institutions and others.
2. Unlisted stocks (stated as 1,443 million yen in the consolidated balance sheet), stocks ofaffiliated companies (unlisted stocks) (stated as 1,533 million yen in the consolidatedbalance sheet), and contributions to investment partnerships (stated as 86 million yen in
the consolidated balance sheet) have no market price and it is extremely difficult toassess their market value, so they are not included in “(3) Short-term investments andinvestment securities.”

VI. Notes Concerning Per-Share Data
1. Net assets per share:¥962.45

2. Net income per share for this consolidated fiscal year:¥85.62

VII. Notes Concerning Significant Subsequent Events(Introduction of stock compensation-type stock options)
At the Board of Directors Meeting on May 8, 2012, it was resolved that the Company would grant
stock compensation-type stock options (stock acquisition rights) to the Directors of the Company asfollows, and that it would submit the proposal to that effect to the Seventh Ordinary General Meetingof Shareholders (scheduled to be held on June 18, 2012).
1. Reason for issue of stock acquisition rights
The remuneration system for the Company’s Directors (apart from Outside Directors) makes its
basic policy the promotion of the sharing value with the Company’s shareholders and enhancing themorale and motivation of the Directors to improve the Company’s performance.
In addition, accompanying the start of the “ Mid-term Plan of BANDAI NAMCO Group (from
April 2012 to March 2015)” (the “Mid-term Plan”) announced in February 2012, we have been
making the relationship between performance and remuneration significantly clearer and placing40

more weight on performance-based remuneration in the Directors’ remuneration in order to strongly
orient their focus to achieving the goals defined in the Mid-term Plan. As one part of that effort, we
would now like to introduce a new system for allotting stock compensation-type stock options on
condition that the predefined performance goals are achieved.
Because the performance requirements have been imposed for these stock compensation-type stock
options, not as a condition for exercising the options but as a condition for being allotted the options,the stock compensation-type stock options will not be granted to the Directors if those performancerequirements are not satisfied.
2. Various conditions for grant of stock acquisition rights(1)

Persons to whom stock acquisition rights are allotted

Stock acquisition rights shall be allotted to the Directors of the Company (excluding Outside
Directors).
If the “Election of Nine (9) Directors” proposal is approved without requiring any changes at theOrdinary General Meeting of Shareholders to be held on June 18, 2012, then six (6) Directors(excluding three (3) Outside Directors) will be subject to the proposal.
(2)

Class and number of shares to be delivered upon exercise of stock acquisition rights

The maximum number of shares of common stock of the Company to be delivered upon exerciseof stock acquisition rights per year is 120,000 (0.05% of shares issued).
In the event that the Company carries out a share split or share consolidation, the number of shares
to be delivered upon exercise of stock acquisition rights will be adjusted in accordance with thefollowing formula; provided, however, that such adjustment will only be carried out with respect tothe number of shares to be delivered upon exercise of stock acquisition rights that are yet to be
exercised at the time of the share split or share consolidation, and any fraction of less than one shareresulting from such adjustment will be rounded down.
Ratio of share split or
Number of shares
Number of sharesx=share consolidation
before adjustment
after adjustment
Furthermore, if the number of shares to be delivered upon exercise of stock acquisition rights needs
to be adjusted because the Company carries out an absorption-type merger or a consolidation-typemerger with another company with succession to the stock acquisition rights provided for in this
proposal or because the Company carries out an incorporation-type company split or anabsorption-type company split, the Company will make the necessary adjustment in the number of theshares as well.
(3)

Total number of stock acquisition rights

The maximum number of stock acquisition rights to be allotted per year is 1,200.
The number of shares to be delivered upon exercise of one stock acquisition right is 100 shares.
(If, however, the number of shares is adjusted as provided for in the Paragraph (2). above, then thenumber of shares to be delivered upon exercise of one stock acquisition right will be adjusted in thesame manner.)(4)

Requirements for allotment of stock acquisition rights

If the requirement stated in (i) below is satisfied, then stock acquisition rights will be allotted up toa maximum of 60 million yen per year. If, in addition to the requirement stated in (i), the requirement

41

stated in (ii) is also satisfied, then stock acquisition rights will be allotted up to a maximum of 120
million yen per year.
If, however, neither of the requirements stated in (i) or (ii) is satisfied, then no stock acquisitionrights will be allotted.
(i)

The Company’s consolidated operating income is 42,500 million yen or greater inany of the fiscal years from the fiscal year ending March 2013 through the fiscal
year ending March 2015;(ii) The Company’s consolidated operating income is 53,000 million yen or greater inany of the fiscal years from the fiscal year ending March 2013 through the fiscal
year ending March 2015.
(5)

Price for issuance of stock acquisition rights

The price for issuance of each stock acquisition right will be calculated based on the Black-Scholesmodel, an impartial method of valuing stock acquisition rights.
The person who receives an allotment of the stock acquisition rights will, instead of paying theprice for issuance of the stock acquisition rights in cash, offset his or her obligation to pay for issuanceof the stock acquisition rights against the recipient’s right to his or her remuneration from theCompany.
(6)

Amount to be paid upon exercising stock acquisition rights

The amount to be paid upon exercising each stock acquisition right will be one yen per share to beissued or transferred by the exercise of each stock acquisition right, multiplied by the number ofshares to be granted.
(7)

Exercise period for stock acquisition rights

The exercise period for stock acquisition rights will be decided by the Company’s Board of
Directors but must not exceed 20 years from the allotment date of the stock acquisition rights.
(8)

Conditions on exercise of stock acquisition rights

A person who has received an allotment of the stock acquisition rights may, within the period
specified in the Paragraph (7). “Exercise period for stock acquisition rights,” exercise those stockacquisition rights between one and ten days after the date on which that person loses his or her
position as a Director, Auditor, or employee of the Company or of a subsidiary of the Company.
(9)

Restrictions on assignment of stock acquisition rights

Any assignment of stock acquisition rights requires the approval of the Board of Directors of theCompany.
(10) Other details concerning stock acquisition rights
Other details concerning stock acquisition rights will be determined at the Board of Directors’
meeting of the Company at which matters concerning the offering of such stock acquisition rights will
be resolved.

