NAMCO BANDAI
Holdings Inc.
Notice of the Fifth Ordinary General Meeting of Shareholders to beheld on June 21, 2010
An English translation of the original notice in Japanese

DISCLAIMER
The following is an English translation of the Japanese original “Notice of the Fifth Ordinary General
Meeting of Shareholders of NAMCO BANDAI Holdings Inc.” which meeting is to be held on June 21, 2010.
The Company provides this translation for your reference and convenience only and does not guarantee its
accuracy or otherwise. In the event of any discrepancies, the Japanese original notice shall prevail.
These documents have been prepared solely in accordance with Japanese law and are offered here for
informational purposes only. In particular, please note that the financial statements included in the following
translation have been prepared in accordance with Japanese GAAP.

1Securities code: 7832
May 31, 2010
4-5-15 Higashi-Shinagawa, Shinagawa-ku, Tokyo
NAMCO BANDAI Holdings Inc.
President and Representative Director
Shukuo Ishikawa

Dear Shareholders,
NOTICE OF THE FIFTH ORDINARY GENERAL MEETINGOF SHAREHOLDERS
You are cordially invited to attend the Fifth 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 19, 2010.
Meeting Details

1.

Date and Time:

June 21, 2010 (Monday) at 10:00 a.m.

2.

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

3.

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

Report on the Contents of the Business Reports, the Consolidated Financial
Statements and the Results of the Auditing of the Consolidated Financial
Statements by the Accounting Auditor and the Board of Corporate Auditors for theFifth Fiscal Year (from April 1, 2009 to March 31, 2010)
2. Report on the Contents of the Non-Consolidated Financial Statements for the Fifth
Fiscal Year (from April 1, 2009 to March 31, 2010)
Matters to be Resolved:
Proposal No. 1: Appropriation of Surplus
Proposal No. 2: Election of Nine (9) Directors
Proposal No. 3: Election of Four (4) Corporate Auditors

2

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

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

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

3

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

For further assistance regarding the system, etc., please contact:
Transfer Agent Department (Help Desk)
Mitsubishi UFJ Trust and Banking Corporation
Phone: 0120-173-027 (9:00 to 21:00 (Japan Time); toll free only within Japan)

4

(Attached Document)
BUSINESS REPORTS(From April 1, 2009 to March 31, 2010)
1. Current Status of the Group(1) Business Status for This Fiscal Year(i)

Business Progress and Results

In this fiscal year, during the global economic recession, there were visible signs of a partial
recovery in the economy in the context of government deployment of emergency economic
stimulus measures and other factors. However, economic conditions remained harsh due to,among other things, weakness in the self-sustainability of the recovery and highunemployment rates. Reduced consumption had a substantial impact on the entertainment
industry, causing continued uncertainty in the industry as a whole.
In this environment, the Group has worked to put in place the global managementfoundation adopted in the three-year Mid-term Business Plan that has been implemented sinceApril 2009. Moreover, prior to launching “The BANDAI NAMCO Group Restart Plan” in
April 2010, for the purpose of a more assured implementation of the global managementfoundation, the Group carried out steps, including a review of its personnel structure, toimprove profitability.
On the business front, although long-established character toys in the Toys and Hobby
Business posted strong performance figures in Japan, amidst weak individual consumption
world-wide, overall results for the Group were harsh, especially in the Game Contents
Business.
Consequently, the Group’s consolidated results at fiscal year-end were net sales of 378,547
million yen (year-on-year decrease of 11.2%), operating income of 1,883 million yen(year-on-year decrease of 91.6%), and recurring income of 1,907 million yen (year-on-year
decrease of 92.2%). Moreover, the Group recorded losses on, among other things, theamusement facilities scheduled to be closed in the following fiscal year and recorded expenses
related to the review of its personnel structure. Further, as a result of strict examination of the
future business plans of certain subsidiaries, an impairment loss on goodwill was recognized,
and there was a withdrawal of a fixed amount from deferred tax assets. As a result, the Group
recorded a net loss of 29,928 million yen (compared with a net income of 11,830 million yen
in the previous fiscal year).

5

(ii) Outline of Business by Business Segment(Millions of yen)
Year Ended
March 31,2010

Net SalesYear Ended
March 31,2009

Toys and Hobby

148,843

165,725

Decreaseof 16,881

Game Contents

137,528

149,891

Decreaseof 12,362

Loss of
6,845

11,609Decreaseof 18,454

Visual andMusic Content

29,236

34,638Decreaseof 5,402

Loss of 871

38

Decreaseof 910

Amusement
Facility

65,362

77,269Decreaseof 11,907

284

393

Decreaseof 108

Other
Businesses

17,452

19,009Decreaseof 1,556

358

565

Decreaseof 206

Eliminations
and Corporate(19,876)(20,133)

Increaseof 257(1,828)(1,792)

Decreaseof 36

Consolidated

378,547

426,399

Decreaseof 47,852

1,883

22,348Decreaseof 20,464

Business
Segment

ChangeOperating Income (Loss)Year EndedYear Ended
March 31,
March 31,
Change2010
2009
Decrease
10,786
11,533of 746(Note) In this fiscal year, the Network Business was merged with the Game Contents Business. Thus,
the Game Contents Business figures for the previous fiscal year, shown above, include theprevious fiscal year’s Network Business figures.
Toys and Hobby BusinessIn the Toys and Hobby Business, long-established character toys, such as the MASKED
RIDER series and FRESH PRETTY CURE !, posted strong performance figures in Japan,
mainly during the Christmas shopping season. Also, Tamagotchi, for which there were tie-ups
to a made-for-television animation, and the DATA CARDDASS MASKED RIDER BATTLE:GANBARIDE became popular. In addition, HYPER YO-YO and VooV, both of which werelaunched to expand the target population for the purpose of aiming for the overwhelming
position of No. 1 in Japan, made favorable starts.
Overseas, despite the strong sales of BEN10 character toys, overall performance was weak,
especially in the Americas where the competitive environment was particularly fierce.
As a result, net sales in the Toys and Hobby Business were 148,843 million yen(year-on-year decrease of 10.2%), and operating income was 10,786 million yen (year-on-year
decrease of 6.5%).
Game Contents BusinessIn the Game Contents Business, although some signs of recovery were discernible for home
video game software, such as by the fact that GOD EATER for PlayStation Portable waslaunched in Japan and proved popular, this business segment as a whole faced difficulties
mainly with small to medium size game titles. Overseas, Tekken 6, released for the PlayStation
3 and Xbox 360, was a hit. However, a lack of other hit titles in a depressed market kept
performance sluggish.
As for arcade game machines, despite the launch of the force-feedback battle party game
TANK! TANK! TANK! in this fiscal year and repeat sales of machines launched in the previous
fiscal year, performance did not reach the level of the previous fiscal year, when large medal
machines and other machines were popular.
In addition, amortization of goodwill was recorded with respect to NAMCO BANDAI
Partners S.A.S., which became a wholly owned subsidiary of the Company this fiscal year.
As a result, net sales in the Game Contents Business were 137,528 million yen

6(year-on-year decrease of 8.2%), and operating loss was 6,845 million yen (compared with anoperating income of 11,609 million yen in the previous fiscal year).
Visual and Music Content BusinessIn the Visual and Music Content Business, GUNDAM 30th ANNIVERSARY COLLECTION,
Psalms of Planets Eureka Seven, and other visual package software were popular in Japan. In
addition, application of the new business model, which called for simultaneous worldwide
development through special theater screenings, packaged product sales, and on-demand
distribution, helped to make the first episode of Mobile Suit Gundam UC (Unicorn) a huge hit.
However, amidst a stagnant package software market, the visual package software business asa whole faced steep challenges. On the other hand, sales of music package software were solid,
particularly for animation-related music. Overseas, the profitability of business in theAmericas improved through greater efficiency of the business.
As a result, net sales in the Visual and Music Content Business were 29,236 million yen(year-on-year decrease of 15.6%), and operating loss was 871 million yen (compared with anoperating income of 38 million yen in the previous fiscal year).
Amusement Facility BusinessIn the Amusement Facility Business, implementation of different marketing strategies foreach customer segment in Japan led to glimmers of a gradual recovery in sales at existing
facilities, but their sales remained sluggish, at 91.2% of the figure for the previous fiscal year.
Costs, on the other hand, were reduced as a result of the strategic closure or sale of 63
facilities, most of which were unprofitable, in the previous fiscal year, and the ongoing efforts
to improve business efficiency. Overseas, despite efforts to improve operational efficiency in
the Americas and business development in Europe centered on complex facilities, overall
performance was sluggish.
As a result, net sales in the Amusement Facility Business were 65,362 million yen(year-on-year decrease of 15.4%), and operating income was 284 million yen (year-on-year
decrease of 27.5%).
Number of Facilities
Directly Managed
Facilities
289

Revenue-Sharing
Facilities
896

Other

Total

5

1,190

Other Businesses
Other Businesses consist of companies that conduct operations, such as logistics support
and building management for each of the Group’s strategic business units. During this fiscal
year, efforts were made to improve the efficiency of these operations related to group support.
However, due to a decline in the amount of work handled, performance did not reach the levelof the previous fiscal year.
As a result, net sales in the Other Businesses were 17,452 million yen (year-on-year
decrease of 8.2%), and operating income was 358 million yen (year-on-year decrease of
36.6%).
(iii) Capital Expenditures
In this fiscal year, the Group carried out 11,587 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.

7

(iv) Fundraising
The Group carried out no significant fundraising during this fiscal year.
(v)

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

Not applicable.
(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 April 1, 2009, NAMCO BANDAI Games Inc. and Bandai Networks Co., Ltd., each ofwhich was a subsidiary of the Company, implemented a merger where NAMCO BANDAI
Games Inc. is the surviving company and the Company succeeded to a part of the share
management business that had been carried out by Bandai Networks Co., Ltd by way of anabsorption-type company split.
On that same date, BANDAI VISUAL CO., LTD. and ANIME CHANNEL, CO., LTD.,
each of which was a subsidiary of the Company, implemented a merger where BANDAIVISUAL CO., LTD. is the surviving company.
(viii) Acquisitions and Disposals of Shares, Other Equities, and Stock Subscription Rights in
Other Companies
On July 7, 2009, NAMCO BANDAI Games Europe S.A.S, a subsidiary of the Company,
additionally acquired shares in Distribution Partners S.A.S., which made that company and its
18 subsidiaries into wholly owned subsidiaries.
Distribution Partners S.A.S. has changed its corporate name to NAMCO BANDAI Partners
S.A.S..
On October 1, 2009, NAMCO BANDAI Games Inc., a subsidiary of the Company,
implemented an incorporation-type company split, under which NAMCO BANDAI Online
Inc. was newly incorporated as a subsidiary.

8(2) Status of Assets and Profits & Losses for the Previous Three Fiscal Years
2nd Fiscal Year
(Year Ended
March 31, 2007)

3rd Fiscal Year
(Year Ended
March 31, 2008)

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

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

Net sales(Millions of yen)

459,132

460,473426,399

378,547

Recurring income(Millions of yen)

45,61536,19824,513

1,907

Net income (loss)(Millions of yen)

24,252

32,67911,830(29,928)

Net income (loss)
per share¥95.73¥128.65¥47.95(¥123.98)

Total assets(Millions of yen)

408,490413,023

363,444

325,935

Net assets(Millions of yen)

284,254289,944

260,579

229,012

Net assets per share¥1,063.29¥1,127.72¥1,067.71¥938.74

Fiscal YearClassification9

(3) Important Parent Company and Subsidiaries(i)Relationship with the Parent Company
Not applicable.

(ii) Important Subsidiaries
Name of Company
Bandai Co., Ltd.

Capital¥ 24,664 million

Ownership
Ratio

Description of Principal Business100.0%

Manufacturing and sales of toys andapparel, etc.
Planning, development and sales ofhome video game software and arcade
game machines, etc., and distribution
service of mobile content, etc.
Planning, production and sales of visualsoftware, etc.

NAMCO BANDAI
Games Inc.

¥ 15,000 million

100.0%BANDAI VISUAL
CO., LTD.

¥ 2,182 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 in the U.S.

BANDAI S.A.

€ 21,690,000

100.0%

NAMCO Holdings
UK LTD.

£ 29,500,000

100.0%

HK$ 103,000,000

100.0%BANDAI (H.K.) CO.,LTD.

Operating holding company in someparts of Europe. Import and sales oftoys, etc.
Pure holding company in some parts ofEuropeOperating holding company in Asian
region. Import, manufacturing and salesof toys, etc.

