Consolidated Financial Report for the Fiscal Year Ended
March 31, 2009

May 8, 2009DISCLAIMER- NAMCO BANDAI Holdings Inc. provides this translation for your reference and convenience only and without any
warranty as to its accuracy or otherwise. In the event of any discrepancy, the original “Kessan Tanshin” in Japanese
shall prevail.
- This document contains forward-looking statements that are based on management’s estimates, assumptions andprojections at the time of publication. A number of factors could cause actual results to differ materially fromexpectations.
- This document does not include the non-consolidated financial statements of NAMCO BANDAI Holdings Inc.

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Stock Listing: Tokyo Stock Exchange
Code Number: 7832
(URL: http://www.bandainamco.co.jp/)
May 8, 2009

Consolidated Financial Report for the Fiscal Year Ended March 31, 2009
Representative:
Contact:
Date of Ordinary General Meeting of Shareholders:
Scheduled starting date for dividend payments:
Scheduled filing date of the annual security report:

Shukuo Ishikawa, President and Representative Director
Yuji Asako, Executive Officer, Corporate Planning Division
June 22, 2009
June 23, 2009
June 23, 2009

1. Consolidated Results for the Fiscal Year Ended March 31, 2009
(April 1, 2008 to March 31, 2009)(Millions of yen with fractional amounts discarded, unless otherwise noted)(1) Consolidated Operating Results(Percentages indicate year-on-year changes.)
Operating income
Recurring income

Net sales

Fiscal Year Ended
March 31, 2009
Fiscal Year Ended
March 31, 2008

¥ million
426,399%(7.4)¥ million
22,348%(33.1)¥ million
24,513%(32.3)

460,473

0.3

33,411(20.9)

36,198(20.6)Net income

Fiscal Year Ended
March 31, 2009
Fiscal Year Ended
March 31, 2008

Net income per share

Net income per share(diluted)¥ million
11,830%(63.8)

¥
47.95

¥
47.88

32,67934.7

128.65128.47

ROE(Net income / Net assets)

ROA(Recurring income /Total assets)

Operating Margin(Operating income /Net sales)%%
Fiscal Year Ended
4.3
6.3
March 31, 2009
Fiscal Year Ended
11.7
8.8
March 31, 2008
(Reference)
Gain or loss from the equity method: 360 million yen (FY2009.3), (441) million yen (FY2008.3)

%
5.2
7.3

(2) Consolidated Financial Position
Total assets

Net assets

Equity ratio¥ million¥ million%
As of March 31, 2009
363,444
260,579
70.9
As of March 31, 2008
413,023
289,944
69.4(Reference)
Equity: 257,645 million yen (as of March 31, 2009), 286,795 million yen (as of March 31, 2008)-2-

Net assets
per share¥
1,067.71
1,127.72

(3) Consolidated Statements of Cash Flows
Cash ｆlows fromoperating activities

Cash flows frominvesting activities

Cash flows fromfinancing activities¥ million
19,301¥ million(10,327)¥ million(16,529)

Cash and cash
equivalents at endof period¥ million
110,037

35,000(14,980)(15,066)

129,289

Fiscal Year Ended
March 31, 2009
Fiscal Year Ended
March 31, 2008
2. Dividend

Dividend record dates

End offirstquarter¥–

Dividend per share
End of
End ofFiscalsecondthird
year-endquarterquarter
¥
¥
¥
12.00
–
12.00

Total

Total
Payout ratio
Dividend /dividend (Consolidated)
Net assets
payment(Consolidated)(Full year)¥ million
%
%
6,092
18.7
2.2

¥
Fiscal Year Ended
24.00
March 31, 2008
Fiscal Year Ended
–
12.00
–
12.00
24.00
5,853
50.1
2.2
March 31, 2009
(Projection)
–
12.00
–
12.00
24.00
–
46.3
–
Fiscal Year Ending
March 31, 2010
Note: The stable portion of the dividend is given in the projection for the end of second quarter and the fiscal year-end based on the
Company’s basic policy regarding appropriation of profits. Thus, the actual fiscal year-end dividend will be decided according to
the consolidated financial results.
3. Consolidated Projections for the Fiscal Year Ending March 31, 2010
(April 1, 2009 to March 31, 2010)
Net sales

Six Months Ending
September 30, 2009
Full Year¥ million
195,000%
2.2

430,000

0.8

Operatingincome¥ million%
2,500(55.2)
22,5000.7(Percentages indicate year-on-year changes.)
Recurring
Net income
Net income
incomeper share¥ million% ¥ million
%
¥
3,000
(58.8)
1,000(22.0)
4.14
23,500(4.1)

12,5005.7

51.80

4. Other Information(1) Changes in Significant Subsidiaries during the Period (Changes in Specified Subsidiaries Resulting in the Change in Scope ofConsolidation): Yes
Included: 1 company (D3 INC.)

Excluded: 1 company (Banpresto Co., Ltd.)

Note: For more details, please refer to the section of “2. The BANDAI NAMCO Group” on pages 14-21.
(2) Changes in Accounting Policies, Procedures, and Methods of Presentation for Preparing the Consolidated Financial Statements
a. Changes due to revisions to accounting standards and other regulations: Yes
b. Changes due to other reasons: No
Note: For more details, please refer to the section of “Changes in the Important Information Constituting the Basis for Preparation ofConsolidated Financial Statements” on page 47.
(3) Number of Issued Shares (Common Stock)a. Total number of issued shares at the end of the period (including treasury stock)
As of March 31, 2009

250,000,000 shares

As of March 31, 2008

256,080,191 sharesb. Number of shares of treasury stock at the end of the period
As of March 31, 2009

8,694,796 shares

As of March 31, 2008

1,766,271 shares

Note: Please refer to the section of “Per Share Data” on page 86 for the number of shares used to calculate “Net income per share”.

-3-(Reference) Non-consolidated Financial Statements
1. Non-consolidated Results for the Fiscal Year Ended March 31, 2009
(April 1, 2008 to March 31, 2009)(1) Non-consolidated Operating Results(Percentages indicate year-on-year changes.)
Operating income
Recurring income

Net sales

Fiscal Year Ended
March 31, 2009
Fiscal Year Ended
March 31, 2008

¥ million
23,754%98.7¥ million
20,869%146.5¥ million
20,773%144.7

11,958

91.6

8,465

124.9

8,489

119.0

Net income

Fiscal Year Ended
March 31, 2009
Fiscal Year Ended
March 31, 2008

Net income per share

Net income per share(diluted)¥ million
19,936

%
161.5

¥
80.72

¥
80.62

7,624

49.9

30.00

29.96

(2) Non-consolidated Financial Position
Total assets

Net assets

Equity ratio¥ million¥ million%
As of March 31, 2009
306,579
252,893
82.0
As of March 31, 2008
299,245
255,764
85.0(Reference)
Equity: 251,425 million yen (as of March 31, 2009), 254,233 million yen (as of March 31, 2008)

Net assets
per share¥
1,041.48
998.13*Proper use of earnings projections, and other special matters
1. The above projections are based on information available to the Company as of the date of the announcement of these materials and on
assumptions pertaining to uncertain factors, which may affect future operating results, as of the date of the announcement of thesematerials. Actual business results may differ from the projections due to a number of factors in the future. Please refer to the section of“(1) Analysis on Results of Operations” of “1. Results of Operations” on pages 5-10 for matters pertaining to the earnings projections.

-4-1. Results of Operations(1) Analysis on Results of Operations
a. Summary for the Period (April 1, 2008 to March 31, 2009)
The economic environment in this fiscal year saw the disarray in the U.S. financial markets arising from the subprime
loan issues which evolved into a global financial crisis, with reduced individual consumption worldwide and employment
instability due to the rapid declining of the business performance developing into a social problem. In addition, reduced
consumption had substantial impact on the entertainment industry, causing continued uncertainty in the industry as awhole.
In such environment, the BANDAI NAMCO Group (“the Group”) continued to push ahead with strengthening,enriching, and expanding its portfolio management in the third and final year of the three-year Mid-term Business Plan
implemented in April 2006.
On the business front, in this difficult market environment, boys’ toys based on popular characters in both Japan andabroad performed well in the Toys and Hobby Business. In the Game Contents Business, popular home video gamesoftware titles made a positive contribution to performance overseas. The decline in individual consumption, however, kept
performance sluggish as a whole and below the levels of the previous fiscal year. On the expenses front, the Group
recorded, among other things, amortization of goodwill resulting from Bandai Visual Co., Ltd. and Bandai Networks Co.,
Ltd. having been made wholly owned subsidiaries during the previous fiscal year, loss on valuation of investment securities,
and impairment loss on amusement facilities.
Consequently, the Group’s consolidated results at fiscal year-end were net sales of 426,399 million yen (year-on-year
decrease of 7.4%), operating income of 22,348 million yen (year-on-year decrease of 33.1%), recurring income of 24,513
million yen (year-on-year decrease of 32.3%), and net income of 11,830 million yen (year-on-year decrease of 63.8%).

An overview of each business is presented as follows.

Operating Results by Business Segment(¥ million)

Year Ended
March 31,2009

Net SalesYear Ended
March 31,2008

Toys and Hobby

165,725

180,164

Amusement Facility

77,26989,829Game Contents

139,405

145,672

Network

10,89012,044Visual and Music Content

34,63836,949Other Businesses

19,00919,809Eliminations andCorporate(20,538)(23,997)

Consolidated

426,399

460,473-5-

ChangeDecrease of
14,439Decrease of
12,559Decrease of
6,267
Decrease of
1,153
Decrease of
2,311
Decrease of800
Increase of
3,459
Decrease of
34,073Operating Income
Year Ended
March 31,
Change2008
Decrease of
11,533
14,3092,776
Decrease of
393
1,631
1,238
Decrease of
10,94014,793
3,853
Decrease of
669
904
235
Decrease of
38
3,832
3,793
Decrease of
565
753
188
Increase of(1,791)(2,813)
1,021
Decrease of
22,34833,411
11,063

Year Ended
March 31,2009

Toys and Hobby BusinessIn the Toys and Hobby Business, boys’ toys based on the character, Engine Sentai Go-onger, posted strong
performances in Japan. In addition, the card game Battle Spirits, newly launched in this fiscal year with tie-ups to a
made-for-television animation, also became popular. Amidst the stagnation of individual consumption, however, candy
toys, children’s clothing and other peripheral toy categories were struggling.
Overseas, the BEN10 character boys’ toys made a positive contribution to performance in Europe and North
America. Given the economic downturn, however, the results did not equal the strong performance of the previous
fiscal year, when the Tamagotchi sold well.
As a result, net sales in the Toys and Hobby Business were 165,725 million yen (year-on-year decrease of 8.0%),
and operating income was 11,533 million yen (year-on-year decrease of 19.4%).

Amusement Facility BusinessIn the difficult market environment, the Amusement Facility Business was sluggish, with domestic existing-facility
sales at 86.7% of the figure for the previous fiscal year. In view of such environment, continued efforts were made to
cut costs in order to improve profitability and about 20% of existing amusement facilities in Japan, a total of 63, wereclosed to increase efficiency.
Overseas, efforts in the United States were continuously focused on improving operational efficiency. In Europe,
this business performed well, particularly in complex facilities in Great Britain. In Asia, Wonder Park Plus, alarge-scale amusement facility in Hong Kong making use of Group synergies, became popular.
As a result, net sales in the Amusement Facility Business were 77,269 million yen (year-on-year decrease of 14.0%),
and operating income was 393 million yen (year-on-year decrease of 75.9%).

Facilities as of March 31, 2009
Directly Managed Facilities

Revenue-Sharing Facilities

Theme Parks

Spa Facilities

Total

322

1,129

4

3

1,458

Game Contents BusinessIn the Game Contents Business, the worldwide launch of Soul Caliber IV, home video game software, for the
PLAYSTATION 3 and the Xbox360, contributed strongly to business results. In Europe and North America, Active Life
Outdoor Challenge (Family Trainer Athletic World, in Japan) and WE SKI (Family Ski, in Japan) for the Wii performed
well. In Japan, the multi-platform developed Gundam Musou 2 for the PLAYSTATION 3, the Xbox360 and the
PlayStation 2 and Taiko Drum Master series for the Wii and the DS became popular. Minor titles, however, faceddifficulties as a whole. Moreover, in preparation for the implementation of the Mid-term Business Plan from April 2009,the valuation of work-in-process related to games under development was revisited and treated part of the costs as an
expense.
With respect to arcade game machines, the large medal machine Sea Story Lucky Marine Theater gained popularity,
but sales did not reach the performance levels of the previous fiscal year, which were strong particularly in repeat sales.
Game contents for mobile phones and other mobile devices, however, performed robustly, thanks to the development ofa wide variety of content to suit increasingly diverse user preferences.

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As a result, net sales in the Game Contents Business were 139,405 million yen (year-on-year decrease of 4.3%), andoperating income was 10,940 million yen (year-on-year decrease of 26.0%).

Network BusinessIn the Network Business, game contents tailored to suit a variety of user preferences in the mobile content sector,
from high value-added content, such as Dragon Ball Mobile and ONE PIECE Mobile Jack, to casual games, such as the
Simple 100 series and Zoo Keeper, performed well. Further, customizable contents for mobile phones, particularly
customizable Mobile Suit Gundam and Hello Kitty for standby displays, were popular, but the number of ringtone
service subscribers continued to decline.
As a result, net sales in the Network Business were 10,890 million yen (year-on-year decrease of 9.6%). With
amortization of goodwill, operating income was 669 million yen (year-on-year decrease of 26.0%).

Visual and Music Content BusinessIn the Visual and Music Content Business, the animated television series Mobile Suit Gundam 00 (Double O),
Macross F (Frontier), and CODE GEASS: Lelouch of the Rebellion R2, released on Blu-ray Disc and DVD in Japan,
were popular visual software packages. In this transition period for hardware, where there is a shift from DVD to
Blu-ray Disc; however, overall performance was sluggish. Sales of music software packages, particularly those related
to animation, performed strongly. Overseas, we accepted returning of merchandise in conjunction with a review of thebusiness model for package sales in the United States.
As a result, net sales in the Visual and Music Content Business were 34,638 million yen (year-on-year decrease of
6.3%). With amortization of goodwill, operating income was 38 million yen (year-on-year decrease of 99.0%).

Other Businesses
Other Businesses consist of companies that conduct operations such as logistics support and building management
to the Group’s each strategic business unit. During this fiscal year, efforts were made to improve the efficiency of these
operations related to group support.
As a result, net sales in Other Business were 19,009 million yen (year-on-year decrease of 4.0%), and operating
income was 565 million yen (year-on-year decrease of 25.0%).

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Operating Results By Geographic Segment(¥ million)

Net SalesYear Ended
March 31,2009

Year Ended
March 31,
2008

Japan

333,534

360,697

Americas50,933

EuropeOperating Income
Year Ended
March 31,2009

Year Ended
March 31,2008

Decrease of
27,162

15,86324,480Decrease of
8,616

54,566

Decrease of
3,632

872

2,318

Decrease of
1,445

45,02046,397

Decrease of
1,376

6,248

6,830

Decrease of
581

Asia

37,37737,932

Decrease of
554

2,289

2,854

Decrease of565

Eliminations andCorporate(40,466)(39,119)

Decrease of
1,346(2,926)(3,072)

Increase of146

Consolidated

426,399

460,473

Decrease of
34,073

22,34833,411

Decrease of
11,063

ChangeChangeJapan
In the Toys and Hobby Business, although the Engine Sentai Go-onger character boys’ toys and the card game
Battle Spirits, newly launched in this fiscal year, posted strong performance, the peripheral toy categories struggled due
to weak individual consumption. In the Game Contents Business, the home video game software titles Gundam Musou2, developed for the multiple platforms of PLAYSTATION 3, Xbox360 and PlayStation 2, and Taiko Drum Master
series for the Wii and the DS became popular. Minor titles, however, faced difficulties as a whole. With respect toarcade game machines, sales did not reach the performance levels of the previous fiscal year, which were strong
particularly in repeat sales. In the Visual and Music Content Business, sales remained sluggish amid a transition period
for hardware. The Amusement Facility Business also struggled under difficult market environment, particularly existing
facilities.
As a result, net sales in Japan were 333,534 million yen (year-on-year decrease of 7.5%). Operating income, which
includes the recording of amortization of goodwill in association with Bandai Visual Co., Ltd. and Bandai Networks
Co., Ltd. becoming wholly owned subsidiaries, was 15,863 million yen (year-on-year decrease of 35.2%).

Americas
In the Toys and Hobby Business, the BEN10 character boys’ toys performed strongly. Given the economic
downturn, however, performance did not reach the levels of the previous fiscal year which enjoyed strong performancefrom POWER RANGERS and Tamagotchi. In the Game Contents Business, Soul Calibur IV for the PLAYSTATION 3
and the Xbox360 contributed strongly to business results, while Active Life Outdoor Challenge (Family Trainer Athletic
World, in Japan) and WE SKI (Family Ski, in Japan) for the Wii performed well. Moreover, in preparation for the
implementation of the Mid-term Business Plan from April 2009, the valuation of work-in-process related to games
under development was revisited and treated part of the costs as an expense. In the Visual and Music Content Business,
we accepted returning of merchandise in conjunction with a review of the business model for package sales, while in
the Amusement Facility Business, efforts continued to be focused on improving operational efficiency.
As a result, net sales in Americas were 50,933 million yen (year-on-year decrease of 6.7%) and operating income
was 872 million yen (a year-on-year decrease of 62.4%).
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EuropeIn the Toys and Hobby Business, although the BEN10 character boys’ toys performed strongly, performance did notreach the levels of the previous fiscal year which enjoyed strong performance from POWER RANGERS and Tamagotchi.
In the Game Contents Business, Soul Calibur IV, developed for the PLAYSTATION 3 and the Xbox360, and Dragon
Ball Z: Burst Limit, also for the PLAYSTATION 3 and the Xbox360, and others delivered strong performance. The
Amusement Facility Business showed steady performance, particularly in complex facilities in Great Britain.
As a result, net sales in Europe were 45,020 million yen (year-on-year decrease of 3.0%) and operating income was
6,248 million yen (year-on-year decrease of 8.5%).

