NAMCO BANDAI
Holdings Inc.
Notice of the Eighth Ordinary General Meeting of Shareholders
to be held on June 24, 2013
An English translation of the original notice in Japanese

DISCLAIMER
The following is an English translation of the Japanese original “Notice of the Eighth Ordinary General
Meeting of Shareholders of NAMCO BANDAI Holdings Inc.” which meeting is to be held on June 24, 2013.
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
June 3, 2013
4-5-15 Higashi-Shinagawa, Shinagawa-ku, Tokyo
NAMCO BANDAI Holdings Inc.
President and Representative Director
Shukuo Ishikawa
Dear Shareholders,
NOTICE OF THE EIGHTH ORDINARY GENERAL MEETINGOF SHAREHOLDERS
You are cordially invited to attend the Eighth 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 22, 2013.
Meeting Details
1.

Date and Time:

June 24, 2013 (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 Audit & Supervisory Board for the
Eighth Fiscal Year (from April 1, 2012 to March 31, 2013)
2. Report on the Contents of the Non-Consolidated Financial Statements for the
Eighth Fiscal Year (from April 1, 2012 to March 31, 2013)
Matters to be Resolved:
Proposal No. 1: Appropriation of Surplus
Proposal No. 2: Election of Nine (9) Directors
4.

Information on Exercise of Voting Rights
Please see “Information on Exercise of Voting Rights” on page 3 of this document.

2

[Information on Exercise of Voting Rights]
Please exercise your voting rights after reviewing the Reference Documents for the General
Meeting of Shareholders on pages 5 to 13.
You may exercise your voting rights by one of the following three methods.
A: Exercise of Voting Rights via attending the General Meeting of Shareholders:
Please hand in the enclosed Voting Rights Exercise Form at the reception desk at
the place of the shareholders’ meeting.
In addition, please bring this NOTICE OF THE EIGHTH ORDINARY GENERALMEETING OF SHAREHOLDERS.
B: Exercise of Voting Rights via Postal Mail:
Please indicate, on the enclosed Voting Rights Exercise Form, your approval ordisapproval of each item on the agenda and return the completed form so that it arrivesby 5:30 p.m., Saturday, June 22, 2013.
C: Exercise of Voting Rights via the Internet etc.:
Please access the website designated by the Company for the exercise of voting
rights (http://www.evote.jp/), enter and send your approval or disapproval of each itemon the agenda by 5:30 p.m., Saturday, June 22, 2013.
For details, please see the following page.

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

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 or smartphone, such as firewalls, etc. that are in place to regulate yourInternet connections, anti-virus software that has been installed on your PC or smartphone, or
the use of a proxy server.
3. When exercising voting rights via mobile phone, you must use one of the following services:
i-mode, EZweb or Yahoo! Mobile. For security reasons, you cannot vote using mobile handsetsthat cannot send encrypted information (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)[For Institutional investors]
Institutional investors may make use of the Tokyo Stock Exchange’s Electronic
Voting Platform (commonly known as the TSE Platform).

4

Reference Documents for the General Meeting of Shareholders
Proposals and References
Proposal No. 1 Appropriation of Surplus
Appropriation of surplus is as follows:
Fiscal Year-end Dividends
The Company places the return of profits to shareholders as one of its highest
management priorities. The Company assumes its basic policy is to further strengthen
the Group’s competitiveness and, while maintaining a sound financial status, to achieve
regular distributions 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 ¥21 per share to the stable year-end dividend of ¥12 pershare, to pay a year-end dividend of ¥33 per share for this eighth fiscal year.
Since the Company paid an interim dividend of ¥12 per share on December 10, 2012,
the total annual dividend for the fiscal year will be ¥45 per share.
(i) Type of dividend assets:Cash(ii) Allocation of dividend assets to be paid to shareholders and total amount of dividend:
Dividend per share of common stock of the Company ···················¥33
Total amount of dividends············································ ¥7,253,560,116(iii) Effective date of distribution of surplus (dividend):
June 25, 2013

5

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)

Positions andResponsibilities in
the Company

Career Summary
Apr. 1978:
Aug. 1991:
Jun. 1995:

Shukuo Ishikawa(April 15, 1955)
1

Number of theCompany’s
Shares Owned
33,800 Shares

Jun. 1999:
President andRepresentative
Director

Apr. 2005:
Apr. 2006:
Jun. 2006:
Apr. 2009:
Apr. 2010:
Apr. 2012:

6

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

Candidate
No.

Name
(Date of Birth)

Positions andResponsibilities in
the Company

Career Summary
Apr. 1977:
Apr. 1991:

Kazunori Ueno
(September 16,
1953)
2
Number of theCompany’s
Shares Owned
73,150 Shares

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
SBU of the Company
Apr. 2012:
Executive Vice President andRepresentative Director in charge ofToys and Hobby SBU of the Company(current position)(Major concurrent positions)
President and Representative Director of Bandai Co.,
Ltd.

Executive Vice
President andRepresentative
Directorin charge ofToys and
Hobby SBU

7

Candidate
No.

Name
(Date of Birth)

Positions andResponsibilities in
the Company

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

Shuji Ohtsu(August 6, 1959)
3

Number of theCompany’s
Shares Owned
17,300 Shares

Yuji Asako(January 18,
1966)
4
Number of theCompany’s
Shares Owned
16,200 Shares

Director andDivision
GeneralManager of theGroup
Administrative
Headquarters

Director andDivision
GeneralManager of the
Corporate
Planning
Division

8

Licensed as a CPA
Partner in Century Audit Corporation
Partner in Century Ota Showa & Co.
(currently Ernst & Young ShinNihon
LLC)
Sep. 2003:
Partner in KPMG AZSA & Co. (currently
KPMG AZSA LLC)
May 2004:
Board Member of KPMG AZSA & Co.
Oct. 2007:
Joined the Company as Adviser
Jun. 2008:
Director in charge of Overseas
Operations, Group Administrative
Headquarters, Corporate Legal Affairs
Office and Internal Auditing Division of
the Company
Jun. 2011:
Director in charge of Overseas Regional
Headquarters Companies and Division
General Manager of the Group
Administrative Headquarters of theCompany
Apr. 2013:
Director and Division General Managerof the Group Administrative
Headquarters of the Company (current
position)
President and Representative Director of
NAMCO BANDAI Holdings (USA) Inc.
(current position)(Major concurrent positions)
President and Representative Director of NAMCO
BANDAI Holdings (USA) Inc.
Apr. 1986:
Joined Bandai Co., Ltd.
Aug. 2005: 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 Managerof the Corporate Planning Division of theCompany (current position)

Candidate
No.

Name
(Date of Birth)

Positions andResponsibilities in
the Company

Career Summary
Mar. 1976:
Apr. 1992:

Satoshi Oshita(July 3, 1953)
5

Number of theCompany’s
Shares Owned
27,500 Shares

Directorin charge ofContent SBU

9Joined Bandai Co., Ltd.
General Manager, Toy Marketing
Department of Bandai Co., Ltd.
Jun. 1999:
Executive Officer and Deputy Division
Head, Consumer Business Division, andGeneral Manager, SWAN Business
Department of Bandai Co., Ltd.
Mar. 2002:
Joined Bandai Networks Co., Ltd., as
Executive Manager
Jun. 2002:
President and Representative Director ofBandai Networks Co., Ltd.
Jun. 2007:
Director in charge of Network SBU of theCompany
Apr. 2009:Managing Director in charge of CS
business and NE business of NAMCO
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
President and Representative Director of
NAMCO BANDAI Games Inc. (current
position)
Jun. 2012:
Director in charge of Content SBU of theCompany (current position)(Major concurrent positions)
President and Representative Director of NAMCO
BANDAI Games Inc.

Candidate
No.

Name
(Date of Birth)

Positions andResponsibilities in
the Company

Career Summary
Apr. 1978:

Masahiro
Tachibana(April 16, 1951)
6
Number of theCompany’s
Shares Owned
53,300 Shares

Joined NAMCO LIMITED (currently
NAMCO BANDAI Games Inc.)
Jul. 1986:
General Manager, Operations Divisionof 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 marketof 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 GamesInc.)