(Notes) 1. Bandai Networks Co., Ltd. merged with and was absorbed by NAMCO BANDAI
Games Inc. on April 1, 2009.
2. BANDAI S.A. carried out a capital increase by a debt equity swap and a contribution inkind where shares of subsidiaries owned by the Company were contributed on February
25, 2010.
3. NAMCO Holdings UK LTD. carried out a capital increase by a contribution in kind
where shares of subsidiaries owned by the Company were contributed on February 25,
2010.
(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. To address these issues,
the Group is using “Focus,” a business strategy called for in its Mid-term Business Plan, toclarify the mission of each of its business units.
In addition, given the difficult economic environment that now prevails and the Group’s
decline in profitability, the Group, seeking to realize its medium- to long-term Group vision of
becoming a “Globally Recognized Entertainment Group,” began implementing the “BANDAI
NAMCO Group Restart Plan” in April 2010 under the new management structure, to transform
itself into a speedy Group and to improve its profitability and strengthen its financial standing.

10

(i)

Common Issues Faced by All Strategic Business Units (“SBUs”)

Efforts Toward Domestic Business Expansion
The Group will, in order to create new markets and attract new customer segments for the
expansion of its domestic operations, maximize utilization of the managerial resources that it
owns and expand its targets and categories through making effective use of synergies between
its business units, alliances with external partners, and other approaches. In addition, in
response to the changes in the environment surrounding the entertainment industry, the Groupwill tackle a variety of tasks with speed without resorting to existing business practices andmodels. It will also strive for improved efficiency in the Group as a whole by taking actions
such as a review of indirect operations.
Efforts Toward Overseas Business Expansion
Based on the strategies laid out in the Mid-term Business Plan, the Group will proactively
invest in ways that are directed at dynamic growth in the Toys and Hobby SBU and theContent SBU in the European and North American markets. In particular, it will expand thebusiness categories and regions for the Toys and Hobby Business and maximize the value of
its content focusing on home video game software content with a view to expanding overseas
operations.

Efforts Toward Changing the Content Strategy
The Group is reinforcing its content creation, acquisition, development, and utilization
functions in order to respond to changes in the environment, including the development ofoligopolies in the distribution and media fields and the widespread penetration of networks.
Specifically, the Contents Business Strategy Meeting, which crosscuts the entire Group,
focuses on maximizing the value of each content. The Group also founded the IP Project on
April 1, 2010, to aim for more vigorous creation and acquisition of new content.

Efforts Toward Corporate Social Responsibility (CSR)
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 are crosscutting the Group and that include three
types of responsibilities: environmental and social contribution responsibilities, economic
responsibilities, and legal and ethical responsibilities. In accordance with these fundamental
principles, a range of measures is being implemented by the Group CSR Committee and its
sub-committees—the Group Social Contribution Committee and the Group Environmental
Committee, as well as by the Group Risk Compliance Committee, the Group Information
Security Committee, and the Internal Control Committee.

11(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 overwhelming position of No. 1 in Japan, expanding its target population
segment, and creating new businesses, as well as by working to reinforce its existing
operations, expand its categories, and expand the business regions in the overseas market,
particularly in the European and North American markets. For the purpose of a more efficientand effective implementation of these actions, this unit will actively devote managerial
resources, especially in Europe and North America, with a view to building cooperative
relationships with external partners.
Content SBU
This unit’s industry is facing issues, such as the “diversification of both platforms andcustomer needs.” The Group integrated the Game Contents Business and Visual and Music
Content Business in April 2010 and the Group will review development based on existing
business categories and drive forward business strategies based on the Group’s content, which
will allow the Group to respond swiftly to changing customers’ needs throughout the world
and to maximize the value of the Group’s content. Within this business unit, the Production
Group, which focuses on creation and acquisition of content, will be an aggregator of smallerorganizations and provide rapid response to changing customer needs by delegating its
authority. In the medium term, this unit will reinforce its development and sales structures toexpand its business, focusing on home video game software in the European and North
American markets and to create and strengthen franchise titles suitable for worldwide
deployment.
Amusement Facility SBU“Increasingly diverse consumer needs,” “weak individual consumption,” and a “revision of
consumption tax rate” are among the issues for this unit’s industry. To address these issues, byusing its know-how in character merchandizing, especially in its domestic operations, this unit
will drive the operation of more differentiated facilities and provision of services with theadded value that only the Group can offer. In addition, this unit will work to improve
profitability by specializing in its core operations and closing unprofitable facilities throughout
the world.
We ask for our shareholders’ further assistance and guidance.

12(5) Description of the Principal Businesses
Business Segment
Toys and Hobby
Business
Game Contents
Business
Visual and Music
Content Business
Amusement Facility
Business

Description of Business
Manufacturing and sales of toys, candy toys, production for vending
machines, cards, plastic models, apparel, sundries, etc.
Planning, development and sales of home video game software, arcade
game machines, and prizes for amusement machines, etc., and distribution
service of mobile content, etc.
Planning, production and sales of visual and music content, package
software, and on demand visual distribution, etc.
Operation of amusement facilities, etc.

Transportation and storage of products, leasing, management of real estate,
printing, sales of environmental equipment, etc.
(Note) The Network Business was merged with the Game Contents Business on April 1, 2009.
Other Businesses(6) Principal Business Offices of the Group(i)

The Company
Head Office

4-5-15 Higashi-Shinagawa, Shinagawa-ku, Tokyo(Note) On June 23, 2009, the Company moved its head office (location of its headquarters) from
Minato-ku, Tokyo, to Shinagawa-ku, Tokyo.
(ii) Principal Subsidiaries
Bandai Co., Ltd.

Taito-ku, Tokyo

NAMCO BANDAI Games Inc.

Shinagawa-ku, Tokyo

BANDAI VISUAL CO., LTD.

Shinagawa-ku, Tokyo

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

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

NAMCO Holdings UK LTD.

London, U.K.

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

Kowloon, Hong Kong

(Note) Bandai Networks Co., Ltd. merged with and was absorbed by NAMCO BANDAI Games Inc.
on April 1, 2009.

13

(7) Outline of Employees(i)Employees of the Group
Business Segment

Number of Employees

Change from the End of Previous
Fiscal Year
Increase of 100(Decrease of 254)
Increase of 518(Increase of 4)

Toys and Hobby Business
2,051(1,364)
Game Contents Business
3,271
(324)
Visual and Music Content
Increase of 4
(Decrease of 8)288(11)
Business
Decrease of 117(Decrease of 758)
Amusement Facility Business
1,190(4,743)
Decrease of 2
(Increase of 12)
Other Businesses
495
(314)
Increase of 16(Decrease of 7)
Corporate (Common)
257(35)
Increase of 376 (Decrease of 1,057)
Total
7,552
(6,791)(Notes) 1. The number of employees refers to the employees actually at work.
2. The numbers in parentheses listed for “Number of Employees” are the average numbersof temporary personnel employed for this fiscal year.
3. The number of employees listed for “Corporate (Common)” is the number of
employees of the administration sector, etc. of the Company and NAMCO BANDAI
Holdings (USA) Inc.
4. The total number of employees includes 275 former employees who retired on March
31, 2010 due to, among other things, the Group’s offer for employees to take voluntary
retirement and participate in voluntary early retirement programs.
5. The Network Business was merged with the Game Contents Business on April 1, 2009.
(ii) Employees of the Company
Change from the End
Average Years ofof Previous Fiscal
Average Age
ServiceYear
254
Increase of 17
37.9
11.6
(Notes) 1. The number of employees refers to the employees actually at work.
2. 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.
Number of
Employees(8) Principal Lenders
Lenders

Amount

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

¥6,155 million

Sumitomo Mitsui Banking Corporation¥3,830 million

Mizuho Corporate Bank, Ltd.

¥1,164 million

Mitsubishi UFJ Trust and Banking Corporation(9) Other Important Matters of the GroupNot applicable.

14¥998 million

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

Total Number of Shares Issuable:(ii) Total Number of Issued Shares:

1,000,000,000 shares
250,000,000 shares(iii) Number of Shareholders: 39,777(increase of 2,868 from the end of the previous fiscal year)(iv) Major Shareholders (Top 10 Shareholders)Name of Shareholders
Northern Trust Co (AVFC) Sub A/C American
ClientMasaya Nakamura

Number of
Shares Held

Shareholding Ratio

23,344,291

9.66

12,360,000

5.12

MAL Ltd.
12,010,100
4.97
Northern Trust Co AVFC Re U.S. Tax Exempted
11,812,100
4.89
Pension Funds
The Master Trust Bank of Japan, Ltd. (Trust
8,780,300
3.63
account)
Japan Trustee Services Bank, Ltd. (Trust account)
8,566,700
3.55
The Silchester International Investors
8,208,300
3.40International Value Equity Trust
Bank Julius Baer and Co., Ltd.
6,500,000
2.69
The Nomura Trust and Banking Co., Ltd.
(Retirement and severance benefits trust.
4,586,100
1.90
The Bank of Tokyo-Mitsubishi UFJ account)
Mellon Bank N.A. as Agent for its Client Mellon
4,430,972
1.83
Omnibus US Pension(Notes) 1. The shareholding ratio is calculated after reduction of the number of treasury
stocks(8,432,955 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)
6,595,200 shares
8,223,300
sharesJapan 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)
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.

15

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

Stock Subscription Rights Held by Company Directors and Corporate Auditors of theCompany That Were Delivered as Consideration for the Execution of Their Duties
Stock Subscription Rights as per Resolutions Made at the 2nd Ordinary General Meetingof Shareholders Held on June 25, 2007 and the Board of Directors Meetings Held on
That Date and on July 18, 2007.

a. Number of Stock Subscription Rights
926 (100 shares per stock subscription right)
b. Number of Shares Underlying Stock Subscription Rights
92,600 sharesc. Amount Paid for the Issuance of Stock Subscription Rights
No requirement to make payment.
d. Value of the Property to Be Contributed at the Time of Exercising Stock Subscription
Rights
100 yen per stock subscription right (1 yen per share)e. Period During Which Stock Subscription Rights Can Be Exercised
From July 10, 2010 to June 30, 2015
f. Conditions for Exercising Stock Subscription Rights• After stock subscription rights are allocated, if the Company’s stock price growth rate up
to the start of the period for exercising such rights does not exceed the TOPIX (Tokyo
Stock Price Index) growth rate, then those stock subscription rights cannot be exercised.
The Company’s stock price growth rate shall be calculated as the average of therespective closing prices for common stocks of the Company on the Tokyo Stock
Exchange on each of the days (except if there is no trading) within the 3 months prior tothe month in which the starting date for the period for exercising the stock subscription
rights falls divided by the average of the respective closing prices for common stocks of
the Company on the Tokyo Stock Exchange on each of the days (except if there is no
trading) within the 3 months prior to the month in which the allotment date falls. The
TOPIX growth rate is calculated in the same way as the Company’s stock price growthrate.
• The stock subscription right holders may also exercise such rights even after they cease
to be at their positions.
• If a stock subscription right holder passes away, his or her heir (limited to one individual)
shall exercise those rights.
• No transfer, pledge or any other disposal of stock subscription rights is allowed.
g. Stock Subscription Rights Held by Directors and Corporate Auditors (As of March 31,
2010)
Number of Shares
Number of Stock
Underlying Stock
Number of Holders
Subscription Rights
Subscription Rights
Directors (excluding
736
73,6004
Outside Directors)
Outside Directors

−

−

−

Corporate Auditors

−

−

−

16

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

Name of Issue

Third Issuance ofStock Subscription
RightsFourth Issuance ofStock Subscription
RightsAdditional Issuancefor Second Issuanceof Stock Subscription
RightsDate of resolution atGeneral Meeting ofJune 26, 2006
June 26, 2006
June 25, 2007
Shareholders
Persons receiving
Employees of the
Employees of
Directors ofrights; number ofCompany and its
subsidiaries of thesubsidiaries of thepersons
subsidiaries; 603
Company; 231
Company; 85
Type of stock;number of stock
Common stock;
Common stock;
Common stock;subscription rights
1,838,000 shares
583,000 shares
268,100 shares(Note)
Date of delivery ofstock subscription
July 18, 2006
April 18, 2007
July 19, 2007
rightsValue of the property
to be contributed at¥1,754 per share¥1,895 per share¥1 per share
the time of
exercising stock
subscription rights
Period during whichstock subscription
From July 10, 2008,
From April 1, 2009,
From July 10, 2010,
rights can be
to June 30, 2010
to June 30, 2010
to June 30, 2015
exercised(Note) In the above, a number of stock subscription rights are stated as converted into a number ofshares underlying stock subscription rights.