42

VIII.Other Notes
1. Additional Information(1)

Application of accounting standards, etc., concerning accounting changes or error corrections

Any accounting changes and corrections of past errors made after the beginning of thisconsolidated fiscal year are subject to the “Accounting Standard for Accounting Changes and Error
Corrections” (Accounting Standards Board of Japan Statement No. 24, issued on December 4, 2009)
and “Guidance on Accounting Standard for Accounting Changes and Error Corrections” (AccountingStandards Board of Japan Guidance No. 24, issued on December 4, 2009).
(2)

Effect of changes to the corporation tax rate

The “Act to partially revise the Income Tax Act and others in order to construct a tax systemcorresponding to changes in the structure of economic system” (Act No. 114 of 2011) and the“Special measures act to secure the financial resources required to implement policy on restoration
after the Great East Japan Earthquake” (Act No. 117 of 2011) were promulgated on December 2,
2011, and from the consolidated fiscal years beginning on April 1, 2012, the corporation tax rates
have been reduced and a special reconstruction corporation tax has been imposed. Pursuant to thosechanges, the effective statutory tax rates used in calculating deferred tax assets and deferred tax
liabilities will change from 40.6% to (i) 38.0% for temporary differences, etc. forecast to be resolvedin the period between the consolidated fiscal year beginning on April 1, 2012 and the consolidated
fiscal year beginning on April 1, 2014, and to (ii) 35.6% for temporary differences, etc. forecast to
be resolved in the consolidated fiscal year beginning on April 1, 2015 and thereafter.
These changes in the tax rate reduced the amount of deferred tax assets (the amount after deducting
the amount of deferred tax liabilities) by 1,060 million yen while increasing the deferred gains orlosses on hedges by 1 million yen, the unrealized gains or losses on other securities, net of tax by 132
million yen and the adjustment for income taxes by 1,193 million yen, respectively.
In addition, deferred tax liabilities for land revaluations fell by 82 million yen, and land revaluation,
net of tax, increased by the same amount.
(3)

Application of a consolidated taxation regime

As the Company and some of its consolidated subsidiaries have applied for approval of the use of aconsolidated taxation regime in which the Company is the consolidated parent corporation in thisconsolidated fiscal year and the consolidated taxation regime will be applied from the next
consolidated fiscal year, accounting, from this consolidated fiscal year, has been carried out on theassumption of the application of the consolidated taxation regime, based on the “Practical Solution on
Tentative Treatment of Tax Effect Accounting Under Consolidated Taxation System (Part 1)”(Accounting Standards Board of Japan PITF No. 5, issued on March 18, 2011) and “Practical
Solution on Tentative Treatment of Tax Effect Accounting Under Consolidated Taxation System (Part2)” (Accounting Standards Board of Japan PITF No. 7, issued on June 30, 2010).
2. Loss on Impairment of Fixed Assets
Groupings for evaluating fixed asset impairment are made by the Company and its
consolidated subsidiaries according to management accounting classifications based on strategic
business units, excluding significant idle assets, assets scheduled for disposal, and assets forrental use. Of these, in the amusement facility business, the individual facility, the smallest unit
used in management accounting, is mainly the basic unit for grouping assets.
In addition, the book values of the following assets, which exclude reusable assets, werereduced to the recoverable amount. The amount of reduction was recorded as a loss on
impairment of fixed assets in extraordinary loss.

43

SBU

Toys and
Hobby

Content

Amusement
Facility

Other

Items
Internetcontent
business
softwareAssetsscheduled
for disposal
Assets forbusiness use
Assets forbusiness use
Assetsscheduled
for disposal
Assets forrental use

Amusement
facility

Assetsscheduled
for disposal

Classification

Intangible assets
Buildings & structures,
Other property, plant andequipment
Property, plant and equipment(other)Intangible assets and otherassetsLocation

Impairment
Loss(Millionsof yen)Seoul, Korea (Note 2)321

Kyoto City, Kyoto, etc.
(Note 3)30

Cergy-Pontois, France(Note 1)
Shinagawa-ku, Tokyo(Note 2)27
255

Intangible assets and otherassetsShinagawa-ku, Tokyo,
etc. (Note 5)

27

Land

Ota-ku, Tokyo (Note 6)

27

Amusement facilities andmachines and other assets

Koto-ku, Tokyo, etc.
(Note 1)
STAFFORDSHIRE,
U.K., etc. (Note 2)
NORFOLK, U.K., etc.
(Note 1)
Narashino City, Chiba(Note 3)

228
97
66
6

Buildings & structures,
Other property, plant andequipment

Shinagawa-ku, Tokyo(Note 5)

13

Land, etc.

Nagoya City, Aichi(Note4)

2

Total
1,105
(Notes) 1. Impairment loss was recorded because it was forecast that the book value of these fixed
assets could not be recovered due to a decline in business profitability. The recoverable
amount was calculated by the estimated value in use of zero.
2. Impairment loss was recorded because it was forecast that the book value of these fixed
assets could not be recovered due to a decline in business profitability. The recoverable
amount was calculated by the estimated value in use based on the expected future cash
flows.
3. Impairment loss was recorded because it was judged that the recoverable value of these
fixed assets had declined sharply due to the decision to close them. The recoverable
amount was calculated by the estimated value in use of zero.
4. Impairment loss was recorded because the decision was made to sell this real estate asset.
The recoverable amount of the real estate was calculated by the net sale price and valued
based on the appraised value.
5. Impairment loss was recorded on these assets, for which no future use is anticipated.
The recoverable amount was calculated by the estimated value in use of zero.
6. Impairment loss was recorded because it was judged that this fixed asset’s recoverable
value had declined sharply due to the change in use from a rental building to a rental
parking lot. The recoverable amount of the real estate was calculated by the net saleprice and valued by its roadside land price.

44

Non-Consolidated Balance Sheet(As of March 31, 2012)(Millions of yen)AmountASSETS
Current assets
Cash and time deposits
Trade receivables
Prepaid expenses
Deferred tax assets
Other current assets
Total current assets

36,936
237
267
58
2,012
39,512

Fixed assets
Property, plant and equipment
Buildings
Structures
Tools, furniture and fixtures
Construction in progress
Total property, plant and equipment
Intangible assets
Goodwill
Software
Other intangible assets
Total intangible assets
Investments and other assets
Investment securities
Investments in affiliated companies
Long term prepaid expenses
Other investments and assets
Total investments and other assets
Total fixed assets
TOTAL ASSETS

26
148
267
112
554
198
263
1,268
1,731
11,006
282,06241
1,521
294,632
296,917
336,43045

(Millions of yen)AmountLIABILITIESCurrent liabilities
Short-term borrowings from affiliated companies
Short-term borrowings
Accounts payable-otherAccrued expenses
Accrued income taxes
Deposits receivables
Unearned revenue
Provision for directors’ bonuses
Other current liabilities
Total current liabilities
Long-term liabilities
Long-term borrowings
Deferred tax liabilities
Accrued retirement and severance benefits
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
TOTAL NET ASSETSTOTAL LIABILITIES AND NET ASSETS