Directorin charge ofAmusement
Facility SBU

10

Candidate
No.

Name
(Date of Birth)

Positions andResponsibilities in
the Company

Career Summary
Jul. 1972:

7

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
Outside Directorof Toys “R” US-Japan, Ltd.
Apr. 2004:
Chairman, Representative Director, andChief Executive Officer of Toys “R”
Manabu Tazaki
US-Japan, Ltd.
(November 8,
Jul.
2006:
Business Advisor to the Company
1948)
Apr. 2008:
Outside Director of NAMCO
Director
LIMITED*
Jun. 2009:
Outside Director of the Company
Number of the(current position)
Company’s
Mar.
2011:
OutsideDirector of STUDIO ALICE
Shares Owned
Co., Ltd. (current position)
5,300 Shares* 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.
(Reason for proposing Mr. Manabu Tazaki as a candidate for Outside Director)
Given his extensive experience in corporate management, his excellent character andknowledge, and his thorough knowledge of trends in the toys and hobby, and other industries
within which the Group is developing its businesses, the Company anticipates that he will beable further to strengthen management oversight and check functions and to introduce a
broader managerial perspective and thus believes that he will be able to perform the duties ofan Outside Director appropriately.

11

Candidate
No.

Name
(Date of Birth)

Positions andResponsibilities in
the Company

Career Summary
Apr. 1976:
Jul. 1987:

8

Joined TEIJIN LIMITED
Joined Mitsui Bank, Ltd. (currently
Sumitomo Mitsui Banking
Corporation)
Dec. 1998:
Resigned from The Sakura Bank,
Limited (currently Sumitomo Mitsui
Banking Corporation)
Jan. 1999:
Representative Director of UNISONCAPITAL, Inc.
Apr. 2004:
Assistant Professor, Graduate School ofInternational Corporate Strategy (ICS),
Hitotsubashi University
Outside Director
Representative Director of GCA Co,
Ltd. (currently GCA Holdings
Nobuo Sayama
Corporation)
Apr.
2005:
Professor,
Graduate School of(December 3,
International
Corporate Strategy (ICS),
1953)
Director
Hitotsubashi University(current position)
Oct. 2005:
Representative Director of Mezzanine
Number of the
Corporation
Company’sMar. 2008:
Managing Director of GCA Savvian
Shares Owned
Group Corporation--- Shares
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
Representative Director of Integral Corporation
Outside Director of Little eArth Corporation Co., Ltd.
(Reason for proposing Mr. Nobuo Sayama as a candidate for Outside Director)
Given his extensive experience in corporate management and his profound scholarly
knowledge via his teaching activities in the field of corporate strategy, the Company anticipatesthat he will be able further to strengthen management oversight and check functions, and thus
believes that he will be able to perform the duties of an Outside Director appropriately.

12

Candidate
No.

Name
(Date of Birth)

Positions andResponsibilities in
the Company

Career Summary
Apr. 1984:
Apr. 1991:

9(Notes)Admitted to the bar in Japan
JoinedMori Sogo Law OfficeOutside Director(currently Mori Hamada & Matsumoto)Jun. 2006:
Outside Audit & Supervisory Board
Tomohisa
Member of NAMCO BANDAI Games
Inc.
TabuchiApr.
2007:
Established
STW & Partners(December 9,Partner of STW & Partners
1957)
Director(current position)
Jun. 2010:
Outside Director of Hitachi Medical
Corporation (current position)
Number of theJun. 2011:
Outside Director of the Company
Company’s(current position)
Shares Owned(Major concurrent positions)--- Shares
Partner of STW & Partners
Outside Director of Hitachi Medical Corporation(Reason 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 audit & supervisory board member, the Company 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 to perform the duties of an Outside Director appropriately.
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 four years, Mr. Nobuo Sayama about two
years, and Mr. Tomohisa Tabuchi about two years. Liability Limitation Agreements
under Article 427, Paragraph 1, of the Companies Act have not been concluded
between Mr. Manabu Tazaki, Mr. Nobuo Sayama, or Mr. Tomohisa Tabuchi and theCompany.
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.
3. There are no special interests between each of the candidates for Director and theCompany.
END

13

(Attached Document)
BUSINESS REPORTS(From April 1, 2012 to March 31, 2013)
1. Current Status of the Group(1) Business Status for This Fiscal Year(i)

Business Progress and Results

In this fiscal year, although some signs of improvement in economic conditions have begun
appearing thanks to positive expectations towards factors such as economic policies aimed atpromoting growth in the domestic environment from late 2012, the economic slowdown inEurope resulting from financial instability and the effect of exchange rate fluctuations havemeant that, overall, harsh economic conditions continued. As for the entertainment industry,
weak individual consumption and other factors added further uncertainty to conditions.
In this environment, the BANDAI NAMCO Group (“the Group”) is implementing various
measures aimed at medium-to long-term growth under the concept of “Empower, Gain
Momentum, Accelerate Evolution,” which is the vision of the Group’s new Mid-term Plan,
started in this fiscal year. On the business front, the Content Business contributed toperformance in each category, particularly in network content by coordinated deployment
revolving around IP (intellectual property) such as characters.
Consequently, the Group’s consolidated results at fiscal year-end were net sales of 487,241
million yen (year-on-year increase of 7.3%), operating income of 48,642 million yen(year-on-year increase of 40.6%), recurring income of 49,972 million yen (year-on-yearincrease of 42.9%), and net income of 32,383 million yen (year-on-year increase of 67.8%).
(ii) Outline of Business by Business Segment(Millions of yen)
Year Ended
March 31,2013

Net SalesYear Ended
March 31,2012

Toys and Hobby

172,977

177,994

Decreaseof 5,016

11,255

16,112

Decreaseof 4,857

Content

263,595

225,503

Increaseof 38,092

36,43817,003

Increaseof 19,434

Amusement
Facility

60,18561,032

Decreaseof 847

1,683

2,380

Decreaseof 696

Other

25,78827,482

Decreaseof 1,694

1,692

2,050

Decreaseof 358Eliminations
and Corporate(35,305)(37,801)

Increaseof 2,496(2,427)(2,941)

Increaseof 514

Consolidated

487,241454,210

Increaseof 33,030

48,642

34,606

Increaseof 14,036

Business
Segment

Change14

Operating Income
Year EndedYear Ended
March 31,
March 31,
2013
2012

ChangeToys and Hobby BusinessIn the Toys and Hobby Business, domestically, sales performed favorably due to coordinatedsales of products in the variety of categories revolving around toys including long-establishedcharacters such as the KAMEN RIDER series and PRETTY CURE! series. Although domestic
performance was lower year on year in total, for reasons such as a lower gross margin ratio
resulting from changes in the product mix, the Group made steady efforts toward broadening
the scope of target customers, including by developing products such as the new Aikatsu!
characters for girls, plastic models for elementary school students, and highly collectable toys
for adults.
Overseas, in North America and Europe, although products of the Power Rangers series soldfavorably, overall performance was weak amid a harsh market environment. In the Asian
region, plastic models and highly collectable toys for adults became popular in addition tocharacter toys thanks to developments in conjunction with Japan.
As a result, net sales in the Toys and Hobby Business were 172,977 million yen (year-on-year
decrease of 2.8%), and operating income was 11,255 million yen (year-on-year decrease of
30.1%).
Description of Business
Manufacturing and sales of toys, candy toys, production for vending machines, cards, plastic
models, apparel, sundries, etc.

Content BusinessIn the Content Business, the network content area made a significant contribution to
performance mainly through social games such as the Mobile Suit Gundam series, ONE
PIECE Grand Collection, and THE IDOL M@STER CINDERELLA GIRLS. Arcade gamemachines for well-established series and new game machines such as Fishing Spirits became
popular, and prize sales of popular characters were favorable. Also contributing toperformance were visual and music content areas, which enjoyed favorable sales of Mobile
Suit Gundam UC (Unicorn) and repeat sales of visual packages that were launched in previous
years, as well as sales of LCD units for pachinko and pachi-slot machines. In home video
game software, the launch of the latest titles of popular series such as SOULCALIBUR,
NARUTO, TALES OF, and ONE PIECE in both the Japanese and overseas markets, anddomestic sales of titles with concepts based on popular television programs, trended strongly.
As a result, net sales in the Content Business were 263,595 million yen (year-on-year increaseof 16.9%), and operating income was 36,438 million yen (year-on-year increase of 114.3%).
Description of Business
Planning, development and sales of home video game software, arcade game machines, andprizes for amusement machines, distribution services for network content, planning,production and sales of films, visual and music content software, distribution services foron-demand visual content, live entertainment operations, etc.