17

(3) Directors and Corporate Auditors of the Company(i)

Directors and Corporate Auditors
Title

Responsibilities in the Company and Major
Concurrent Positions
Chairman of the Japan Toy Association

Name

Chairman and Director
President andRepresentative Director
Director

Takeo Takasu
Shukuo Ishikawa

Director

Shuji Ohtsu

Director
Director

Yusuke Fukuda
Kazunori Ueno

Director

Masatake Yone

Director

Kazuo Ichijo

Director
Full Time Corporate
AuditorFull Time Corporate
AuditorCorporate Auditor

Manabu Tazaki
Koichiro Honma

Jun Higashi

Responsible for the Strategic Business Units
overall and the Affiliated Business Companies
Responsible for Overseas Operations and in
charge of the Administrative Headquarters and theInternal Auditing Division
In charge of the Corporate Planning Division
Responsible for the Toys and Hobby SBU and
President and Representative Director of Bandai
Co., Ltd.
Attorney-at-Law. Partner in Mori Hamada &Matsumoto Law Firm
Outside Director of GCA Savvian Corporation
Outside Corporate Auditor of THK CO., LTD.
Professor in the Graduate School of International
Corporate Strategy, Hitotsubashi University
Outside Director of Shimano, Inc.
Outside Director of Calbee Foods Co., Ltd.
Outside Corporate Auditor of Information
Services International-Dentsu, Ltd.

Katsutoshi Hirasawa

Attorney-at-Law. Partner in Sudoh & Takai Law
Offices
Outside Director of eBANK Corporation(currently Rakuten Bank, Ltd.)
Outside Corporate Auditor of USEN Corporation
Attorney-at-Law. Partner in Marunouchi-Chuo
Corporate Auditor
Kouji Yanase
Law Office(Notes) 1. Directors Masatake Yone, Kazuo Ichijo and Manabu Tazaki are Outside Directors.
2. Corporate Auditors Osamu Sudoh and Kouji Yanase are Outside Corporate Auditors.
3. The Company believes that Directors Masatake Yone, Kazuo Ichijo, and Manabu
Tazaki and Corporate Auditors Osamu Sudoh and Kouji Yanase have no risk of
conflicts of interest with general shareholders and have a high degree of independence.
The Company has appointed Director Kazuo Ichijo as an Independent Director/Auditor
as defined in the rules of the Tokyo Stock Exchange and filed the notification regarding
his appointment thereto.
Osamu Sudoh18

4. Full Time Corporate Auditor Katsutoshi Hirasawa was engaged in financing andaccounting activities at the Accounting Department of Bandai Co., Ltd., after he was
employed in the Administration Department of the Shizuoka Plant of Bandai Co., Ltd.,
where he was engaged in administration jobs such as accounting, general affairs and soon. Thus, Mr. Katsutoshi Hirasawa has a deep knowledge of financing and accounting.
5. Corporate Auditor Osamu Sudoh has considerable experience with bankruptcy issues as
an attorney and has the deep knowledge of finance and accounting necessary to engage
in such bankruptcy issues.
6. Director Takeo Takasu resigned from the office of Representative Director of theCompany as of February 2, 2010.
7. Director Shukuo Ishikawa assumed the office of President and Representative Directorof NAMCO BANDAI Games Inc. as of April 1, 2010.
(ii) Directors and Corporate Auditors Who Retired or Were Dismissed During This Fiscal
Year
Not applicable.
(iii) Remuneration, etc. Paid to Directors and Corporate Auditors
Total Amount of Remuneration, etc. Paid During This Fiscal Year
Number of People

Amount Paid

Directors

8¥317 million(Outside Directors)(3)(¥41 million)

Corporate Auditors

4(Outside Corporate Auditors)(2)¥65 million(¥21 million)

Total

12

¥383 million(Outside Directors and Outside
Corporate Auditors)(5)(¥62 million)(Notes) 1. There are no employees serving as Directors.
2. At the 1st Ordinary General Meeting of Shareholders held on June 26, 2006, theremuneration limit for Directors was set at 700 million yen per fiscal year, of which 350
million yen was set as the limit for base remuneration and the remaining 350 million
yen was set as the limit for cash bonus.
3. At the Ordinary General Meetings of Shareholders for Bandai Co., Ltd. and NAMCO
LIMITED (currently NAMCO BANDAI Games Inc.) held on June 23, 2005 and on
June 25, 2005 respectively, it was resolved that the total amount of remuneration for
Corporate Auditors shall be no more than 8 million yen per month.
(iv) Matters Concerning Outside Directors and Outside Corporate Auditorsa.

Status of Major Concurrent Posts of Other Companies, etc. and Relationships Between
Those Companies, etc. and the Company
Major concurrent posts of Outside Directors and Outside Corporate Auditors are asstated in (i) Directors and Corporate Auditors on page 18.
Moreover, there are no special interests between the Company and the entities withwhich Outside Directors and Outside Corporate Auditors have concurrent posts.

19

b.

Main Activities in This Fiscal Year
• Status of Attendance at Board of Directors Meetings and Board of Corporate Auditors
Meetings
Board of Directors Meetings(Held 19 times)
Number of
Meetings
Attendance Rate
Attended

Director Masatake Yone
Director Kazuo Ichijo
Director Manabu Tazaki
Corporate Auditor
Osamu Sudoh
Corporate Auditor
Kouji Yanase

Board of Corporate Auditors
Meetings (Held 13 times)
Number of
Meetings
Attendance Rate
Attended

18
19
13

94.7%
100.0%
92.9% (Note)

−
−
−

−
−
−

15

79.0%

13

100.0%

17

89.5%

12

92.3%

(Note) Director Manabu Tazaki was elected at the 4th Ordinary General Meeting of Shareholders
held on June 22, 2009, and, thus, the number of Board of Directors Meetings on which his
attendance rate is based differs from that of the other Outside Directors and Outside
Corporate Auditors. There have been 14 Board of Directors Meetings since he assumed theoffice of Director.
• Statements Made at Board of Directors Meetings and Board of Corporate Auditors
Meetings
Director Masatake Yone provides advice and proposals by giving opinions, etc.
primarily from his position as an attorney to ensure the appropriateness and validity ofdecisions of the Board of Directors.
Director Kazuo Ichijo provides advice and proposals by giving opinions, etc. primarily
from his position as a graduate school professor specializing in organizational theory toensure the appropriateness and validity of decisions of the Board of Directors.
Director Manabu Tazaki provides advice and proposals by giving opinions, etc. basedon his wealth of experience and position as a corporate officer to ensure theappropriateness and validity of decisions of the Board of Directors.
Corporate Auditors Osamu Sudoh and Kouji Yanase provide advice and proposals bygiving opinions, etc. primarily from their positions as attorneys to ensure theappropriateness and validity of decisions of the Board of Directors and the Board of
Corporate Auditors.
c.

Summary of Contracts Concerning Limited Liability
Not applicable.

d.

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

20

(4)

Accounting Auditors(i)Name: KPMG AZSA & Co.

(ii) Amount of Remuneration, etc.
Amount Paid
Amount of Remuneration, etc. for Accounting Auditors¥77 million
for This Fiscal Year
Total in Money and Other Financial Benefits to Be Paid
¥233 million
by the Company and Its Subsidiaries to Accounting
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 entitles 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 Auditors, there isno clear distinction between the total 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 this fiscal year described above is the total amount of
remuneration, etc. for these audits.
(iii) Non-Auditing Operations
Not applicable.
(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 principal, the Board of Corporate Auditors will remove
such Accounting Auditor with the unanimous approval of the Corporate Auditors.
Additionally, in the event that the Board of Corporate Auditors judges that an Accounting
Auditor’s behavior caused a material impediment to the audit operations of the Company, it
will request the Board of Directors to present a proposal for the removal or non-renewal ofsuch Accounting Auditor at a General Meeting of Shareholders, as prescribed in Article 344,
Paragraph 2 of the Companies Act, even if such Accounting Auditor does not fall under any of
the items of Article 340, Paragraph 1 of the Companies Act.
Under these circumstances, the Board of Directors will be responsible for proposing suchagendum to the General Meeting of Shareholders. Moreover, if the Board of Directors finds it
necessary because of an impediment to the execution of the duties of the Accounting Auditor,
etc., it will, having received the approval of the Board of Corporate Auditors, present the
proposal for removal or non-renewal of such Accounting Auditor at a General Meeting of
Shareholders, as prescribed in Article 344, Paragraph 1 of the Companies Act.
(v)

Summary of Contracts Concerning Limited Liability

Not applicable.

21

(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
the Laws and Regulations and the Articles of Incorporationa.

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

b.

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

c.

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

d.

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

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

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

b.

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

22

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 the Group business operations, subsidiaries aresegmented with separate SBUs for each category. Mid-term Business Plan and annual
budgets are determined for each SBU and the Group as a whole, and each Director in
charge of each SBU is responsible for the efficient execution of such SBU businesses.

b.

The Company has established several meetings, including the Group Management
Meeting, the SBU Monthly Report Meeting and 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.

c.

The Group has revised the roles of its overseas holding companies that control relevant
regions to create a system that ensures that each SBU carries out its operations
efficiently.

(v)

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

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

b.

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

c.

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

d.

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

23

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

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

b.

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

c.

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

d.

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

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

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

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

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

b.

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

c.

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

24

d.

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

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

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

b.

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

c.

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

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

The Group Value
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 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.

25

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 the financial and business
policies should be the one who sufficiently understands the importance of our managerial
vision and mission of the Group mentioned above, the managing resources, such as content
that supports the accomplishment of that vision and mission, and the importance of various
stakeholders related to the Company, and who maximizes the mid-to-long term corporate
value and shareholders’ common interest.
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 followings 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
Board of Directors of the Company, to whom the shareholders entrusted the management, isengaged in the following efforts to implement the Group’s basic policy.
Steps to Increase the Company’s Corporate Value
・Promoting the Mid-term Business Plan
The three-year Mid-term Business Plan that went into effect on April 1, 2009, promotes
two strategies, “Focus,” the business strategy, and “Enhancing the Entertainment-hub,” thefunctional strategy, to lay the foundation for global growth.
Under “Focus,” the business strategy, the Group clarifies the mission of each of thebusiness units on the basis of market environment and competitive superiority. In concreteterms, aiming for growth overseas, the Group will make forward-looking investments in thearea of the Toys and Hobby SBU and the Content SBU. On the other hand, in the domestic
market, the Group will focus on implementing measures to improve profitability,
particularly in the Amusement Facility SBU.
The functional strategy, “Enhancing the Entertainment-hub,” is directed at further
strengthening a series of functions such as creation and acquisition, development andutilization of contents by adding synergies among the Group as well as between the Groupand external partner companies. The Mid-term Business Plan calls for developing thatapproach, which thus far has largely been implemented domestically, into a global model.
・Promoting Efficient Management
The Group has been actively promoting efficient management.
The Group has put in place rules for restructuring and withdrawing from businesses; it
has reinforced systems for continuous monitoring in order to discern business trends more
swiftly, and has introduced the use of return on invested capital (ROIC) as an indicator in
making rapid decisions about restructuring businesses or withdrawing from them. In
addition, the Group is working towards cost reductions by standardizing processes acrossthe Group as a whole and is promoting managerial efficiency.

26

・Reinforcing Personnel Strategies
Aiming for dynamic 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 Activities
Strengthening its environmental management, the Group is aiming at a 5.4% reduction in
CO2 emissions from each of our worksites by Fiscal Year ending March 2012 (as comparedwith the Fiscal Year ended March 2009 level) as a mid-term Group environmental target.
・Proactive IR Activities
Our Group discloses information in a timely and appropriate manner in accordance with
the Financial Instruments and Exchange Act and rules prescribed by the Tokyo Stock
Exchange. We aim to be a highly transparent corporation that clearly provides shareholders
with information concerning management strategies and business directions. We thus work toprovide ample opportunities, for instance, company information meetings and financial
information meetings for the president and other executives of the Company, to explain
directly to both foreign and Japanese individual investors, institutional investors, stock
analysts, etc.
・Proactive Policy for the Return of Profits to Shareholders
The Company places the return of profits to shareholders as one of its highest priorities in
its management. The Company assumes that its basic policy is to further strengthen theGroup’s competitiveness and, while maintaining a sound financial status, to achieve regular
distributions of dividends and improvement in the Company’s corporate value. In concreteterms, the Company will provide a return to shareholders that targets a consolidated payout
ratio of 30%, based on stable annual dividend payments of 24 yen per share.
In addition, part of any profit, after deduction of dividends, may be used to acquire
treasury stock upon comprehensive consideration of the amount of funds on hand,
performance trends, recent share price trends, the existence or nonexistence of major
investment proposals, and other factors.
The Company will make priority use of profit, after deduction of dividends, forforward-looking investment in expanding operations overseas under the three-year Mid-term
Business Plan that has been implemented since April 2009.

27

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 and aiming to increase the corporate value of the Group 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 a 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.