Asia
Although the Toys and Hobby Business delivered a steady performance centering on the Mobile Suit Gundam
plastic models and the POWER RANGERS character boys’ toys, performance did not reach the levels of the previous
fiscal year due to a decline in production transactions for Europe and North America. In the Amusement Facility
Business, Wonder Park Plus, a large-scale amusement facility in Hong Kong also serving as the base for the Group’s
information dissemination in the Asia region, became popular.
As a result, net sales in Asia were 37,377 million yen (year-on-year decrease of 1.5%) and operating income was2,289 million yen (year-on-year decrease of 19.8%).

b. Outlook for the Fiscal Year Ending March 31, 2010
As for the future of the economy, there are fears that the trend of economic recession that has occurred from thedisarray of the global financial market will become prolonged and serious. Also, the uncertain environment of weak
individual consumption and employment instability is expected to continue. This, moreover, is having a global impact on
the entertainment industry, in which the Group is extensively involved. Based on current circumstances, the Group expects
the harsh business environment will continue.
Amidst these conditions, the Group will press ahead with its sights set on the medium- to long-term Group vision of
becoming a “Globally Recognized Entertainment Group.” By promoting up-front investment in growing business areas andimproving profitability of businesses, the Group shall further develop its global management foundation, based on thethree-year Mid-term Business Plan that started in April 2009.
Specifically, in the Toys and Hobby Business, in Japan, while strengthening development of long-established character
series aimed at existing users such as Samurai Sentai Shinkenger, Masked Rider Decade, aimed at boys, and FRESH Pretty
Cure, aimed at girls, and Mobile Suit Gundam, which is celebrating its 30th anniversary, the Group will also focus on newcontent development including the card game Battle Spirits. Overseas, the Group will work on strengthening productdevelopment centering on not only POWER RANGERS and BEN10 for boys, but also new characters such as Kamen Rider
Dragon Knight (Kamen Rider Ryuki, in Japan).
In the Game Contents Business, the Group will place particular focus on the home video game software business in
Europe and North America. In addition to the popular series titles originated in Japan such as Tekken 6, developed for
PLAYSTATION 3 and Xbox360, the focus on Europe and North America will also include casual games such as the“Family” series, for the Wii.
In the Visual and Music Content Business, amidst the transition period for hardware, where there is a shift from DVD-9-to Blu-ray Disc, the Group will aim to boost profitability by ensuring a balance of content for all target groups.
For the Amusement Facility Business, the Group will improve profitability by continuing to implement scrap-and-build
measures and differentiating its stores from competitors’ by utilizing the Group’s assets.
In light of the above considerations, the consolidated projections of the fiscal year ending March 31, 2010 are as
follows: net sales of 430,000 million yen (year-on-year increase of 0.8%), operating income of 22,500 million yen(year-on-year increase of 0.7%), recurring income of 23,500 million yen (year-on-year decrease of 4.1%), and net incomeof 12,500 million yen (year-on-year increase of 5.7%).

(2) Analysis of Financial Positiona. Assets, Liabilities, and Net Assets
At the end of the fiscal year ended March 31, 2009, total assets stood at 363,444 million yen, a decrease of 49,578
million yen from the end of the previous fiscal year. The main factors of this decline were decreases of 19,356 million yen
in cash and time deposits, 11,454 million yen in property, plant and equipment including amusement facilities andmachines, and land, and 10,622 million yen in trade receivables.
Total liabilities amounted to 102,865 million yen, a decrease of 20,213 million yen from the end of the previous fiscal
year. The main factors were as follows. While there were increases of 3,519 million yen in short-term borrowings and
1,328 million yen in long-term debt, there were decreases of 5,842 million yen in trade payables, 6,451 million yen inaccounts payable–other, and 3,623 million yen in deferred tax liabilities (long-term liabilities).
Total net assets stood at 260,579 million yen, a decrease of 29,364 million yen from the end of the previous fiscal year.
The main factors of this decline were as follows. While there was an increase of 11,830 million yen in net income, as aresult of purchases and retirement of treasury stock, there was an increase in treasury stock of 6,784 million yen and adecrease in additional paid-in capital of 8,058 million yen, and a decrease of 18,784 million yen in translation adjustments
as a result of currency fluctuation.
As a result, the equity ratio became 70.9% compared with 69.4% at the end of the previous fiscal year.

b. Cash Flows
As of the end of the fiscal year, cash and cash equivalents (hereafter “funds”) remaining on hand had decreased by
19,252 million yen from the end of the previous fiscal year to 110,037 million yen. Below is the breakdown of cash flows
by activities.

(Cash Flows from Operating Activities)
The amount of funds provided by operating activities totaled 19,301 million yen (down 44.9% compared with theprevious fiscal year). As a main breakdown of funds used, income taxes paid was 12,726 million yen (16,286 million yen
in the previous fiscal year) and investment for amusement facilities and machines was 6,646 million yen (compared with
9,286 million yen in the previous fiscal year). However, overall, there was a net increase in funds due to income before
income taxes and minority interests of 21,125 million yen (45,964 million yen in the previous fiscal year), and depreciation
and amortization of 22,545 million yen (24,758 million yen in the previous fiscal year).

(Cash Flows from Investing Activities)
The amount of funds used by investing activities totaled 10,327 million yen (down 31.1% compared with the previous- 10 -

fiscal year). Although there were 4,512 million yen in proceeds from withdrawal from time deposits (1,988 million yen in
the previous fiscal year) and 4,052 million yen in proceeds from sales of property, plant and equipment (22,424 million yen
in the previous fiscal year), this was offset by 10,811 million yen in purchases of property, plant and equipment andintangible assets (14,670 million yen in the previous fiscal year), 5,645 million yen in advances of loans receivable (1,617
million yen in the previous fiscal year), and 3,344 million yen in purchases of investment securities including Distribution
Partners S.A.S. (4,993 million yen in the previous fiscal year).

(Cash Flows from Financing Activities)
The amount of funds used in financing activities amounted to 16,529 million yen (up 9.7% compared with the previous
fiscal year). Although there was 10,000 million yen in proceeds from long-term debt (16,000 million yen in the previous
fiscal year), this was offset by 17,500 million yen in payments into fund trust for purchase of treasury stock (not applicablein the previous fiscal year) and dividends paid of 6,009 million yen (7,162 million yen in the previous fiscal year).

(Reference) Cash Flow Indices
FY2006.3

FY2007.3

FY2008.3

FY2009.3

Equity ratio (%)

63.0

67.1

69.4

70.9

Equity ratio (market capitalization basis) (%)

105.5

116.1

83.1

65.3

Cash flows to interest bearing debt ratio (%)

102.0

53.8

41.9

95.5

Interest coverage ratio (times)

90.4

180.1

199.6

113.0

Equity ratio: Total stockholders’ equity/Total assets
Equity ratio (market capitalization basis): Market capitalization/Total assets
Cash flows to interest bearing debt ratio: Interest-bearing debt/Cash flow
Interest coverage ratio: Cash flow/Interest expenses
Note 1: All calculations are performed using consolidated financial figures.
Note 2: Market capitalization is calculated on the basis of the number of issued shares excluding treasury stock.
Note 3: Operating cash flow is used for cash flow.
Note 4: Interest-bearing debt covers all debt reported in the consolidated balance sheets for which interest is paid.
(3) Fundamental Policy on Profit Sharing
The Company positions the return of profits to stockholders as one of its highest management priorities. The
fundamental policy is to maintain a stable dividend and increase corporate value while becoming an even more competitive
Group, and preserving a sound financial position. In concrete terms, the Company plans to maintain the consolidated
dividend payout ratio at a level of 30%, based on stable annual dividend payments of 24 yen per share. In addition, after
appropriation of dividend from the consolidated periodical net income, the Company has resolved to attribute a portion of
the remaining balance to the acquisition of its own shares, with comprehensive consideration of aspects such as the level ofcash held, its operating performance, its share price trend, and its plan for large-scale investments.
As part of our three-year Mid-term Business Plan that started in April 2009, we shall place priority on allocating theremaining portion of net income after appropriation of dividend to up-front investment aimed at business expansion
overseas.
* Please refer to page 3 for the dividend forecasts of FY2009.3 and FY2010.3.

- 11 -

(4) Business Risks
Risk factors related to the Group’s businesses that may significantly affect decisions made by the investmentcommunity, include, but are not limited to, those listed below. These statements on risk are based on information available
to the Group as of May 8, 2009, the filing date for the NAMCO BANDAI Holdings Inc.’s financial report (Kessan
Tanshin) for the fiscal year ended March 31, 2009.

Risks associated with the core business model
The Group’s businesses are centered on products and services based on content, including various characters. The
Group’s operating results may be affected by changes in the popularity of specific content or related trends. Therefore, theGroup is working to achieve stable earnings by strengthening, enriching, and expanding its portfolio management throughthree-dimensional and multi-lateral business administration. This portfolio compromises a business portfolio, in which theGroup conducts operations in a diverse array of business domains; a content portfolio, consisting of many different
characters and content; and a regional portfolio, where businesses are conducted in various regions around the world. In
particular, as part of our Mid-term Business Plan that started from April 2009, we shall work on further developing our
regional portfolio through business expansion in the European and North American markets.

Risks associated with overseas business expansion
The Group is aggressively expanding its business overseas. This initiative exposes the Group to a variety of risks,
including business risks associated with regional characteristics, such as local media and distribution systems; risks
associated with intellectual property rights, such as those related to counterfeit products; and risks associated withfluctuations in exchange rates. Operationally, the Group conducts sufficient research to minimize these risks, develops theorganizational structures and formulates countermeasures before proceeding with overseas business expansion. With
respect to intellectual property rights, the Group cooperates with local government agencies and other authorities to
identify counterfeit products, promote enhanced recognition of genuine products, etc. In addition, for foreign exchangerisks, the Group uses forward contracts to lower the risks from short-term fluctuations in the exchange rates for major
currencies.

Retaining and developing key personnel
In the fast-changing entertainment industry, it is essential for the Group to retain and develop personnel who can
respond effectively to rapid changes. In addition to developing compensation system that will facilitate the retention ofthese employees, the Group actively delegates authority. To develop the next generation of employees, the Group isdevoting resources to training seminars and other development programs. Furthermore, we will actively adopt personnel
exchanges with the aim of reinforcing cooperation between each Strategic Business Unit.

Risk associated with Game Contents BusinessIn the Game Contents Business, titles are a significant cause of fluctuations in profits, and there is a risk that changes inthe timing of product launches will affect earnings in a given period. The Group, taking a world-wide perspective of
operations, tightly controls schedules and resource allocation while striving to diversify risks by considering the key
strengths of the Group and flexibly developing multiple products with different software characteristics and development
periods. Moreover, while the market environment is undergoing tremendous changes due to the diversification of customer- 12 -

needs, the Group is seeking to implement a title lineup that will reflect a balance among the various platforms, and respondpromptly to customer needs.

Risks associated with advances in and new generations of platforms
In developing game content, visual content, and network content, the Group faces the risk related to advances in andnew generations of content-provision platforms and the risk of delays in changing its business models in response to thesedevelopments. The Group conducts research into new technologies and works to develop competitive content that is in stepwith the latest advances. At the same time, the Group takes steps to further develop the content it creates and to acquire
rights to new content. In line with its medium- to long-term strategy, in which there is a specific focus on the global market,
the Group is examining ways to establish next-generation business models and optimal organizational structures anddistributing the appropriate managerial resources to growth areas.

Decline in domestic birthrate
In the future, an ongoing decline in the domestic birthrate might affect the financial results of the Group. Accordingly,
the Group has been expanding the scope and target of its business activities in Japan and is aggressively taking steps toexpand its scope of business and the regions in which it conducts operations in overseas markets.

Concentration of production and quality control in China
In the Group’s Toys and Hobby Business, most of the products, particularly toys, are manufactured in China. Thus theGroup faces the following risks: the risk of higher production costs from the revaluation of the yuan and labor cost
increases, country risk stemming from the regional concentration of production, and risk regarding quality control of the
products. In response, the Group is working to reduce production costs and to diversify its production bases into Southeast
Asia and other regions. Additionally, the Group is establishing stricter quality standards and designing products with safetyin mind based on relevant legal restrictions and industry quality and safety standards in all of its business fields.

Risks from higher crude oil prices
The Group faces the risk that if crude oil prices rise from now on, it could lead to higher production costs fromincreased product raw material prices and higher transportation costs. Accordingly, in addition to working to standardize
the metal casts and molds used for character toys marketed worldwide and to reduce costs by enhancing the efficiency ofprocesses, ranging from production to distribution, the Group is also reviewing its business structures to improve
profitability.

Additional risks include disasters, such as natural disasters or accidents, changes in laws and regulations, defective or
deficient products or services, leaks of customer information, and litigation associated with business activities. The Group
maintains risk management systems and works to strengthen its management foundation in order to minimize the effects on
its results in the unlikely event that any of these risks should materialize.

- 13 -

2. The BANDAI NAMCO Group(1) Business Overview
The BANDAI NAMCO Group (“the Group”) comprises NAMCO BANDAI Holdings Inc. (“the Company”), 79
subsidiaries and 11 affiliates. Operations primarily encompass the manufacture and sales of toys and plastic models, thecore activity of the character merchandising business; amusement facility operations; manufacture and sales of arcade
game machines and other related products; the production and sales of home video game software; mobile content; and the
production and sales of video-related products. The Group is also engaged in distribution, planning, development and theprovision of other services related to the above areas of business.
The Group’s businesses and the relationships among the Company and its subsidiaries and affiliates with businesssegments are outlined below. Business classifications correspond directly to the classifications for business segment
information.
Business
Segment

Business Outline

RegionDomestic

Toys and
Hobby
Business

Toys, candy toys, vending machine
capsule products, cards, plastic
models, apparel, sundries, stationery,etc.
Overseas

Amusement
Facility
Business

Major Companies
Bandai Co., Ltd., Megahouse Corp.,
Seika Co., Ltd., Seeds Co., Ltd., Plex Co., Ltd.,CCP Co., Ltd., People Co., Ltd.,Sun-Star Stationery Co., Ltd.,and 3 other companies
BANDAI AMERICA INC., BANDAI S. A.,
BANDAI U.K. LTD., BANDAI ESPANA S.A.,BANDAI (H.K.) CO., LTD.,BANDAI ASIA CO., LTD.,BANDAI INDUSTRIAL CO., LTD.,BANDAI KOREA CO., LTD.,
CREATIVE B WORKS CO., LTD.,BANDAI (SHENZHEN) CO., LTD.,and 4 other companies

Domestic

NAMCO LIMITED, Pleasure Cast Co., Ltd.,
Hanayashiki Co., Ltd., NAMCO SPA RESORT LTD.

Overseas

NAMCO CYBERTAINMENT INC.,
NAMCO OPERATIONS EUROPE LTD.,
NAMCO OPERATIONS SPAIN S.L.,
NAMCO ENTERPRISES ASIA LTD.,
SHANGHAI NAMCO LTD.

Operation of amusement facilities,etc.

- 14 -

Business
Segment

Business Outline

RegionDomestic

Game
Contents
Business

Home video game software, arcade
game machines, prizes foramusement machines, etc.

Overseas

NetworkBusiness

Mobile content, etc.

Visual andMusic
Content
Business

Visual content, visual software, on
demand visual distribution, etc.

Domestic

Domestic

Overseas

Other
Businesses

Corporate

Transportation and storage of
products, leasing, management ofreal estate, printing, development andsales of environmental equipment,
etc.

Management of regional businesscompanies

Domestic

Major Companies
NAMCO BANDAI Games Inc.,
Banpresto Co., Ltd.,Bec Co., Ltd., Banpresto Sales Co., Ltd.,
Banpresoft Co., Ltd.,NAMCO TALES STUDIO LTD.,
D3 INC.,
D3PUBLISHER INC.,
Entertainment Software Publishing Inc.,and 2 other companies
NAMCO BANDAI Games America Inc.,
NAMCO AMERICA INC.,
NAMCO NETWORKS AMERICA INC.,
NAMCO Holdings UK LTD.,
NAMCO EUROPE LTD.,
NAMCO BANDAI Games Europe S.A.S.,BANPRESTO (H.K.) LTD.,
NAMCO BANDAI Networks Europe LTD.,
D3Publisher of America, Inc.,
D3Publisher of Europe Ltd., D3DB S.r.l.,Vicious Cycle Software, Inc.,
Distribution Partners S.A.S.,
and 1 other company
Bandai Networks Co., Ltd., VIBE Inc.,and 1 other company
Bandai Visual Co., Ltd., Sunrise Inc.,
Bandai Channel Co., Ltd., Lantis Co., Ltd.,EMOTION CO., LTD.,ANIME CHANNEL CO., LTD.,SUNRISE Music Publishing Co., Ltd.
BANDAI ENTERTAINMENT INC.,
BEEZ ENTERTAINMENT S.A.S.,
and 1 other company
BANDAI LOGIPAL INC.,
LOGIPAL EXPRESS INC.,
NAMCO BANDAI Business Services Inc.,
Artpresto Co., Ltd., NAMCO ECOLOTECH LTD.,
NAMCO TRADING LTD., Happinet Corp.,
Sotsu Co., Ltd., Italian Tomato Ltd.,and 5 other companies

Overseas

3 companies

Overseas

NAMCO BANDAI Holdings (USA) Inc.

- 15 -

Chart of business system is as follows:
END USERJAPANOVERSEAS
Plex Co., Ltd.

Bandai Co., Ltd.

Production

Seeds Co., Ltd.

CCP Co., Ltd.
People Co., Ltd. *Seika Co., Ltd.
Sun-Star Stationery Co., Ltd.*

Toys and Hobby Business

BANDAI AMERICA INC.
BANDAI S.A.
BANDAI U.K. LTD.
BANDAI ESPANA S.A.

Plan andWork

CREATIVE B WORKS
CO., LTD.

BANDAI KOREA
CO., LTD.

Production
Quality
Control

BANDAI(SHENZHEN)
CO., LTD.

BANDAI ASIA
CO., LTD.

Quality Control

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

Megahouse Corp.

NAMCO LIMITED

Product Sale

Pleasure Cast Co., Ltd.
Hanayashiki Co., Ltd.

NAMCO SPA RESORT LTD.

Amusement Facility Business

Product Sale

SHANGHAI
NAMCO LTD.*

Product Parts Sale

Production

NAMCO OPERATIONSEUROPE LTD.
NAMCO OPERATIONSSPAIN S.L.
Product Sale

NAMCO ENTERPRISESASIA LTD.

Product Sale

NAMCO CYBERTAINMENT
INC.
Intellectual Properties License

NAMCO BANDAI Games Inc.

Plan andWork

Business

NetworkBusiness

Visual and Music Content

Bandai Networks Co., Ltd.

Licenses（Mobile） Distribution License

NAMCO NETWORKSAMERICA INC.
Production License, Selling License

NAMCO AMERICA INC.
Licenses, Product Sale

NAMCO EUROPE LTD.
Licenses

NAMCO BANDAI
Networks Europe LTD.

Production

D3 INC.
D3PUBLISHER INC.
Entertainment Software Publishing Inc.

NAMCO BANDAI Games
America Inc.
Product Sale

Plan and Work

NAMCO TALES STUDIO LTD.
Bec Co., Ltd.
Banpresoft Co., Ltd.

Banpresto Co., Ltd.

Game Contents Business

Banpresto Sales Co., Ltd.

ProductSale

BANPRESTO (H.K.) LTD.
NAMCO BANDAI
Games Europe S.A.S.