15

Amusement Facility BusinessIn the Amusement Facility Business, domestically, despite a steady performance mainly bydifferentiated facilities located in shopping centers that offer customers the opportunity toexperience the distinctive worldview of specific characters, sales at existing facilities declined
to 95.5% from the previous fiscal year, when we recorded a high level of sales.
In the challenging market environment presented by countries outside Japan, results wereroughly level with those of the previous fiscal year as a result of efficiency in operations fromthe selection and concentration of stores.
As a result, net sales in the Amusement Facility Business were 60,185 million yen(year-on-year decrease of 1.4%), and operating income was 1,683 million yen (year-on-year
decrease of 29.3%).
Description of Business
Operation of amusement facilities, etc.

Number of Facilities as of March 31, 2013
Directly Managed
Facilities
254

Revenue-Sharing
Facilities
1,015

Others

Total

2

1,271

Other Businesses
Other Businesses consist of companies that conduct businesses such as logistics support,
printing, and other kinds of administration and operational support for each of the Group’s
strategic business units. We are making efforts to manage such operations related to groupsupport in an efficient manner.
As a result, net sales in the Other Businesses were 25,788 million yen (year-on-year decreaseof 6.2%), and operating income was 1,692 million yen (year-on-year decrease of 17.5%).
Description of BusinessTransportation and storage of products, management of real estate, printing, etc.

(iii) Capital Expenditures
In this fiscal year, the Group carried out 18,535 million yen in capital expenditures; thefunds were primarily used for investments in the manufacturing of molds associated with thedevelopment of new products and in amusement facilities and machines.
(iv) Fundraising
Not applicable.
(v)

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

Not applicable.

16

(vi) Acquisitions of Other Companies’ Businesses
Not applicable.
(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 September 28, 2012, NAMCO BANDAI Games Europe S.A.S. and NAMCO BANDAI
Partners S.A.S., subsidiaries of the Company, carried out an absorption-type merger in which
NAMCO BANDAI Games Europe S.A.S. 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

8th Fiscal Year

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

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

7th Fiscal Year
(Year Ended
March 31, 2012)(Year Ended
March 31, 2013)

Net sales(Millions of yen)

378,547

394,178454,210487,241

Recurring income(Millions of yen)

1,907

16,39934,96049,972

Net income (loss)(Millions of yen)

(29,928)

1,848

19,30332,383

Net income (loss)
per share(¥123.98)¥7.71¥85.62¥147.40

Total assets(Millions of yen)

325,935

308,269

342,171374,203

Net assets(Millions of yen)

229,012

213,693

213,125

248,769

Net assets per share¥938.74¥896.83¥962.45¥1,124.45

Classification

17(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.

¥ 10,000 million

100.0%

NAMCO BANDAI
Games Inc.

¥ 10,000 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.

(Notes) 1. Bandai Co., Ltd. carried out a capital reduction of 14,664 million yen on October 15,
2012, as part of the Group’s capital strategy.
2. NAMCO BANDAI Games Inc. carried out a capital reduction of 5,000 million yen on
October 4, 2012, as part of the Group’s capital strategy.
(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

18

responsibilities, and legal and ethical responsibilities. In accordance with these fundamental
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 and reforming its
organizational structure, it is working to expand its content lineup and the regions in which it
is operating, with a view to achieving medium-term growth. In addition, on the development
and production side, improvements in the value chain will enable more speedy andprice-competitive product development.
Content SBU
This unit’s industry is facing issues that include “evolution of platforms and networks” and“increasingly diverse customer needs.” The Group is reviewing development based on its
existing business categories and promoting its content-focused IP strategy, thereby achieving a
speedy response to changing consumer needs throughout the world while working tomaximize the value of its content. Specifically, in the domestic market, it is aiming to secure
the No. 1 position in each of its main business categories. For overseas, it is reinforcing
deployment of its arcade game machines in developing countries, mainly in Asia, and iscarrying out the world-wide launch of carefully selected home video game software titles
developed domestically, seeking to improve profitability. On the development front, it will put
in place and improve the development environment from a medium- and long-term
perspective, such as by implementing measures to respond swiftly to technological progressand changes in the environment.
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 is reinforcing its domestic sales and marketing by customer segment,
while it increases added value by making use of its know-how in character merchandising andworks to differentiate the Group’s facilities. Overseas, it is considering development ofbusiness in Asia while implementing a continuous process of selection and concentration ofbusinesses in North America and Europe.
We ask for our shareholders’ further assistance and guidance.

19

(5) Principal Business Offices of the Group (As of March 31, 2013)(i)

The Company
Head Office

4-5-15 Higashi-Shinagawa, Shinagawa-ku, Tokyo(ii) Principal Subsidiaries
Bandai Co., Ltd.

Taito-ku, Tokyo

NAMCO BANDAI Games Inc.
NAMCO LIMITED

Shinagawa-ku, Tokyo
Ota-ku, Tokyo

NAMCO BANDAI Holdings (USA) Inc.
BANDAI S.A.

California, U.S.A.
Cergy-Pontoise, France

NAMCO Holdings UK LTD.

London, U.K.

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

Hong Kong, China(6) Outline of Employees (As of March 31, 2013)(i)

Employees of the Group

Change from the End ofPrevious Fiscal Year
Toys and Hobby Business
2,170(1,464)
Increase of 34(Decrease of 43)
Content Business
2,939
(393)
Decrease of 38(Increase of 82)
Amusement Facility Business
1,110(3,586)
Increase of 4 (Decrease of 169)
Other Businesses
594
(371)
Increase of 58(Increase of 59)
Corporate (Common)
170(21)
Decrease of 88(Decrease of 26)
Total
6,983
(5,835)Decrease of 30(Decrease of 97)(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

20

(ii) Employees of the Company
Change from
Average Years
the End of
Average Ageof Service
Previous Fiscal Year
Decrease of 87
39.5
13.3
161 (21)(Decrease of 26)(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. The decrease in the number of employees is mainly due to transfers to other companies
within the Group.
Number of
Employees(7) Principal Lenders (As of March 31, 2013)
Lenders
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Sumitomo Mitsui Banking Corporation
Mizuho Corporate Bank, Ltd.
Mitsubishi UFJ Trust and Banking Corporation(8) Other Important Matters of the GroupNot applicable.

21

Amount¥5,887 million¥4,748 million¥1,283 million¥1,026 million

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

Status of Shares (As of March 31, 2013)
Total Number of Shares Issuable:(ii) Total Number of Issued Shares:

1,000,000,000 shares
222,000,000 shares(iii) Number of Shareholders: 42,800(increase of 2,463 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)
MAL Ltd.
The Chase Manhattan Bank, N.A. London S.L.
Omnibus Account
XIL, LTD.
Masaya Nakamura
The Nomura Trust and Banking Co., Ltd.
(Retirement and severance benefits trust.
The Bank of Tokyo-Mitsubishi UFJ account)
State Street Bank and Trust Company 505225

Shareholding Ratio

9,518,500

4.33

7,407,900

3.37

7,010,100

3.19

6,618,285

3.01

6,000,000

2.73

5,960,000

2.71

4,586,100

2.09

3,926,753

1.79

Nintendo Co., Ltd.
3,845,700
1.75Japan Trustee Services Bank, Ltd.
3,675,300
1.67(Trust account 9)(Notes) 1. The shareholding ratio is calculated after reduction of the number of treasury
stocks (2,195,148 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)
7,268,400 shares
6,906,600 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)3,675,300 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.

22

(2)

Stock Subscription Rights, etc.