28

Consolidated Balance Sheet(As of March 31, 2010)(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

96,64752,726
2,037
12,81723,805
4,334
5,763
20,769(1,138)217,762

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
Goodwill
Other intangible assets
Total 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

10,497
15,327
11,592
8,597
46,0142,951
9,550
12,501
23,2755,886
22,302(1,807)49,656108,172
325,935

29

(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

35,956
8,876
13,741
8,239
402
767
2,034
16,58486,604Long-term liabilities
Long-term borrowings
Deferred tax liabilities, land revaluation
Provision for directors’ bonuses
Accrued retirement and severance benefits
Accrued directors’ and corporate auditors’ retirement and severance
benefits
Other long-term liabilities
Total long-term liabilities
TOTAL LIABILITIES

3,746
10,31996,923

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

10,00079,960163,454(9,455)
243,958

Valuation difference and translation adjustments
Other securities valuation difference
Deferred gains or losses on hedges, net of taxes
Land revaluation
Translation adjustments
Total valuation difference and translation adjustments
Stock subscription rights
Minority interests
TOTAL NET ASSETSTOTAL LIABILITIES AND NET ASSETS

19
79(6,491)(10,900)(17,292)
810
1,535
229,012
325,935

30

3,333
673
129
2,403
32

Consolidated Statement of Income(From April 1, 2009 to March 31, 2010)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Amortization of negative goodwill
Other non-operating income
Non-operating expenses
Interest expense
Foreign exchange loss
Other non-operating expenses
Recurring income
Extraordinary income
Gain on sales of fixed assets

Gain on sales of investment securities
Reversal of allowance for doubtful receivables
Reversal of accrued retirement and severance benefits
Gain on reversal of stock subscription rights
Other extraordinary income
Extraordinary loss
Loss on sales of fixed assets
Loss on disposal of fixed assets
Loss on impairment of fixed assets
Loss on business restructuring
Special retirement expenses
Other extraordinary loss
Loss before income taxes and minority interests
Corporate income, inhabitant and enterprise taxes
Income taxes for the previous period
Deferred income taxes
Minority interests
Net loss

31(Millions of yen)Amount378,547
249,793
128,753
126,869
1,883
1,234
371
212
124
526
1,210
378
620
212
1,907
741
37
176
61
14
402
49
21,94320
321
15,902
1,865
1,899
1,933
19,294
7,064
963
2,470
10,498135
29,928

Consolidated Statement of Changes in Net Assets(From April 1, 2009 to March 31, 2010)(Millions of yen)
Stockholders’ equity
Common stock
Balance as of March 31, 2009
Changes during the period
Total changes during the period
Balance as of March 31, 2010
Additional paid-in capital
Balance as of March 31, 2009
Changes during the period
Disposal of treasury stock
Total changes during the period
Balance as of March 31, 2010
Retained earnings
Balance as of March 31, 2009
Changes during the period
Cash dividends
Net loss
Changes in the scope of consolidation
Changes in scope of application of the equity
methodIncrease due to the company split
Total changes during the period
Balance as of March 31, 2010
Treasury stock
Balance as of March 31, 2009
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, 2010

32

10,000−10,00079,88772
72
79,960199,453(5,795)(29,928)
115
(416)
25
(35,999)
163,454(9,624)
(9)
184

(6)
168
(9,455)

Consolidated Statement of Changes in Net Assets(From April 1, 2009 to March 31, 2010)(Millions of yen)
Total stockholders’ equity
Balance as of March 31, 2009
Changes during the period
Cash dividends
Net loss
Purchase of treasury stock
Disposal of treasury stock
Changes in treasury stock accompanying
changes to holdings in companies to which theequity method is applied
Changes in the scope of consolidation
Changes in scope of application of the equity
methodIncrease due to the company split
Total changes during the period
Balance as of March 31, 2010
Valuation difference and translation adjustments
Other securities valuation difference
Balance as of March 31, 2009
Changes during the period
Net changes in the period other than changes instockholders’ equity
Total changes during the period
Balance as of March 31, 2010
Deferred gains or losses on hedges, net of tax
Balance as of March 31, 2009
Changes during the period
Net changes in the period other than changes instockholders’ equity
Total changes during the period
Balance as of March 31, 2010Land revaluation
Balance as of March 31, 2009
Changes during the period
Net changes in the period other than changes instockholders’ equity
Total changes during the period
Balance as of March 31, 2010
Translation adjustments
Balance as of March 31, 2009
Changes during the period
Net changes in the period other than changes instockholders’ equity
Total changes during the period
Balance as of March 31, 2010

33

279,717(5,795)(29,928)
(9)
256

(6)
115
(416)
25
(35,758)
243,958(1,911)

1,930
1,930
19
(105)

185
185
79
(6,299)

(192)
(192)
(6,491)(13,755)

2,855
2,855
(10,900)

Consolidated Statement of Changes in Net Assets(From April 1, 2009 to March 31, 2010)(Millions of yen)
Total valuation difference and translation adjustments
Balance as of March 31, 2009
Changes during the period
Net changes in the period other than changes instockholders’ equity
Total changes during the period
Balance as of March 31, 2010
Stock subscription rights
Balance as of March 31, 2009
Changes during the period
Net changes in the period other than changes instockholders’ equity
Total changes during the period
Balance as of March 31, 2010
Minority interests
Balance as of March 31, 2009
Changes during the period
Net changes in the period other than changes instockholders’ equity
Total changes during the period
Balance as of March 31, 2010
Total net assets
Balance as of March 31, 2009
Changes during the period
Cash dividends
Net loss
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
Changes in the scope of consolidation
Changes in scope of application of the equity
methodIncrease due to the company split
Net changes in the period other than changes instockholders’ equity
Total changes during the period
Balance as of March 31, 201034

(22,071)

4,779
4,779
(17,292)
1,468

(657)
(657)
810
1,465

69
69
1,535
260,579(5,795)(29,928)
(9)
256

(6)
115
(416)
25
4,191
(31,566)
229,012

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

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:
80 companies(ii) Names of Principal Consolidated Subsidiaries:
Bandai Co., Ltd., NAMCO BANDAI Games Inc., BANDAI VISUAL CO.,LTD., NAMCO LIMITED, BANDAI LOGIPAL INC., NAMCO BANDAI
Holdings (USA) Inc., BANDAI S.A., NAMCO Holdings UK LTD. andBANDAI (H.K.) CO., LTD.
Since BANDAI (GUANGZHOU) CO., LTD., gained in importance, that company wasadded to the scope of the consolidation from this consolidated fiscal year. Since Bandai
Networks Co., Ltd., and ANIME CHANNEL, CO., LTD., were merged withconsolidated subsidiaries of the Company, they were excluded from the scope of
consolidation.
NAMCO BANDAI Games Europe S.A.S., a consolidated subsidiary of the Company,
additionally acquired shares in Distribution Partners S.A.S., making that company awholly owned subsidiary, in conjunction with which Distribution Partners S.A.S. (whichchanged its corporate name to NAMCO BANDAI Partners S.A.S. after becoming awholly owned subsidiary) and its 18 subsidiaries were added to the scope of
consolidation.
Furthermore, NAMCO BANDAI Online Inc. was newly incorporated as a result of anincorporation-type company split of NAMCO BANDAI Games Inc., a consolidated
subsidiary of the Company, and was added to the scope of consolidation. Seika Co., Ltd.,and NAMCO ECOLOTECH LTD. were liquidated and thus were excluded from thescope of consolidation.
(2)(i)

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

(ii) Reason for Exclusion from the Scope of Consolidation:
As the scale of the business conducted by each of the non-consolidated
subsidiaries is small, 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.

35

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:
Non-consolidated subsidiary:

SHANGHAI NAMCO LTD.

Affiliated companies:

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

In addition, Distribution Partners S.A.S., through an additional acquisition of its shares,
was made a wholly owned subsidiary, and thus was excluded from the scope of
application of the equity method for this consolidated fiscal year. Tsuburaya Productions
Co., Ltd., gained in importance and thus was treated as a company to which the equity
method is applied.
(2)

Status of Non-Consolidated Subsidiaries and Affiliated Companies to Which the Equity Method
Was Not Applied:(i)Name of the Principal Non-Consolidated Subsidiary or Affiliated Company:
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
the Company and it seemed unimportant as a whole in consideration of thecompany’s net income or loss and retained earnings, etc. corresponding to theownership held by the Company.
3. Information Concerning the Fiscal Year, etc. for Consolidated Subsidiaries
NAMCO BANDAI Holdings (USA) Inc. and some other consolidated subsidiaries (18domestic and 26 overseas subsidiaries) have the last day of December, January, or February
as 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 last day of theconsolidated fiscal year for the consolidated financial statements of the Company.

36

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

Valuation Basis and Methods for Significant Assets:
Valuation Basis and Methods for Securities:
Held-to-maturity securities:

Stated using the amortized(straight-line method)cost

methodOther 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.
However, with respect to the contributions to limited liability
partnerships for investment businesses and similar partnerships, theamount corresponding to the equity holdings of the partnership’s assets
is stated as investment securities, and the amount corresponding to
profits or losses resulting from the operations of the partnership is statedas profits or losses for this consolidated fiscal year.
(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 method based on the averagemethod.
(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:
2 to 50 years
Amusement facilities and machines:
3 to 15 years
Overseas consolidated subsidiaries:
Stated using the straight-line method.

37

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

1 to 5 years(iii) Leased Assets:
Stated using the straight-line method, with the useful life set to the lease period,
for a residual value of zero.
However, financing lease transactions other than those in which titles to leased
property are determined to be transferred to lessees, which transactions started
on or before March 31, 2008, are stated by applying the accounting treatment
applicable to ordinary operating lease transactions.
(3)

Basis of Recognition for Significant Provision:(i)

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

(ii) Provision for Directors’ Bonuses:
The Company and its domestic consolidated subsidiaries provide accrued
bonuses for directors based on the estimated amounts to be paid in respect of thisconsolidated fiscal year.
(iii) Provision for Losses from Business Restructuring:
Certain consolidated subsidiaries make provision for estimated losses on
restructuring of operations.
(iv) Provision for Sales Returns:
Certain consolidated subsidiaries provide for losses on returned goods after theend of this consolidated fiscal year based on historic experience.
(v)

Accrued Retirement and Severance Benefits:
Accrued retirement and severance benefits for employees in respect of defined
benefit plans is 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.

38

(vi) Accrued Directors’ and Corporate Auditors’ Retirement and Severance Benefits:
To provide for payment of retirement and severance benefits to directors andcorporate auditors, certain domestic consolidated subsidiaries record the amountpayable at the end of the consolidated fiscal year in accordance with internal
regulations.
(4)(i)

Accounting Standards for Significant Income and Expense:
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. Interest rate swaps that meet
specific matching criteria are accounted for using specific allowed methods
under relevant accounting standards.

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

Forward exchange contracts and interest rate swaps
Foreign-currency-denominated assets and liabilities
and scheduled transactions, and interest on
borrowings(iii) Hedging Policies:
Hedging is implemented for the purpose of reducing risks arising fromfluctuations in exchange rates and interest rates involved in operational andfinancing 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 by39

comparing 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. Also, for interest
rate swaps for which the specific allowed methods are applied, the assessment ofeffectiveness is not performed.
(6)

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.

5. Valuation of Assets and Liabilities of Consolidated Subsidiaries
Assets and liabilities of consolidated subsidiaries are assessed based on their fair market
value.
6. Amortization of Positive Goodwill and Negative Goodwill
Goodwill is amortized over a five-year period using the straight-line method.
7. Changes in the Important Information Constituting the Basis for Preparation of Consolidated
Financial Statements(Change in Categories for Presentation with Respect to Amusement Facilities Business)
In the past, the costs of backroom supporting operations at amusement facilities have beentreated as cost of sales for the amusement facilities business; however, from this consolidated
fiscal year, they are stated as selling, general and administrative expenses. This change is madeto provide a more appropriate presentation of costs concerning facilities management
operations from the point of view of the correspondence between sales and cost of sales, inconjunction with reviewing how facilities are operated and the roles of operating staff, andclarifying facilities management operations, given that competition has grown more intense in
the amusement facilities business.
The impact of this change, in comparison with the standard used until the previous
consolidated fiscal year, is a 2,011 million yen reduction in the cost of sales for thisconsolidated fiscal year and an increase by the equivalent amount in gross profit, as well as anincrease by the equivalent amount in selling, general and administrative expenses.
This change has no impact upon operating income, recurring income and net loss before
income taxes and minority interests.
(Application of “Partial Amendments to ‘Accounting Standards for Retirement Benefits’ (Part3)”)
The “Partial Amendments to ‘Accounting Standards for Retirement Benefits’ (Part 3)”(ASBJ Statement No. 19, issued on July 31, 2008) were applied from this consolidated fiscal
year.
This change has no impact upon operating income, recurring income and net loss before
income taxes and minority interests.