46

90,911
5,333
933
661
231
15
142
125
19
98,374
12,833613
17
140
13,604
111,979

10,000174,282
2,500
171,782
39,9801,645
38,334
26,104
12,230(2,297)
221,965

2,485
2,485
224,451
336,430

Non-Consolidated Statements of Operations(From April 1, 2011 to March 31, 2012)(Millions of yen)Amount12,417

Operating revenue
Dividend income from affiliatedcompanies
Business management income fromaffiliated companies
Operating expenses
General and administrative expenses
Operating income
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 income
Extraordinary income
Gain on sales of investment securities, net
Extraordinary loss
Loss on valuation of investment securities
Loss on valuation of stocks of affiliatedcompanies
Other extraordinary losses
Loss before income taxes
Corporate income, inhabitant and enterprise
taxes
Adjustment for income taxes
Net loss

9,686
2,730
2,583
2,583
9,834
1,897
32
159
1,693
12
2,047
164
1,679
202
9,684
30
30
12,541
1,288
11,178
74
2,826
193
(76)

47

117
2,944

Non-Consolidated Statement of Changes in Net Assets(From April 1, 2011 to March 31, 2012)(Millions of yen)
Stockholders’ equity
Common stock
Balance as of April 1, 2011
Changes during the period
Total changes during the period
Balance as of March 31, 2012
Additional paid-in capital
Capital reserve
Balance as of April 1, 2011
Changes during the period
Total changes during the period
Balance as of March 31, 2012
Other capital surplus
Balance as of April 1, 2011
Changes during the period
Disposal of treasury stock
Retirement of treasury stock
Total changes during the period
Balance as of March 31, 2012
Total additional paid-in capital
Balance as of April 1, 2011
Changes during the period
Disposal of treasury stock
Retirement of treasury stock
Total changes during the period
Balance as of March 31, 2012
Retained earnings
Legal reserve
Balance as of April 1, 2011
Changes during the period
Total changes during the period
Balance as of March 31, 2012
Other retained earnings
General reserve
Balance as of April 1, 2011
Changes during the period
Total changes during the period
Balance as of March 31, 2012
Retained earnings carried forward
Balance as of April 1, 2011
Changes during the period
Cash dividends
Net loss
Total changes during the period
Balance as of March 31, 2012
Total retained earnings
Balance as of April 1, 2011
Changes during the period
Cash dividends
Net loss
Total changes during the period
Balance as of March 31, 2012

10,000−10,000
2,500
−
2,500
189,4710(17,688)(17,688)
171,782
191,9710(17,688)(17,688)
174,282
1,645
−
1,645
26,104−
26,104
20,719(5,545)(2,944)(8,489)12,23048,469(5,545)(2,944)(8,489)39,98048

(Millions of yen)
Treasury stock
Balance as of April 1, 2011
Changes during the period
Purchase of treasury stock
Disposal of treasury stock
Retirement of treasury stock
Total changes during the period
Balance as of March 31, 2012
Total stockholders’ equity
Balance as of April 1, 2011
Changes during the period
Cash dividends
Net loss
Purchase of treasury stock
Disposal of treasury stock
Retirement of treasury stock
Total changes during the period
Balance as of March 31, 2012
Valuation difference and foreign currency translation
adjustments
Unrealized gains or losses on other securities, net oftax
Balance as of April 1, 2011
Changes during the period
Net changes in the period other than changes instockholders’ equity
Total changes during the period
Balance as of March 31, 2012
Total valuation difference and foreign currencytranslation adjustments
Balance as of April 1, 2011
Changes during the period
Net changes in the period other than changes instockholders’ equity
Total changes during the period
Balance as of March 31, 2012
Total net assets
Balance as of April 1, 2011
Changes during the period
Cash dividends
Net loss
Purchase of treasury stock
Disposal of treasury stock
Retirement of treasury stock
Net changes in the period other than changes instockholders’ equity
Total changes during the period
Balance as of March 31, 201249

(3,421)(16,565)
017,6881,123(2,297)
247,019(5,545)(2,944)(16,565)0−(25,054)
221,965

123
2,361
2,361
2,485
123
2,361
2,361
2,485
247,143(5,545)(2,944)(16,565)
0−2,361(22,692)
224,451

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)

Valuation Basis and Methods for Assets:

Valuation basis and methods for securities:(i) 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 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 to Article 2, Paragraph
2 of the Financial Instruments and Exchange Act), these are stated by the net
amount corresponding to the Company’s equity share, based on the mostrecent available financial reports according to the date for settlement ofaccounts provided for in the partnership agreement.
(2)

Depreciation Methods for Fixed Assets:(i)

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

Basis of Recognition for Provision:(i) Provision for Directors’ bonuses:
The Company provides for directors’ bonuses based on estimated bonus payments in this fiscal
year.
(ii) Accrued Retirement and Severance Benefits:
The Company provides for retirement and severance benefits for employees based on
estimated retirement benefit obligations as of the end of this fiscal year.
(4)

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

50

2. Notes to Change in Method of Presentation(Non-Consolidated Balance Sheet)“Provision for directors’ bonuses,” which had been included in “Other current liabilities” under “Current
Liabilities” until the previous fiscal year, is stated separately since its monetary importance has increased forthis fiscal year.
3. Notes to Non-Consolidated Balance Sheet(1)

Amount of accumulated depreciation of property, plant and equipment: ¥445 million(2)

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:(3)¥754 million¥498 million

Restrictive Financial Covenants
The Company raised funds by means of long-term borrowings from a financial institution as ofAugust 5, 2011. The terms of those borrowings include the following restrictive financial covenants:(i)

The Company shall maintain the amounts of net assets on the consolidated balance sheet as of
the closing dates of the interim and end of each fiscal year (the “Interim and End of Fiscal
Year”) at 75% or above of whichever is greater: (a) the amount of net assets on the
consolidated balance sheet as of the closing date of the immediately preceding Interim or End
of Fiscal Year or (b) the amount of the net assets on the consolidated balance sheet as of theclosing date of the fiscal year ended March 2011.