(i)

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

Directors and Audit & Supervisory Board Members (As of March 31, 2013)
Title

Name

President and Representative Shukuo Ishikawa
Director
Executive Vice President and Kazunori Ueno
Representative Director
Director
Shuji Ohtsu

Director
Director

Director

Director
Director

Director

Full Time Audit &Supervisory Board Member
Full Time Audit &Supervisory Board Member
Audit & Supervisory Board
MemberAudit & Supervisory Board
MemberResponsibilities in the Company and
Major Concurrent Positions
Chairman of the Board of NAMCO BANDAI Games Inc.

Responsible for the Toys and Hobby SBU
President and Representative Director of Bandai Co., Ltd.
Responsible for Overseas Regional Headquarters
Companies and the Division General Manager of theGroup Administrative Headquarters
Yuji Asako
Division General Manager of the Corporate Planning
Division
Satoshi Oshita
Responsible for the Content SBU
President and Representative Director of NAMCO
BANDAI Games Inc.
Masahiro Tachibana Responsible for the Amusement Facility SBU
President and Representative Director of NAMCO
LIMITED
Manabu Tazaki
Outside Director of STUDIO ALICE CO., LTD
Nobuo Sayama
Professor, Graduate School of International Corporate
Strategy (ICS), Hitotsubashi University
Representative Director of Integral Corporation
Outside Director of Little eArth Corporation Co., Ltd.
Tomohisa Tabuchi
Attorney-at-Law
Partner in STW & Partners
Outside Director of Hitachi Medical Corporation
Koichiro Honma
Katsuhiko Kohtari

Certified Public Accountant

Osamu Sudoh

Attorney-at-Law
Partner in Sudoh & Takai Law Offices
Outside Director of Rakuten Bank, Ltd.
Outside Director of Accordia Golf Co., Ltd.
Outside Audit & Supervisory Board Member of
Mitsui-Soko Co., Ltd.
Attorney-at-Law
Partner in Marunouchi-Chuo Law Office

Kouji Yanase

23

(Notes) 1. Directors Manabu Tazaki, Nobuo Sayama and Tomohisa Tabuchi are Outside Directors.
2. Full Time Audit & Supervisory Board Member Katsuhiko Kohtari and Audit &Supervisory Board Members Osamu Sudoh and Kouji Yanase are Outside Audit &Supervisory Board Members.
3. Full Time Audit & Supervisory Board Member Katsuhiko Kohtari is a certified public
accountant and has considerable knowledge of finance and accounting.
4. Audit & Supervisory Board Member Osamu Sudoh has considerable experience withbankruptcy issues as an attorney-at-law and has the deep knowledge of finance andaccounting necessary to engage in such bankruptcy issues.
5. President and Representative Director Shukuo Ishikawa stepped down as Chairman of
the Board of NAMCO BANDAI Games Inc. on March 31, 2013.
6． The Company has appointed Outside Directors Manabu Tazaki, Nobuo Sayama, andTomohisa Tabuchi and Outside Audit & Supervisory Board Members Katsuhiko
Kohtari, Osamu Sudoh, and Kouji Yanase as Independent Directors/Auditors as definedin the rules of the Tokyo Stock Exchange and has filed therewith the notification
regarding their appointments.
(ii) Directors and Audit & Supervisory Board Members Who Retired or Were Dismissed
during This Fiscal Year
Not applicable.
(iii) Remuneration, etc. Paid to Directors and Audit & Supervisory Board Members
Total Amount of Remuneration, etc., Paid During This Fiscal Year
Number of People
Amount of Remuneration, etc.
Directors
8¥406 million
Audit & Supervisory Board
4¥67 million
MembersTotal
12¥474 million(Outside Directors and Outside(6)(¥88 million)
Audit & Supervisory Board
Members)(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. In addition, at the 7th Ordinary General Meetingof Shareholders held on June 18, 2012, it was resolved that the upper limit on theirstock option remuneration is 120 million yen per year.
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 Audit &Supervisory Board Members must be 8 million yen per month.

24

(iv) Matters Concerning Outside Directors and Outside Audit & Supervisory Board Membersa.

Status of Major Concurrent Positions of Other Companies, etc. and Relationships
Between Those Companies, etc. and the Company
Major concurrent positions of Outside Directors and Outside Audit & Supervisory Board
Members are as stated in “(i) Directors and Audit & Supervisory Board Members” onpages 23.
Moreover, there are no special relationships between the Company and the entities withwhich Outside Directors and Outside Audit & Supervisory Board Members haveconcurrent positions.

b.

Main Activities in This Fiscal Year
(Directors)
Board of Directors Meetings(Held 18 times)
Number of
Meetings
Attended

ManabuTazaki

Nobuo
SayamaTomohisa
Tabuchi

18

18

18

Statements Made at
Board of Directors Meetings

Attendance Rate

100.0%

Provided advice and proposals by giving opinions,etc. based on his wealth of experience and position
as a corporate officer to ensure the appropriatenessand validity of decisions of the Board of Directors.

100.0%

Provided advice and proposals by giving opinions,etc. based on 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 theappropriateness and validity of decisions of theBoard of Directors.

100.0%

Provided 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.

25

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

KatsuhikoKohtari

Osamu
Sudoh

Kouji
Yanase

c.

18

16

17

100.0%

88.9%

94.4%

Audit & Supervisory
Board Meetings(Held 10 times)
NumberofAttendance
Meetings
Rate
Attended

10

10

10

Statements Made at
Board of Directors Meetings andAudit & Supervisory Board Meetings

100.0%

Provided advice and proposals bygiving opinions, etc. primarily fromhis position as a certified public
accountant to ensure theappropriateness and validity ofdecisions of the Board of Directors andthe Audit & Supervisory Board.

100.0%

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

100.0%

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

Summary of Contracts Concerning Limited Liability
Not applicable.

d.

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

26

(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¥228 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 Audit & Supervisory Board will remove
such Accounting Auditor with the unanimous approval of the Audit & Supervisory Board
Members.
Additionally, in the event that the Audit & Supervisory Board 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 Audit & Supervisory Board, 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.

27

(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 to the President and Representative Director of the Company of intent tocomply 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.

To ensure that the execution of the duties by Directors complies with the laws andregulations and the Articles of Incorporation, the Company and Group companies have
put in place internal consultation points, external consultation points with external legal
advisors, and the Audit & Supervisory Board Members hotline, which enables reporting
directly to the Audit & Supervisory Board Members.

(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 andmanagement of important documents including documents circulated for approval ineach department. The Company has a system to ensure that Directors and Audit &Supervisory Board Members 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 has defined the28basic policy for a Business Continuity Plan (BCP) for the Group, and is drawing up a
BCP for the Group and organizing a Business Continuity Management (BCM) system toachieve 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 Quarterly 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 be fully
informed in order to execute 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
and Group companies have put in place internal consultation points, external consultation
points with external legal advisors, and the Audit & Supervisory Board Members hotline,

29

which enables reporting directly to the Audit & Supervisory Board Members, to receive
reports or consultations concerning compliance from employees and others.

(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 to the President and Representative Directorof the Company of intent to comply with the Group Compliance Charter. Moreover, theGroup Compliance Charter has been revised as needed in response to revisions in thelaws and regulations, etc., or changes in the social context surrounding the Group, and aguidebook, the Compliance Book, has been issued and distributed to all officers andemployees in the Group in order to ensure thorough knowledge 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 Audit &Supervisory Board Members and those Employees’ Independence from the Directorsa.

The Audit & Supervisory Boards’ regulations and the audit standards for Audit &Supervisory Board Members specify in writing and the Board of Directors has adopted aresolution to the effect that the Audit & Supervisory Board Members may request the
President and Representative Director to assign employees to assist the Audit &Supervisory Board Members in carrying out their duties and that, to ensure those
employees’ independence from the Board of Directors, the Directors and the Audit &Supervisory Board Members are given an opportunity to confer on personnel mattersconcerning those employees in advance.

30

(viii) Systems for Reports to the Audit & Supervisory Board Members, Including Reports to
the Audit & Supervisory Board Members Made by Directors and Employeesa.

Directors and employees must promptly report to the Audit & Supervisory Board 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 andGroup companies have put in place an Audit & Supervisory Board Members hotline,
which enables reporting directly to the Audit & Supervisory Board Members, to receive
reports or consultations concerning compliance from employees and others.

c.

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

d.