40

8. Change in Method of Presentation(Consolidated Balance Sheet)
What had been stated separately through the previous consolidated fiscal year as“Guarantee money deposited” (for which the balance at the end of this consolidated fiscal year
is 15,394 million yen) was stated within “Other investments and assets” under “Investment andother assets,” since it is at or below 5 percent of the total of assets.
(Consolidated Statement of Income)(1) “Amortization of negative goodwill,” which had been stated through the previous consolidated
fiscal year within “Other non-operating income” under “Non-operating income” was statedseparately, since it is above 10 percent of the total non-operating income.
The total of “Amortization of negative goodwill” for the previous consolidated fiscal year was
116 million yen.

II.

(2)

What had been stated through the previous consolidated fiscal year as “Equity in gain ofaffiliated companies” (for which the balance for this consolidated fiscal year is 0 million yen)
was stated within “Other non-operating income” under “Non-operating income,” since it isbelow 10 percent of the total non-operating income.

(3)“Loss on business restructuring,” which had been stated through the previous consolidated fiscal
year within “Other extraordinary loss” under “Extraordinary loss” was stated separately, since
its monetary importance has increased this consolidated fiscal year.
The total of “Loss on business restructuring” for the previous consolidated fiscal year was 114
million yen.

(4)

What had been stated through the previous consolidated fiscal year as “Loss on valuation of
investment securities” (for which the balance for this consolidated fiscal year is 122 million yen),“Provision for allowance of doubtful receivables” (for which the balance for this consolidated
fiscal year is 718 million yen), and “Litigation settlement” (for which the balance for thisconsolidated fiscal year is 66 million yen) were stated within “Other extraordinary loss” under“Extraordinary loss,” since each is below 10 percent of the total extraordinary loss.

Notes to Consolidated Balance Sheet
1. Pledged Assets:
Time deposits: ¥4 million
Pledged for bank transaction guarantees
2. Amount of Accumulated Depreciation of Property, Plant and Equipment:¥122,256 million
3. Discounted Notes Receivable¥50 million

4. Land Revaluation
A revaluation of land for business-use was implemented pursuant to the “Law Concerning
Land Revaluation” (Law No. 34, promulgated on 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 the41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,
promulgated on May 2, 1991)”, as stipulated in “Article 2-4 of the Ordinance
Implementing the Law Concerning Land Revaluation (Cabinet Order No. 119,
promulgated on 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 513 million yen.
III. Notes to Consolidated Statement of Changes in Net Assets
1. Type and Total Number of Shares Issued
Common stock

250,000,000 shares

2. Matters Concerning Distribution of Surplus(1)

Paid Dividend Amounts, etc.

Date of Resolution

June 22, 2009,
Ordinary General
Meeting of
Shareholders
November 5, 2009,
Board of Directors’Meeting(2)

Type ofsharesTotalamount ofdividends(millions ofyen)

Dividend pershare (yen)Date ofrecordEffective
date

Common
stock

2,896

12

March 31,2009

June 23,
2009

Common
stock

2,898

12

September
30, 2009

December 7,
2009

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 21, 2010,
Ordinary General
Meeting of
Shareholders

Common
stock

2,898

Source ofdividends

Dividend
per share(yen)

Date ofrecordEffective
date

Retainedearnings

12

March 31,2010

June 22,2010

3. Number of the Company’s Stock Subject to Stock Subscription Rights
Series 3 stock subscription rights:
Common stock
1,753,000 shares
Series 4 stock subscription rights:
Common stock
562,000 shares

42

IV.

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 sheets,
their market value as of March 31, 2010, 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 sheets(Millions of yen)
(1) Cash and time deposits
96,64796,647—(2) Trade receivables
52,72652,726—(3) Short-Term Investments andInvestment Securities
1. Held-to-maturity securities
27
27—
2. Other securities
14,286
14,2860Total assets
163,687
163,6870(1) Trade payables
35,95635,956—(2) Short-term borrowings
8,876
8,876
—
(3) Accounts payable-other
13,741
13,741—(4) Accrued income taxes
8,239
8,239
—
(5) Long-term borrowings
3,333
3,333
—
Total liabilities
70,147
70,147—
Derivative transactions (*)91
91—(*) Debts and credits derived from derivative transactions are stated on a net basis.
(Notes) 1. Relevant matters of method of calculating the market value of financial instruments and43

securities 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) Long-term borrowings
The market value of long-term borrowings is calculated by discounting the total principle
and interest by the current market interest rate for comparable debt.
Derivative transactions
The market value of derivative transactions is stated at the price on the exchange or the
price as presented by counterparty financial institutions and others.
2. Unlisted securities (stated as 1,577 million yen in the consolidated balance sheets) haveno market price and their future cash flow cannot be estimated. Since it is recognizedthat it is extremely difficult to assess their market value, they are not included in “(3)Short-Term Investments and Investment Securities.”(Additional Information)
The “Accounting Standard for Financial Instruments” and the related “Implementation
Guidance” (ASBJ Statement No. 10, issued March 10 2008) and “Guidance on Disclosuresabout Fair Value of Financial Instruments” (ASBJ Guidance No. 19, issued March 10, 2008)
were applied from this consolidated fiscal year.

V. Notes Concerning Per-Share Data
1. Net assets per share: ¥938.74
2. Net loss per share for this consolidated fiscal year:¥123.98

VI. Other Notes
1. Additional Information(Additional investment in NAMCO BANDAI Partners S.A.S.)
On July 7, 2009, NAMCO BANDAI Games Europe S.A.S, a consolidated subsidiary of theCompany, additionally acquired shares in Distribution Partners S.A.S. (which changed its
corporate name to NAMCO BANDAI Partners S.A.S. after becoming a wholly owned
subsidiary of NAMCO BANDAI Games Europe S.A.S.), making that company a consolidated
subsidiary of the Company.
(1) Name and Business Content of Acquired Company, Main Reason for the Business Combination,
Date of the Business Combination, Legal Form of the Business Combination and Percentage of
Voting Rights Acquired:(i) Name and Business Content of the Acquired Company:

44Name: Distribution Partners S.A.S.
(The Acquired Company changed its corporate name to NAMCO BANDAI
Partners S.A.S. after becoming a wholly owned subsidiary of NAMCO
BANDAI Games Europe S.A.S.)
Business content: Distribution of electronic products and products for PCs andgame consoles(ii) Main Reason for the Business Combination:
The objective is to build a distribution network for the Group in European regionand strengthen its Game Contents Business in that region.
(iii) Date of the Business Combination:
July 1, 2009(iv) Legal Form of the Business Combination:
Acquisition of shares(v) Percentage of Voting Rights Acquired:
66.0% (Total percentage of voting rights after the additional acquisition ofshares: 100.0%)(2)

Period of Performance of the Acquired Company Included in the Consolidated Financial
Statements:
From July 1, 2009 to March 31, 2010
In addition, during the period from April 1, 2009 to June 30, 2009, the Acquired Company
was an affiliated company of the Company to which the equity method was applied.

(3)

Acquisition Cost of the Acquired Company and the Breakdown of the Cost:
Consideration paid for the additional
acquisition of shares
Direct cost of acquisition
Existing Equity
Acquisition Cost

(4)

¥3,627 million¥53 million¥631 million¥4,312 million

Value of Goodwill or Negative Goodwill Generated, Cause of the Generation, Amortization
Method and Amortization Period:(i) Value of Goodwill: ¥8,305 million(ii) Cause of the Generation:
Because the cost of the acquisition exceeded the market value of the net assets ofthe company at the time of the business combination was carried out, thedifference is recognized as goodwill.
(iii) Amortization Method and Amortization Period
Amortized by the straight-line method over five years.
At the end of this consolidated fiscal year, however, as a result of reviewing thebusiness plan which was considered at the time of acquisition of the shares, it
was determined that the future super-profit initially assumed could not be

45

expected; thus, the relevant book value was reduced by the entire amount andthat reduction stated as an impairment loss under extraordinary loss.
(5)

(6)

Value of Assets Acquired and Liabilities Undertaken on the Date of the Business Combinationand their Main Breakdown:
Current assets
Fixed assets
Total assets¥17,344 million¥484 million¥17,828 million

Current liabilities
Fixed liabilities
Total liabilities¥19,408 million¥2,413 million¥21,822 million

Contents of the Conditional Payment of Acquisition Price Stipulated in the Business
Combination Agreement and the Subsequent Accounting Processing Policies:
Not applicable.

(7)

Amount Allocated to Research and Development Costs, etc. in the Acquisition Cost, and its
Category:
Not applicable.

(8)

Allocation of Acquisition Cost:
There are no distinguishable assets or liabilities that are allocated other than goodwill.

2. Loss on Impairment of Fixed Assets
Groupings for evaluating fixed asset impairment are made by the Company and its
consolidated subsidiaries according to management accounting classifications based on strategic
business units, excluding significant idle assets, assets scheduled for disposal, and leased assets.
Of these, in the amusement facility business, the individual facility, the smallest unit used inmanagement 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.
Location
Muko City, Kyoto, etc.
(Note 1)

Items
Amusement facility

Toshima-ku, Tokyo, etc.
(Note 2)

Amusement facility

Kishiwada City, Osaka(Note 3)

Amusement facility

Illinois, U.S.A., etc.
(Note 4)

Amusement facility

Classification
Amusement facilities
and machines andother assets
Amusement facilities
and machines andother assets
Amusement facilities
and machines andother assets
Amusement facilities
and machines

46

Impairment Loss
(Millions of yen)
284

90

1,152
480

Location

Items

Braintree, U.K., etc.
(Note 1)

Amusement facility

New Territories, H.K.,
etc.
(Note 1)

Amusement facility

Cambridge, U.K. (Note1)

Assets for business use

Shinagawa-ku, Tokyo(Note 4)

Assets for business use

Kasuya-gun, Fukuoka,
etc.
(Note 1)

Warehouse

Classification
Amusement facilities
and machines andother assets
Amusement facilities
and machines andother assets
Buildings &structures,
Other property, plantand equipment
Other property, plantand equipment, Other
intangible fixed assets
and other assets
Buildings &structures,
Other property, plantand equipment
Goodwill

Impairment Loss
(Millions of yen)
342

1

3

747

50

12,749―(Note 5)―
Total
15,902(Notes) 1. An impairment loss was recorded because it was forecasted that the book value of this
fixed asset could not be recovered due to the decline in business profitability. In addition,
the asset was determined to have no value.
2. An impairment loss was recorded because the recoverable amount of this asset decreased
due to the decision to close the facility. In addition, the asset was determined to have novalue.
3. An impairment loss was recorded because it was forecasted that the book value of this
fixed asset could not be recovered due to the decline in business profitability. The
recoverable amount was measured to be the net selling price, which was assessed basedon the reasonable estimated selling price.
4. An impairment loss was recorded because it was forecasted that the book value of this
fixed asset could not be recovered due to the decline in business profitability. The
recoverable amount was measured to be the estimated value in use based on future cashflow.
5. Because it was determined that the future super-profit assumed in the business planconsidered at the time of acquisition of the shares was unlikely to be realized, the total
unamortized balance was stated as an impairment loss.
3. Notes Concerning Business Combinations, etc.
(Transactions conducted by commonly controlled entities, etc.)
The merger of subsidiaries and succession to part of the businesses of subsidiaries due to acompany split in the course of the restructuring of the Group’s businesses
On April 1, 2009, NAMCO BANDAI Games Inc. merged with and absorbed Bandai
Networks Co., Ltd. due to an absorption-type merger. Also, the Company succeeded to a part ofthe share management business that had been carried out by Bandai Networks Co., Ltd., due tothe company split (absorption-type company split) on such date.
(1)

Names and Business Content of Combined Companies, Legal Form of Business Combination,
and Overview of Transaction Including Transaction Objectives

47

(i)

Names and Business Content of Combined Companies
A. NAMCO BANDAI Games Inc.
Planning, development, and sales of home video game software and coin-operated
game machines, etc.
B.

Bandai Networks Co., Ltd.
Distribution of content for mobile phones, consignment of website development,
mail order sales, etc.

C.

NAMCO BANDAI Holdings Inc. (the Company)
Planning and implementation of management strategy and business management
and instruction of the group companies.