D3Publisher of America, Inc.
D3Publisher of Europe Ltd.
D3DB S.r.l.
Vicious Cycle Software, Inc.

Product Sale

Distribution Partners S.A.S. *Plan and Work

VIBE Inc.
Lantis Co., Ltd.

Sunrise Inc.

Bandai Channel Co., Ltd.
Provide Contents

Bandai Visual Co., Ltd.
EMOTION CO., LTD. Provide Works

Master Recordings Management

SUNRISE Music Publishing Co., Ltd.
BANDAI ENTERTAINMENT INC.

Plan and Work
Provide Contents

BEEZ ENTERTAINMENT S.A.S.

ANIME CHANNEL CO., LTD.

BANDAI LOGIPAL INC.
LOGIPAL EXPRESS INC.
NAMCO BANDAI
Business Services Inc.
Artpresto Co., Ltd.
NAMCO ECOLOTECH LTD.
NAMCO TRADING LTD.
Happinet Corp.*
Sotsu Co., Ltd.*
Italian Tomato Ltd.*

Other Businesses

Services to Support Group Companies

NAMCO BANDAI Holdings (USA) Inc.

NAMCO Holdings UK LTD.**NAMCO BANDAI Holdings Inc.
*Affiliated companies accounted for by the equity method.
** NAMCO Holdings UK LTD. is a regional holding company in Europe, and is included in the Game Contents segment.

16

(2) Associated Companies (Subsidiaries and Affiliated Companies)

Name

Address

CapitalMain Business

Ratio of
VotingRightsOwnership(%)

Description ofRelationship

Notes

A: 2
B: ¥8 billion

4, 10(Consolidated subsidiaries)
Bandai Co., Ltd.

Taito-ku, Tokyo¥24,664 million Toys and Hobby

100.0

Megahouse Corp.

Taito-ku, Tokyo¥10 million Toys and Hobby

100.0(100.0)––

Seika Co., Ltd.

Taito-ku, Tokyo¥10 million Toys and Hobby

99.9(99.9)––

Seeds Co., Ltd.

Shimotsuga-gun,Tochigi¥100 million Toys and Hobby

100.0(100.0)––Plex Co., Ltd.

Taito-ku, Tokyo¥50 million Toys and Hobby

100.0(100.0)––

CCP Co., Ltd.

Taito-ku, Tokyo¥300 million Toys and Hobby

100.0(100.0)––BANDAI AMERICA INC.

California,
U.S.A.

US$
Toys and Hobby
24.6 million

100.0(100.0)–4

BANDAI S.A.

Cergy-Pontoise,FranceEuro

Toys and Hobby

100.0

–

–

BANDAI U.K. LTD.

Southampton,
U.K.

Stg £.

Toys and Hobby

100.0

–

–

BANDAI ESPANA S.A.

Madrid, Spain

Euro
Toys and Hobby
4,808 thousand

100.0

–

–

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

Central,Hong KongHK$
Toys and Hobby
103 million

100.0

–

4

BANDAI ASIA CO., LTD.

Central,Hong KongHK$

Toys and Hobby

100.0(100.0)––BANDAI INDUSTRIAL
CO., LTD.

Chacheongsao,
Thailand

Baht

Toys and Hobby

100.0(100.0)–4

BANDAI KOREA CO.,LTD.

Seoul, Korea

WON
Toys and Hobby
1,500 million

66.7

–

–

9 million
5 million

7 million
475 million

CREATIVE B WORKS CO.,Seoul, Korea
LTD.

WON

Toys and Hobby

100.0(100.0)––BANDAI (SHENZHEN)
CO., LTD.

Shenzhen City,
China

RMB
Toys and Hobby
18,206 thousand

100.0(100.0)––

NAMCO LIMITED

Ota-ku, Tokyo¥10,000 million

Amusement
Facility

100.0

A: 3
B: ¥2.5 billion

4, 11Pleasure Cast Co., Ltd.

Shinagawa-ku,
Tokyo¥480 million

Amusement
Facility

100.0(100.0)––Hanayashiki Co., Ltd.

Taito-ku, Tokyo¥480 million

Amusement
Facility

100.0(100.0)––

NAMCO SPA RESORTLTD.

Kishiwada,
Osaka¥100 million

Amusement
Facility

100.0(100.0)

–

–

NAMCO
CYBERTAINMENT INC.

Illinois, U.S.A.

Amusement
2,800 Facility

100.0(100.0)––50 millionUS$- 17 -

Name

Address

Ratio of
VotingRightsOwnership(%)

Description ofRelationship

Notes

Amusement
23 million Facility

100.0(100.0)–

4

Euro
Amusement
500 thousand Facility

100.0(100.0)––

Amusement
47 million Facility

100.0

–

–

CapitalStg £.

Main Business

NAMCO OPERATIONSEUROPE LTD.

London, U.K.

NAMCO OPERATIONSSPAIN S.L.

Madrid, Spain

NAMCO ENTERPRISESASIA LTD.

Causeway Bay,
Hong Kong

NAMCO BANDAI GamesInc.

Shinagawa-ku,
Tokyo¥15,000 million Game Contents

100.0

A: 1

Banpresto Co., Ltd.

Shinagawa-ku,
Tokyo¥100 million Game Contents

100.0(100.0)

B: 2.5 billion–

D3 INC.

Shibuya-ku,
Tokyo¥1,737 million Game Contents

95.2(95.2)–

4, 5, 7

Bec Co., Ltd.

Taito-ku, Tokyo¥166 million Game Contents

100.0(100.0)––Banpresto Sales Co., Ltd.

Shinagawa-ku,
Tokyo¥200 million Game Contents

100.0(100.0)––Banpresoft Co., Ltd.

Shinagawa-ku,
Tokyo¥200 million Game Contents

100.0(100.0)––

NAMCO TALES STUDIO
LTD.

Toshima-ku,
Tokyo¥100 million Game Contents

100.0(100.0)––

D3PUBLISHER INC.

Shibuya-ku,
Tokyo¥100 million Game Contents

100.0(100.0)––Entertainment Software
Publishing Inc.

Shibuya-ku,
Tokyo¥90 million Game Contents

100.0(100.0)––

NAMCO BANDAI Games
America Inc.

California,
U.S.A.

Game Contents

100.0(100.0)––

NAMCO AMERICA INC.

Illinois, U.S.A.

Game Contents

100.0(100.0)––

NAMCO NETWORKSAMERICA INC.

California,
U.S.A.

US$

Game Contents

100.0(100.0)––

D3Publisher of America, Inc.

California,
U.S.A.

US$
Game Contents
975 thousand

100.0(100.0)––

Vicious Cycle Software, Inc.

North Carolina,
U.S.A.

US$

Game Contents

100.0(100.0)––

NAMCO Holdings UK LTD. London, U.K.

Stg £.
Game Contents
24.5 million

100.0

–

4

NAMCO EUROPE LTD.

London, U.K.

Stg £.
Game Contents
7.3 million

100.0(100.0)–4

NAMCO BANDAI Games
Europe S.A.S.

Cergy-Pontoise,FranceEuro
Game Contents
14,241 thousand

100.0(100.0)–4

BANPRESTO (H.K.) LTD.

New Territories,
Hong Kong

HK$

Game Contents

100.0(100.0)––

NAMCO BANDAI
Networks Europe LTD.

London, U.K.

Stg £.
Game Contents
1.5 million

100.0(100.0)

–

–

HK$

US$
100
US$
10
10

230

32 million- 18 -

4, 12

Main Business

Description ofRelationship

Notes

Name

Address

D3Publisher of Europe Ltd.

Cambridge, U.K.

Stg £.
Game Contents
683 thousand

100.0(100.0)––

D3DB S.r.l.

Milano, Italy

Euro
Game Contents
10 thousand

50.0(50.0)–

8

Bandai Networks Co., Ltd.

Shinagawa-ku,
Tokyo¥1,113 million Network

100.0

VIBE Inc.

Shinagawa-ku,
Tokyo¥352 million Network

100.0(100.0)

Bandai Visual Co., Ltd.

Shinagawa-ku,
Tokyo¥2,182 million

Visual andMusic Content

100.0

A: 2
B: ¥4 billion

4

Sunrise Inc.

Suginami-ku,
Tokyo¥49 million

Visual andMusic Content

99.3
(7.6)

B: ¥9.7 billion–

Bandai Channel Co., Ltd.

Minato-ku,
Tokyo¥30 million

Visual andMusic Content

94.5

A: 1

–

Lantis Co., Ltd.

Shibuya-ku,
Tokyo¥420 million

Visual andMusic Content

50.6(50.6)EMOTION CO., LTD.

Shinagawa-ku,
Tokyo¥120 million

Visual andMusic Content

100.0(100.0)

ANIME CHANNEL CO.,LTD.

Shinagawa-ku,
Tokyo¥200 million

Visual andMusic Content

100.0(100.0)––SUNRISE Music PublishingCo., Ltd.

Suginami-ki,
Tokyo¥10 million

Visual andMusic Content

100.0(100.0)––BANDAI
ENTERTAINMENT INC.

California,
U.S.A.

US$
Visual and
100 thousand Music Content

100.0(100.0)––BEEZ ENTERTAINMENT
S.A.S.

Paris, France

Euro

100.0
(100.0)––BANDAI LOGIPAL INC.

Katsushika-ku,
Tokyo¥1,424 million Other

100.0

LOGIPAL EXPRESS INC.

Katsushika-ku,
Tokyo¥100 million Other

100.0(100.0)––

NAMCO BANDAI Business
Taito-ku, Tokyo
Services Inc.

¥100 million Other

100.0

C: ¥600 million

4

Artpresto Co., Ltd.

Taito-ku, Tokyo¥30 million Other

100.0

–

–

NAMCO ECOLOTECHLTD.

Ota-ku, Tokyo¥225 million Other

94.8

NAMCO TRADING LTD.

Ota-ku, Tokyo¥40 million Other

100.0(100.0)

NAMCO BANDAI Holdings California,(USA) Inc.
U.S.A.

CapitalRatio of
VotingRightsOwnership(%)

Visual and5 million Music Content

Management andinstruction ofbusiness
10 companies in the
North America
Region.

US$- 19 -

100.0

A: 2
B: ¥4 billion
–

–
A: 1

–

–
–

B: ¥1 billion

A: 1

4

–
–

A: 1

4

–

–

Name

Address

CapitalMain Business

Ratio of
VotingRightsOwnership(%)

Description ofRelationship

Notes

70.0
(70.0)––(Companies accounted for by the equity method)
RMB
Amusement
26,724 thousand Facility

SHANGHAI NAMCO LTD.

Shanghai, China

People Co., Ltd.

Chuo-ku, Tokyo¥238 million Toys and Hobby

20.5
(0.1)

–

5, 7

Happinet Corp.

Taito-ku, Tokyo¥2,751 million Other

26.3
(0.3)

–

5, 6

Sotsu Co., Ltd.

Chuo-ku, Tokyo¥414 million Other

16.8

–

5, 7, 9Italian Tomato Ltd.

Minato-ku,
Tokyo¥100 million Other

30.6(30.6)––¥50 million Toys and Hobby

33.4(33.4)––

Euro
Game Contents
37 thousand

34.0(34.0)––

Sun-Star Stationery Co., Ltd. Taito-ku, Tokyo
Distribution Partners S.A.S.

Lyon, France* The value of ‘A’ represents the number of Directors and Corporate Auditors at the company in question who are also
Directors, Corporate Auditors, or employers of NAMCO BANDAI Holdings Inc.
* The value of ‘B’ represents the amount of borrowings from the subsidiaries to NAMCO BANDAI Holdings Inc.
* The value of ‘C’ represents the amount of financial assistance from NAMCO BANDAI Holdings Inc.
Notes: 1.
2.
3.
4.
5.
6.
7.
8.
9.

In the “Main Business” column, the name of the relevant type-of-business segment is given.
In “Ratio of Voting Rights Ownership,” amounts within parenthesis represent indirect ownership.
NAMCO BANDAI Holdings Inc. manages and provides guidance to BANDAI NAMCO Group companies,
except for certain affiliated companies.
These companies are “Tokutei Kogaisha” (specified subsidiaries).
These companies file their “Yuka Shoken Houkokusho” (annual security reports)
Listed on the First Section of the Tokyo Stock Exchange (TSE).
Listed on the JASDAQ Stock Exchange.
Although 50% or less voting rights are owned, the company in question is classified as a subsidiary because
NAMCO BANDAI Holdings Inc. substantially controls the company.
Although less than 20% voting rights are owned, the company in question is classified as an affiliated company
because NAMCO BANDAI Holdings Inc. has effective leverage over the company.

- 20 -

10. The percentage of net sales (excluding inter-segment sales among consolidated subsidiaries) of Bandai Co., Ltd.
exceeds 10% of the consolidated net sales.
Key financial data(¥ million)(1) Net sales

102,013(2) Recurring income

5,242(3) Net income

3,317(4) Net assets

60,436(5) Total assets

82,761

11. The percentage of net sales (excluding inter-segment sales among consolidated subsidiaries) of NAMCO
LIMITED exceeds 10% of the consolidated net sales.
Key financial data(¥ million)(1) Net sales

57,793(2) Recurring income

783(3) Net loss

1,198(4) Net assets

40,079(5) Total assets

47,017

12. The percentage of net sales (excluding inter-segment sales among consolidated subsidiaries) of NAMCO
BANDAI Games Inc. exceeds 10% of the consolidated net sales.
Key financial data(¥ million)(1) Net sales

90,170(2) Recurring income

5,671(3) Net income

3,640(4) Net assets

63,746(5) Total assets

79,316- 21 -

3. Management Policies(1) Fundamental Management Policy
Guided by our vision of becoming “The Leading Innovator in Global Entertainment,” the Group’s mission is tocontinue to provide “Dreams, Fun and Inspiration” through entertainment to people around the world.
Moreover, with the sights set on the Medium to Long-term Group Vision of being a “Globally RecognizedEntertainment Group,” the Group will press ahead with various medium- to long-term strategies for strengthening overseas
business, making innovation in our content strategy, and expanding our scale to compete in the global market. The Groupaims to achieve an operating income of 100 billion yen, overseas sales ratio of 50% and ROE of 10% or higher in the
Mid-term Business Plan starting from 2015.

(2) Targets and Management Performance Indicators
The Group has adopted ROE (Return on Equity) as management performance indicators. Looking ahead, we aim tofurther expand profits by strengthening investments, particularly in overseas business, as well as effectively utilize
stockholders’ equity to build a strong and stable management base over the medium- to long-term. Specifically, the Groupaims to achieve consolidated ROE of 10% or higher in the Mid-term Business Plan starting from 2015, and are tackling toachieve this target on two fronts: business expansion and efficient management.
In addition, we will introduce Return on Invested Capital (ROIC) as a new indicator to facilitate swift decision-making
with regard to business recovery and closure in the rapidly changing entertainment industry.

(3) Medium- to Long-term Business Strategy
a. Strategy of Mid-term Business Plan
The three-year Mid-term Business Plan that went into effect on April 1, 2009, promotes two strategies, “Focus,” thebusiness strategy, and “enhance the Entertainment-hub,” the functional strategy, to lay the foundation for global growth.

Efforts toward the business strategy “Focus”
Under “Focus,” the business strategy, the Group clarifies the mission of each of the business units on the basis ofmarket environment and competitive superiority, then categorizing each as (i) a “business for dynamic growth” in which
the Group will actively invest and (ii) a “business for profit improvement” for which the Group implement measures toimprove profitability. In particular, the Group defines the “Toys and Hobby Business” and the “Game Contents Business”
as “businesses for dynamic growth” in which the Group will carry out aggressive up-front investments to expand thebusiness, particularly in the European and North American markets. The Group defines the “Visual and Music Content
Business” and the “Amusement Facility Business” as “businesses for profit improvement”, for which the Group will
implement measures to improve profitability, with an emphasis on the domestic market.

Efforts toward the functional strategy “enhance the Entertainment-hub”
The functional strategy, “enhance the Entertainment-hub,” is directed at further strengthening a series of functions suchas creation and acquisition, development and utilization of contents by adding synergies among the Group as well as
between the Group and external partner companies. The Mid-term Business Plan calls for developing that approach, which
thus far has largely been implemented domestically, into a global model.
- 22 -

b. Initiatives in Support of Mid-term Business Plan Strategies
Strengthening the corporate governance structure
Since the commencement of the current Mid-term Business Plan in April 2009, the Company has shifted from asingle-representative-director structure to a structure featuring two Representative Directors: a Chairman and
Representative Director who leads the entire group based on our long-term vision, and a President and Representative
Director who will be responsible for the management and business operations of the Group. At the same time, after the
relevant resolution item is passed by the Ordinary General Meeting of Shareholders scheduled for June 22, 2009, we shall
add one Outside Director. As a result, three out of the nine Directors will be from outside the Company, which will further
strengthen our management oversight function. Also, to further clarify distinction between corporate management andbusiness operations, the Company shall strengthen the Executive Officer System and the Representative Directors of theGroup’s major business companies will dedicate themselves to business operations as Senior Executive Officers of theCompany.

Pursuing management efficiency
To improve the existing rules of business recovery and closure of the Group, and to assess the circumstances ofbusinesses more promptly, we will strengthen the mechanism for continuous monitoring and introduce Return on Invested
Capital (ROIC) as a new indicator to facilitate swift decision-making with regard to business recovery and closure. In
addition, we will take cost cutting measures by standardizing business processes across the entire Group to pursue more
efficient operations.

Strengthening personnel strategy
To achieve dynamic growth of businesses in the overseas market, the Group is strengthening a system to recruit anddevelop personnel on a global basis. We are also energizing our personnel by actively exchanging employees amongst theentire group.

Strengthening CSR activities
To strengthen our environmental management, the Group will set a medium-term environmental target for the Group to
cut CO2 emissions by 5.4% from each of its facilities by the end of the fiscal year ending March 31, 2012 (compared withthe fiscal year ended March 31, 2009).

(4) Issues to be Addressed
The Group and this industry must address many important, long-term issues, including (i) the increasing diversificationof consumer needs, (ii) reacting to changes in the market and the environment, and (iii) increasingly intense competition ona global scale. To address these issues, the Group is using “Focus,” a business strategy called for in its Mid-term Business
Plan, to clarify the mission of each of its business units. In particular, such strategy categorizes each business as a “businessfor dynamic growth” or a “business for profit improvement.” The Group will make proactive up-front investments in“business for dynamic growth” and will implement measures to improve revenues in “business for profit improvement.” At
the same time, progress in implementing “enhance the Entertainment-hub,” its functional strategy, will enable the Group to
evolve its business model, which is its core strength, from a domestically focused to a global model.
- 23 -

a. Common Issues Faced by All Strategic Business Units (“SBUs”)
Efforts toward domestic business expansion
The Group will, in order to create new markets and attract new customer segments for the expansion of its domestic
operations, maximize utilization of the managerial resources that it owns and expand its targets and categories throughmaking effective use of synergies between its business units, alliances with external partners, and other approaches. In
addition, in response to the changes in environment surrounding the entertainment industry, the Group will also engage inbuilding new business models free from the constraints imposed by existing business practices and models.