Besides meetings of the Board of Directors, Audit & Supervisory Board Members also
participate in important meetings including the SBU Quarterly Report Meeting andmeetings of the Boards of Directors of principal subsidiary companies, and have regularmeetings with Directors and important employees to confirm the current state of affairsof the Company, receive reports, exchange opinions, and so on.

(ix) Systems to Ensure the Effectiveness of Audits Conducted by the Audit & Supervisory
Board Membersa.

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

b.

Besides participating in meetings of the Board of Directors, Audit & Supervisory Board
Members also participate in important meetings including the SBU Monthly Report
Meeting and meetings of the Boards of Directors of principal subsidiary companies, withthe aim of strengthening audits of the subsidiaries.

c.

The Group Audit & Supervisory Board, which consists of Full Time Audit & Supervisory
Board Members, holds workshops aimed at improving the quality of audits to provide
information about audit policies and other relevant matters, confirm the current status ofaudits, receive reports, and discuss. In addition, it provides training in audit proceduresfor employees who also serve as part-time Audit & Supervisory Board Members, with theaim of improving the effectiveness of audits for the Group as a whole.

31

(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.
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, the32

priority 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.
・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.
・Promoting Efficient Management
The Group has put in place standards for business reconstruction; it has reinforced
systems for continuous monitoring in order to discern business trends more swiftly, and ismaking swift decisions on restructuring businesses or withdrawing from them, based on
in-house indicators. In addition, the Group is working towards cost reductions bystandardizing processes across the Group as a whole and is promoting managerial
efficiency.
・Reinforcing Personnel Strategies
Aiming for business growth in overseas markets, the Group is strengthening its global
systems for acquiring and training personnel. In addition, the Group is driving forward a
proactive system for personnel exchanges within the Group to invigorate its humanresources.
・ 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

33ratio of 30%, based on stable annual dividend payments of 24 yen per share.
In addition, its fundamental policy is that part of any profit, after deduction of dividends,
may be used to acquire treasury stock, upon comprehensive consideration of the amount offunds on hand, performance trends, recent share price trends, the existence or nonexistence ofmajor investment proposals, and other factors.
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.

34

Consolidated Balance Sheet(As of March 31, 2013)(Millions of yen)AmountASSETS
Current assets
Cash and time deposits
Trade receivables
Short-term investments
Finished goods and merchandiseWork in process
Raw materials and supplies
Deferred tax assets
Other current assets
Allowance for doubtful receivables
Total current assets

119,132
77,0694,379
10,915
19,597
6,130
10,57917,483(484)
264,804

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

10,40313,007
11,537
12,30747,255
8,497
25,404
8,398
21,180(1,338)53,646109,399374,20335

(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
Other current liabilities
Total current liabilities

46,471
5,596
22,495
7,852
1,173
352
1,344
23,105
108,391

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

7,500
590
3,724
5,227
17,042
125,433

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

10,00052,245
199,118(2,385)258,979

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(11,948)
5,212
642(5,608)(12,194)
1,738
248,769
374,20336

Consolidated Statements of Operations(From April 1, 2012 to March 31, 2013)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Equity in gain of affiliated companies
Foreign exchange gain
Other non-operating income
Non-operating expenses
Interest expense
Loss on investments in partnerships
Other non-operating expenses
Recurring income
Extraordinary income
Gain on sales of fixed assets
Gain on sales of investments in affiliated companies
Gain on negative goodwill
State subsidy
Other extraordinary income
Extraordinary loss
Loss on sales of fixed assets
Loss on disposal of fixed assets
Loss on impairment of fixed assets
Provision for losses from business restructuring
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

37(Millions of yen)Amount487,241
304,162
183,078
134,435
48,642
1,634
193
264
341
264
571
305
141
90
72
49,972
173
46
34
24
51
17
1,656
76
203
505
401
469
48,48919,649(3,611)

16,03832,451
68
32,383

Consolidated Statement of Changes in Net Assets(From April 1, 2012 to March 31, 2013)(Millions of yen)
Stockholders’ equity
Common stock
Balance as of April 1, 2012
Changes during the period
Total changes during the period
Balance as of March 31, 2013
Additional paid-in capital
Balance as of April 1, 2012
Changes during the period
Disposal of treasury stock
Total changes during the period
Balance as of March 31, 2013
Retained earnings
Balance as of April 1, 2012
Changes during the period
Cash dividends
Net income
Reversal of land revaluation
Total changes during the period
Balance as of March 31, 2013
Treasury stock
Balance as of April 1, 2012
Changes during the period
Purchase of treasury stock
Disposal 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, 2013

38

10,000—10,00052,245(0)(0)
52,245173,250(5,714)32,383(800)
25,868199,118(2,383)(1)00(1)(2,385)

(Millions of yen)
Total stockholders’ equity
Balance as of April 1, 2012
Changes during the period
Cash dividends
Net income
Purchase of treasury stock
Disposal of treasury stock
Changes in treasury stock accompanying
changes to holdings in companies to which theequity method is applied
Reversal of land revaluation
Total changes during the period
Balance as of March 31, 2013
Accumulated other comprehensive income
Unrealized gains or losses on other securities, net oftax
Balance as of April 1, 2012
Changes during the period
Net changes in the period other than changes instockholders’ equity
Total changes during the period
Balance as of March 31, 2013
Deferred gains or losses on hedges, net of tax
Balance as of April 1, 2012
Changes during the period
Net changes in the period other than changes instockholders’ equity
Total changes during the period
Balance as of March 31, 2013Land revaluation, net of tax
Balance as of April 1, 2012
Changes during the period
Reversal of land revaluation
Total changes during the period
Balance as of March 31, 2013
Foreign currency translation adjustments
Balance as of April 1, 2012
Changes during the period
Net changes in the period other than changes instockholders’ equity
Total changes during the period
Balance as of March 31, 2013

39

233,112(5,714)32,383
(1)
0
0
(800)
25,866258,979

2,867
2,344
2,344
5,212
229
412
412
642
(6,408)800
800(5,608)(18,357)
6,163
6,163
(12,194)(Millions of yen)
Total accumulated other comprehensive income
Balance as of April 1, 2012
Changes during the period
Reversal of land revaluation
Net changes in the period other than changes instockholders’ equity
Total changes during the period
Balance as of March 31, 2013
Minority interests
Balance as of April 1, 2012
Changes during the period
Net changes in the period other than changes instockholders’ equity
Total changes during the period
Balance as of March 31, 2013
Total net assets
Balance as of April 1, 2012
Changes during the period
Cash dividends
Net income
Purchase of treasury stock
Disposal of treasury stock
Changes in treasury stock accompanying changes
to holdings in companies to which the equity
method is applied
Reversal of land revaluation
Net changes in the period other than changes instockholders’ equity
Total changes during the period
Balance as of March 31, 201340

(21,669)
800
8,921
9,721
(11,948)
1,682
56
56
1,738
213,125(5,714)32,383
(1)
0
0
—
8,977
35,644
248,769

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:
70 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 NAMCO BANDAI Studios Inc. and BANDAI PHILIPPINES INC. were newly
incorporated, those companies have been added to the scope of consolidation for thisconsolidated fiscal year.
In addition, with respect to companies included among consolidated subsidiaries in theprevious consolidated fiscal year, since NAMCO BANDAI Partners S.A.S. was merged
into the consolidated subsidiary NAMCO BANDAI Games Europe S.A.S. and since
NAMCO BANDAI Networks Europe Ltd., BEEZ ENTERTAINMENT S.A.S. and
NAMCO BANDAI Partners Israel Ltd. were liquidated, those companies have been
excluded from the scope 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.

41

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
BANDAI (H.K.) CO., LTD. and some other consolidated subsidiaries (9 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.
From this consolidated fiscal year, the closing date has been changed to March 31 for
NAMCO BANDAI Holdings (USA) Inc. and nine other companies whose closing date had
been December 31. In connection with those changes, the number of months included in thisconsolidated fiscal year for each of those companies is 15 months.