(ii) Legal Form of the Business Combinations
A. An absorption-type merger in which Bandai Networks Co., Ltd. was thedisappearing company; and NAMCO BANDAI Games Inc. was the surviving
company.
B. An absorption-type company split in which Bandai Networks Co., Ltd. was the split
company; and the Company was the successor company.
(iii) Overview of Transaction Including Transaction Objectives
The Group has considered what its optimal organizational structure would be to work forfurther growth in the network-related market, which includes distributing content formobile phones: this is a market for which technological progress and other factors haveproduced drastic changes in the environment and in which competition is becoming
increasingly intense on a global scale. Thus far, NAMCO BANDAI Games Inc. hasstrengths in leveraging its in-house technical development capabilities and effectively
utilizing content for each platform, including home video game software, coin-operated
game machines, and mobile phones. Also, Bandai Networks Co., Ltd. has strengths in thecomprehensive development of operations, such as e-commerce, centered on the
distribution of mobile phone content and the provision of technical solutions. NAMCO
BANDAI Games Inc., and Bandai Networks Co., Ltd., have each worked to grow theirbusinesses by leveraging their respective strengths. This time, the merger of these twocompanies and the establishment of a new business unit within NAMCO BANDAI
Games Inc. are designed to reinforce the total power of the network business within theGroup and to create new content and businesses through the synergistic fusion of variedstrengths.
In addition, upon this restructuring within the Group, the Company has succeeded to partof the share management business that had been carried out by Bandai Networks Co.,
Ltd., due to the company split (absorption-type company split).
(2)

Overview of Accounting Process
The accounting process for the consolidated financial statements was conducted astransactions conducted by commonly controlled entities, handled in accordance with theprovisions of the “Accounting Standard for Business Combinations” (issued by theBusiness Accounting Council on October 31, 2003) and “Guidance on Accounting Standard
for Business Combinations and Accounting Standard for Business Divestitures” (ASBJ
Guidance No. 10, final revision issued on November 15, 2007).

48

Non-Consolidated Balance Sheet(As of March 31, 2010)(Millions of yen)AmountASSETS
Current assets
Cash and time deposits
Trade receivables
Prepaid expenses
Other current assets
Total current assets

26,105
271
230
1,595
28,202

Fixed assets
Property, plant and equipment
Buildings
Structures
Tools, furniture and fixtures
Total property, plant and equipment
Intangible assets
Goodwill
SoftwareTotal 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

32
260
23
316
623
29
653
11,025
287,09063
1,869
300,050
301,019
329,22249

(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
Other current liabilities
Total current liabilities

60,614
8,657
274
185
3
16
171
48
69,971Long-term liabilities
Long-term borrowings
Accrued retirement and severance benefits
Other long-term liabilities
Total long-term liabilities
TOTAL LIABILITIES

3,333
12
147
3,493
73,464

NET 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 translation adjustments
Other securities valuation difference
Total valuation difference and translation adjustments
Stock subscription rights
TOTAL NET ASSETSTOTAL LIABILITIES AND NET ASSETS

50

10,000202,0382,500
199,538
52,832
1,645
51,187
26,10425,082(9,413)
255,457
(510)
(510)
810
255,757
329,222

Non-Consolidated Statement of Income(From April 1, 2009 to March 31, 2010)(Millions of yen)Amount9,608

Operating revenue
Dividend income from affiliatedcompanies
Business management income fromaffiliated companies
Operating expenses
General and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Rental income
Other non-operating income
Non-operating expenses
Interest expense
Expenses related to rental assets
Foreign exchange loss
Other non-operating expenses
Recurring income
Extraordinary income
Gain on sales of investment securities
Gain on extinguishment of tie-in shares
Gain on reversal of stock subscritpion rights
Other extraordinary income
Extraordinary loss
Loss on sales of investment securities
Loss on valuation of investment securities
Bad debt written off
Other extraordinary losses
Income before income taxes
Corporate income, inhabitant and enterprise
taxes
Income taxes for the previous period
Net income

6,705
2,903
2,631
2,631
6,976
2,156
43
133
1,955
24
2,667
265
1,938
413
51
6,465
929
174
352
402
0
151
16
81
51
1
7,243
33
(86)

51

(53)
7,296

Non-Consolidated Statement of Changes in Net Assets(From April 1, 2009 to March 31, 2010)(Millions of yen)
Stockholders’ equity
Common stock
Balance as of March 31, 2009
Changes during the period
Total changes during the period
Balance as of March 31, 2010
Additional paid-in capital
Capital reserve
Balance as of March 31, 2009
Changes during the period
Total changes during the period
Balance as of March 31, 2010
Other capital surplus
Balance as of March 31, 2009
Changes during the period
Disposal of treasury stock
Total changes during the period
Balance as of March 31, 2010
Total additional paid-in capital
Balance as of March 31, 2009
Changes during the period
Disposal of treasury stock
Total changes during the period
Balance as of March 31, 2010
Retained earnings
Legal reserve
Balance as of March 31, 2009
Changes during the period
Total changes during the period
Balance as of March 31, 2010
Other retained earnings
General reserve
Balance as of March 31, 2009
Changes during the period
Total changes during the period
Balance as of March 31, 2010
Retained earnings carried forward
Balance as of March 31, 2009
Changes during the period
Cash dividends
Net income
Total changes during the period
Balance as of March 31, 2010
Total retained earnings
Balance as of March 31, 2009
Changes during the period
Cash dividends
Net income
Total changes during the period
Balance as of March 31, 2010

10,000−10,000

2,500
−
2,500
199,46771
71
199,538
201,967
71
71
202,038

1,645
−
1,645

26,104−
26,104
23,581(5,795)
7,296
1,500
25,082
51,331(5,795)7,296
1,500
52,83252

Non-Consolidated Statement of Changes in Net Assets(From April 1, 2009 to March 31, 2010)(Millions of yen)
Treasury stock
Balance as of March 31, 2009
Changes during the period
Purchase of treasury stock
Disposal of treasury stock
Total changes during the period
Balance as of March 31, 2010
Total stockholders’ equity
Balance as of March 31, 2009
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, 2010
Valuation difference and translation adjustments
Other securities valuation difference
Balance as of March 31, 2009
Changes during the period
Net changes in the period other than changes instockholders’ equity
Total changes during the period
Balance as of March 31, 2010
Total valuation difference and translation adjustments
Balance as of March 31, 2009
Changes during the period
Net changes in the period other than changes instockholders’ equity
Total changes during the period
Balance as of March 31, 2010
Stock subscription rights
Balance as of March 31, 2009
Changes during the period
Net changes in the period other than changes instockholders’ equity
Total changes during the period
Balance as of March 31, 2010
Total net assets
Balance as of March 31, 2009
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, 2010

53

(9,588)(9)184
175(9,413)
253,709(5,795)
7,296
(9)
256
1,747
255,457(2,284)

1,773
1,773
(510)
(2,284)

1,773
1,773
(510)
1,468

(657)
(657)
810
252,893(5,795)
7,296
(9)
256
1,115
2,863
255,757

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.
(2)

Depreciation Methods for Fixed Assets:(i)

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

Basis of Recognition for Provision:
Accrued Retirement and Severance Benefits:
The Company provides for retirement and severance benefits for employees based on
estimated retirement benefit obligations as of the end of this fiscal year.

(4)

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

(5)

Change in Method of Presentation(Non-Consolidated Balance Sheet)
What had been stated through the previous fiscal year as “Uncollected refunds of income
taxes” (for which the balance for this fiscal year is 1,215 million yen) was stated within “Other
current assets” since it is at or below 1 percent of the total of assets.
(Non-Consolidated Statement of Income)(i) “Gain on sales of investment securities” which had been stated through the previous fiscal year
within “Other extraordinary income” in “Extraordinary income” was stated separately, since it
is above 10 percent of the total extraordinary income.
The total of “Gain on sales of investment securities” for the previous fiscal year was one
million yen.

54

(ii) “Income taxes for the previous period,” which had been stated through the previous fiscal year
within “Corporate income, inhabitant and enterprise taxes” was stated separately, since its
monetary importance has increased in this fiscal year.
The total of “Income taxes for the previous period” for the previous fiscal year was negative
22 million yen.
2. Notes to Non-Consolidated Balance Sheet(1)

Amount of accumulated depreciation of property, plant and equipment: ¥101 million(2)

Monetary claims and obligations with respect to affiliated companies (excluding amounts given in
specific categories)
Short-term monetary claims on affiliated companies:¥632 million
Short-term monetary obligations to affiliated companies: ¥201 million

3. Notes to Non-Consolidated Statement of Income
Transactions with affiliated companies (excluding amounts given in specific categories)
Non-operating Transactions:Non-operating income¥1,980 million
Non-operating expenses¥144 million
4. Notes to Non-Consolidated Statement of Changes in Net Assets
The total number and category of treasury stock as of the end of this fiscal year
Common stock
8,432,955 shares
5. Notes Concerning Tax Effect Accounting
Breakdown of Main Reasons for Deferred Tax Assets
Deferred tax assets
Loss on valuation of investments in affiliated companies
Loss on valuation of investment securities
Losses carried forward
Other securities valuation difference
Stock remuneration expenses
Accrued bonuses
OthersSubtotal deferred tax assets
Valuation allowance
Total deferred tax assets
Deferred tax liabilities
Enterprise tax receivable
Total gross deferred tax liabilities
Net deferred tax assets¥950 million¥417 million¥222 million¥207 million¥109 million¥28 million¥32 million¥1,968 million(¥1,939 million)¥29 million(¥29 million)(¥29 million)¥−million55

6. Notes Concerning Transactions with Related Parties(1)

Subsidiaries and Affiliated Companies, etc.

Type

Ratio ofvoting rights
ownership

Subsidiary

Subsidiary

Subsidiary

Subsidiary

Subsidiary

Subsidiary

Company

Bandai Co.,
Ltd.

NAMCO
BANDAI
Games Inc.

BANDAIVISUAL
CO., LTD.
NAMCO
LIMITED
BanprestoCo., Ltd.

Sunrise Inc.

Holding
directly
100.0%

Holding
directly
100.0%

Holding
directly
100.0%
Holding
directly
100.0%

Relationshipwith relatedpartiesInterlocking
directorate

BANDAI
S.A.

2,226

−

13,439

Short-termborrowings fromaffiliated companies

−

2,619

−

−

1,807

−
Short-termborrowings fromaffiliated companies

−

14
6,534

Interlocking

Payment of interest
Borrowings(Note 2)−
Short-termborrowings fromaffiliated companies

directorate

Payment of interest

18

−

3,708

Short-termborrowings fromaffiliated companies

11

−

9,713

Short-termborrowings fromaffiliated companies

9,786

32

−

−

11,600−−Interlocking
directorate−

Borrowings(Note 2)

Borrowings(Note 2)−

Payment of interest

Holding100.0%−−
Short-termborrowings fromaffiliated companies

Holdingindirectly

40

20
4,038

Payment of interest

indirectly

19,052

Payment of interest
Borrowings(Note 2)100.0%

directly 91.8%

−

6,953

7.6%

Subsidiary

Receipt of dividends(Note 1)
Borrowings(Note 2)

Borrowings(Note 2)

Holdingindirectly

AmountPayment of interest
Receipt of dividends(Note 1)
Rental building−

Account
items

Content(Millions of yen)
Balance asof March 31,
2010−

Underwriting of
capital increase(Note 3)

13,079
−
4,391
−
8,486

−
4,680

−

Conditions of transactions and policies for determining the conditions of transactions(Notes) 1. The receipt of dividends is based on the Group’s regulations.
2. The borrowings are transactions made by the cash management system (CMS); the amountstated is the average balance during this fiscal year. The interest rate on these borrowings is,based on intra-Group regulations, determined reasonably, taking into account market interest
rates.
3. ¥11,600 million is the sum of the following amounts: ¥6,412 million by issuance of shares bymeans of shareholders allotment underwritten by the Company; ¥3,660 million by debt equity
swap by the Company; and ¥1,527 million by contribution in kind of shares in BANDAIESPANA S.A. and in other subsidiary held by the Company.

56

(2)

Officers and Major Individual Shareholders, etc.

Type

Ratio ofvoting rights
ownership

Relationshipwith relatedparties

Name

Officer

Takeo
TakasuOwnership
directly 0.0%

Director of
the Company

Ownership
directly 0.0%

Director of

Officer

ShukuoIshikawa

Jun Higashi

Ownership
directly 0.0%

Officer

Officer(Note)

Kazunori
Ueno

Ownership
directly 0.0%

the Company
Director of
the Company
Director of
the Company

Content
Disposal of treasury
stock accompanying
exercise of stock
options (Note)
Disposal of treasury
stock accompanying
exercise of stock
options (Note)
Disposal of treasury
stock accompanying
exercise of stock
options (Note)
Disposal of treasury
stock accompanying
exercise of stock
options (Note)

AmountAccount
items(Millions of yen)
Balance asof March 31,
2010

25

−

−

22

−

−

21

−

−

28

−

−

The price at which treasury stock is disposed of is determined based on the stock options (stock
subscription rights) exercise price set by the resolution at the first Ordinary General Meeting of
Shareholders of the Company. The figure in the “Amount” column is the book value as stated on
the Company books at the time of such disposal.