Efforts toward overseas business expansion
The Group is examining ways to build the optimal business model and is strengthening its structure to further the
expansion of its operations overseas. In addition, based on the strategy defined in our Mid-term Business Plan, we aresetting our sights on further growth through actively devoting managerial resources towards expansion of the Toys andHobby Business and the Game Contents Business in the European and North American markets.

Efforts toward changing the content strategy
The Group is reinforcing its content creation, acquisition, development, and utilization functions in order to respond tochanges in the environment, including the development of oligopolies in the distribution and media fields and thewidespread penetration of networks. In addition, we are holding the Contents Business Strategy Meeting, a new body for
conferring that cuts laterally across the Group to consider the synergy effects between the Group businesses and the
optimal next-generation business models.

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 boundless enthusiasm. To ensure that we can continue to provide “Dreams,
Fun and Inspiration,” we have formulated Group-wide CSR initiatives that include three types of responsibilities.
In accordance with these fundamental principles, a range of measures is being implemented by the Group-wide CSR
Committee and its sub-committees—the Group Environmental Committee, the Group Social Contribution Committee, and
the Group Compliance Committee—as well as by the Group Crisis Management Committee, the Group Information
Security Committee, and the Internal Control Committee.

•

Environmental and social contributive responsibilities (safety/quality, environmental conservation, cultural/social
support activities)
Safety/quality initiatives
The Group follows industry standards and in-house standards corresponding to products and services, and theGroup has built a system that facilitates the achievement of higher levels of safety and quality, so that customers canuse our products with confidence.

- 24 -

Environmental conservation initiatives
The Group is aggressively implementing forward-looking environmental conservation measures to ensure that theGroup can continue to provide “Dreams, Fun and Inspiration” to people around the world.

Cultural/social support activities
The Group is also active in areas outside the provision of products and services, such as museum operations andvolunteer activities.

•

Economic initiatives
The Group is continually working to enhance management transparency and is working to provide maximum
returns to society and stakeholders by selecting the optimal operational fields for Group development and focusing ourmanagement resources on those fields through monitoring the management plan and conditions of each Group
company.

•

Legal and ethical responsibilities (compliance)
The Group has formulated basic compliance standards for Group companies, officers, and employees in Japan andoverseas, and the Group conducts regular training as well as constant monitoring to ensure appropriate observance oflegal and ethical standards.

b. Issues Specific to Each SBU
Toys and Hobby SBU
This unit’s industry is facing issues such as “shrinking domestic market due to the falling birthrate” and “increasingly
diverse consumer needs.” It is addressing these issues by expanding its target population segment and creating new
businesses, in addition to enhancing its toy business, a core business of this unit in Japan, as well as by working toreinforce its existing operations and expand its categories overseas, particularly in the European and North American
markets. For speedy implementation of its plans, this unit will actively devote managerial resources, especially in Europe
and North America, with an eye to actively building cooperative relationships with external partners.

Game Contents SBUThis unit’s industry is facing issues such as “flattening of growth in the domestic market,” “change in customer needs,”
and “soaring content development costs for higher performance platforms.” To address these issues, this unit is enhancing
its world-wide development and marketing structure for home video game software. It is also addressing the constructionof flexible development systems, including the sharing of know-how and technologies among units, for its arcade gamemachine and mobile content businesses. These initiatives will enable the Game Contents SBU to exercise its great strength
in its development capacity on a world-wide scale, as well as to develop a balanced number of titles across each platform
and to respond swiftly to changing customer needs.

- 25 -

Visual and Music Content SBU
The issues for this unit include “change in the profit model in accord with increasingly high performance platforms”
and “adapting to the Blu-ray Disc format.” To address to these issues, the unit will work to improve profitability byimplementing strategic resource allocation based on thorough content portfolio management, as well as maximize theGroup’s capacity to create content and the value of content, and reinforce cross-media strategies. The Visual and Music
Content SBU is also formulating new business models in response to the changing environment.

Amusement Facility SBU“Changes in business revenue structures,” “increasingly diverse consumer needs,” and “revision of consumption tax
rate” are among the issues for this unit’s industry. To address these issues, this unit is working to enhance profitability byclosing unprofitable facilities and reviewing its standards for opening and closing facilities. It is also reinforcing its ability
to target its marketing to each customer segment. In addition, the unit is making use of its know-how in character
merchandizing, especially in its domestic operations, to drive the development of facilities and provision of services withthe added value only the Group can offer.

- 26 -

4. Consolidated Financial Statements(1) Consolidated Balance Sheets(¥ million)
As of March 31, 2008

As of March 31, 2009

AssetsCurrent assets
Cash and time deposits

126,103

Trade receivables

73,140*2

106,747
62,518

Short-term investments

7,068

4,426

Inventories

36,428–Merchandise and finished goods–

11,642Work in process–

21,653

Raw materials and supplies

–

4,354

Deferred tax assets

5,908

6,145

Other current assets

19,67019,044

Allowance for doubtful receivables

(607)

(446)

267,713

236,085

Total current assets
Fixed assets
Property, plant and equipment
Buildings and structures

26,31524,066

Accumulated depreciation(14,477)(13,410)

Buildings and structures, net

11,83810,655

Amusement facilities and machines

81,04270,823

Accumulated depreciation(57,241)(51,728)

Amusement facilities and machines, net

23,801

19,094Land*3Other property, plant and equipment

14,346*3

11,782

66,576

67,284

Accumulated depreciation(53,115)(56,825)

Other property, plant and equipment, net

13,46010,45963,44651,991

Total property, plant and equipment
Intangible assets
Goodwill

15,80012,054

Other intangible assets

11,191

10,230Total intangible assets

26,991

22,285Investments and other assets
Investment securities*1

26,143*1

24,949

Guarantee money deposited

20,11218,012

Deferred tax assets

6,290

7,124

Other investments and assets

3,541

4,248

Allowance for doubtful receivables(1,215)(1,254)

Total investments and other assets

54,87153,081

145,309

127,359

413,023

363,444

Total fixed assets
Total assets- 27 -

(¥ million)
As of March 31, 2008

As of March 31, 2009

Liabilities
Current liabilities
Trade payables

42,60336,760

Short-term borrowings

5,338

8,857

Accounts payable–other

24,88918,437

Accrued income taxes

9,262

6,374

473

635

Provision for directors’ bonus
Provision for losses from business restructuring

1,082

154

Provision for sales return

829

911

Other current liabilities

17,16912,171

Total current liabilities

101,648

84,303Long-term debt

10,662

11,990

Deferred tax liabilities

4,239

−

492

481

Long-term liabilities

Deferred tax liabilities, land revaluation*3

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

*3

1,571

1,906

27

46

Other long-term liabilities

4,438

4,136

Total long-term liabilities

21,43018,561

123,079

102,865

Common stock

10,00010,000Additional paid-in capital

87,94579,887Retained earnings

192,865

199,453

Treasury stock(2,840)(9,624)

Total stockholders’ equity

287,971279,717

Other securities valuation difference

192(1,911)

Deferred gains or losses on hedges, net of taxes

(112)

(105)

Total liabilities
Net assets
Stockholders’ equity

Valuation difference and translation adjustments

Land revaluation*3(6,284)*3(6,299)Translation adjustments

5,028(13,755)

Total valuation difference and translation adjustments(1,175)(22,071)

Stock subscription rights

1,531

1,468

Minority interests

1,616

1,465

289,944

260,579

413,023

363,444

Total net assets
Total liabilities and net assets- 28 -

(2) Consolidated Statements of Income(¥ million)
Prior Fiscal Year
(From April 1, 2007
to March 31, 2008)
Net sales

Current Fiscal Year
(From April 1, 2008
to March 31, 2009)

460,473

Cost of sales*1

Gross profit

296,400

426,399*1

164,072

Selling, general and administrative expenses*2, *3Operating income

130,661

280,376
146,023*2, *3

123,674

33,411

22,348Interest income

2,342

1,707

Dividend income

210

331

–

360

Other non-operating income

1,400

909

Total non-operating income

3,954

3,309

202

246

Foreign exchange loss

225

744

Equity in loss of affiliated companies

441–

Loss on valuation of derivatives

96–

Other non-operating expenses

201

153

Non-operating income

Equity in gain of affiliated companies

Non-operating expenses
Interest expense

Total non-operating expenses
Recurring income

1,167

1,144

36,19824,513Extraordinary income
Gain on sales of fixed assets*4Gain on sales of investment securities

16,974

*4

1,635

1

–

Gain on sales of investments in affiliated companies

298–

Reversal of allowance for doubtful receivables

208

47

Reversal of accrued retirement and severance benefits

501–

Reversal of provision for losses from business restructuring–

338

Gain on reversal of stock subscription rights–

188

Other extraordinary income–

110

Total extraordinary income

17,9842,321- 29 -

(¥ million)
Prior Fiscal Year
(From April 1, 2007
to March 31, 2008)

Current Fiscal Year
(From April 1, 2008
to March 31, 2009)

Extraordinary loss
Loss on sales of fixed assets*5

Loss on disposal of fixed assets
Loss on impairment of fixed assets
Non-deductible consumption tax, etc.
Loss on business restructuring

125

*5

45

*6

743

*6

256

*7

4,247

*7

953

775

–

460

–

Provision for losses on business restructuring

1,082

–

Loss on valuation of investment securities

224

997

Provision for allowance of doubtful receivables

200

642

–

647

Litigation settlement

282

1,061

Other extraordinary loss

73

1,103

Special retirement expenses

8,217

5,708

Income before income taxes and minority interests

Total extraordinary loss

45,964

21,125

Corporate income, inhabitant and enterprise taxes

14,843

9,843

Income taxes for the previous period

–

1,173

Deferred income taxes(2,209)(1,956)

Total income taxes

12,633

9,059

Minority interests

651

235

32,67911,830Net income- 30 -

(3) Consolidated Statements of Changes in Net Assets(¥ million)
Prior Fiscal Year
(From April 1, 2007
to March 31, 2008)

Current Fiscal Year
(From April 1, 2008
to March 31, 2009)

Stockholders’ equity
Common stock
Balance as of March 31, 2008

10,00010,000––10,00010,00097,142

87,945–278

Retirement of treasury stock(8,184)(8,336)

Decrease in treasury stock due to share exchange(1,012)–

Total changes during the period(9,196)(8,058)87,94579,887

182,389

192,865–(66)

Cash dividends(7,162)(6,009)Net income

32,67911,830Changes in the scope of consolidation

(131)

818

92

–

(15,001)

15

Changes during the period
Total changes during the period
Balance as of March 31, 2009
Additional paid-in capital
Balance as of March 31, 2008
Changes during the period
Purchase of treasury stock from consolidated
subsidiaries

Balance as of March 31, 2009
Retained earnings
Balance as of March 31, 2008
Effect of changes in accounting policies applied to foreignsubsidiaries
Changes during the period

Increase due to transition of consolidated subsidiaries
into companies to which the equity method is applied
Reversal of land revaluation
Total changes during the period

10,476

6,654

192,865

199,453(3,952)(2,840)Purchase of treasury stock(10,235)(15,119)

Disposal of treasury stock

Balance as of March 31, 2009
Treasury stock
Balance as of March 31, 2008
Changes during the period–

1Retirement of treasury stock

8,184

8,336

Decrease in treasury stock due to share exchange

3,164

–

(1)

(2)

1,112

(6,784)(2,840)(9,624)

Changes in treasury stock accompanying changes toholdings in companies to which the equity method isappliedTotal changes during the period
Balance as of March 31, 2009

- 31 -

(¥ million)
Prior Fiscal Year
(From April 1, 2007
to March 31, 2008)

Current Fiscal Year
(From April 1, 2008
to March 31, 2009)

Total stockholders’ equity
Balance as of March 31, 2008
Effect of changes in accounting policies applied to foreignsubsidiaries

285,578

287,971–(66)(7,162)(6,009)Changes during the period
Cash dividends
Net income

32,67911,830Purchase of treasury stock(10,235)(15,119)

Purchase of treasury stock from consolidated
subsidiaries–

278

Disposal of treasury stock–

1

Retirement of treasury stock

–

–

2,152

–

(1)

(2)

(131)

818

92

–

(15,001)

15

Decrease in treasury stock due to share exchange
Changes in treasury stock accompanying changes toholdings in companies to which the equity method isappliedChanges in the scope of consolidation
Increase due to transition of consolidated subsidiaries
into companies to which the equity method is applied
Reversal of land revaluation
Total changes during the period

2,392(8,188)287,971279,717

4,100

192

Net changes in the period other than changes instockholders’ equity(3,908)(2,103)

Total changes during the period(3,908)(2,103)

192(1,911)

91(112)

Net changes in the period other than changes instockholders’ equity

(204)

7

Total changes during the period

(204)

7

(112)

(105)

(21,286)(6,284)

Net changes in the period other than changes instockholders’ equity

15,001(15)

Total changes during the period

15,001(15)(6,284)(6,299)Balance as of March 31, 2009
Valuation difference and translation adjustments
Other securities valuation difference
Balance as of March 31, 2008
Changes during the period

Balance as of March 31, 2009
Deferred gains or losses on hedges
Balance as of March 31, 2008
Changes during the period

Balance as of March 31, 2009Land revaluation
Balance as of March 31, 2008
Changes during the period

Balance as of March 31, 2009

- 32 -

(¥ million)
Prior Fiscal Year
(From April 1, 2007
to March 31, 2008)

Current Fiscal Year
(From April 1, 2008
to March 31, 2009)

Translation adjustments
Balance as of March 31, 2008

5,684

5,028

Net changes in the period other than changes instockholders’ equity(655)(18,784)

Total changes during the period(655)(18,784)

5,028(13,755)(11,409)(1,175)

10,233(20,896)

Changes during the period

Balance as of March 31, 2009
Total valuation difference and translation adjustments
Balance as of March 31, 2008
Changes during the period
Net changes in the period other than changes instockholders’ equity
Total changes during the period

10,233(20,896)(1,175)(22,071)

577

1,531

Net changes in the period other than changes instockholders’ equity

954

(63)

Total changes during the period

954

(63)

1,531

1,468

9,507

1,616

Net changes in the period other than changes instockholders’ equity(7,890)(150)

Total changes during the period(7,890)

(150)

1,616

1,465

Balance as of March 31, 2009
Stock subscription rights
Balance as of March 31, 2008
Changes during the period

Balance as of March 31, 2009
Minority interests
Balance as of March 31, 2008
Changes during the period

Balance as of March 31, 2009- 33 -

(¥ million)
Prior Fiscal Year
(From April 1, 2007
to March 31, 2008)

Current Fiscal Year
(From April 1, 2008
to March 31, 2009)

Total net assets
Balance as of March 31, 2008
Effect of changes in accounting policies applied to foreignsubsidiaries

284,254289,944–(66)(7,162)(6,009)Changes during the period
Cash dividends
Net income

32,67911,830Purchase of treasury stock(10,235)(15,119)

Purchase of treasury stock from consolidated subsidiaries–

278

Disposal of treasury stock–

1

Retirement of treasury stock

–

–

2,152

–

(1)

(2)

(131)

818

92

–

Decrease in treasury stock due to share exchange
Changes in treasury stock accompanying changes toholdings in companies to which the equity method isappliedChanges in the scope of consolidation
Increase due to transition of consolidated subsidiaries into
companies to which the equity method is applied
Reversal of land revaluation(15,001)15

Net changes in the period other than changes instockholders’ equity

3,297(21,110)

Total changes during the period

5,690(29,298)

289,944

260,579

Balance as of March 31, 2009

- 34 -

(4) Consolidated Statements of Cash Flows(¥ million)
Prior Fiscal Year
(From April 1, 2007
to March 31, 2008)

Current Fiscal Year
(From April 1, 2008
to March 31, 2009)

Cash flows from operating activities
Income before income taxes and minority interests

45,964

21,125

Depreciation and amortization

24,75822,545

Loss on impairment of fixed assets

4,247

953

Amortization of goodwill

2,870

4,080

Increase (decrease) in allowance for doubtful receivables(1,272)(79)

Increase (decrease) in provision for losses from businessrestructuring

1,082

(927)

Increase (decrease) in provision for sales return

324

267

Increase (decrease) in provision for directors’ bonus

(177)

165

Increase (decrease) in accrued retirement and severance
benefits

(421)

308

Increase (decrease) in accrued directors’ and corporate
auditors’ retirement and severance benefits

(505)

1

Interest and dividend income(2,553)(2,038)Interest expense

202

246

Foreign exchange loss (gain)25

33

Equity in loss (gain) of affiliated companies

441

(360)

Loss on disposal of fixed assets

743

256

(16,849)(1,589)Loss (gain) on sales of fixed assets
Loss on disposal of amusement facilities and machines

1,214

795

Loss (gain) on sales of investment securities

(288)

(57)

Loss (gain) on valuation of investment securities

224

1,326

Decrease (increase) in trade receivables

6,128

3,826

Decrease (increase) in inventories(3,936)(2,128)Investment for amusement facilities and machines(9,286)(6,646)

Increase (decrease) in trade payables(4,203)(58)

Increase (decrease) in accounts payable–other

2,074(4,912)

Increase (decrease) in consumption tax payables

46(1,108)

Other(1,916)(5,905)

Subtotal

48,94030,124

Interest and dividends received

2,521

2,074

Interest paid

(175)

(170)

Income taxes paid

(16,286)(12,726)

Net cash provided by operating activities

35,00019,301- 35 -

(¥ million)
Prior Fiscal Year
(From April 1, 2007
to March 31, 2008)

Current Fiscal Year
(From April 1, 2008
to March 31, 2009)

Cash flows from investing activities
Payments for deposit in time deposits(4,206)(1,639)Proceeds from withdrawal from time deposits

1,988

4,512

Purchases of property, plant and equipment(10,470)(8,012)

Proceeds from sales of property, plant and equipment

22,424

4,052

Purchases of intangible assets(4,199)(2,799)Purchases of investment securities(4,993)(3,344)26

353

Acquisition of shares in consolidated subsidiaries, net ofcash acquired(15,982)(49)

Proceeds from acquisition of subsidiary shares related tochanges in scope of consolidation–

Proceeds from sales of investment securities

Payments for sales of subsidiary shares related to changes inscope of consolidation

*2

277

(62)

–

Advances of loans receivable(1,617)(5,645)

Collection of loans receivable

1,452

297

Guarantee money deposited(1,587)(1,198)Proceeds from collection of guarantee money deposited

2,259

2,864

Other

(11)