(ii) With respect to the recurring income or loss on the consolidated statements of operations foreach fiscal year end, the Company shall not record recurring losses for two consecutive fiscal
years.
(iii) From the date of this loan agreement and until all obligations to the lender and its agents under
the terms of this agreement have been fulfilled, the Company shall maintain the ownership
ratio (direct or indirect) at 100% with respect to Bandai Co., Ltd., NAMCO BANDAI Games
Inc., and NAMCO LIMITED.
4. Notes to Non-Consolidated Statements of Operations
Transactions with affiliated companies (excluding amounts given in specific categories)
Non-operating Transactions:Non-operating income¥1,713 million
Non-operating expenses¥80 million
5. Notes to Non-Consolidated Statement of Changes in Net Assets
The total number and type of treasury stock as of the end of this fiscal year
Common stock
2,193,835 shares
6. Notes Concerning Tax Effect Accounting
Breakdown of Main Reasons for Deferred Tax Assets and Deferred Tax Liabilities

51

Deferred tax assets
Loss on valuation of stocks of affiliated companies
Loss on valuation of investment securities¥1,483 million
OthersSubtotal deferred tax assets
Valuation allowance
Total deferred tax assets
Deferred tax liabilities
Unrealized gains or losses on other securities, net of tax
OthersTotal gross deferred tax liabilities
Net deferred tax liabilities

52¥4,813 million¥170 million¥6,467 million(¥6,384 million)¥82 million(¥630 million)(¥7 million)(¥637 million)(¥555 million)

7. Notes Concerning Transactions with Related Parties
Subsidiaries and Affiliated Companies, etc.
(Millions of yen)Type

Subsidiary

Company

Bandai Co.,Ltd.

Ratio ofvoting rights
ownership
Holding
directly
100.0%

Relationshipwith relatedpartiesContent
Borrowings(Note 1)

Interlocking
directorate

Payment ofinterest
Rental building
Borrowings(Note 1)

Subsidiary

Subsidiary

Subsidiary

Subsidiary

Subsidiary

Subsidiary

NAMCO
BANDAI
Games Inc.

NAMCO
LIMITEDBANDAIVISUAL
CO., LTD.

BanprestoCo., Ltd.

Sunrise Inc.

NAMCO
BANDAI
Holdings(USA) Inc.

Holding
directly
100.0%

Holding
directly
100.0%

Holding
directly
100.0%

Holdingindirectly
100.0%

Holding
directly
91.8%
indirectly
7.6%

Holding
directly
100.0%

Interlocking
directorate

Payment ofinterest
Loans(Note 2)
Receipt ofinterest
Borrowings(Note 1)

Interlocking
directorate

Payment ofinterest
Borrowings(Note 1)

AmountAccount
items

32,948

Short-termborrowings fromaffiliatedcompanies
–

–

1,553

–
Short-termborrowings fromaffiliatedcompanies

–

9,635

–

Interlocking
directorate

Payment ofinterestCapitalincrease

13,658

9

–

–

5,000

–

–

19

–

–

14,737

Short-termborrowings fromaffiliatedcompanies

14

–

4,736

Short-termborrowings fromaffiliatedcompanies

4
4,367

–
Payment ofinterest
Borrowings(Note 1)

41,50832–
Payment ofinterest
Borrowings(Note 1)

Balance asof March
31, 2012

4
10,789–
Short-termborrowings fromaffiliatedcompanies–
Short-termborrowings fromaffiliatedcompanies

14,699
–
4,771
–
4,486
–
10,786

10

–

–

6,651

–

–

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. The interest rate on these borrowings is,based on intra-Group regulations, determined reasonably, taking into account market interest
rates.
2. The interest rate on these loans is, based on intra-Group regulations, determined reasonably,
taking into account market interest rates.

53

8. Notes Concerning Per-Share Data
Net assets per share:
Net loss per share:¥1,021.13¥13.05

9. Notes Concerning Significant Subsequent Events(Introduction of stock compensation-type stock options)Because this item is explained in the Notes to Consolidated Financial Statements, VII. Notes
Concerning Significant Subsequent Events, the details are omitted.
10. Other Notes(Additional Information)(1)

Application of accounting standards, etc., concerning accounting changes or error corrections

Any accounting changes and corrections of past errors made after the beginning of thisnon-consolidated fiscal year are subject to the “Accounting Standard for Accounting Changes andError Corrections” (Accounting Standards Board of Japan Statement No. 24, issued on December 4,2009) and “Guidance on Accounting Standard for Accounting Changes and Error Corrections”(Accounting Standards Board of Japan Guidance No. 24, issued on December 4, 2009).
(2)

Impact of changes in the corporate tax rate

The “Act to partially revise the Income Tax Act and others in order to construct a tax systemcorresponding to changes in the structure of economic system” (Act No. 114 of 2011) and the“Special measures act to secure the financial resources required to implement policy on restoration
after the Great East Japan Earthquake” (Act No. 117 of 2011) were promulgated on December 2,
2011, and from the non-consolidated fiscal years beginning on April 1, 2012, the corporation tax rates
have been reduced and a special reconstruction corporation tax has been imposed. Pursuant to thosechanges, the effective statutory tax rates used in calculating deferred tax assets and deferred tax
liabilities will change from 40.6% to (i) 38.0% for temporary differences, etc. forecast to be resolvedin the period between the non-consolidated fiscal year beginning on April 1, 2012 and thenon-consolidated fiscal year beginning on April 1, 2014, and to (ii) 35.6% for temporary differences,
etc. forecast to be resolved in the non-consolidated fiscal year beginning on April 1, 2015 andthereafter.
These changes in the tax rate reduced the amount of deferred tax liabilities (the amount after
deducting the amount of deferred tax assets) by 82 million yen while increasing the unrealized gains
or losses on other securities, net of tax by 88 million yen and the adjustment for income taxes by 5
million yen, respectively.
(3)

Application of a consolidated taxation regime

As the Company has applied for approval of the use of a consolidated taxation regime in which theCompany is the consolidated parent corporation in this non-consolidated fiscal year and theconsolidated taxation regime will be applied from the next non-consolidated fiscal year, accounting,from this non-consolidated fiscal year, has been carried out on the assumption of the application of
the consolidated taxation regime, based on the “Practical Solution on Tentative Treatment of Tax
Effect Accounting Under Consolidated Taxation System (Part 1)” (Accounting Standards Board ofJapan PITF No. 5, issued on March 18, 2011) and “Practical Solution on Tentative Treatment of Tax
Effect Accounting Under Consolidated Taxation System (Part 2)” (Accounting Standards Board ofJapan PITF No. 7, issued on June 30, 2010).
END

54

Independent Auditor’s Report
May 17, 2012
The Board of Directors
NAMCO BANDAI Holdings Inc.
KPMG AZSA LLC

Hiroshi Shiina (Seal)
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
Yoshihiko Nakamura (Seal)
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
Yoshichika Kaneko (Seal)
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
We have audited the consolidated financial statements, comprising the consolidated balance sheet, theconsolidated statements of operations, the consolidated statement of changes in net assets and the related
notes of NAMCO BANDAI Holdings Inc. as at March 31, 2012 and for the year from April 1, 2011 toMarch 31, 2012 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 such internal
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 acceptedin Japan. Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether the consolidated financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the consolidated financial statements. The procedures selected depend on our judgement, including theassessment of the risks of material misstatement of the consolidated financial statements, whether due tofraud or error. In making those risk assessments, we consider internal control relevant to the entity’s
preparation and fair presentation of the consolidated financial statements in order to design audit
procedures that are appropriate in the circumstances, 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 ofaccounting estimates made by management, as well as evaluating the overall presentation of theconsolidated financial statements.