42

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

43Overseas consolidated subsidiaries:
Stated using the straight-line method.
The general useful life of property, plant and equipment is as follows:
Buildings and structures:
5 to 50 years
Amusement facilities and machines:
3 to 7 years(ii) Intangible Assets (Exclusive of leased assets):
Stated using the straight-line method.
The general useful life of software is as follows:
Software (used internally):
3 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)

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 theaverage remaining years of service of employees at the point when the costs are
incurred.

44

(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.
(6)

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

45

(7)
(i)

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) Application of consolidated taxation system:
From this consolidated fiscal year, the Company has applied the consolidated
taxation system.
II.

Notes to Changes in Accounting Policy(Change in Depreciation Method)
Following the revision of the Corporation Tax Act, from this consolidated fiscal year, theCompany and a portion of its domestic consolidated subsidiaries have applied the depreciation
method based on the revised Corporation Tax Act to property, plant and equipment acquired on
or after April 1, 2012.
In connection with those changes, operating income, recurring income, and income before
income taxes and minority interests for this consolidated fiscal year each increased by 382
million yen compared with the previous method.

III. Notes to Changes in Method of Presentation(Consolidated Balance Sheet)“Short-term investments,” which had been stated within “Other current assets” under “Current
assets” until the previous consolidated fiscal year, was stated separately, since it is above 1
percent of the total assets.
The total of “Short-term investments” for the previous consolidated fiscal year was 2,073
million yen.
(Consolidated Statements of Operations)(1) “Reversal of allowance for doubtful receivables” ( the balance of which at the end of thisconsolidated fiscal year is 107 million yen), which had been stated separately until theprevious 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) “Commission for purchase of treasury stock” (the balance of which at the end of thisconsolidated fiscal year is 1 million yen), which had been stated separately until theprevious consolidated fiscal year, is included in “Other non-operating expenses” under“Non-operating expenses” since it is at or below 10 percent of the total non-operating
expenses.
(3) “Loss on investments in partnerships,” 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.
The total of “Loss on investments in partnerships” for the previous consolidated fiscal
year was 8 million yen.
(4) “Gain on sales of investment securities, net” (the balance of which at the end of thisconsolidated fiscal year is 15 million yen), which had been stated separately until theprevious consolidated fiscal year, is included in “Other extraordinary income” under46

“Extraordinary income” since it is at or below 10 percent of the total extraordinary
income.
(5) “Reversal of provision for loss on disaster” (the balance of which at the end of thisconsolidated fiscal year is 1 million yen), which had been stated separately until theprevious consolidated fiscal year, is included in “Other extraordinary income” under“Extraordinary income” since it is at or below 10 percent of the total extraordinary
income.
(6) “Loss on valuation of investment securities” (the balance of which at the end of thisconsolidated fiscal year is 18 million yen), which had been stated separately until theprevious consolidated fiscal year, is included in “Other extraordinary loss” under“Extraordinary loss” since it is at or below 10 percent of the total extraordinary loss.
(7) “Special retirement expenses” (the balance for this consolidated fiscal year is 51 millionyen), which had been stated separately until the previous consolidated fiscal year, is
included in “Other extraordinary loss” under “Extraordinary loss” since it is at or below
10 percent of the total extraordinary loss.
(8) “Provision for losses from business restructuring” 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 thisconsolidated fiscal year.
The total of “Provision for losses from business restructuring” for the previous
consolidated fiscal year was 167 million yen.
IV. Notes to Consolidated Balance Sheet
1. Amount of Accumulated Depreciation of Property, Plant and Equipment:¥137,137 million
2. Guarantee Obligation: ¥135 million
Pledged for guarantees for liabilities arising from lease agreements executed by affiliatedcompanies.
3. 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 1,121 million yen.

47

4. 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¥181 million¥220 million

5. 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.

48

V.

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 18, 2012
Ordinary General
Meeting of
Shareholders
November 2, 2012,
Board of Directors
Meeting(2)

Type ofsharesTotalamount ofdividends(millions ofyen)

Dividend pershare (yen)Date ofrecordEffective
date

Common
stock

3,077

14

March 31,2012

June 19,
2012

Common
stock

2,637

12

September
30, 2012

December
10, 2012

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 24, 2013,
Ordinary General
Meeting of
Shareholders

Common
stock

7,253

Source ofdividends

Dividend
per share(yen)

Date ofrecordEffective
date

Retainedearnings

33

March 31,2013

June 25,
2013

49

VI. 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, 2013, 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
119,132
119,132—(2) Trade receivables
77,06977,069—(3) Short-term investments andinvestment securities
1. Other securities
18,901
18,901—
2. Stock of affiliated companies
7,389
9,124
1,735
Total assets
222,493
224,228
1,735(1) Trade payables
46,471
46,471—(2) Short-term borrowings
5,596
5,596
—
(3) Accounts payable-other
22,49522,495—(4) Accrued income taxes
7,852
7,852
—
(5) Long-term borrowings
7,500
7,500
—
Total liabilities
89,91589,915—Derivative transactions (*)
963
963
—
(*) 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.

50

(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 1,527 million yen in the consolidated balance sheet), stocks ofaffiliated companies (unlisted stocks) (stated as 1,882 million yen in the consolidatedbalance sheet), and contributions to investment partnerships (stated as 82 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”.

VII. Notes Concerning Per-Share Data
1. Net assets per share:¥1,124.45

2. Net income per share for this consolidated fiscal year:¥147.40

VIII.Other Notes
1. 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.

51

SBU

Items

Classification

Location

Impairment
Loss(Millionsof yen)90

Internetcontent
business
softwareIntangible assets

Seoul, Korea (Note 1)

Assetsscheduled
for disposal

Buildings & structures,
Other property, plant andequipment

Taito-ku, Tokyo (Note3)
Funabashi City, Chiba,
etc. (Note 2)Content

Assetsscheduled
for disposal

Property, plant and equipment
and other assets

Shinagawa-ku, Tokyo(Note 3)

Amusement
Facility

Amusement
facility

Amusement facilities andmachines and other assets

Nagoya City, Aichi, etc.
(Note 3)
Kobe City, Hyogo (Note2)

Corporate(Common)Assetsscheduled
for disposal

Buildings & structures,
Other property, plant andequipment

Shinagawa-ku, Tokyo(Note 3)Toys and
Hobby

71
16
12
185
44
84

Total
505
(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 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.
3. 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.
2.

Notes Concerning Business Combinations, etc.

(Transactions conducted by commonly controlled entities, etc.)(1) Names and business content of the companies involved in the combination, the date ofcombination, legal form of the combination, name of the company after the combination, andoutline of the transaction, including its purpose.
(i) Names and business content of the companies involved in the combinationa. NAMCO BANDAI Games Europe S.A.S. (a consolidated subsidiary of the Company)
Sales and marketing of home video game softwareb. NAMCO BANDAI Partners S.A.S. (a consolidated subsidiary of the Company)
A holding company and a shared-service company of the NAMCO BANDAI Partners
group that carries out sales, etc., of home video game software(ii) Date of combination
September 28, 2012(iii) Legal form of the combination
An absorption-type merger in which NAMCO BANDAI Games Europe S.A.S. is thesurviving company and NAMCO BANDAI Partners S.A.S. was the company absorbed.

52

(iv) Name of the company after the combination
NAMCO BANDAI Games Europe S.A.S. (a consolidated subsidiary of the Company)(v) Outline of the transaction, including its purpose
Based on the Mid-term Plan that went into effect in April of 2012, the marketing operationsof NAMCO BANDAI Games Europe S.A.S. and the sales operations of NAMCO BANDAI
Partners S.A.S. were integrated for more efficient operations, aiming at recoveringprofitability in the Content Business in the European region.
(2) Overview of Accounting Process
The accounting process for the consolidated financial statements was conducted astransactions made by commonly controlled entities, handled in accordance with the provisions of
the “Accounting Standard for Business Combinations” (ASBJ Statement No. 21, December 26,2008) and “Guidance on Accounting Standard for Business Combinations and AccountingStandard for Business Divestitures” (ASBJ Guidance No. 10, final revision issued on December
26, 2008).