2

(14,980)(10,327)*2

Net cash used in investing activities
Cash flows from financing activities
Net increase (decrease) in short-term borrowings

(739)

128

Proceeds from long-term debt

16,00010,000

Repayment of long-term debt

(2,542)(5,338)

Repayment of bond

(10,000)–

Repayment of lease obligations

–

(104)

Payments into fund trust for purchase of treasury stock–(17,500)

Proceeds from withdrawal of fund trust for purchase oftreasury stock

–

2,376

(10,235)

(7)

–

1

Purchase of treasury stock
Proceeds from disposal of treasury stock
Dividends paid

(7,162)(6,009)Dividends paid to minority interests

(387)

(76)

Net cash used in financing activities(15,066)(16,529)

Effect of exchange rate changes on cash and cash equivalents(304)(12,619)

Net increase (decrease) in cash and cash equivalents

4,648(20,175)

124,155

129,289

485

1,142

Cash and cash equivalents at beginningof period
Increase in cash and cash equivalents due to consolidation of
additional subsidiaries
Increase in cash and cash equivalents due to merger with
non-consolidated subsidiaries
Decrease in cash and cash equivalents due to company split
Cash and cash equivalents at end of period*1- 36 -

–

*3

–

*4

(305)

*1

110,037

129,289

85

Events or conditions that may cast significant doubt on the premise of going concern
No items to report

Important Information Constituting the Basis for Preparation of Consolidated Financial Statements
Prior Fiscal Year
(From April 1, 2007 to March 31, 2008)
1. Information
Concerning the
Scope ofConsolidation

Current Fiscal Year
(From April 1, 2008 to March 31, 2009)(1) Total number of consolidated subsidiaries:(1) Consolidated subsidiaries:
Total number of consolidated subsidiaries:
55 companies
The names of consolidated subsidiaries have been
omitted as they are listed in 2. The BANDAI
NAMCO Group; (2) Associated Companies(Subsidiaries and Affiliated Companies).
Since EMOTION CO., LTD., ANIME CHANNEL
CO., LTD., and BANDAI VISUAL USA INC.,
gained in importance and LOGIPAL EXPRESS
INC. was newly incorporated as a result of anincorporation-type company split, those companies
were added to the scope of consolidation from thisconsolidated fiscal year.
Following (i) the sale of stocks in MONOLITH
SOFTWARE Inc. and Yunokawa Kanko Hotel Co.,
Ltd. and (ii) the merger of NAMCO SUPPORTERS
LTD., and Popy Co., Ltd. with other consolidated
subsidiaries, the said companies were excluded fromthe scope of consolidation. Sunlink Co., Ltd., wasalso excluded from the scope of consolidation after
Bandai Co., Ltd. sold a part of its shares to Happinet
Corporation, and the equity method was applied
thereto.
In addition, the corporate name of NAMCO
EUROPE LTD. was changed in January 2007, to
NAMCO Holdings UK LTD., NAMCO EUROPE
LTD. and NAMCO BANDAI Networks Europe
LTD. were newly established as subsidiaries andadded to the scope of consolidation.
(2) Non-consolidated subsidiaries:
Including SHANGHAI NAMCO LTD., 18 of theCompany’s subsidiaries are excluded from the scopeof consolidation, because total assets, net sales, net
income or loss and retained earnings, etc.
corresponding to the ownership held by theCompany of each non-consolidated subsidiary
have no material impact on the consolidated
financial statements.

- 37 -

63 companies
The names of consolidated subsidiaries have been
omitted as they are listed in 2. The BANDAI
NAMCO Group; (2) Associated Companies(Subsidiaries and Affiliated Companies).
Since BEEZ ENTERTAINMENT S.A.S. and
SUNRISE Music Publishing Co., Ltd., gained inimportance and BANDAI (SHENZHEN) CO., LTD.,
was newly incorporated, those companies wereadded to the scope of consolidation from thisconsolidated fiscal year.
XS ENTERTAINMENT INC. and BANDAIVISUAL USA INC. were liquidated and thus were
excluded from the scope of consolidation.
Also, new Banpresto Co., Ltd., was newly
incorporated as a result of an incorporation-typecompany split of Banpresto Co., Ltd., and was added
to the scope of consolidation. Banpresto Co., Ltd.,was merged with by NAMCO BANDAI Games Inc.
due to an absorption-type merger, and thus was
excluded from the scope of consolidation.
A tender offer having been carried out by NAMCO
BANDAI Games Inc. for D3 INC. and its
consolidated subsidiaries, D3PUBLISHER INC.,
Entertainment Software Publishing Inc.,
D3Publisher of America, Inc., D3Publisher ofEurope Ltd., D3DB S.r.l., and Vicious Cycle
Software, Inc., those companies were added to thescope of consolidation.
(2) Names etc. of the principal non-consolidated
subsidiaries
Principal non-consolidated subsidiaries
SHANGHAI NAMCO LTD.
BANDAI LOGIPAL (H.K.) LTD.
Total assets, net sales, net income or loss andretained earnings, etc. corresponding to theownership held by the Company of each
non-consolidated subsidiary have no material impact
on the consolidated financial statements andtherefore excluded from the scope of consolidation.

Prior Fiscal Year
(From April 1, 2007 to March 31, 2008)
2. Information
Concerning
Application of
the Equity
Method(1) Application of equity method:
1 non-consolidated subsidiary,
SHANGHAI NAMCO LTD., was accounted for by
the equity method.
5 affiliated companies were accounted for by theequity method:
Happinet Corporation

Current Fiscal Year
(From April 1, 2008 to March 31, 2009)(1) Number of non-consolidated subsidiaries andaffiliated companies to which the equity method wasapplied: 7 companies
Names of the principal non-consolidated subsidiary
and affiliated companies:
Non-consolidated subsidiary:
SHANGHAI NAMCO LTD.
Affiliated companies:
Happinet Corporation

Sotsu Co., Ltd.
People Co., Ltd.,

Sotsu Co., Ltd.

Italian Tomato Ltd.

People Co., Ltd.

Sunlink Co., Ltd.
Note that in the consolidated fiscal year underreview, Sotsu Agency Co., Ltd. changed its
corporate name to Sotsu Co., Ltd.

With the sale of shares in Sunlink Co., Ltd. toHappinet Corporation, Sunlink Co., Ltd. was
excluded from the scope of application of the equity
method for this consolidated fiscal year.
Furthermore, with the investment in Distribution
Partners S.A.S. and the acquisition of shares in
Sun-Star Stationery Co., Ltd., in connection withthat company’s split, those companies were treatedas companies to which the equity method is applied.

(2) Non-consolidated subsidiaries and affiliatedcompanies to which the equity method was notapplied

3. Information
Concerning the
Fiscal Year, etc.
for Consolidated
Subsidiaries(2) Non-consolidated subsidiaries and affiliatedcompanies to which the equity method was notapplied

The equity method was not applied to 17
non-consolidated subsidiaries including Sunrise
Interactive as well as 6 affiliated companies
including EURO VISUAL S.A.S., because it wasdeemed that the exclusion of these companies fromthe application of the equity method would havelittle, and no material, impact on the consolidated
net income or loss and retained earnings, etc. andtheir significance is minimal as a whole.

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

Consolidated subsidiaries with fiscal years to March 31:

NAMCO BANDAI Holdings (USA) Inc. and someother consolidated subsidiaries (21 domestic and 25
overseas subsidiaries) have the last day ofDecember, January, or February as closing date.

Bandai Co., Ltd.
NAMCO LIMITEDNAMCO BANDAI Games Inc.

In, addition, Bandai Visual Co., Ltd. and NAMCO
BANDAI Business Services Inc. changed theirrespective closing dates from the last day of
February to March 31 and thus had a 13-monthfiscal year.

Banpresto Co., Ltd.
Bandai Networks Co., Ltd.
Banpresoft Co., Ltd.
NAMCO TALES STUDIO LTD.

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

VIBE Inc.

- 38 -

Prior Fiscal Year
(From April 1, 2007 to March 31, 2008)
Consolidated subsidiaries with fiscal years to January
31:
Artpresto Co., Ltd.
Consolidated subsidiaries with fiscal years to December
31:
NAMCO BANDAI Holdings (USA) Inc.
BANDAI AMERICA INC.
NAMCO CYBERTAINMENT INC.
NAMCO BANDAI Games America Inc.
NAMCO AMERICA INC.
NAMCO NETWORKS AMERICA INC.
BANDAI ENTERTAINMENT INC.
BANDAI VISUAL USA INC.
BANDAI S.A.
BANDAI U.K. LTD.
BANDAI ESPANA S.A.
NAMCO Holdings UK LTD.
NAMCO EUROPE LTD.
NAMCO OPERATRIONS EUROPE LTD.
NAMCO OPERATRIONS SPAIN S.L.
NAMCO BANDAI Games Europe S.A.S.
NAMCO BANDAI Networks Europe LTD.
BANDAI (H.K.) CO., LTD.
BANPRESTO (H.K.) LTD.
BANDAI ASIA CO., LTD.
NAMCO ENTERPRISES ASIA LTD.
BANDAI INDUSTRIAL CO., LTD.
BANDAI KOREA CO., LTD.
CREATIVE B WORKS CO., LTD.
XS ENTERTAINMENT INC.
Consolidated subsidiaries other than those above
have the last day of February as closing date.
All of the above settlement dates fall within 3months of the consolidated settlement date.
Consequently, the results of the above consolidated
subsidiaries are reflected in the consolidated
financial statements.
However, necessary adjustments for consolidation
purposes were made in the case of materialtransactions conducted between the subsidiaryclosing dates and the consolidated closing date forthe consolidated financial statements of theCompany.

- 39 -

Current Fiscal Year
(From April 1, 2008 to March 31, 2009)

4. Information
Concerning theBasis forAccounting
Treatment

Prior Fiscal Year
(From April 1, 2007 to March 31, 2008)

Current Fiscal Year
(From April 1, 2008 to March 31, 2009)(1) Valuation basis and methods for significant assets:(1) Valuation basis and methods for significant assets:

(i)

(i)

Securities:

Securities:

Bonds to be held to maturity
Stated using the amortized cost method(straight-line method)

Bonds to be held to maturity

Other securities

Other securities

Same as left column

Securities with market values:

Securities with market values:

Same as left column

Stated using the market price method basedon amounts using market prices, etc. on theclosing date. (valuation differences arereflected directly in net assets and cost of sales
is calculated using the moving averagemethod.)Securities without market values:

Securities without market values:

Same as left column

Stated using the cost method based on themoving average method.
However, with respect to the contributions
to limited liability partnerships forinvestment businesses and similar
partnerships, the amount corresponding to
the equity holdings of the partnership’s
assets is stated as investment securities, andthe amount corresponding to profits or losses
resulting from the operations of thepartnership is stated as profits or losses forthis consolidated fiscal year.
(ii) Derivative trading:(ii) Derivative trading:Stated using the market price method.

Same as left column(iii) Inventories:(iii) Inventories:

Work in process, such as game software, etc.:

Domestic consolidated subsidiaries:
Work in process, such as game software, etc.:
Stated using the cost method based on thespecific cost method.

Others:Stated using the cost method based on thespecific cost method.
(The value stated on the balance sheets wascalculated by writing down the book value
based on declining profitability.)
Others:Generally, stated using the cost method
based on the total average method.
Overseas consolidated subsidiaries:
Work in process, such as game software, etc.:
Stated using the cost method based on thespecific cost method.

Domestic consolidated subsidiaries:
Generally, stated using the cost method
based on the total average method.
(The value stated on the balance sheets wascalculated by writing down the book value
based on declining profitability.)
Overseas consolidated subsidiaries:

Others:Generally, stated using the lower of cost
method based on the first-in first-out (FIFO)
method.

- 40 -

Generally, stated using the lower of cost
method based on the total average method.

Prior Fiscal Year
(From April 1, 2007 to March 31, 2008)

Current Fiscal Year
(From April 1, 2008 to March 31, 2009)(Change in accounting policies)“Accounting Standard for Measurement of
Inventories” (ASBJ Statement No. 9, issued on
July 5, 2006) was applied from thisconsolidated fiscal year.
The impact of this change on operating
income, recurring income, and net income
before income taxes and minority interests isimmaterial.

(2) Depreciation methods for significant depreciable
assets:(i) Property, plant and equipment:
The Company and domestic consolidated
subsidiaries:
Generally, stated using the declining-balancemethod.
However, for buildings (excluding equipment
attached thereto) acquired on or after April 1, 1998,
and for part of the amusement facilities andmachines, etc., the straight-line method was used.
The general useful life of property, plant andequipment is as follows:
Buildings and structures:

2 to 50 years

Amusement facilities and machines:
3 to 15 years(2) Depreciation methods for significant depreciable
assets:(i) Property, plant and equipment (exclusive of leased
assets):The Company and domestic consolidated
subsidiaries:
Generally, stated using the declining-balancemethod.
However, for buildings (excluding equipment
attached thereto) acquired on or after April 1, 1998,
and for part of the amusement facilities andmachines, etc., the straight-line method was used.
The general useful life of property, plant andequipment is as follows:
Buildings and structures:

2 to 50 years

Amusement facilities and machines:
3 to 15 years(Change in accounting policies)(Additional information)

Due to the revision of the Corporation Tax Law,
the Company and some of its domestic consolidated
subsidiaries changed the method of calculating thedepreciation of property, plant and equipment
acquired on or after April 1, 2007 for the accounting
period of this consolidated fiscal year (from April 1,
2007 to March 31, 2008) based on the revised
Corporation Tax Law.

As for the property, plant and equipment of somedomestic consolidated subsidiaries, the useful life
was changed from this consolidated fiscal year,
pursuant to the change in statutory useful life in the2008 revision of the Corporation Tax Law.

As a result of this, operating income, recurringincome and net income before taxes and minority
interests each decreased by 988 million yen.
The impact on segment information is noted in
the relevant section.

- 41 -The impact of this change on operating income,recurring income, and net income before income
taxes and minority interests is immaterial.

Prior Fiscal Year
(From April 1, 2007 to March 31, 2008)

Current Fiscal Year
(From April 1, 2008 to March 31, 2009)(Additional information)
Due to the revision of the Corporation Tax Law,
the Company and some of its domestic consolidated
subsidiaries, in respect of the property, plant andequipment acquired prior to March 31, 2007, aredepreciating the amount of difference between thememorandum value and an amount equivalent to
5% of the acquisition cost of the assets using thestraight-line method over a period of 5 years, fromthe consolidated fiscal year following theconsolidated fiscal year when the book value of theassets was depreciated to the amount equivalent to
5% of the acquisition cost based on the Corporation
Tax Law prior to revision.
As a result of this, operating income, recurringincome and net income before taxes and minority
interests each decreased by 186 million yen.
The impact on segment information is noted in
the relevant section.
Overseas consolidated subsidiaries:

Overseas consolidated subsidiaries:

Stated using the straight-line method.

Same as left column

The general useful life of property, plant andequipment is as follows:
Buildings and structures:

5 to 50 years

Amusement facilities and machines:
2 to 7 years(ii) Intangible assets:(ii) Intangible assets:
Stated using the straight-line method.
The general useful life of software is as follows:
Software (used internally):

Stated using the straight-line method.
Same as left column

1 to 5 years(iii)(iii) Leased assets:
Stated using the straight-line method, with theuseful life set to the lease period, for a residual valueof zero.
However, financing lease transactions other thanthose in which titles to leased property are
determined to be transferred to lessees, whichtransactions started on or before March 31, 2008, arestated by applying the accounting treatment
applicable to ordinary operating lease transactions.

(3) Basis of recognition for significant provision:(3) Basis of recognition for significant provision:(i) Allowance for doubtful receivables:(i) Allowance for doubtful receivables:

The allowance for doubtful receivables isprovided for possible losses on unrecoverable
receivables. For ordinary receivables, the amount of
the allowance is based on the historical rate of loss.
For receivables from debtors at risk of bankruptcy
and receivables from debtors in bankruptcy or underreorganization, etc., the amount of the allowance isbased on individually estimated unrecoverable
amounts.

- 42 -

Same as left column

Prior Fiscal Year
(From April 1, 2007 to March 31, 2008)(ii) Provision for directors’ bonus:

Current Fiscal Year
(From April 1, 2008 to March 31, 2009)(ii) Provision for directors’ bonus:

The Company and its domestic consolidated
subsidiaries provide accrued bonuses for directors
based on the estimated amounts to be paid in respectof this consolidated 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 return:Same as left column(iii) Provision for losses from business restructuring:Same as left column(iv) Provision for sales return:Certain consolidated subsidiaries provide forlosses on returned goods after the end of thisconsolidated fiscal year based on historicexperience.

Certain consolidated subsidiaries provide forlosses on returned goods after the end of thisconsolidated fiscal year based on historicexperience.

(Changes in display of accounting categories)
Estimated losses on returned goods at foreignsubsidiaries that were disclosed within “Other
current liabilities” in the previous consolidated
fiscal year are disclosed within “Provision for sales
return” in the consolidated fiscal year because somedomestic consolidated subsidiaries now bookprovision for sales return.
Estimated losses on returned goods included in“Other current liabilities” in the previous
consolidated fiscal year amounted to 514 millionyen.
(v) Accrued retirement and severance benefits:(v) Accrued retirement and severance benefits:

The Company and its consolidated subsidiaries
provide for retirement and severance benefits for
employees based on estimated retirement benefit
obligations and pension assets as of the end of thisconsolidated fiscal year.

The Company and its consolidated subsidiaries
provide for retirement and severance benefits for
employees based on estimated retirement benefit
obligations and pension assets as of the end of thisconsolidated fiscal year.

In addition, actuarial gain/loss is amortized inamounts using the straight-line method in eachconsolidated fiscal year over a fixed period (9 to 17
years) from the following consolidated fiscal year
within the average remaining period of service for
affected employees when incurred.

In addition, actuarial gain/loss is amortized inamounts using the straight-line method in eachconsolidated fiscal year over a fixed period (9 to 19
years) from the following consolidated fiscal year
within the average remaining period of service for
affected employees when incurred.

In certain domestic consolidated subsidiaries, past
service obligations are amortized over a fixed period(10 years) within the average remaining period ofservice for affected employees when incurred.

In certain domestic consolidated subsidiaries, past
service obligations are amortized over a fixed period(10 to 11 years) within the average remaining periodof service for affected employees when incurred.

(vi) Accrued directors’ and corporate auditors’
retirement and severance benefits:
To prepare for the payment of directors’ andcorporate auditors’ retirement and severance
benefits, some domestic consolidated subsidiaries
record the amounts payable at the end of fiscal yearin accordance with their respective internal rules.

- 43 -(vi) Accrued directors’ and corporate auditors’
retirement and severance benefits:
Same as left column

Prior Fiscal Year
(From April 1, 2007 to March 31, 2008)(4) Accounting policies for translation of significant
assets and liabilities into Japanese currency:
Receivables and payables denominated in foreign
currencies are translated at spot exchange rates
prevailing at the end of each fiscal year, andresulting gains or losses are included in income.