55

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis forour audit opinion.
OpinionIn our opinion, the consolidated financial statements referred to above present fairly, in all material
respects, the financial position and the results of operations of NAMCO BANDAI Holdings Inc. and its
consolidated subsidiaries for the period, for which the consolidated financial statements were prepared, in
accordance with accounting 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’s Report as
required by the Companies Act.

56

Independent Auditor’s Report
May 17, 2012
The Board of Directors
NAMCO BANDAI Holdings Inc.
KPMG AZSA LLC

Hiroshi Shiina (Seal)
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
Yoshihiko Nakamura (Seal)
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
Yoshichika Kaneko (Seal)
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
We have audited the non-consolidated financial statements, comprising the non-consolidated balance
sheet, the non-consolidated statements of operations, the non-consolidated statement of changes in net
assets and the related notes, and the supplementary schedules of NAMCO BANDAI Holdings Inc. as at
March 31, 2012 and for the year from April 1, 2011 to March 31, 2012 in accordance with Article 436-2-1of the Companies Act.
Management’s Responsibility for the Financial Statements and Others
Management is responsible for the preparation and fair presentation of the financial statements and the
supplementary schedules in accordance with accounting principles generally accepted in Japan, and forsuch internal control as management determines is necessary to enable the preparation of financial
statements and the supplementary schedules that are free from material misstatements, whether due tofraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on the financial statements and the supplementary schedules
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 toobtain reasonable assurance about whether the financial statements and the supplementary schedules arefree from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial statements and the supplementary schedules. The procedures selected depend on ourjudgement, including the assessment of the risks of material misstatement of the financial statements andthe supplementary schedules, whether due to fraud or error. In making those risk assessments, weconsider internal control relevant to the entity’s preparation and fair presentation of the financial
statements and the supplementary schedules 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 the57

appropriateness of accounting policies used and the reasonableness of accounting estimates made bymanagement, as well as evaluating the overall presentation of the financial statements and the
supplementary schedules.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis forour audit opinion.
OpinionIn our opinion, the financial statements and the supplementary schedules referred to above present fairly,
in all material respects, the financial position and the results of operations of NAMCO BANDAI
Holdings Inc. for the period, for which the financial statements and the supplementary schedules wereprepared, in accordance with accounting 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’s Report as
required by the Companies Act.

58

Board of Corporate Auditors’ Report
Audit Report
We, the Board of Corporate Auditors, prepared this audit report, as a unanimous opinion of all
members of the Board of Corporate Auditors, on the execution of duties by Directors during the 7th
fiscal year from April 1, 2011 to March 31, 2012, based on audit reports prepared by each Corporate
Auditor.
1. Method and Content of Audits by Corporate Auditors and the Board of Corporate Auditors
We devised the 7th auditing plan (auditing policies, duties assigned to each Corporate Auditor andauditing methods), received reports on the progress on, and results of, audits from each Corporate
Auditor, as well as reports on the execution of their duties from Directors, etc. and the Accounting
Auditor, and requested explanations as necessary.
Each Corporate Auditor communicated with the Directors, the internal auditing division, and other
employees, etc., in accordance with the internal regulations established by the Board of Corporate
Auditors, such as Board of Corporate Auditors regulations, Corporate Auditors regulations, auditing
standards for internal control system, and the above-mentioned auditing plan, to collect informationand improve the auditing environment. We attended the meetings of the Board of Directors and othersignificant meetings, received reports on the execution of duties from Directors and employees, etc.,
obtained explanations thereof as necessary, viewed documents concerning important decisions, andinvestigated the conditions of operations and assets of the Company. We also periodically received
reports from Directors and employees, etc., requested explanations as necessary, and expressed
opinion, regarding the development and operation of internal control systems that were organizedbased on decisions by the Board of Directors in relation to the development of a system to ensure thatthe execution of duties by Directors and other operations of the Company as described in the business
reports were in conformity 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. In addition, we received reports on evaluations and audit status ofinternal controls on financial reporting from Directors, etc. and from KPMG AZSA LLC, the
Accounting Auditor of the Company, concerning internal controls on financial reporting, and requested
explanations thereof as necessary. 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 based on the meetings ofthe Board of Directors and other discussions. Regarding the Company’s subsidiaries, wecommunicated and shared information with the Directors and the Corporate Auditors, etc. of thesubsidiaries, and received reports on their business as necessary from them. Using the aforementioned
method, we examined the business reports and supplementary statements for this fiscal year underreview.
Furthermore, 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 theproper execution of duties” (as per Article 131 of the Corporate Accounting Rules) was organized inaccordance with “Quality Control Standards for Auditing” (October 28, 2005, Business Accounting
Council), and requested explanations as necessary. Using the aforementioned method, we examined
non-consolidated financial statements (non-consolidated balance sheet, non-consolidated statements ofoperations, non-consolidated statement of changes in net assets, and notes thereto), their supplementarystatements and consolidated financial statements (consolidated balance sheet, consolidated statementsof operations, consolidated statement of changes in net assets, and notes thereto) for this fiscal year
under review.

59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 thecondition of the Company and are in conformity with the applicable laws and regulations andthe 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 ofIncorporation.
(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 to thedescription of those internal control systems in the business reports and the execution ofduties by Directors. In addition, as of the date hereof, we have received reports from the
Directors, etc. and from KPMG AZSA LLC as to the effectiveness of the internal controls on
financial reporting.
(iv) We confirm that there is nothing to be cited in respect of the basic policy described in thebusiness reports concerning what and how a person or entity controlling decisions on thefinancial 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 thebusiness reports are in accordance with this basic policy and that these actions 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 17, 2012
Board of Corporate Auditors
NAMCO BANDAI Holdings Inc.
Standing Corporate Auditor
Koichiro Homma
Standing Corporate Auditor(outside corporate auditor)
Corporate Auditor(outside corporate auditor)
Corporate Auditor(outside corporate auditor)(Seal)

Katsuhiko Kohtari(Seal)

Osamu Sudo

(Seal)

Kouji Yanase(Seal)

END

60

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 of dividends and improvement in the Company’s corporate value.
In concrete terms, the Company’s basic policy is to provide a return to shareholders thattargets at a payout ratio of 30% in accordance with consolidated operational results andbased on stable annual dividend payments of ¥24 per share.
In view of the Company’s performance in this fiscal year, it will add a
performance-based dividend of ¥2 per share to the stable year-end dividend of ¥12 pershare, to pay a year-end dividend of ¥14 per share for this seventh fiscal year.
Since the Company paid an interim dividend of ¥12 per share on December 5, 2011,
the total annual dividend for the fiscal year will be ¥26 per share.
(i) Type of dividend assets:Cash(ii) Allocation of dividend assets to be paid to shareholders and total amount ofdividend:¥14 per share of common stock of the Company
Total amount of dividends would be ¥3,077,286,310(iii) Effective date of distribution of surplus (dividend):
June 19, 201261

Proposal No. 2 Election of Nine (9) Directors
Since the terms of office of the nine (9) Directors of the Company will expire as of theconclusion of this General Meeting of Shareholders, the Company requests the election of nine(9) Directors.
The candidates for Director of the Company are as follows:
Candidate
No.