53

Non-Consolidated Balance Sheet(As of March 31, 2013)(Millions of yen)AmountASSETS
Current assets
Cash and time deposits
Trade receivables
Prepaid expenses
Deferred tax assets
Accounts receivable-other
Other current assets
Total current assets

45,8119341
4410,791
80
57,079Fixed 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

81
157
444
194
877
56
1,687
1,207
2,951
13,536
247,84430
1,322
262,734
266,563
323,64254

(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
Provision for stock-based compensation
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

55

68,319
5,333
1,227
489
3,040
13
224
143
64
7
78,864
7,500
1,048
21
49
8,619
87,483

10,000174,282
2,500
171,782
49,563
1,645
47,918
26,104
21,813(2,299)231,547

4,611
4,611
236,159
323,642

Non-Consolidated Statements of Operations(From April 1, 2012 to March 31, 2013)(Millions of yen)Amount18,188Operating 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 disposal of fixed assets
Loss on impairment of fixed assets
Other extraordinary losses
Income before income taxes
Corporate income, inhabitant and enterprise
taxes
Adjustment for income taxes
Net income

16,041
2,147
2,955
2,955
15,233
1,709
24
188
1,401
94
1,683
197
1,387
98
15,259
4
4
71
53
5
11
15,192
(126)
20

56

(105)
15,298

Non-Consolidated Statement of Changes in Net Assets(From April 1, 2012 to March 31, 2013)(Millions of yen)
Stockholders’ equity
Common stock
Balance as of April 1, 2012
Changes during the period
Total changes during the period
Balance as of March 31, 2013
Additional paid-in capital
Capital reserve
Balance as of April 1, 2012
Changes during the period
Total changes during the period
Balance as of March 31, 2013
Other capital surplus
Balance as of April 1, 2012
Changes during the period
Disposal of treasury stock
Total changes during the period
Balance as of March 31, 2013
Total additional paid-in capital
Balance as of April 1, 2012
Changes during the period
Disposal of treasury stock
Total changes during the period
Balance as of March 31, 2013
Retained earnings
Legal reserve
Balance as of April 1, 2012
Changes during the period
Total changes during the period
Balance as of March 31, 2013
Other retained earnings
General reserve
Balance as of April 1, 2012
Changes during the period
Total changes during the period
Balance as of March 31, 2013
Retained earnings carried forward
Balance as of April 1, 2012
Changes during the period
Cash dividends
Net income
Total changes during the period
Balance as of March 31, 2013
Total retained earnings
Balance as of April 1, 2012
Changes during the period
Cash dividends
Net income
Total changes during the period
Balance as of March 31, 2013

10,000—10,000
2,500
—
2,500
171,782(0)(0)
171,782
174,282(0)(0)
174,282
1,645
—
1,645
26,104—
26,104
12,230(5,714)
15,298
9,583
21,81339,980(5,714)
15,2989,583
49,56357

(Millions of yen)
Treasury stock
Balance as of April 1, 2012
Changes during the period
Purchase of treasury stock
Disposal of treasury stock
Total changes during the period
Balance as of March 31, 2013
Total stockholders’ equity
Balance as of April 1, 2012
Changes during the period
Cash dividends
Net income
Purchase of treasury stock
Disposal of treasury stock
Total changes during the period
Balance as of March 31, 2013
Valuation difference and foreign currency translation
adjustments
Unrealized gains or losses on other securities, net oftax
Balance as of April 1, 2012
Changes during the period
Net changes in the period other than changes instockholders’ equity
Total changes during the period
Balance as of March 31, 2013
Total valuation difference and foreign currencytranslation adjustments
Balance as of April 1, 2012
Changes during the period
Net changes in the period other than changes instockholders’ equity
Total changes during the period
Balance as of March 31, 2013
Total net assets
Balance as of April 1, 2012
Changes during the period
Cash dividends
Net income
Purchase of treasury stock
Disposal of treasury stock
Net changes in the period other than changes instockholders’ equity
Total changes during the period
Balance as of March 31, 201358

(2,297)(1)0(1)(2,299)221,965(5,714)
15,298(1)
0
9,581
231,547

2,485
2,126
2,126
4,611
2,485
2,126
2,126
4,611
224,451(5,714)
15,298(1)
02,126
11,708236,159

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

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

(ii) Other Securities:
Securities with market values:
Stated using the market price method based on amounts using market prices, etc. on theclosing date. (Valuation differences are reflected directly in net assets and cost of sales iscalculated using the moving average method.)
Securities without market values:
Stated using cost method based on the moving average method.
With respect, however, to contributions to limited partnerships for investment
and similar partnerships (deemed to be securities under Article 2, Paragraph 2of 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)(i)

Depreciation Methods for Fixed Assets:
Property, Plant and Equipment:
Stated using the declining-balance method.
The general useful life of property, plant and equipment is as follows:
Buildings
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) Provision for Stock-based Compensation
The Company provides for stock-based compensation based on estimated amounts in thisfiscal year.
(iii) 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.

59

(4)

Other Important Information Constituting the Basis of Preparation of Non-Consolidated Financial
Statements:(i) Accounting Treatment of Consumption Tax:
Consumption tax is accounted for separately and is not figured into each listed item.
(ii) Application of consolidated taxation system
From this consolidated fiscal year, the Company has applied the consolidated taxation system.
2. Notes to Changes in Accounting Policy(Change in depreciation method)
Following the revision of the Corporation Tax Act, from this fiscal year the Company has applied thedepreciation method based on the revised Corporation Tax Act to property, plant and equipment acquired on
or after April 1, 2012.
In connection with those changes, operating income, recurring income, and income before income taxes
for this fiscal year each increased by 25 million yen compared with the previous method.
3. Notes to Change in Method of Presentation(Non-Consolidated Balance Sheet)“Accounts receivable-other,” which had been included in “Other current assets” under “Current assets”
until the previous fiscal year, is stated separately since it is above 1 percent of the total assets for thisfiscal year.
The total of “Accounts receivable-other” for the previous fiscal year was 518 million yen.
(Non-Consolidated Statements of Operations)(1) “Loss on valuation of investment securities” (the balance for this fiscal year is 5 million yen), which
had been stated separately until the previous fiscal year, is included in “Other extraordinary loss”
under “Extraordinary loss” since it is at or below 10 percent of the total extraordinary loss from thisfiscal year.
(2) “Loss on disposal of fixed assets,” which had been included in “Other extraordinary loss” under“Extraordinary loss” until the previous fiscal year, is stated separately since it is above 10 percent of
the total extraordinary loss for this fiscal year.
The total of “Loss on disposal of fixed assets” for the previous fiscal year was 14 million yen.
4. Notes to Non-Consolidated Balance Sheet(1)

Amount of accumulated depreciation of property, plant and equipment: ¥793 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)¥10,763 million¥540 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.

60

(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.
5. Notes to Non-Consolidated Statements of Operations
Transactions with affiliated companies (excluding amounts given in specific categories)
Non-operating Transactions:Non-operating income¥1,462 million
Non-operating expenses¥120 million
6. 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
2,195,148 shares
7. Notes Concerning Tax Effect Accounting
Breakdown of Main Reasons for Deferred Tax Assets and Deferred Tax Liabilities
Deferred tax assets
Loss on valuation of stocks of affiliated companies
Loss on valuation of investment securities
OthersSubtotal deferred tax assets
Valuation allowance
Total deferred tax assets¥4,813 million¥1,483 million¥188 million¥6,485 million(¥6,430 million)¥55 million

Deferred tax liabilities
Unrealized gains or losses on other securities, net of tax
Total gross deferred tax liabilities
Net deferred tax liabilities(¥1,058 million)(¥1,058 million)(¥1,003 million)61

8. 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)

Interlocking
directorate

Payment ofinterest
Borrowings(Note)

Subsidiary

Subsidiary

Subsidiary

Subsidiary

Subsidiary

Subsidiary

NAMCO
BANDAI
Games Inc.

NAMCO
LIMITEDBANDAIVISUAL
CO., LTD.

BanprestoCo., Ltd.

Sunrise Inc.

NAMCO
BANDAI
Studios Inc.