7. Notes Concerning Per-Share Data

Net assets per share:
Net income per share:¥1,055.39¥30.21

8. Other Notes
Matters Concerning Business Combinations, etc.
(Transactions, etc. Conducted by Commonly Controlled Entities)
Merger of subsidiaries and succession to a part of the businesses of a subsidiary due to a company
split in the course of the restructuring of the Group’s businesses.
These notes are omitted here because they are stated above in the Notes to Consolidated Financial
Statements, under “VI. Other Notes, 3. Notes Concerning Business Combinations, etc.”

57

Accounting Auditor’s Report Concerning the Consolidated Financial Statements
Independent Auditor’s Report
May 19, 2010

The Board of Directors
NAMCO BANDAI Holdings Inc.
KPMG AZSA & Co.
Hiroshi Shiina (Seal)
Designated and Engagement Partner
Certified Public Accountant
Seiichi Sasa (Seal)
Designated and Engagement Partner
Certified Public Accountant
Yoshichika Kaneko (Seal)
Designated and Engagement Partner
Certified Public Accountant

We have audited the consolidated financial statements, that is, the consolidated balance sheets, theconsolidated statements of income, consolidated statements of changes in net assets and notes to consolidated
financial statements of NAMCO BANDAI Holdings Inc. for this consolidated fiscal year from April 1, 2009 to
March 31, 2010 in accordance with Article 444, Paragraph 4 of the Companies Act. The preparation of theconsolidated financial statements is the responsibility of the Company’s management. Our responsibility is toexpress an opinion on the consolidated financial statements based on our audit as an independent auditor.
We conducted our audit in accordance with auditing standards generally accepted in Japan. Those auditing
standards require us to obtain reasonable assurance about whether the consolidated financial statements arefree of material false statement. An audit is performed on a test basis, and includes assessing the principles
used, the method of their application and estimates made by management, as well as evaluating the overall
presentation of the consolidated financial statements. We believe that our audit provides a reasonable basis forour opinion.
We find that the aforementioned consolidated financial statements are compliant with corporate auditing
standards generally accepted in Japan and that all of the important matters concerning property, losses, andprofits for this consolidated fiscal year of these statements for NAMCO BANDAI Holdings Inc. and the Groupconsisting of consolidated subsidiaries are correctly listed.
Our firm and engagement partners have no interest with the Company which should be disclosed pursuant to
the provisions of the Certified Public Accountants Law of Japan.
END

58

Accounting Auditor’s Report Concerning the Non-Consolidated Financial Statements
Independent Auditor’s Report
May 19, 2010

The Board of Directors
NAMCO BANDAI Holdings Inc.
KPMG AZSA & Co.
Hiroshi Shiina (Seal)
Designated and Engagement Partner
Certified Public Accountant
Seiichi Sasa (Seal)
Designated and Engagement Partner
Certified Public Accountant
Yoshichika Kaneko (Seal)
Designated and Engagement Partner
Certified Public Accountant

We have audited the non-consolidated financial statements, that is, the non-consolidated balance sheets, thenon-consolidated statements of income, non-consolidated statements of changes in net assets and notes tofinancial statements of NAMCO BANDAI Holdings Inc. and their supplementary statements for the 5th fiscal
year from April 1, 2009 to March 31, 2010 in accordance with Article 436, Paragraph 2, Item 1 of theCompanies Act. The preparation of the non-consolidated financial statements and their supplementarystatements is the responsibility of the Company’s management. Our responsibility is to express an opinion on
the non-consolidated financial statements and their supplementary statements based on our audit as
independent auditors.
We conducted our audit in accordance with auditing standards generally accepted in Japan. Those auditing
standards require us to obtain reasonable assurance about whether the non-consolidated financial statements
and their supplementary statements are free of material false statement. An audit is performed on a test basis,
and includes assessing the accounting principles used, the method of their application and estimates made bymanagement, as well as evaluating the overall presentation of the non-consolidated financial statements andtheir supplementary statements. We believe that our audit provides a reasonable basis for our opinion.
We find that the aforementioned non-consolidated financial statements and their supplementary statements arecompliant with corporate auditing standards generally accepted in Japan and that all of the important mattersconcerning property, profits and losses for the non-consolidated financial statements and their supplementarystatements are correctly listed.
Our firm and engagement partners have no interest with the Company which should be disclosed pursuant to
the provisions of the Certified Public Accountants Law of Japan.
END

59

Board of Corporate Auditors’ Report
Audit Report
We, the Board of Corporate Auditors, prepared this audit report, as a unanimous opinion of all
members of the Board of Corporate Auditors, on the execution of duties by Directors during the 5th
fiscal year from April 1, 2009 to March 31, 2010, based on audit reports prepared by each Corporate
Auditor.
1. Method and Content of Audits by Corporate Auditors and the Board of Corporate Auditors
We devised the 5th auditing plan (auditing policies, duties assigned to each Corporate Auditor andauditing methods), received reports on the progress on, and results of, audits from each Corporate
Auditor, as well as reports on the execution of their duties from Directors, etc. and the Accounting
Auditor, and requested explanations as necessary.
Each Corporate Auditor communicated with the Directors, the internal auditing division, and other
employees, etc., in accordance with the internal regulations established by the Board of Corporate
Auditors, such as Board of Corporate Auditors regulations, Corporate Auditors regulations, auditing
standards for internal control system, and the above-mentioned auditing plan, to collect informationand improve the auditing environment. We attended the meetings of the Board of Directors and othersignificant meetings, received reports on the execution of duties from Directors and employees, etc.,
obtained explanations thereof as necessary, viewed documents concerning important decisions, andinvestigated the conditions of operations and assets of the Company. We also monitored and verified
the internal administrative system that was organized based on decisions by the Board of Directors in
relation to the development of a system to ensure that the execution of duties by Directors and otheroperations of the Company were in conformity with applicable laws and regulations and theCompany’s Articles of Incorporation, and a system stipulated in Article 100, Paragraphs 1 and 3 of the
Enforcement Ordinance of the Companies Act. In addition, we received reports on evaluations andaudit status of internal controls on financial reporting from Directors, etc. and from KPMG AZSA &Co., the Accounting Auditor of the Company, concerning internal controls on financial reporting, andrequested explanations thereof as necessary. We further examined the content of basic policies (Article
118, Item 3-(a) of the Enforcement Ordinance of the Companies Act) and actions (Article 118, Item
3-(b) of the Enforcement Ordinance of the Companies Act) described in business reports based on themeetings of the Board of Directors and other discussions. Regarding the Company’s subsidiaries, wecommunicated and shared information with the Directors and the Corporate Auditors, etc of thesubsidiaries, and received reports as necessary from them. Using the aforementioned method, we
examined the business reports and supplementary statements for this fiscal year under review.
Furthermore, we monitored and verified that the Accounting Auditor remained independent andperformed audits appropriately, and we were also notified that a “system for ensuring the proper
execution of duties” (as per Article 131 of the Corporate Accounting Rules) was organized 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 statement ofincome, non-consolidated statement of changes in net assets, and notes thereto), their supplementarystatements and consolidated financial statements (consolidated balance sheet, consolidated statement ofincome, consolidated statement of changes in net assets, and notes thereto) for this fiscal year underreview.

60

2. Results of the Audit(1) Audit Results of business report, etc.
(i) We confirm that the business report 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 the
execution of duties by Directors for those internal control systems. In addition, as of thedate hereof, we have received reports from the Directors, etc. and from KPMG AZSA & Co.
as to the effectiveness of the internal controls on financial reporting.
(iv) We confirm that there is nothing to be cited in respect of the basic policy described in thebusiness report concerning how controlling policy decisions regarding the financial andbusiness activities of the Company should be made.
We confirm that actions (Article 118, Item 3-(b) of the Enforcement Ordinance of theCompanies Act) described in the business report are in accordance with this basic policy andthat these actions do not damage our Group’s value and shareholders’ interest, nor serve tomaintain 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 & Co., 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 & Co., the
Accounting Auditor of the Company, are appropriate.
May 21, 2010
Board of Corporate Auditors
NAMCO BANDAI Holdings Inc.
Standing Corporate Auditor
Standing Corporate Auditor
Outside Corporate Auditor
Outside Corporate Auditor

Koichiro Homma
Katsutoshi Hirasawa
Osamu Sudo
Kouji Yanase(Seal)(Seal)(Seal)(Seal)END

61

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 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’s basic policy is to provide a return to shareholders that targets at apayout ratio of 30% in accordance with consolidated operational results and based on stableannual dividend payments of ¥24 per share.
It is to be regretted that the Company posted a net loss on a consolidated performancebasis for this fiscal year. Nonetheless because the Company places priority on providing
returns to shareholders, the Company will pay a year-end dividend of ¥12 per share for thisfifth fiscal year.
Since the Company paid an interim dividend of ¥12 per share on December 7, 2009, thetotal annual dividend for the fiscal year will be ¥24 per share.
(i) Type of dividend assets:Cash(ii) Allocation of dividend assets to be paid to shareholders and total amount of dividend:¥12 per share of common stock of the Company
Total amount of dividends would be ¥2,898,804,540(iii) Effective date of distribution of surplus (dividend):
June 22, 201062

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

Candidate
No.

Name(Date of Birth)

Career Summary, Positions and Responsibilities in the
Company (Major Concurrent Positions)Apr. 1968:

1

Takeo Takasu(June 24, 1945)

Joined the Sanwa Bank Ltd. (currently the
Bank of Tokyo-Mitsubishi UFJ, Ltd.)
Oct. 1993:
General Manager, Los Angeles Branch, theSanwa Bank Ltd.
Apr. 1996:
Joined Bandai Co., Ltd. as General
Manager, Planning OfficeJun. 1996:
President and Representative Director,
Bandai Holding Corp.
Jun. 1997:
Managing Director, Bandai Co., Ltd.
Mar. 1999:
President and Representative Director,
Bandai Co., Ltd.
Jun. 2005:
Chairman and Representative Director,
Bandai Co., Ltd.
Sep. 2005:
President and Representative Director of
the Company
May 2007:
Chairman of the Japan Toy Association(current position)
Apr. 2009:
Chairman and Representative Director of
the Company
Feb. 2010:
Chairman and Director of the Company(current position)(Major concurrent positions)
Chairman of the Japan Toy Association

Number of
Shares of theCompany
Owned

63

84,250 Shares

Candidate
No.

Name
(Date of Birth)

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

2

3

4
(*)

Joined NAMCO LIMITED (currently
NAMCO BANDAI Games Inc.)
Aug. 1991: General Manager, EM Development
Department of NAMCO LIMITED
Jun. 1995:
Director in charge of Development
Division II, General Manager, EM
Development Department and VS
Development Department of NAMCO
LIMITED
Jun. 1999:
Managing Director in charge of Research,
Development and Production, andDevelopment Division II of NAMCO
LIMITED
Shukuo Ishikawa
Apr. 2005:
Executive Vice President and(April 15, 1955)
Representative Director in charge ofcontents business of NAMCO LIMITED
Apr. 2006:
President and Representative Director of
NAMCO BANDAI Games Inc.
Jun. 2006:
Director of the Company
Apr. 2009:
President and Representative Director of
the Company (current position)
Apr. 2010:
President and Representative Director of
NAMCO BANDAI Games Inc. (current
position)(Major concurrent positions)
President and Representative Director of NAMCO
BANDAI Games Inc.
Mar. 1986:
Licensed as a CPA
Dec. 1996:
Partner in Century Audit Corporation
Jan. 2000:
Partner in Century Ota Showa & Co.
(currently Ernst & Young ShinNihon LLC)
Sep. 2003:
Partner in KPMG AZSA & Co.
May 2004:
Board Member of KPMG AZSA & Co.
Oct. 2007:
Joined the Company as Adviser
Shuji Ohtsu
Jun. 2008:
Director in charge of Overseas Operations,(August 6, 1959)
Group Administrative Headquarters,
Corporate Legal Affairs Office and Internal
Auditing Division of the Company
Apr. 2010:
Director in charge of Overseas Operations,Group Administrative Headquarters, andthe Internal Auditing Division of theCompany (current position)
Apr. 1986:
Joined Bandai Co., Ltd.
Aug. 2005: General Manager, Accounting Division ofBandai Co., Ltd.
Sep. 2005:
Joined the Company, as General Manager
Yuji Asakoof the Corporate Administration(January 18,
Department
1966)
Apr. 2006:
Director, NAMCO BANDAI Games Inc.
(current position)
Apr. 2008:
Executive Officer, Division General
Manager of Corporate Planning Divisionof the Company (current position)

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

64

9,000 Shares

5,800 Shares

5,000 Shares

Candidate
No.