Name(Date of Birth)

Career Summary, Positions and Responsibilities in the
Company (Major Concurrent Positions)Apr. 1978:

1

Joined NAMCO LIMITED(currently NAMCO BANDAI Games Inc.)
Aug. 1991: General Manager, EM Development
Department of NAMCO LIMITED
Jun. 1995:
Director in charge of Development
Division II, General Manager, EM
Development Department and VS
Development Department of NAMCO
LIMITED
Jun. 1999:
Managing Director in charge of Research,
Development and Production, andDevelopment Division II of NAMCO
LIMITED
Shukuo Ishikawa Apr. 2005:
Executive Vice President andRepresentative Director in charge of(April 15, 1955)
contents business of NAMCO LIMITED
Apr. 2006:
President and Representative Director of
NAMCO BANDAI Games Inc.
Jun. 2006:
Director of the Company
Apr. 2009:
President and Representative Director of
the Company (current position)
Apr. 2010:
President and Representative Director of
NAMCO BANDAI Games Inc.
Apr. 2012:
Chairman of the Board of NAMCO
BANDAI Games Inc. (current position)(Major concurrent positions)
Chairman of the Board of NAMCO BANDAI Games
Inc.

Number of theCompany’s
Shares Owned

62

25,300 Shares

Candidate
No.

Name
(Date of Birth)

Career Summary, Positions and Responsibilities in the
Company (Major Concurrent Positions)Apr. 1977:
Apr. 1991:

2

Kazunori Ueno
(September 16,
1953)

3

Shuji Ohtsu(August 6, 1959)

Joined Bandai Co., Ltd.
General Manager, Candy Toy / Vending
Machine Business Department of Bandai
Co., Ltd.
Jun. 2001:
Director in charge of the Toy Business
Projects and General Manager, Character
Toy Business Department of Bandai Co.,Ltd.
Apr. 2003:
Managing Director and President, Toys &Hobby Company and Chief Gundam
Officer (CGO) of Bandai Co., Ltd.
Jun. 2005:
President and Representative Director ofBandai Co., Ltd., and Chief Gundam
Officer (CGO) (current position)
Sep. 2005:
Director of the Company
Jun. 2007:
Director in charge of Toys and Hobby SBUof the Company
Apr. 2012:
Executive Vice President andRepresentative Director, in charge of Toysand Hobby SBU of the Company (current
position)(Major concurrent positions)
President and Representative Director of Bandai Co., Ltd.
Mar. 1986:
Licensed as a CPA
Dec. 1996:
Partner in Century Audit Corporation
Jan. 2000:
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
Jun. 2011:
Director in charge of Overseas Regional
Headquarters Companies and Division
General Manager of the Group
Administrative Headquarters of theCompany (current position)

Number of theCompany’s
Shares Owned

63

63,150 Shares

13,100 Shares

Candidate
No.

Name
(Date of Birth)

Career Summary, Positions and Responsibilities in the
Company (Major Concurrent Positions)Apr. 1986:
Aug. 2005:

4

Yuji Asako(January 18,
1966)

5
(*)

Satoshi Oshita(July 3, 1953)

Joined Bandai Co., Ltd.
General Manager, Accounting Division ofBandai Co., Ltd.
Sep. 2005:
Joined the Company, as General Managerof the Corporate Administration
Department
Apr. 2006:
Director, NAMCO BANDAI Games Inc.
Apr. 2008:
Executive Officer, Division General
Manager of Corporate Planning Divisionof the Company
Jun. 2010:
Director in charge of Corporate Planningand Division General Manager of the
Corporate Planning Division of theCompany
Jun. 2011:
Director and Division General Manager of
the Corporate Planning Division of theCompany (current position)
Mar. 1976:
Joined Bandai Co., Ltd.
Apr. 1992:
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
BANDAI Games Inc.
Apr. 2010:
President and Representative Director of
BANDAI VISUAL CO., LTD.
Apr. 2012:
Executive Officer in charge of Content
SBU of the Company (current position)
President and Representative Director of
NAMCO BANDAI Games Inc. (current
position)(Major concurrent positions)
President and Representative Director of NAMCO
BANDAI Games Inc.

Number of theCompany’s
Shares Owned(*) New candidate for Director of the Company

64

11,900 Shares

21,200 Shares

Candidate
No.

Name
(Date of Birth)

Career Summary, Positions and Responsibilities in the
Company (Major Concurrent Positions)Apr. 1978:

6

Masahiro
Tachibana(April 16, 1951)

Joined NAMCO LIMITED (currently
NAMCO BANDAI Games Inc.)
Jul. 1986:
General Manager, Operations Division of
NAMCO LIMITED
Jun. 1988:
Director in charge of Operations
Representative and General Manager,
Operations Division of NAMCO
LIMITED
Jun. 1989:
Managing Director in charge ofOperations, and General Manager,
Operations Division of NAMCO
LIMITED
Jun. 1994:
Representative Director and Managing
Director of NAMCO LIMITED
Apr. 2004:
Representative Director and Senior
Managing Director, CT Company
President, and Head of CT Control
Division of NAMCO LIMITED
Apr. 2005:
Senior Managing Director of NAMCO
LIMITED
Sep. 2005:
Director in charge of domestic market of
the Company
Apr. 2008:
Director in charge of Amusement Facility
SBU of the Company
President and Representative Director of
NAMCO LIMITED* (current position)
Jun. 2010:
Director in charge of Amusement Facility
SBU of the Company (current position)(Major concurrent positions)
President and Representative Director of NAMCO
LIMITED** Newly established company through theincorporation-type company split of NAMCO
LIMITED (currently NAMCO BANDAI Games Inc.)

Number of theCompany’s
Shares Owned

65

44,500 Shares

Candidate
No.