Current Fiscal Year
(From April 1, 2008 to March 31, 2009)(4) Accounting policies for translation of significant
assets and liabilities into Japanese currency:
Same as left column

Assets and liabilities of overseas subsidiaries aretranslated at spot exchange rates prevailing at theend of each fiscal year, while revenues and expensesof the same are translated at the average rates for theperiod. The differences resulting from suchtranslations are recorded in minority interests andtranslation adjustment under net assets.
(5) Accounting standards for income and expense:(5) Accounting standards for income and expense:

Videogame software production costs:

Videogame software production costs:

The production of videogame software involves
the complex combination of both software andcontent. Consequently, it is difficult to treat these
constituent items as separate components foraccounting purposes.

The production of videogame software involves
the complex combination of both software andcontent. Consequently, it is difficult to treat these
constituent items as separate components foraccounting purposes.

In addition, the Company judges the main
component of videogame software is the so-called
content, which includes visual image and music
data, and the game itself.

In addition, the Company judges the main
component of videogame software is the so-called
content, which includes visual image and music
data, and the game itself.

Therefore, based on the above, videogame
software production costs are recorded as work inprocess effective from the point at which an internal
decision is made to commercialize a product.

Therefore, based on the above, videogame
software production costs are recorded as work inprocess effective from the point at which an internal
decision is made to commercialize a product.

Also, for software production costs recorded
under assets, cost of sales is recorded based on
estimated sales volume.

Also, for software production costs recorded
under assets, cost of sales is recorded based on
estimated sales volume.

(Change in display of accounting categories)
In order to disclose videogame software
production costs recorded under assets in a more
appropriate manner, the account in which such costs
are to be disclosed has been changed from “Other
current assets (payments in advance)” to“Inventories” in some consolidated subsidiaries.
The videogame software production costs
included in “Other current assets (payments inadvance)” in the previous consolidated fiscal year
totals 2,026 million yen.

- 44 -

Prior Fiscal Year
(From April 1, 2007 to March 31, 2008)

Current Fiscal Year
(From April 1, 2008 to March 31, 2009)(6) Accounting policies for significant lease transactions: (6) Accounting policies for significant lease transactions:
The Company and its consolidated subsidiaries
account for financing lease transactions, other thanthose in which titles to leased property aretransferred to lessees, by applying accounting
treatment applicable to ordinary lease transactions.
However, overseas consolidated subsidiaries
follow the accounting standards in the country of
domicile and therefore treat financing leasetransactions in accordance with accounting
treatment applicable to ordinary sale and purchasetransactions.
(7) Significant accounting policies for hedging:(7) Significant accounting policies for hedging:(i) Accounting for hedging:(i) Accounting for hedging:

The Company uses deferred hedge accounting.

Same as left column

In addition, the allocation method was used forforward exchange contracts when appropriate. The
special method was used for interest rate swaps
when appropriate.
(ii) Hedging instruments and hedged items:-Hedging instruments:(ii) Hedging instruments and hedged items:-Hedging instruments:

Forward exchange contracts and interest rate
swaps
-Hedged items:

Same as left column-Hedged items:

Foreign-currency-denominated assets andliabilities and scheduled transactions, andinterest on debt.
(iii) Hedging policies:

Same as left column(iii) Hedging policies:

Hedging is implemented for the purpose of
reducing risks arising from fluctuations in exchange
rates and interest rates involved in operational andfinancing activities.

Same as left column(iv) Method of assessing the effectiveness of hedging:(iv) Method of assessing the effectiveness of hedging:

The effectiveness of a hedging transaction is, inprinciple, determined by comparing the cumulativechanges in the cash flows or the market movementsof the hedged item and the cumulative changes in
the cash flows or the market movements of thehedging instrument from the start of hedging to thetime of assessing the effectiveness thereof.

Same as left column

However, if important conditions are common forthe hedging instrument and the hedged asset,
liability, or scheduled transaction, no suchdetermination is made because it is apparent that
100% effectiveness in hedging was achieved.
Also, no such determination is made, either, forinterest rate swaps using the special method.

- 45 -

Prior Fiscal Year
(From April 1, 2007 to March 31, 2008)

Current Fiscal Year
(From April 1, 2008 to March 31, 2009)(8) Other important information constituting the basis of (8) Other important information constituting the basis ofpreparation of consolidated financial statements:
preparation of consolidated financial statements:
Accounting treatment of consumption tax:

Accounting treatment of consumption tax:

Consumption tax is accounted for separately andis not figured into each listed item. Note that
non-deductible consumption taxes, etc. regarding
assets, etc. were recorded as expenses for thecurrent consolidated fiscal year.

Consumption tax is accounted for separately andis not figured into each listed item.

5. Valuation ofAssets andLiabilities ofConsolidated
Subsidiaries

Assets and liabilities of consolidated subsidiaries areassessed based on their fair market value.

Same as left column

6. Amortization of
Positive
Goodwill and
Negative
Goodwill

Goodwill is amortized over a five-year period using
the straight-line method. Goodwill of overseas
consolidated subsidiaries is treated in accordance withthe accounting regulations of the country of domicile.

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

7. Scope of Cashand Cash
Equivalents inConsolidated
Statements ofCash Flows

Cash and cash equivalents include cash on hand,deposits on demand, and short-term, highly liquid
investments with maturities of 3 months or less from thedate of acquisition that are readily convertible to cash
and are subject to only insignificant risk of changes invalue.

Same as left column- 46 -

Changes in the Important Information Constituting the Basis for Preparation of Consolidated Financial Statements
Prior Fiscal Year
(From April 1, 2007 to March 31, 2008)

Current Fiscal Year
(From April 1, 2008 to March 31, 2009)(Practical Solution on Unification of Accounting Policies Applied
to Foreign Subsidiaries for Consolidated Financial Statements)
With the adoption of the “Practical Solution on Unification of
Accounting Policies Applied to Foreign Subsidiaries for
Consolidated Financial Statements” (PITF Practical Solution No.
18, issued on May 17, 2006), necessary adjustments to theconsolidated returns were carried out.
The impact of this change on operating income, recurringincome, and net income before income taxes and minority interests
is immaterial.
(Accounting Standard for Lease Transactions)
Before the change the accounting treatment for finance leasetransactions not involving the transfer of ownership followed themethod for operating lease transactions. However, the “AccountingStandard for Lease Transactions” (ASBJ Statement No. 13[Business Accounting Council Committee No. 1, June 17, 1993;
revised March 30, 2007]) and the “Guidance on AccountingStandard for Lease Transactions” (ASBJ Guidance No. 16 [TheJapanese Institute of Certified Public Accountants (JICPA)
Accounting Standard Committee, January 18, 1994; revised March
30, 2007]) are applied and the accounting treatment for suchtransactions follows the method for ordinary purchase or sales
transactions from this consolidated fiscal year.
In addition, for financing lease transactions other than those inwhich titles to leased property are determined to be transferred tolessees, which transactions started before the first year in which the
new standard was adopted, the accounting treatment applicable toordinary operating lease transactions continues to apply.
This change has no impact on operating income, recurringincome, and net income before income taxes and minority interests.

- 47 -

Change in Method of Presentation
Prior Fiscal Year
(From April 1, 2007 to March 31, 2008)(Consolidated Balance Sheets)

Current Fiscal Year
(From April 1, 2008 to March 31, 2009)(Consolidated Balance Sheets)
1. With the adoption of the “Cabinet Office Order Partially
Amending Terminology, Format, and Method of Presentation of
Financial Statements” (Cabinet Office Order No. 50, August 7,2008), what had been stated in the previous consolidated fiscal
year as “Inventories” is, from this consolidated fiscal year,
subdivided into “Merchandise and finished goods,” “Work inprocess,” and “Raw materials and supplies.” In addition, thevalues of “Merchandise and finished goods,” “Work in process,”and “Raw materials and supplies” subsumed under “Inventories”
in the previous consolidated fiscal year were 11,463 million yen,
21,481 million yen, and 3,484 million yen, respectively.
2. What had been stated through the previous consolidated fiscal
year as “Deferred tax liabilities” (for which the balance for thisconsolidated fiscal year is 616 million yen) is stated within“Other long-term liabilities” under “Long-term liabilities” since it
is at or below one percent of the total of liabilities and net assets.

(Consolidated Statements of Income)(Consolidated Statements of Income)1. What had been stated through the previous consolidated fiscal
year as “Gain on sales of investments in affiliated companies”(for which the total for this consolidated fiscal year is 72 million
yen) is stated within “Other extraordinary income” under“Extraordinary income” since it is at or below ten percent of thetotal extraordinary income.
2. What had been stated through the previous consolidated fiscal
year as “Loss on business restructuring” (for which the total forthis consolidated fiscal year is 114 million yen) and as “Provision
for losses on business restructuring” (for which the total for thisconsolidated fiscal year is 130 million yen) is stated within“Other extraordinary loss” in “Extraordinary loss” since each isat or below ten percent of the total extraordinary loss.
3. “Income taxes for the previous period,” which had been statedthrough the previous consolidated fiscal year as part of“Corporate income, inhabitant and enterprise taxes,” hasincreased their importance in this consolidated fiscal year and arestated separately.
In addition, the value of “Income taxes for the previous
period” subsumed under “Corporate income, inhabitant andenterprise taxes” in the previous consolidated fiscal year was 13
million yen.

- 48 -

Prior Fiscal Year
(From April 1, 2007 to March 31, 2008)

Current Fiscal Year
(From April 1, 2008 to March 31, 2009)(Consolidated Statements of Cash Flows)(Consolidated Statements of Cash Flows)

1. Changes in foreign subsidiaries’ estimated losses from sales
return, which in the previous fiscal year were included in otheroperating cash flows, are in the period under review presented aschanges in provision for sales return, as some domestic
consolidated subsidiaries reported provision for sales return.
Changes in estimated losses from sales return included in otheroperating cash flows in the previous fiscal year reflected adecline of 8 million yen.
2. To achieve a more appropriate presentation of capitalized gamesoftware costs, at some consolidated subsidiaries the line item
was changed from other current assets (advances) to inventories.
Owing to this adjustment, changes in capitalized software
production cost, which in the previous fiscal year were included
in changes in advances among other operating cash flows, are in
the period under review included in changes in inventories.
Changes in capitalized game software production cost included in
the previous fiscal year in changes in advances among otheroperating cash flows reflected a decline of 48 million yen.

Additional Information
Prior Fiscal Year
(From April 1, 2007 to March 31, 2008)

Current Fiscal Year
(From April 1, 2008 to March 31, 2009)(Legal action, etc.)(Legal action, etc.)

The Company and its U.S. consolidated subsidiaries had a suitbrought against them on October 5, 2006 in California by Game
Ballers, Inc., claiming compensatory damages in relation to certain
business transactions, but a settlement was reached and a settlementagreement concluded in September 2007. An extraordinary loss of
282 million yen (2.4 million US dollars) was booked under“Litigation settlement” in respect of this settlement.

On December 4, 2006, Kevin Curran and three other persons,
successors in interest to General Computer Corporation in the
United States, sued the Company’s group for compensation fordamages related to payment of royalty payments. An out-of-court
settlement was reached in December 2008 and a loss of 1,061
million yen (9,236 thousand US dollars) accompanying that
settlement was stated as “Litigation settlement.”- 49 -

Notes to Consolidated Financial Statements(Consolidated Balance Sheets)
Prior Fiscal Year(As of March 31, 2008)

Current Fiscal Year(As of March 31, 2009)*1. Shares of non-consolidated subsidiaries and affiliatedcompanies
Investment securities (shares)*1. Shares of non-consolidated subsidiaries and affiliatedcompanies

9,122 million yen

Investment securities (shares)

12,150 million yen*2. Pledged assets:
Time deposits:

131 million yen

Pledged for bank transaction guarantees
2. Guarantees for loans
Guarantees for lease agreements
concluded with trading partners ofoverseas subsidiaries

82 million yen*3. Land revaluation*3. Land revaluation
A revaluation of land for business-use was implemented
pursuant to the “Law Concerning Revaluation of Land” (Law No.
34, promulgated on March 31, 1998) and the revalued difference
was recorded under net assets.

A revaluation of land for business-use was implemented
pursuant to the “Law Concerning Revaluation of Land” (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 determinedbased on official notice prices that arecalculated by the method assessed andpublished by the Commissioner of the
National Tax Agency. The
Commissioner assesses and publishes
the method to calculate land value that
forms the foundation for calculating
taxable value for land value tax
prescribed in “Article 16 of Land Value
Tax Law (Law No. 69, promulgated on
May 2, 1991)”, as stipulated in “Article
2-4 of the Ordinance Implementing the
Law Concerning Land Revaluation(Cabinet Order No. 119, promulgatedon March 31, 1998)”. Reasonableadjustments are made to the official
notice prices.

Revaluation method: The fair value of land is determinedbased on official notice prices that arecalculated by the method assessed andpublished by the Commissioner of the
National Tax Agency. The
Commissioner assesses and publishes
the method to calculate land value that
forms the foundation for calculating
taxable value for land value tax
prescribed in “Article 16 of Land Value
Tax Law (Law No. 69, promulgated on
May 2, 1991)”, as stipulated in “Article
2-4 of the Ordinance Implementing the
Law Concerning Land Revaluation(Cabinet Order No. 119, promulgatedon March 31, 1998)”. Reasonableadjustments are made to the official
notice prices.

Revaluation date:

Revaluation date:

March 31, 2002

Difference between the market price ofthe revalued land at the end of thisconsolidated fiscal year and therevaluated book value after therevaluation:(581) million yen- 50 -March 31, 2002

Difference between the market price ofthe revalued land at the end of thisconsolidated fiscal year and therevaluated book value after therevaluation:(157) million yen

(Consolidated Statements of Income)Prior Fiscal Year
(From April 1, 2007 to March 31, 2008)

Current Fiscal Year
(From April 1, 2008 to March 31, 2009)*1. 199 million yen of inventory valuation loss of by cost or market *1. The book value of ending inventories is devalued based upon
method is included.
the declining in profitability. The following loss on valuation of
inventories is included in cost of sales.
3,844 million yen*2. Major components of selling, general and administrative
expenses
Advertising expenses:*2. Major components of selling, general and administrative
expenses

30,549 million yen

Advertising expenses:

28,409 million yen

Officers’ remuneration and employee
salaries and benefits:

30,884 million yen

Officers’ remuneration and employee
salaries and benefits:

27,992 million yen

Provision for employee retirement
and severance benefits:

1,115 million yen

Provision for employee retirement
and severance benefits:

1,247 million yen

497 million yen

Provision for directors’ bonus:

625 million yen

Provision for officers’ retirement andseverance benefits:

46 million yen

Provision for officers’ retirement andseverance benefits:

12 million yen

Research and development expenses:

17,583 million yen

Research and development expenses:

17,511 million yen

Allowance for doubtful receivables:

55 million yen

Allowance for doubtful receivables:

134 million yen

17,583 million yen*3. Research and development expenses
included in selling, general andadministrative expenses:

17,511 million yen

Provision for directors’ bonus:*3. Research and development expenses
included in selling, general andadministrative expenses:*4. Gains from sales of property, plant and equipment related
mainly to the sales of land.

*4. Gains from sales of property, plant and equipment related
mainly to the sales of land.

*5. Losses from sales of fixed assets related mainly to the sales ofland.

*5. Losses from sales of fixed assets related mainly to the sales ofbuildings and structures.

*6. Losses from disposal of fixed assets related mainly to thedisposal of buildings and structures and disposal of tools,
furniture and fixtures.

*6. Losses from disposal of fixed assets related mainly to thedisposal of buildings and structures and disposal of tools,
furniture and fixtures.

*7. Loss on impairment of fixed assets*7. Loss on impairment of fixed assets

In order to identify assets for impairment, the Company and its
consolidated subsidiaries group their fixed assets according tomanagement accounting classifications based on each strategic
business unit, except for important idle assets, assets schedule for
disposal and lease assets. Of these, in the Amusement Facility
Business, most are grouped according to fixed regions because theassets owned for the business of this unit are widely spread acrossJapan and overseas.

In order to identify assets for impairment, the Company and its
consolidated subsidiaries group their fixed assets according tomanagement accounting classifications based on each strategic
business unit, except for important idle assets, assets scheduled for
disposal and lease assets. Of these, in the Amusement Facility
Business, the smallest unit mainly used in managerial accounting,the individual facility, is the basic unit for grouping assets.

Also, the book value of the following assets, except for thoseassets which may be reused, was reduced to the collectible
amount and the decrease in value was recorded as a loss on
impairment of fixed assets in extraordinary loss.

In the past, in the Amusement Facility Business, asset groupings
were mainly organized by a certain region; in some domestic
consolidated subsidiaries, however, due to changes in theirorganization, the units used in the managerial accounting and theunits in those groupings diverge; thus, from this consolidated fiscal
year, the smallest unit mainly used in managerial accounting, theindividual facility, is the basic unit for grouping assets.

(Changes in grouping of assets)

Accompanying these changes, the Company stated an
impairment loss of 160 million yen as an extraordinary loss andreduced net income before income taxes and minority interests inthe same amount of the impairment loss.
In addition, the book value of the following assets, except for
those assets which may be reused, was reduced to the collectible
amount and the decrease in value was recorded as a loss on
impairment of fixed assets in extraordinary loss.

- 51 -

Prior Fiscal Year
(From April 1, 2007 to March 31, 2008)

Location
Yokohama City,
Kanagawa, etc.
(Note 1)Kanazawa City,
Ishikawa(Note 2)
Ayase City,
Kanagawa, etc.
(Note 3)

Items

Amusement
facility
Amusement
facility
Amusement
facility

Classification
Amusement
facilities andmachines, etc.
Amusement
facilities andmachines, etc.
Amusement
facilities andmachines, etc.

Current Fiscal Year
(From April 1, 2008 to March 31, 2009)

Impairment
loss(¥ million)
937

173

84

Hakodate City,
Hokkaido(Note 2)

Amusement
facility(touristhotel)

Buildings &structures, etc.

482

BEDFORDSHIRE,
U.K., etc.
(Note 2)

Amusement
facility

Amusement
facilities andmachines, etc.

946

Amusement
facilities andmachines, etc.