Holding
directly
100.0%

Holding
directly
100.0%

Holding
directly
100.0%

Holdingindirectly
100.0%

Holding
directly
100.0%

Holdingindirectly
100.0%

Interlocking
directorate

Payment ofinterest
Amount to bereceived due toapplication of
consolidated
taxation system
Borrowings(Note)

Interlocking
directorate

Payment ofinterest
Borrowings(Note)

AmountAccount
items

27,330

Short-termborrowings fromaffiliatedcompanies

27

–

9,894

Short-termborrowings fromaffiliatedcompanies

9Interlocking
directorate

Payment ofinterest

8,536
–

3,267

11,633

Short-termborrowings fromaffiliatedcompanies

9,188

11

–

4,778

Short-termborrowings fromaffiliatedcompanies

4
4,901
4
11,205–
Payment ofinterest
Borrowings(Note)–

Accounts
receivable-other–
Payment ofinterest
Borrowings(Note)

22,257

3,267–
Payment ofinterest
Borrowings(Note)–

Balance asof March
31, 2013–
Short-termborrowings fromaffiliatedcompanies–
Short-termborrowings fromaffiliatedcompanies

11

–

4,381

Short-termborrowings fromaffiliatedcompanies

1

–

–
4,787
–
5,834
–
11,791–
5,020–

Conditions of transactions and policies for determining the conditions of transactions(Note) The borrowings are transactions made by the cash management system (CMS); the amount statedis 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.
9. Notes Concerning Per-Share Data
Net assets per share:
Net income per share:¥1,074.40¥69.6062

Independent Auditor’s Report
May 20, 2013
The Board of Directors
NAMCO BANDAI Holdings Inc.
KPMG AZSA LLC

Yoshihiko Nakamura (Seal)
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
Hiroo Iwaide (Seal)
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
Terukazu Nagamine (Seal)
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant

We have audited the consolidated financial statements, comprising the consolidated balance
sheet, the consolidated statements of operations, the consolidated statement of changes in net
assets and the related notes of NAMCO BANDAI Holdings Inc. as at March 31, 2013 and for theyear from April 1, 2012 to March 31, 2013 in accordance with Article 444-4 of the Companies
Act.
Management’s Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial
statements in accordance with accounting principles generally accepted in Japan, and for suchinternal control as management determines is necessary to enable the preparation of consolidated
financial statements that are free from material misstatements, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on the consolidated financial statements based on our
audit as independent auditor. We conducted our audit in accordance with auditing standards
generally accepted in Japan. Those standards require that we plan and perform the audit to obtainreasonable assurance about whether the consolidated financial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the consolidated financial statements. The procedures selected depend on ourjudgement, including the assessment of the risks of material misstatement of the consolidated
financial statements, whether due to fraud or error. In making those risk assessments, weconsider internal control relevant to the entity’s preparation and fair presentation of theconsolidated financial statements in order to design audit procedures that are appropriate in thecircumstances, while the objective of the financial statement audit is not for the purpose of
expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes
evaluating the appropriateness of accounting policies used and the reasonableness of accounting
estimates made by management, as well as evaluating the overall presentation of the63consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide abasis for our audit opinion.
OpinionIn our opinion, the consolidated financial statements referred to above present fairly, in allmaterial respects, the financial position and the results of operations of 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 acceptedin Japan.
Other Matter
Our firm and engagement partners have no interest in the Company which should be disclosed
pursuant to the provisions of the Certified Public Accountants Law of Japan.
Notes to the Reader of Independent Auditor’s Report:
The Independent Auditor’s Report herein is the English translation of the Independent Auditor’sReport as required by the Companies Act.

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Independent Auditor’s Report
May 20, 2013
The Board of Directors
NAMCO BANDAI Holdings Inc.
KPMG AZSA LLC

Yoshihiko Nakamura (Seal)
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
Hiroo Iwaide (Seal)
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
Terukazu Nagamine (Seal)
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant

We have audited the non-consolidated financial statements, comprising the non-consolidatedbalance sheet, the non-consolidated statements of operations, the non-consolidated statement ofchanges in net assets and the related notes, and the supplementary schedules of NAMCO
BANDAI Holdings Inc. as at March 31, 2013 and for the year from April 1, 2012 to March 31,
2013 in accordance with Article 436-2-1 of the Companies Act.
Management’s Responsibility for the Financial Statements and Others
Management is responsible for the preparation and fair presentation of the non-consolidated
financial statements and the supplementary schedules in accordance with accounting principles
generally accepted in Japan, and for such internal control as management determines is necessary
to enable the preparation of financial statements and the supplementary schedules that are freefrom material misstatements, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on the financial statements and the supplementaryschedules based on our audit as independent auditor. We conducted our audit in accordancewith auditing standards generally accepted in Japan. Those standards require that we plan andperform the audit to obtain reasonable assurance about whether the non-consolidated financial
statements and the supplementary schedules are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the non-consolidated financial statements and the supplementary schedules. The
procedures selected depend on our judgement, including the assessment of the risks of material
misstatement of the non-consolidated financial statements and the supplementary schedules,
whether due to fraud or error. In making those risk assessments, we consider internal control
relevant to the entity’s preparation and fair presentation of the non-consolidated financial
statements and the supplementary schedules in order to design audit procedures that areappropriate in the circumstances, while the objective of the financial statement audit is not for65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 reasonablenessof accounting estimates made by management, as well as evaluating the overall presentation of
the non-consolidated financial statements and the supplementary schedules.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide abasis for our audit opinion.
OpinionIn our opinion, the non-consolidated financial statements and the supplementary schedules
referred to above present fairly, in all material respects, the financial position and the results ofoperations of NAMCO BANDAI Holdings Inc. for the period, for which the non-consolidated
financial statements and the supplementary schedules were prepared, in accordance withaccounting principles generally accepted in Japan.
Other Matter
Our firm and engagement partners have no interest in the Company which should be disclosed
pursuant to the provisions of the Certified Public Accountants Law of Japan.
Notes to the Reader of Independent Auditor’s Report:
The Independent Auditor’s Report herein is the English translation of the Independent Auditor’sReport as required by the Companies Act.

66

Audit & Supervisory Board’s Report
Audit Report
We, the Audit & Supervisory Board, prepared this audit report, as a unanimous opinion of all
members of the Audit & Supervisory Board, on the execution of duties by Directors during the 8th
fiscal year from April 1, 2012 to March 31, 2013, based on audit reports prepared by each Audit &Supervisory Board Member.
1. Method and Content of Audits by Audit & Supervisory Board Members and the Audit &Supervisory Board
We devised the 8th auditing plan (auditing policies, duties assigned to each Audit & Supervisory
Board Member and auditing methods), received reports on the progress on, and results of, audits fromeach Audit & Supervisory Board Member, as well as reports on the execution of their duties from
Directors, etc. and the Accounting Auditor, and requested explanations as necessary.
Each Audit & Supervisory Board Member communicated with the Directors, the internal auditing
division, and other employees, etc., in accordance with the internal regulations established by the Audit& Supervisory Board, such as Audit & Supervisory Board’s regulations, Audit & Supervisory Board
Members’ regulations, auditing standards for internal control system, and the above-mentioned
auditing plan, to collect information and improve the auditing environment. We attended the meetingsof the Board of Directors and other significant meetings, received reports on the execution of duties
from Directors and employees, etc., obtained explanations thereof as necessary, viewed documents
concerning important decisions, and investigated the conditions of operations and assets of theCompany. 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 organized based on decisions by the Board of Directors in relation to thedevelopment of a system to ensure that the execution of duties by Directors and other operations of theCompany as described in the business reports were in conformity with applicable laws and regulations
and the Company’s Articles of Incorporation, and a system stipulated in Article 100, Paragraphs 1 and
3 of the Enforcement Ordinance of the Companies Act. 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 of the Board of Directors and other discussions. Regarding theCompany’s subsidiaries, we communicated and shared information with the Directors and the Audit &Supervisory Board Members, etc. of the subsidiaries, and received reports on their business asnecessary from them. Using the aforementioned method, we examined the business reports andsupplementary statements for this fiscal year under review.
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.

67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.
(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 20, 2013
Audit & Supervisory Board
NAMCO BANDAI Holdings Inc.
Standing Audit & Supervisory
Koichiro Honma
Board Member(Seal)

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

Katsuhiko Kohtari(Seal)

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

Osamu Sudo

(Seal)

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

Kouji Yanase(Seal)

END

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