Name
(Date of Birth)

Career Summary, Positions and Responsibilities in the
Company (Major Concurrent Positions)Jul. 1972:

7

Manabu Tazaki(November 8,1948)

Joined McDonald’s Company (Japan),Ltd. (currently McDonald’s Holdings
Japan)
Dec. 1989:
Joined Toys “R” US-Japan, Ltd.
Apr. 1993:
President and Representative Director ofToys “R” US-Japan, Ltd.
Apr. 2004:
Chairman, Representative Director, andChief Executive Officer of Toys “R”
US-Japan, Ltd.
Jul. 2006:
Business Advisor to the Company
Apr. 2008:
Outside Director of NAMCO LIMITED*
Jun. 2009:
Outside Director of the Company(current position)
Mar. 2011:
Outside Director of STUDIO ALICE
Co., Ltd. (current position)* Newly established company through theincorporation-type company split of NAMCO
LIMITED (currently NAMCO BANDAI Games Inc.)(Major concurrent positions)
Outside Director of STUDIO ALICE Co., Ltd.

Number of theCompany’s
Shares Owned

66

4,300 Shares

Candidate
No.

Name
(Date of Birth)

Career Summary, Positions and Responsibilities in the
Company (Major Concurrent Positions)Apr. 1976:
Jul. 1987:

8

9(Notes)Number of theCompany’s
Shares Owned

Joined TEIJIN LIMITED
Joined Mitsui Bank, Ltd. (currently
Sumitomo Mitsui Banking Corporation)
Jan. 1999:
Representative Director of UNISONCAPITAL, Inc.
Apr. 2004:
Assistant Professor, Graduate School ofInternational Corporate Strategy (ICS),
Hitotsubashi University and
Representative Director of GCA Co, Ltd.
(currently GCA Holdings Corporation)
Apr. 2005:
Professor, Graduate School ofInternational Corporate Strategy (ICS),
Hitotsubashi University(current position)
Nobuo Sayama Oct. 2005:
Representative Director of Mezzanine
Corporation(December 3,--- Shares
Mar.
2008:
Managing
Director of GCA Savvian
1953)
Group Corporation (current position),and Representative Director of Integral
Corporation (current position)
Jun. 2011:
Outside Director of the Company(current position)
Outside Director of LAC Holdings, Inc.
(currently Little eArth Corporation Co.,
Ltd.) (current position)(Major concurrent positions)
Professor, Graduate School of International Corporate
Strategy (ICS), Hitotsubashi University
Managing Director of GCA Savvian Group Corporation
Representative Director of Integral Corporation
Outside Director of Little eArth Corporation Co., Ltd.
Apr. 1984:
Admitted to the bar in Japan
Apr. 1991:
Joined Mori Sogo Law Office(currently Mori Hamada & Matsumoto)Jun. 2006:
Outside Corporate Auditor of NAMCO
BANDAI Games Inc.
Apr.
2007:
Established
STW & Partners
Tomohisa
Partner of STW & Partners
Tabuchi(current position)--- Shares(December 9,Jun. 2010:
Outside Director of Hitachi Medical
Corporation (current position)
1957)
Jun. 2011:
Outside Director of the Company(current position)(Major concurrent positions)
Partner of STW & Partners
Outside Director of Hitachi Medical Corporation
1. Each of Mr. Manabu Tazaki, Mr. Nobuo Sayama, and Mr. Tomohisa Tabuchi is acandidate for Outside Director of the Company. Each is currently an Outside
Director of the Company. As of the close of this General Meeting of Shareholders,Mr. Manabu Tazaki will have served about three years, Mr. Nobuo Sayama about67

one year, and Mr. Tomohisa Tabuchi about one year. Liability Limitation
Agreements under Article 427, Paragraph 1, of the Companies Act have not beenconcluded between Mr. Manabu Tazaki, Mr. Nobuo Sayama, or Mr. Tomohisa
Tabuchi and the Company.
(1) Reason for Proposing Them as Candidates for Outside Director of the Company and
Their Competence as Outside Director
The reasons for proposing Mr. Manabu Tazaki as a candidate for Outside Director
are that, given his extensive experience in corporate management, his excellent
character and knowledge, and his thorough knowledge of trends in the toys andhobby, and other industries within which the Group is developing its businesses, theCompany anticipates that he will be able further to strengthen management oversightand check functions and to introduce a broader managerial perspective and thus
believes that he will be able to perform the duties of an Outside Director
appropriately.
The reasons for proposing Mr. Nobuo Sayama as a candidate for Outside Director
are that, given his extensive experience in corporate management and his profoundscholarly knowledge via his teaching activities in the field of corporate strategy, theCompany anticipates that he will be able further to strengthen management oversightand check functions, and thus believes that he will be able to perform the duties of an
Outside Director appropriately.
The reasons for proposing Mr. Tomohisa Tabuchi as a candidate for Outside
Director, although he has not been involved in corporate management other than
through serving as an outside director or outside corporate auditor, are that theCompany anticipates, given his many years of experience as an attorney-at-law, that
he will be able further to strengthen management oversight and check functions,mainly from a legal risk perspective, and thus believes that he will be able toperform the duties of an Outside Director appropriately.
(2) Independence as Outside Director
The Company believes that Mr. Manabu Tazaki, Mr. Nobuo Sayama, and Mr.
Tomohisa Tabuchi, who are candidates for Outside Director of the Company, haveno risk of conflicts of interest with general shareholders and have a high degree of
independence. The Company has filed a notification that each of the candidates
would be Independent Directors/Auditors as defined in the rules of the Tokyo Stock
Exchange.