2

CAUSEWAY BAY,
HONG KONG.
(Note 4)ILLINOIS, U.S.A.
(Note 5)
Shimotsuga-gun,Tochigi, etc.
(Note 6)
Bunkyo-ku, Tokyo,
etc.
(Note 4)
Inashiki-gun
Ibaraki(Note 7)Koto-ku,Tokyo(Note 2)
Total

Assetsscheduled
for disposal,
etc.
Amusement
facility

Goodwill

Buildings &Idle assets
structures, andland, etc.
Buildings &Assetsstructures,
scheduledproperty, plantfor disposal,and equipmentetc.
(others), etc.
Buildings &Warehousestructures, andland
Software for Property, plant
Internetand equipment
content(others), andbusiness
software

662

789

116

35

Location
Kanazawa
City, Ishikawa,etc.
(Note 1)
Sendai City,
Miyagi, etc.
(Note 2)
Osaka City,
Osaka, etc.
(Note 3)

Items

Amusement
facility

Amusement
facility
Amusement
facility

Sapporo City,
Assets for
Hokkaido, etc.
business use(Note 1)

Classification

Amusement
facilities andmachines, etc.
Amusement
facilities andmachines, etc.
Amusement
facilities andmachines, etc.
Buildings &structures, property,
plant andequipment (others)
Buildings &structures, property,
plant andequipment (others)

Impairment
Loss(¥ million)

208

93

474

48

Shibuya-ku,
Tokyo(Note 4)

Assets forbusiness use

Seoul,
KOREA(Note 1)

Software forInternet content
business

Other intangible
fixed assets

25

Minato-ku,
Tokyo(Note 5)

Assetsscheduled for
disposal

Buildings &structures, property,
plant andequipment (others)

22

Minato-ku,
Tokyo(Note 5)
Ibaraki City,
Osaka, etc.
(Note 6)
Total

Assetsscheduled for
disposal

Buildings &structures

13

Idle assets

Land

28

17

4,247

- 52 -

38

953

Prior Fiscal Year
(From April 1, 2007 to March 31, 2008)

Current Fiscal Year
(From April 1, 2008 to March 31, 2009)
Notes:

Notes:

1. An impairment loss was recorded because it was predicted that
1. This asset was separated from its current grouping and an
the book value of this fixed asset could not be collected due toimpairment loss was recorded because the recoverable amount of
the decrease in business profitability. In addition, the asset was
this fixed asset largely decreased due to the decision to close thedetermined to have no value.
facility. In addition, the asset was determined to have no value.
2. An impairment loss was recorded because it was forecasted thatthe book value of this fixed asset could not be recovered due tothe decrease in business profitability. In addition, the asset wasdetermined to have no value.

2. An impairment loss was recorded because it was judged that thevalue that could be collected on this fixed asset had fallen
substantially, due to the decision to close the facility. In addition,
the asset was determined to have no value.

3. This asset was separated from its existing grouping and an
3. These asset were separated from its current grouping and an
impairment loss was recorded for the asset because, while it had
impairment loss was recorded because, it was decided to change
previously been operated to generate income, a rethinking of thethe use of the assets from income generating to use of social
main objective of the operation led to a decision to operate thewelfare projects which resulted in a reduction in their recoverable
asset as a research facility for new product development andamount , and these asset were considered to have lost its mutuallydevelopment of new types of facilities; upon that decision, thecomplementary function in its current grouping. In addition, theasset was determined to have no value.
asset was recognized that the value that could be collected on this
fixed asset had fallen substantially. In addition, the asset was
4. An impairment loss was recorded for this asset which is unlikely
determined to have no value.
to be used because of relocation of facilities. In addition, the asset
was determined to have no value.
5. An impairment loss was recorded because the book value of this
fixed asset could not be recovered due to the decrease inprofitability of the acquired business. In addition, the asset wasdetermined to have no value.

4. This asset was separated from its current grouping and recorded
as an impairment loss because the collectible amount of this fixed
asset largely decreased due to the decision to close the facility.
The asset was determined to have no value.

5. An impairment loss was recorded on this asset, for which no
future use is anticipated, accompanying the relocation of the
6. Assets that had no foreseeable use in the future due to integration
Company and its subsidiaries’ head office functions. In addition,of business units were written down and impairment loss was
the asset was determined to have no value.
recorded. The recoverable amount of real estate assets wasmeasured to be the net selling price, which was assessed based on 6. Assets that had no foreseeable use in the future were written
road rating..
down and impairment loss was recorded. The recoverable amountof real estate assets was measured to be the net selling price,
7. An impairment loss was recorded because it was forecasted thatwhich was assessed based on real assets appraisals.
the book value of this fixed asset could not be recovered due tothe decrease in business profitability. In addition, the recoverable
amount of real estate assets were measured by the net sales value
and assessed based on fixes assets tax rating.

- 53 -

(Consolidated Statements of Changes in Net Assets)
Prior Fiscal Year (From April 1, 2007 to March 31, 2008)
1. Matters concerning the total number and type of shares in issue and the total number and type of treasury stock
Number of shares at the Increase in number ofend of the previous
shares in the current
periodperiodDecrease in number ofshares in the current
periodNumber of shares atthe end of the current
periodIssued shares
Common stock(Note 1)
Total

260,580,191–

4,500,000

256,080,191

260,580,191–

4,500,000

256,080,191

2,731,047

5,186,011

6,150,787

1,766,271

2,731,047

5,186,011

6,150,787

1,766,271

Treasury stock
Common stock(Note 2, 3)
Total
Notes: 1.
2.

3.

The decrease of 4,500,000 shares in the total number of shares issued resulted from the retirement of treasury
stock.
The increase of 5,186,011 shares in treasury stock (shares of common stock) consists of an increase of
4,980,000 shares from the purchase of treasury stock as per a decision made by the Board of Directors, 5,646
shares from the repurchase of shares less than a unit, 198,600 shares from the purchase of treasury stock via a
put for purchase in connection with the share exchange between the Company and Bandai Visual Co., Ltd., and
1,765 shares as a result of an increase in the shareholding ratio in respect of affiliates to which the equity
method applies.
The decrease of 6,150,787 shares in treasury stock (shares of common stock) consists of a decrease of
4,500,000 shares from the retirement of treasury stock, 1,650,696 shares from the allotment of treasury stock toshareholders of Bandai Networks Co., Ltd. and Bandai Visual Co., Ltd., via the share exchange carried out
between them and the Company, and 91 shares from sales of shares less than a unit.

- 54 -

2. Notes to stock subscription rights and treasury stock subscription rights

Category

The
Company

Details of stock subscription rights

Stocksubscription
rights as stock
options(Note)

Number of shares covered by stock
Type of stock
Balance at
subscription rights
for stockend ofsubscription At end of Increase Decrease
periodAt end ofrights(¥ million)
previous in current in current
periodperiodperiodperiodSeries 1 Stocksubscription rights

–

–

–

–

–

195

Series 2 Stocksubscription rights

–

–

–

–

–

232

Series 3 Stocksubscription rights

–

–

–

–

–

345

Series 4 Stocksubscription rights

–

–

–

–

–

80

Series 2–1 Stocksubscription rights

–

–

–

–

–

175

Series 2–2 Stocksubscription rights

–

–

–

–

–

501

–

–

–

–

–

1,531

Total

Note: Exercise periods have not started for any of the stock subscription rights tabulated above.
3. Matters concerning dividends(1) Paid dividend amounts

Date of resolution
June 25, 2007,
Annual General
Meeting of Shareholders
November 8, 2007,
Board of Directors’MeetingType ofsharesTotal amount ofdividends(¥ million)

Dividend
per share(¥)

Date of record

Effective dateCommon
stock

4,127

16

March 31, 2007

June 26, 2007

Common
stock

3,035

12

September 30, 2007

December 10, 2007

(2) Dividends with a date of record in this consolidated fiscal year but an effective date in the following consolidated
fiscal year

Date of resolution
June 23, 2008,
Annual General
Meeting of
Shareholders

Type ofsharesCommonstock

Total amount ofdividends(¥ million)

3,056

Source ofdividends

Dividend
per share(¥)

Date of record

Effective date

Retainedearnings

12

March 31, 2008

June 24, 2008

- 55 -

Current Fiscal Year (From April 1, 2008 to March 31, 2009)
1. Matters concerning the total number and type of shares in issue and the total number and type of treasury stock
Number of shares at the Increase in number ofend of the previous
shares in the current
periodperiodDecrease in number ofshares in the current
periodNumber of shares atthe end of the current
periodIssued shares
Common stock(Note 1)
Total

256,080,191–

6,080,191

250,000,000

256,080,191–

6,080,191

250,000,000

1,766,271

13,009,676

6,081,151

8,694,796

1,766,271

13,009,676

6,081,151

8,694,796

Treasury stock
Common stock(Note 2, 3)
Total
Notes: 1.
2.

3.

The decrease of 6,080,191 shares in the total number of shares issued resulted from the retirement of treasury
stock.
The increase of 13,009,676 shares in treasury stock (shares of common stock) consists of an increase of
13,000,000 shares from the purchase of treasury stock as per a decision made by the Board of Directors, 6,550
shares from the repurchase of shares less than a unit and 3,126 shares as a result of an increase in theshareholding ratio in respect of affiliates to which the equity method applies.
The decrease of 6,081,151 shares in treasury stock (shares of common stock) consists of a decrease of
6,080,191 shares from the retirement of treasury stock and 960 shares from sales of shares less than a unit.

- 56 -

2. Notes to stock subscription rights and treasury stock subscription rights

Category

The
Company

Details of stock subscription rights

Number of shares covered by stock
Type of stock
Balance at
subscription rights
for stockend ofsubscription At end of Increase Decrease
periodAt end ofrights(¥ million)
previous in current in current
periodperiodperiodperiodSeries 1 Stocksubscription rights(Note)

–

–

–

–

–

195

Series 2 Stocksubscription rights(Note)

–

–

–

–

–

60

–

–

–

–

–

389

–

–

–

–

–

159

Series 2–1 Stocksubscription rights(Note)

–

–

–

–

–

175

Series 2–2 Stocksubscription rights(Note)

–

–

–

–

–

487

–

–

–

–

–

1,468

Series 3 Stock
Stocksubscription rights
subscription
rights as stock Series 4 Stocksubscription rights
options(Note)

Total

Note: Exercise periods have not started for the Series 1, Series 2, Series 4, Series 2–1 and Series 2–2 stock subscription
rights.
3. Matters concerning dividends(1) Paid dividend amounts

Date of resolution
June 23, 2008, Annual
General Meeting of
Shareholders (Note)
November 5, 2008,
Board of Directors’MeetingType ofsharesTotal amount ofdividends(¥ million)

Dividend
per share(¥)

Date of record

Effective dateCommon
stock

3,053

12

March 31, 2008

June 24, 2008

Common
stock

2,956

12

September 30, 2008

December 8, 2008

Note: The above is stated excluding dividends on treasury stock owned by affiliated companies. In addition, the total amountof dividends before that exclusion was 3,056 million yen.

- 57 -

(2) Dividends with a date of record in this consolidated fiscal year but an effective date in the following consolidated
fiscal year
The following resolution is planned.
Date of scheduled
Resolution

Type ofsharesJune 22, 2009, Annual
General Meeting of
Shareholders

Commonstock

Total amount ofdividends(¥ million)

Source ofdividends

Dividend
per share(¥)

Date of record

Effective date

Retainedearnings

12

March 31, 2009

June 23, 2009

2,896

(Consolidated Statements of Cash Flows)
Prior Fiscal Year
(From April 1, 2007 to March 31, 2008)

Current Fiscal Year
(From April 1, 2008 to March 31, 2009)*1. Relationship between cash and cash equivalents at the end of
the period under review and the amounts accounted for on the
consolidated balance sheets:*1. Relationship between cash and cash equivalents at the end of
the period under review and the amounts accounted for on the
consolidated balance sheets:(¥ million)(¥ million)

Cash and time deposits

126,103

Cash and time deposits

Short-term investments

7,068

Short-term investments

4,426

Total

133,172

Total

111,173

Time deposits with maturities exceeding
3 months(3,882)Time deposits with maturities exceeding
3 months(1,135)

Cash and cash equivalents

129,289

Cash and cash equivalents

110,037

106,747*2. Key assets and liabilities of companies newly consolidated as
subsidiaries due to acquisition of their equity.
D3 INC.
Breakdown of assets and liabilities of D3 INC. and its
subsidiaries at the time of its new consolidation due to theacquisition of its shares and the reconciliation between theshare acquisition value and the net proceeds from theacquisition are as follows:(¥ million)
Current assets

7,892

Fixed assets

848

Current liabilities(1,954)Long-term liabilities(5,144)

Negative goodwill(250)

Minority interests(79)

Share acquisition value

1,313

Existing equity
Cost of share acquisition

1,309

Cash and cash equivalents of D3 INC.
and its subsidiaries

1,586

Difference: Net proceeds from theacquisition- 58 -(3)277

Prior Fiscal Year
(From April 1, 2007 to March 31, 2008)

Current Fiscal Year
(From April 1, 2008 to March 31, 2009)*2. Principal assets and liabilities of companies removed from theconsolidation due to the sale of the Company’s shareholdings
MONOLITH SOFTWARE INC.
MONOLITH SOFTWARE INC. was removed from theconsolidation owing to the sale of the Company’s
shareholdings. Assets and liabilities at the time of removalfrom the consolidation, the sales price of the shares, and thenet effect on income were as follows.
(¥ million)
Current assets

1,290

Fixed assets

167

Current liabilities(1,125)Long-term liabilities(50)

Minority interests(9)

Decrease in retained earnings due to
exclusion from the consolidation(27)

Equity interest at the time of exclusionfrom the consolidation(20)

Book value of the shares

226

Gain or loss on sale of shares−

Proceeds from sale of shares

226

Cash and cash equivalents(304)

Difference: Net received(78)

Sunlink Co., Ltd.
Sunlink Co., Ltd. was removed from the consolidation
owing to the sale of the Company’s shareholdings. Assets andliabilities at the time of removal from the consolidation, thesales price of the shares, and the net effect on income were as
follows.
(¥ million)
Current assets

2,613

Fixed assets

653

Current liabilities(3,074)Long-term liabilities(471)

Increase in retained earnings due to
exclusion from the consolidation

92

Book value of the shares(185)

Gain on sales of shares

298

Proceeds from sale of shares

113

Cash and cash equivalents(237)

Difference: Net received(124)- 59 -

Prior Fiscal Year
(From April 1, 2007 to March 31, 2008)

Current Fiscal Year
(From April 1, 2008 to March 31, 2009)

Yunokawa Kanko Hotel Co., Ltd.
Yunokawa Kanko Hotel Co., Ltd. was removed from theconsolidation due to the disposition of the Company’s equity
interest. The following states the amounts of assets andliabilities of Yunokawa Kanko Hotel Co., Ltd. at that time, as
well as the selling price of and the net proceeds from the saleof equity shares and claims in Yunokawa Kanko Hotel Co.,Ltd.
(1) Disposal of shares in Yunokawa Kanko Hotel Co., Ltd.
(¥ million)
Current assets

127

Fixed assets

545

Current liabilities(2,567)Long-term liabilities(194)

Book value of the shares(2,087)

Gain on sales of investments

2,097

Proceeds from sale of shares (i)10(2) Sale of claims in the company(¥ million)
Claims amount

2,387

Allowance for doubtful receivables(2,272)

Disposal book value of claims

115

Gain on sales of claims

30

Proceeds from sale of claims (ii)145

Proceeds – Total (i + ii)

155

Cash and cash equivalents(15)

Difference: Net received

140*3. Main assets and liabilities succeeded in connection with amerger of non-consolidated subsidiaries
The following assets and liabilities are assumed from Bandai
Automobile Co., Ltd., which in the period under review mergedwith LOGIPAL EXPRESS INC. The merger caused increase of
215 million yen in additional paid-in capital of the Company.
(¥ million)
Current assets

117

Fixed assets

156
Total assets

Current liabilities

49

Long-term liabilities

8

Total liabilities- 60 -

273

57

Prior Fiscal Year
(From April 1, 2007 to March 31, 2008)

Current Fiscal Year
(From April 1, 2008 to March 31, 2009)*4. Major breakdown of assets and liabilities which are decreased
due to company split
The major breakdown of assets and liabilities of Seika Co., Ltd.
succeeded by Sun-Star Stationery Co., Ltd. Cash and cash
equivalents are decreased by 305 million yen due to this company
split. .
(¥ million)
Current assets

1,556

Fixed assets

21
Total assets

1,577

Current liabilities

906

Long-term liabilities

342

Total liabilities

1,249(Lease Transactions)Disclosure of lease transactions is omitted because there were no material changes from the previous fiscal year-end.

- 61 -

(Securities)
1. Bonds held to maturity with market values(¥ million)
Prior Fiscal Year(As of March 31, 2008)
Type

Bonds held tomaturity
whose market
price exceeds
balance sheet
amountBonds held tomaturity
whose market
price does notexceedbalance sheet
amountBook valueon theconsolidatedbalancesheetsMarketprice

Current Fiscal Year(As of March 31, 2009)

DifferenceBook valueon theconsolidatedbalancesheetsMarketprice

Difference

i. Government
and local
government
bonds, etc.

10

10

–

–

–

–

ii. Corporate
bonds

–

–

–

–

–

–

iii. Other

–

–

–

–

–

–

Subtotal

10

10

–

–

–

–

i. Government
and local
government
bonds, etc.