Name
(Date of Birth)

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

5

Kazunori Ueno
(September 16,
1953)

6
(*)

Masahiro
Tachibana(April 16, 1951)

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 (current position)(Major concurrent positions)
President and Representative Director of BANDAI Co.,Ltd.
Apr. 1978:
Joined NAMCO LIMITED (currently
NAMCO BANDAI Games Inc.)
Jul. 1986:
General Manager, Operations Division of
NAMCO LIMITED
Jun. 1988:
Director in charge of Operations
Representative and General Manager,
Operations Division of NAMCO
LIMITED
Jun. 1989:
Managing Director in charge ofOperations, and General Manager,
Operations Division of NAMCO
LIMITED
Jun. 1994:
Representative Director and Managing
Director of NAMCO LIMITED
Apr. 2004:
Representative Director and Senior
Managing Director, CT Company
President, and Head of CT Control
Division of NAMCO LIMITED
Apr. 2005:
Senior Managing Director of NAMCO
LIMITED
Sep. 2005:
Director in charge of domestic market of
the Company
Apr. 2008:
Director in charge of Amusement Facility
SBU of the Company
President and Representative Director of
NAMCO LIMITED*(current position)(Major concurrent positions)
President and Representative Director of NAMCO
LIMITED** Newly established company through the company splitof NAMCO LIMITED (currently NAMCO BANDAI
Games Inc.)

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

65

37,150 Shares

26,600 Shares

Candidate
No.

Name
(Date of Birth)

Career Summary, Positions and Responsibilities in the
Company (Major Concurrent Positions)Apr. 1981:
Mar. 1987:

7

Masatake Yone
(July 8, 1954)

8

Kazuo Ichijo(October 13,
1958)

9

Manabu Tazaki(November 8,
1948)

Admitted to the bar in Japan
Admitted to the bar in the State of New
York
Jan. 1989:
Partner in Mori Sogo Law Firm
(currently Mori Hamada & Matsumoto
Law Firm) (current position)
Sep. 2005:
Director of the Company (current
position)(Major concurrent positions)
Attorney at Law; Partner in Mori Hamada & Matsumoto
Law Firm
Outside Director of GCA Savvian Corporation
Outside Corporate Auditor of THK CO., LTD.
Apr. 1988:
Full-time Instructor in the Faculty ofSocial Sciences, Hitotsubashi University
Oct. 1993:
Associate Professor in the Faculty ofSocial Sciences, Hitotsubashi University
Apr. 2001:
Professor in the Graduate School ofSocial Sciences, Hitotsubashi University
Jun. 2005:
Director of Bandai Co., Ltd.
Sep. 2005:
Director of the Company (current
position)
Apr. 2007:
Professor in the Graduate School ofInternational Corporate Strategy,
Hitotsubashi University (current
position)(Major concurrent positions)
Professor in the Graduate School of International
Corporate Strategy, Hitotsubashi University
Outside Director of Shimano, Inc.
Outside Director of Calbee Foods Co., Ltd.
Outside Corporate Auditor of Information Services
International-Dentsu, Ltd.
Jul. 1972:
Joined McDonald’s Company (Japan),Ltd. (currently McDonald’s Holdings
Japan)
Dec. 1989:
Joined Toys “R” US-Japan, Ltd.
Apr. 1993:
President and Representative Director ofToys “R” US-Japan, Ltd.
Apr. 2004:
Chairman, Representative Director, andChief Executive Officer of Toys “R”
US-Japan, Ltd.
Jun. 2006:
Advisor to StudioAlice Co., Ltd. (current
position)Jul. 2006:
Business Advisor to the Company
Apr. 2008:
Director of NAMCO LIMITED*
Jun. 2009:
Director of the Company (current
position)* Newly established company through the company splitof NAMCO LIMITED (currently NAMCO BANDAI
Games Inc.)

Number of
Shares of theCompany
Owned

66--- Shares--- Shares

1,700 Shares

(Notes)

1. Each of Mr. Masatake Yone, Mr. Kazuo Ichijo, and Mr. Manabu Tazaki are candidates
for Outside Director of the Company. Mr. Masatake Yone, Mr. Kazuo Ichijo, and Mr.
Manabu Tazaki are currently Outside Director of the Company; at the conclusion of this
General Meeting of Shareholders, it will be about 4 years and 9 months since Mr. Yone
and Mr. Ichijo assumed the office of Outside Director and about 1 year since Mr. Tazaki
assumed the office of Outside Director. A Liability Limitation Agreement under Article
427, Paragraph 1 of the Companies Act, has not been concluded between any of thesecandidates and the Company.
(1) Reason for Proposing Them as Candidates for Outside Director of the Company and
Their Competence as Outside Director
Although Mr. Masatake Yone has not been involved in the management of a company
other than through his role as an Outside Director or Outside Corporate Auditor in thepast, the reason for proposing Mr. Yone as a candidate for Outside Director of theCompany arises from the expectation that, due to his experience as an attorney overmany years, he will be able to supervise and review the Company’s management,
mainly from a legal risk perspective, and the Company believes that he will be able tofulfill the duties of an Outside Director appropriately.
Although Mr. Kazuo Ichijo has not been involved in the management of a company
other than through his role as an Outside Director or Outside Corporate Auditor in thepast, the reason for proposing Mr. Ichijo as a candidate for Outside Director of theCompany arises from the expectation that, due to his teaching experience as a researcherof organizational theory, etc. over many years, he will be able to use his deep knowledge
to supervise and review the Company’s management, and the Company believes that hewill be able to fulfill the duties of an Outside Director appropriately.
The reason for proposing Mr. Manabu Tazaki as a candidate for Outside Director of
the Company arises from the expectation that, due to his extensive experience as amanager of corporations, his excellent character and knowledge, and his thorough viewof trends in the industries in which the Group is developing its businesses, including thetoys and hobby industry, he will be able to serve to strengthen management oversightand check functions further as well as to incorporate a broader managerial perspective
into the Company, and the Company believes that he will be able to fulfill the duties ofan Outside Director appropriately.
(2) Independence as Outside Director
The Company believes that Mr. Masatake Yone, Mr. Kazuo Ichijo, and Mr. Manabu
Tazaki, who are candidates for Outside Director of the Company, have no risk of
conflicts of interest with general shareholders and have a high degree of independence;
The Company has appointed Mr. Kazuo Ichijo as an Independent Director/Auditor as
defined in the rules of the Tokyo Stock Exchange and has filed the notification regarding
his appointment thereto.
As the property to be described pursuant to Article 74, Paragraph 4, Item 6 (b) of theOrdinance for Enforcement of the Companies Act, with respect to Mr. Masatake Yone,
NAMCO BANDAI Games Inc. pays remuneration to Mori Hamada & Matsumoto Law
Firm, in which Mr. Masatake Yone is a partner, for legal work. With respect to Mr.
Manabu Tazaki, the Company has paid him remuneration for his service as a businessadvisor in the past two years.
2. Apart from the remuneration stated in 1. (2) above, there are no special interests
between the candidates for the Director and the Company.

67

Proposal No. 3 Election of Four (4) Corporate Auditors
Since the terms of office of the four (4) Corporate Auditors of the Company will expire asof the conclusion of this General Meeting of Shareholders, the Company requests the election offour (4) Corporate Auditors.
This Proposal has already been approved by the Board of Corporate Auditors.
The candidates for Corporate Auditor of the Company are as follows:

Candidate
No.

Name(Date of Birth)

Career Summary and Positions in the Company (Major
Concurrent Positions)Apr. 1974:
Oct. 1995:
Feb. 1998:

1

Koichiro Homma
Jun. 1999:(January 31,
1952)
Jun. 2004:
Sep. 2005:
Apr. 1982:

2(*)

KatsuhikoKohtari(January 19,
1960)

Mar. 1986:
Aug. 1988:
Jun. 2005:

Joined the Sumitomo Bank Ltd. (currently
Sumitomo Mitsui Banking Corporation)
General Manager, Mita Branch, theSumitomo Bank Ltd.
Joined NAMCO LIMITED (currently
NAMCO BANDAI Games Inc.) as
General Manager, Office of the President
Director, and General Manger, Office of
the President, and General Manager,
Corporate Communications Department of
NAMCO LIMITED
Full Time Corporate Auditor of NAMCO
LIMITED
Full Time Corporate Auditor of theCompany (current position)
Joined Peat Marwick Mitchell & Co., an
accounting firm
Licensed as a CPA
Joined the Chuo Shinko Audit Corporation
Full Time Corporate Auditor of Bandai
Co., Ltd. (current position)* New candidate for Corporate Auditor of the Company

68

Number of
Shares of theCompany
Owned

20,664 Shares

1,200 Shares

Candidate
No.

Name
(Date of Birth)

Career Summary and Positions in the Company (Major
Concurrent Positions)

Number of
Shares of theCompany
Owned

Apr. 1980:
Apr. 1983:
Jun. 1999:

3

4(Notes)Admitted to the bar in Japan
Partner in Tokyo Yaesu Law OfficePartner in Sudoh & Takai Law Offices(current position)
Jun. 2003:
Corporate Auditor of NAMCO LIMITED(currently NAMCO BANDAI Games Inc.)
Sep. 2005:
Corporate Auditor of the Company
Osamu Sudoh(current position)(January 24,
Mar. 2006:
Corporate Auditor of NAMCO LIMITED* 3,900 Shares
1952)(current position)* Newly established company through the company splitof NAMCO LIMITED (currently NAMCO BANDAI
Games Inc.)(Major concurrent positions)
Attorney at Law; Partner in Sudoh & Takai Law Offices
Outside Director of eBANK Corporation (currently
Rakuten Bank, Ltd.)
Outside Corporate Auditor of USEN Corporation
Apr. 1969:
Admitted to the bar in Japan
Jul. 1984:
Established Yanase Law OfficeJun. 1997:
Corporate Auditor of Bandai Co., Ltd.
Sep. 2002:
Partner in Marunouchi-Chuo Law Office(current position)
Kouji Yanase
Apr. 2005:
Vice Chairman of Japan Federation of Bar
19,553 Shares(October 17,
Associations
1942)
Chairman of Tokyo Bar Association
Sep. 2005:
Corporate Auditor of the Company(current position)(Major concurrent positions)
Attorney at Law; Partner in Marunouchi-Chuo Law Office
1. Each of Mr. Katsuhiko Kohtari, Mr. Osamu Sudoh and Mr. Kouji Yanase are
candidates for Outside Corporate Auditor of the Company. Both Mr. Osamu Sudohand Mr. Kouji Yanase are currently Outside Corporate Auditor of the Company; atthe conclusion of this General Meeting of Shareholders, it will be about 4 years and9 months since Mr. Osamu Sudoh and Mr. Kouji Yanase assumed the office ofOutside Auditor. A Liability Limitation Agreement under Article 427, Paragraph 1 of
the Companies Act, has not been concluded between either of these two candidates
and the Company.
(1) Reason for Proposing Them as Candidates for Outside Corporate Auditor of theCompany and Their Competence as Outside Corporate Auditor
Although Mr. Katsuhiko Kohtari has not been involved in the management of acompany other than through his role as an Outside Corporate Auditor in the past, the69reason for proposing Mr. Kohtari as a candidate for Outside Corporate Auditor of
the Company arises from the expectation that, due to his experience as a CPA overmany years, he will be able to utilize his knowledge and experience in corporate
accounting in the Company’s auditing system, and the Company believes that hewill be able to fulfill the duties of an Outside Corporate Auditor appropriately.
Although Mr. Osamu Sudoh has not been involved in the management of acompany other than through his role as an Outside Director or Outside Corporate
Auditor in the past, the reason for proposing Mr. Sudoh as a candidate for Outside
Corporate Auditor of the Company arises from the expectation that, due to his
experience as an attorney over many years, he will be able to utilize his high level ofknowledge and experience from a legal perspective in the Company’s auditing
system, and the Company believes that he will be able to fulfill the duties of an
Outside Corporate Auditor appropriately.
Although Mr. Kouji Yanase has not been involved in the management of acompany other than through his role as an Outside Corporate Auditor in the past, thereason for proposing Mr. Yanase as a candidate for Outside Corporate Auditor of theCompany arises from the expectation that, due to his experience as an attorney overmany years, he will be able to utilize his high level of knowledge and experiencefrom a legal perspective in the Company’s auditing system, and the Company
believes that he will be able to fulfill the duties of an Outside Corporate Auditor
appropriately.
(2) Independence as Outside Corporate Auditor
The Company believes that Mr. Katsuhiko Kohtari, Mr. Osamu Sudoh, and Mr.
Kouji Yanase, who are candidates for Outside Corporate Auditor of the Company,
have no risk of conflicts of interest with general shareholders and have a high degreeof independence.
As the property to be described pursuant to Article 76, Paragraph 4, Item 6 (b) of
the Ordinance for Enforcement of the Companies Act, with respect to Mr. Kouji
Yanase, Bandai Co., Ltd. pays remuneration to Marunouchi-Chuo Law Office, inwhich Mr. Kouji Yanase is a partner, for legal work.
2. Apart from the remuneration stated in 1. (2) above, there are no special interests
between the candidates for the Outside Corporate Auditor and the Company.
END

70