2. There are no special interests between each of the candidates for Director and theCompany.

68

Proposal No. 3 Decision on Remuneration Amount and Details for Directors’ Stock Options
The Company proposes granting its Directors stock acquisition rights in an amountnot exceeding 120 million yen as part of their annual remuneration and requests that
this proposal be approved.
The remuneration system for the Company’s Directors (apart from Outside
Directors) makes its basic policy the promotion of the sharing value with theCompany’s shareholders and enhancing the morale and motivation of the Directors
to improve the Company’s performance. In addition, accompanying the start of the“Mid-term Plan of the BANDAI NAMCO Group (from April 2012 to March 2015)”(the “Mid-term Plan”) announced in February 2012, we have been making therelationship between performance and remuneration significantly clearer and placing
more weight on performance-based remuneration in the Directors’ remuneration inorder to strongly orient their focus to achieving the goals defined in the Mid-term
Plan. As one part of that effort, we would now like to introduce a new system forallotting stock compensation-type stock options on condition that the predefined
performance goals are achieved.
Because the performance requirements have been imposed for these stockcompensation-type stock options, not as a condition for exercising the options but asa condition for being allotted the options, the stock compensation-type stock options
will not be granted to the Directors if those performance requirements are notsatisfied. Thus, under this system, remuneration costs will arise only when the
Company performs well.
To ensure that the goals of the Mid-term Plan are achieved and to provide
motivation to improve performance even more, the Company has, as stated in “3.
Requirements for allotment of stock acquisition rights” below, defined two levels of
the performance requirements: namely, achieving operating income of 42,500
million yen, the goal for the final fiscal year of the period for the Mid-term Plan, andsurpassing that goal to achieve operating income of 53,000 million yen. Whether
those performance requirements have been achieved will be determined for eachfiscal year while the Mid-term Plan is in effect.
In addition, as stated in “7. Conditions on exercise of stock acquisition rights”
below, by limiting the timing of exercise of rights relating to the stockcompensation-type stock options allotted to the time when the recipient steps down
as a Director, the Company thinks that it will be possible to ensure the sharing ofvalue with all shareholders on an ongoing basis.
If Proposal No. 2 is approved without any changes, then there will be six (6)Directors to whom Proposal No. 3 will apply, excluding the three (3) who are
expected to become Outside Directors.
The details of the stock acquisition rights are as stated below.
1. Class and number of shares to be delivered upon exercise of stock acquisition rights
The maximum number of shares of common stock of the Company to be delivered
upon exercise of stock acquisition rights per year is 120,000 (0.05% of sharesissued).
In the event that the Company carries out a share split or share consolidation, thenumber of shares to be delivered upon exercise of stock acquisition rights will be
adjusted in accordance with the following formula; provided, however, that suchadjustment will only be carried out with respect to the number of shares to bedelivered upon exercise of stock acquisition rights that are yet to be exercised at thetime of the share split or share consolidation, and any fraction of less than one share69

resulting from such adjustment will be rounded down.
Number of shares
Number of shares
Ratio of share split or=x
after adjustment
before adjustment
share consolidation
Furthermore, if the number of shares to be delivered upon exercise of stockacquisition rights needs to be adjusted because the Company carries out anabsorption-type merger or a consolidation-type merger with another company withsuccession to the stock acquisition rights provided for in this proposal or because theCompany carries out an incorporation-type company split or an absorption-typecompany split, the Company will make the necessary adjustment in the number ofthe shares as well.
2. Total number of stock acquisition rights
The maximum number of stock acquisition rights to be allotted per year is 1,200.
The number of shares to be delivered upon exercise of one stock acquisition right is
100 shares.
(If, however, the number of shares is adjusted as provided for in the Paragraph 1.
above, then the number of shares to be delivered upon exercise of one stockacquisition right will be adjusted in the same manner.)
3. Requirements for allotment of stock acquisition rights
If the requirement stated in (i) below is satisfied, then stock acquisition rights willbe allotted up to a maximum of 60 million yen per year. If, in addition to therequirement stated in (i), the requirement stated in (ii) is also satisfied, then stockacquisition rights will be allotted up to a maximum of 120 million yen per year.
If, however, neither of the requirements stated in (i) or (ii) is satisfied, then no stockacquisition rights will be allotted.
(i)

The Company’s consolidated operating income is 42,500 million yen or
greater in any of the fiscal years from the fiscal year ending March 2013
through the fiscal year ending March, 2015;(ii) The Company’s consolidated operating income is 53,000 million yen or
greater in any of the fiscal years from the fiscal year ending March 2013
through the fiscal year ending March 2015.
4. Price for issuance of stock acquisition rights
The price for issuance of each stock acquisition right will be calculated based on
the Black-Scholes model, an impartial method of valuing stock acquisition rights.
The person who receives an allotment of the stock acquisition rights will, instead of
paying the price for issuance of the stock acquisition rights in cash, offset his or her
obligation to pay for issuance of the stock acquisition rights against the recipient’s
right to his or her remuneration from the Company.
5. Amount to be paid upon exercising stock acquisition rights
The amount to be paid upon exercising each stock acquisition right will be one yen
per share to be issued or transferred by the exercise of each stock acquisition right,
multiplied by the number of shares to be granted.

70

6. Exercise period for stock acquisition rights
The exercise period for stock acquisition rights will be decided by the Company’s
Board of Directors but must not exceed 20 years from the allotment date of the stockacquisition rights.
7. Conditions on exercise of stock acquisition rights
A person who has received an allotment of the stock acquisition rights may, within
the period specified in the Paragraph 6. “Exercise period for stock acquisitionrights,” exercise those stock acquisition rights between one and ten days after thedate on which that person loses his or her position as a Director, Auditor, or
employee of the Company or of a subsidiary of the Company.
8. Restrictions on assignment of stock acquisition rights
Any assignment of stock acquisition rights requires the approval of the Board of
Directors of the Company.
9. Other details concerning stock acquisition rights
Other details concerning stock acquisition rights will be determined at the Board of
Directors’ meeting of the Company at which matters concerning the offering of suchstock acquisition rights will be resolved.
(Reference)
The Company is scheduled, upon a resolution of the Board of Directors of theCompany, to grant stock acquisition rights to the directors of the core companies ofeach SBU of the Group, Bandai Co., Ltd., NAMCO BANDAI Games, Inc., andNAMCO LIMITED, on the same terms as those stated in Proposal No. 3, as part oftheir remuneration. The number of stock acquisition rights and the conditions fortheir allotment are as follows:
1. Class and number of shares to be delivered upon exercise of stock acquisition rights
The maximum number of shares of common stock of the Company to be delivered
upon exercise of stock acquisition rights per year is 200,000 (0.09% of sharesissued).
2. Total number of stock acquisition rights
The maximum number of stock acquisition rights to be allotted per year is 2,000.
(The number of shares to be delivered upon exercise of one stock acquisition right is
100 shares.)
3. Requirements for allotment of stock acquisition rights
If the requirement stated in (i) below is satisfied, then stock acquisition rights willbe allotted up to a maximum of 100 million yen per year. If, in addition to therequirement stated in (i), the requirement stated in (ii) is also satisfied, then stockacquisition rights will be allotted up to a maximum of 200 million yen per year.
If, however, neither of the conditions stated in (i) or (ii) is satisfied, then no stockacquisition rights will be allotted.
(i)

The Company’s consolidated operating income is 42,500 million yen or
greater and the operating income of the SBU to which the director of thesubsidiary in question belongs reaches or exceeds a certain level in any of
the fiscal years from the fiscal year ending March 2013 through the fiscal
year ending March 2015;

71

(ii) The Company’s consolidated operating income is 53,000 million yen or
greater and the operating income of the SBU to which the director of thesubsidiary in question belongs reaches or exceeds a certain level in any of
the fiscal years from the fiscal year ending March 2013 through the fiscal
year ending March 2015.

END

72