19

19

–

–

–

–

ii. Corporate
bonds

–

–

–

–

–

–

iii. Other

–

–

–

–

–

–

19

19

–

–

–

–

30

30

–

–

–

–

Subtotal
Total- 62 -

2. Other securities with market values(¥ million)
Prior Fiscal Year(As of March 31, 2008)

Current Fiscal Year(As of March 31, 2009)

Acquisition
cost

Book valueon theconsolidatedbalancesheetsDifference

Acquisition
cost

Book valueon theconsolidatedbalancesheetsDifference

1,888

6,820

4,931

1,725

3,890

2,165

–

–

–

200

203

3

–

–

–

–

–

–

1,888

6,820

4,931

1,925

4,094

2,168

i. Stocks
Other
securities
ii. Bonds
whose balance
Corporate
sheet amountbonds
does notiii. Other
exceedacquisition
Subtotal
cost

10,521

7,775(2,745)

9,719

6,607

(3,111)

300

298

(1)

100

97

(2)

222

206

(16)

222

156

(66)

11,0448,280(2,763)

10,042

6,862(3,180)Total

12,933

15,101

2,167

11,968

10,956(1,011)

Type

i. Stocks
Other
securities
ii. Bonds
whose balance
Corporate
sheet amountbonds
exceedsiii. Other
acquisition
cost
Subtotal

Note: Stocks and other securities with market values included in other securities were recognized as 132 million yen for theprior period and 952 million yen for the current period as impairment losses. These were:
Stocks whose market value declined 50% or more:
All stocks
Stocks whose market value declined 30% or more but
Stocks for which no recovery in value is expectedless than 50%:
3. Other securities sold during the prior fiscal year and current fiscal year(¥ million)
Prior Fiscal Year

Current Fiscal Year

(From April 1, 2007 to March 31, 2008)(From April 1, 2008 to March 31, 2009)

Proceeds of sale

Total gains on
sale

26

1

Total loss on sale

Proceeds of sale

Total gains on
sale

57

–

11

- 63 -

Total loss on sale16

4. Principal securities holdings without market value(¥ million)
Prior Fiscal Year(As of March 31, 2008)

Current Fiscal Year(As of March 31, 2009)

Book value on consolidated balance sheets Book value on consolidated balance sheets(1) Bonds held to maturity

34

30

Unlisted bonds

3430(2) Other securities

8,924

6,238

i) Unlisted stocks

1,720

1,690

ii) MMF

5,863

3,694

iii) Other

1,339

853

5. Redemption amounts for other securities with maturities and bonds which are to be held to maturity(¥ million)
Prior Fiscal Year(As of March 31, 2008)

Current Fiscal Year(As of March 31, 2009)

1 year or
less

More
than 1,
up to 5years

Morethan 5,up to 10
years

More
than 10years

1 year or
less

More
than 1,
up to 5years

Morethan 5,up to 10
years

More
than 10
years

9

20

–

–

–

–

–

–

–

34

–

–

–

30

–

–

9

54

–

–

–

30

–

–

Bonds
Government and local
government bonds, etc.
Corporate bonds
Total- 64 -

(Derivative Transactions)
1. Matters Regarding Transaction Status
Prior Fiscal Year

Current Fiscal Year

(From April 1, 2007 to March 31, 2008)(From April 1, 2008 to March 31, 2009)

The Company and its consolidated subsidiaries use derivative
instruments, such as forward exchange contracts and interest rate
swap contracts, to reduce market risks stemming from fluctuations
in foreign exchange rates and interest rates. The Company and its
consolidated subsidiaries implement these financial transactions
solely for the purpose of reducing the risks resulting from such
fluctuations to which they are exposed in the course of theirordinary business activities. Accordingly, the Company does not use
derivative instruments or other financial instruments for speculative
purposes. The Company’s counterparties for derivative instruments
are all highly creditworthy financial institutions and, therefore, theCompany believes that it is exposed to almost no counterparty risk.
Derivative transactions are conducted in accordance with internal
rules that specify transaction authority and transaction amountlimits.

Same as left column

Contract amounts in themselves in “Matters Regarding Fair
Value of Transactions” should not be considered indicative of themarket risk associated with the derivative financial instruments.
The accounting for hedging, hedging instruments and hedged
items, hedging policies, and method of assessing the effectivenessof hedging are as per “Important Information Constituting the Basisfor Preparation of Consolidated Financial Statements, 4.
Information Concerning the Basis for Accounting Treatment, (7)Significant accounting policies for hedging.”- 65 -

2. Matters Regarding Fair Value
Currency items(¥ million)
Prior fiscal year
As of March 31, 2008
Categories

Type

Current fiscal year
As of March 31, 2009

Contract
amountContract
Contract
etc. whose
Unrealized
Fair value
amountamountgain (loss)
periodetc.
etc.
exceeds 1
year

Contract
amountetc. whose
Unrealized
Fair value
gain (loss)
periodexceeds 1
year

Forwardexchange
contracts
Short
Transactions
outsidemarkets

Britishpounds

560

–

548

11

–

–

–

–

Yen

856

–

882

(25)

728

–

824

(95)

Won

229

–

223

6

161

–

165

(4)

–

–

–

–

12

–

12

–

2,612

–

2,348

(264)

952

–

976

23

–

–

–

(271)

–

–

–

(76)

Long
Yen
U.S. dollars
Total
Notes: 1.
2.
3.

Fair value is measured using forward exchange rates
Derivative financial instruments subject to hedge accounting are excluded from disclosure.
The above foreign exchange contracts were entered to manage currency risks from intercompany receivables
and payables in foreign currency and hedge accounting is to apply for the non-consolidated financial statements.
However, such intercompany receivables and payables are eliminated during consolidation, therefore, thesederivatives are not subject to hedge accounting but to disclosure.

- 66 -

Retirement and Severance Benefits
1. Retirement plan types
The Company and part of domestic consolidated subsidiaries

Qualified retirement benefit plan and retirement
lump-sum benefits as qualified retirement benefit
type and defined contribution pension plan as
defined contribution type have been established.

Other domestic consolidated subsidiaries(excluding domestic consolidated subsidiaries without
retirement benefit schemes)

Other domestic consolidated subsidiaries haveestablished as qualified retirement benefit type,
qualified retirement benefit plans, retirement
lump-sum benefits, or comprehensive employees’
pension funds. Some of the consolidated
subsidiaries have concurrently utilized the Smaller
Enterprise Retirement Allowance Mutual Aid
Scheme. Additional benefits may also be paid atretirement.

Foreign consolidated subsidiaries

Some foreign consolidated subsidiaries haveestablished defined contribution types orretirement lump-sum benefits.

2. Retirement benefit liabilities

i.
ii.

Projected benefit obligations
Plan assets at fair value

Prior Fiscal Year(As of March 31, 2008)(13,544)
10,531

iii. Projected benefit obligation in excess of plan
assets (i + ii)
iv. Unrecognized transition liability
v. Unrecognized actuarial gain/loss
vi. Unrecognized prior service liability (reduction
in liability)vii. Net retirement and severance benefits
recognized on the balance sheets(iii + iv + v + vi)
viii. Prepaid pension expense
ix. Accrued retirement and severance benefits(vii – viii)
Notes: 1.

2.

(¥ million)
Current Fiscal Year(As of March 31, 2009)(14,254)9,326(3,013)(4,928)

–
1,996

–
3,531

(413)

(372)

(1,429)(1,769)141

137(1,571)(1,906)

In addition to the plan assets shown above, there are 539 million yen for the prior fiscal year and 438 million
yen for the current fiscal year in plan assets under the employee’s pension fund (accounted for by the ratio ofcontribution).
To calculate retirement benefit liabilities, some subsidiaries have adopted the simplified method.

- 67 -

3. Retirement benefit expenses(¥ million)
Prior Fiscal Year

Current Fiscal Year

(From April 1, 2007
to March 31, 2008)(From April 1, 2008
to March 31, 2009)

i. Service cost for benefits earned – net of
employee contributions
ii. Interest cost on projected benefit obligationiii. Estimated return on plan assets
iv. Transition liability charged off
v. Amortization of unrecognized actuarial gain
vi. Amortization of prior service costvii. Net periodic cost (total i - vi)
Notes: 1.

2.
3.
4.

1,470

1,629

237
(253)
–
236
(40)

244
(274)
–
285
(40)

1,650

1,844

In addition to the retirement benefit expenses shown above, there are also 37 million yen for the prior fiscal year
and 30 million yen for the current fiscal year in contributions to the employees’ pension fund charged to the costof sales and selling, general and administrative expenses. Additional benefits are 117 million yen for the priorfiscal year and 97 million yen for the current fiscal year. Moreover, certain domestic consolidated subsidiaries,
as part of a second career support system/early retirement system, recognized 553 million yen of additional
benefits among special retirement benefits and recorded the amount in extraordinary loss.
Retirement benefit expenses for the subsidiaries which have adopted the simplified methods are included in i.
service cost above.
A portion of overseas defined contribution values related to the establishment of a defined contribution pension
plan has been recorded as i. service cost.
The contribution of certain consolidated subsidiaries that concurrently utilize the Smaller Enterprise Retirement
Allowance Mutual Aid Scheme has been recorded as i. service cost.

4. Key factors in calculation of retirement benefit liabilities

i. Method of the benefit attribution
ii. Discount rate:iii. Estimated rate of return on plan assets
iv. Period of amortization of prior unrecognizedservice cost
v. Period of amortization of unrecognized actuarial
gain or loss

Prior Fiscal Year(As of March 31, 2008)
Benefit/year of service
2.0%
2.0% to 3.0%
10 years

Current Fiscal Year(As of March 31, 2009)
Benefit/year of service
1.7% to 2.0%
2.5% to 3.0%
10 to 11 years

Amortized in amounts using
the straight-line method ineach consolidated fiscal year
over a fixed period (9 to 17
years) from the following
consolidated fiscal year
within the average remaining
period of service for affected
employees when incurred.

Amortized in amounts using
the straight-line method ineach consolidated fiscal year
over a fixed period (9 to 19
years) from the following
consolidated fiscal year
within the average remaining
period of service for affected
employees when incurred.

- 68 -

(Concerning Stock Options, etc.)
Prior Fiscal Year (From April 1, 2007 to March 31, 2008)
1. Item and amount of stock option expenses in the consolidated fiscal year
Selling, general and administrative expenses:¥954 million

2. Types, sizes and changes of stock options(1) Types of stock option
2006 Stock Options
Series 1
Stock subscription rights

Series 2
Stock subscription rights

Series 3
Stock subscription rights

Position and number ofbeneficiaries

Directors of the Company(8)

Directors of subsidiaries(14)

Employees of theCompany andsubsidiaries (603)Type and number of stock
options (Note 1)

Common stock 126,300

Common stock 149,700

Common stock
1,838,000

Grant dateJuly 18, 2006

July 18, 2006

July 18, 2006

Conditions for exercisingrights(Note 2)

(Note 3)(Note 4)

Required tenure

Not specified

Not specified

from July 18, 2006
to July 9, 2008

Applicable period forexercising rightsfrom July 10, 2009
to June 30, 2014

from July 10, 2009
to June 30, 2014

from July 10, 2008
to June 30, 20102007 Stock Options
Series 4
Stock subscription rights

Series 2–1
Stock subscription rights

Series 2–2
Stock subscription rights

Position and number ofbeneficiaries

Employees ofsubsidiaries (231)

Directors of the Company(6)

Directors of subsidiaries(85)

Type and number of stock
options (Note 1)

Common stock 583,000

Common stock 92,600

Common stock 268,100

Grant date

April 18, 2007

July 19, 2007

July 19, 2007

Conditions for exercisingrights(Note 4)(Note 2)

(Note 3)Required tenurefrom April 18, 2007
to March 31, 2009

Not specified

Not specified

Applicable period forexercising rightsfrom April 1, 2009
to June 30, 2010

from July 10, 2010
to June 30, 2015

from July 10, 2010
to June 30, 2015

Notes: 1.
2.

3.

The number of stock options is given in that of shares.
After stock subscription rights are allocated, if the Company’s stock price growth rate up to the start of theperiod for exercising those rights does not exceed the TOPIX (Tokyo Stock Price Index) growth rate, then thosestock subscription rights cannot be exercised. The Company’s stock price growth rate shall be calculated as theaverage closing price for common shares of the Company on the Tokyo Stock Exchange on each of the days
within the previous 3 months prior to the month in which the starting date for the period for exercising the stock
subscription rights falls (except if there is no trading) divided by the average closing price for common shares of
the Company on the Tokyo Stock Exchange on each of the days within the previous 3 months prior to the monthin which the allotment date falls (except if there is no trading). The TOPIX growth rate is calculated in the same
way as the Company’s stock price growth rate.
The annual target of business performance and evaluation period (3 years from the time of the issuance of rights- 69 -

4.

to the time it is possible to exercise those rights) shall be determined, with the sales and operating income, etc.
of the strategic business unit – to which persons to whom stock subscription rights were allotted (hereinafterreferred to as “Stock Subscription Rights Holder(s)”) belongs at the time of issuance of the stock subscription
rights – used as the evaluation index. The ratio of achievement of that target shall be measured for each fiscal
year during that evaluation period. If the ratio of achievement at the end of evaluation period is above 50% on
average during the evaluation period, those rights may be exercised.
However, even if the ratio of achievement is above 50% on average during the evaluation period, the number ofshares that can be acquired by exercising those rights shall be based on a ratio equivalent to the average ratio ofachievement (maximum of 100%).
(i) Stock Subscription Rights Holder(s) must be an employee of the Company or of its Group Companies at
the time those rights are exercised.
(ii) Regardless of the regulation in (i), if the Stock Subscription Rights Holder leaves the Company or its Group
companies due to his or her own personal reasons, that person may possess and exercise the corresponding
rights only up to 6 months from the time of leaving. However, he or she may not possess and exercise thecorresponding rights beyond the period for exercising those rights. If that person leaves upon thecompany’s request or for any other reason that the company believes to be appropriate, those rights and theperiod for exercising those rights shall remain unchanged.

(2) Stock option sizes and changes
Information is given only for stock options that were existed in this consolidated fiscal year. The number of stock
options is given in that of underlying shares.
a. Number of stock options (shares)
2006 Stock Options

Before rights become effective(shares)
Previous fiscal year-end
GrantedExpiredOffered rights
Unoffered
After offer (shares)
Previous fiscal year-end
Offered rights
Exercised rights
Expired
Unexercised

Series 1
Stock subscription rights

Series 2
Stock subscription rights

Series 3
Stock subscription rights

126,300–––
126,300

149,700–––
149,700

1,817,000–
12,000–1,805,000

–
–
–
–
–

–
–
–
–
–

–
–
–
–
–

- 70 -

2007 Stock Options

Before rights become effective(shares)
Previous fiscal year-end
GrantedExpiredOffered rights
Unoffered
After offer (shares)
Previous fiscal year-end
Offered rights
Exercised rights
Expired
Unexercised

Series 4
Stock subscription rights

Series 2–1
Stock subscription rights

Series 2–2
Stock subscription rights–
583,000
4,000–
579,000–
92,600––92,600–268,100
3,400–
264,700

–
–
–
–
–

–
–
–
–
–

–
–
–
–
–

b. Price information
2006 Stock Options
Series 1
Stock subscription rights

Series 2
Stock subscription rights

Series 3
Stock subscription rights

Exercise price of option (¥)

1

1

1,754

Average stock price when
exercised (¥)

–

–

–

1,550.90

1,550.90

219.07

Fair market price on grant date(¥)

2007 Stock Options
Series 4
Stock subscription rights

Series 2–1
Stock subscription rights

Series 2–2
Stock subscription rights

Exercise price of option (¥)

1,895

1

1

Average stock price when
exercised (¥)

–

–

–

279.13

1,893.38

1,893.38

Fair market price on grant date(¥)

- 71 -

3. Method for estimating fair value for stock options
The method for estimating a fair value for 2007 Stock Options granted in the current consolidated fiscal year is asfollows.
a. Valuation formula

Black-Scholes Modelb. Basic figures and estimation method
2007 Stock Options
Series 4
Stock subscription rights

Series 2–1
Stock subscription rights

Series 2–2
Stock subscription rights

Stock price fluctuation(Note 1)23.85％

23.20％

23.20％

Estimated remaining life
(Note 2)2.576 years

5.461 years

5.461 years

Estimated dividends (Note 3)

1.50％

1.27％

1.27％

No-risk interest rate (Note 4)

0.9387％1.551％

1.551％

Notes: 1.
2.

3.
4.

Stock price fluctuation is based on stock prices over the period from the company’s incorporation to the grant
date (*).
The remaining life of the stock options could not be rationally estimated due to a lack of data stock. Estimatedremaining life is therefore based on the assumption that options would be exercised at the midpoint of theapplicable period for exercising rights.
Estimated dividends were based on actual dividends over the period from the company’s incorporation to grant
date (*).
The no-risk interest rate is the rate of yield on government bonds for the period corresponding to the estimatedremaining life.
(*) Series 4 Stock subscription rights: from September 29, 2005 to April 18, 2007
Series 2–1 Stock subscription rights: from September 29, 2005 to July 19, 2007
Series 2–2 Stock subscription rights: from September 29, 2005 to July 19, 2007

4. Method for estimating the number of effective rights of stock options
Basically, it is difficult to rationally estimate the number of expired options at a future date. The number of previously
expired options was therefore used.

Current Fiscal Year (From April 1, 2008 to March 31, 2009)
Disclosure is omitted because the necessity of disclosure in this financial report deems immaterial.

- 72 -(Tax Effect Accounting)Prior Fiscal Year(As of March 31, 2008)

Current Fiscal Year(As of March 31, 2009)
1. Significant components of deferred tax assets and liabilities

1. Significant components of deferred tax assets and liabilities(¥ million)(¥ million)
Deferred tax assets:

Deferred tax assets:
Excess depreciation on fixed assets

4,830

Losses carried forward

8,411

Losses carried forward

2,983

Excess depreciation on fixed assets

4,471

Accrued employee bonuses

1,743

Inventory valuation loss

3,084

Loss on impairment of fixed assets

1,536

Accrued employee bonuses

1,207

Inventory valuation loss

1,253

Valuation loss on advance money

941

Valuation loss on advance money

924

Other securities valuation difference

927

Excess allowance for doubtful accounts

906

Loss on impairment of fixed assets

802

Accrued enterprise taxes etc.

801

Excess allowance for doubtful accounts

799

Research and development expenses

614

Employee retirement and severance benefits

737

580

Employee retirement and severance benefits
Other
Subtotal deferred tax assets
Valuation allowance
Total deferred tax assets

Accrued enterprise taxes etc.

733

5,740

Research and development expenses

507

21,913

Other
Subtotal deferred tax assets(8,870)

Valuation allowance

13,043

Total deferred tax assets

3,466
26,090(13,034)
13,056

Deferred tax liabilities:
Retained earnings of foreign consolidated
subsidiaries(4,177)

Other securities valuation difference(1,294)

Deferred tax liabilities:
Retained earnings of foreign consolidated
subsidiaries(591)

Reserve for deferred income tax on fixed assets(134)

Other securities valuation difference

(490)

Other

(75)

Reserve for deferred income tax on fixed assets

(128)

Other

(161)

Total deferred tax liabilities(5,682)

Net deferred tax assets

7,360

Net deferred tax assets are reported on the consolidatedbalance sheets as:

Total deferred tax liabilities(1,371)

Net deferred tax assets

11,684

Net deferred tax assets are reported on the consolidatedbalance sheets as:(¥ million)(¥ million)

Current assets — Deferred tax assets

5,908

Current assets — Deferred tax assets

6,145

Fixed assets — Deferred tax assets

6,290

Fixed assets — Deferred tax assets

7,124

Current liabilities — Other (deferred tax
liabilities)
Long-term liabilities — Deferred tax liabilities

599
4,239

Current liabilities — Other (deferred tax
liabilities)

969

Long-term liabilities —Other(Deferred tax
liabilities)

616

In addition to the above, deferred tax assets and liabilities
due to land revaluation recorded as “deferred tax liabilities –land revaluation” are as follows:In addition to the above, deferred tax assets and liabilities
due to land revaluation recorded as “deferred tax liabilities –land revaluation” are as follows:(¥ million)(¥ million)
Deferred tax assets due to land revaluation

3,035

Deferred tax assets due to land revaluation

3,035

Valuation allowance(2,843)

Valuation allowance(2,843)

Total deferred tax assets
Deferred tax liabilities due to land revaluation
Total deferred tax liabilities

Total deferred tax assets

192

Deferred tax liabilities due to land revaluation(684)

Total deferred tax liabilities(492)- 73 -

192
(673)
(481)

Current Fiscal Year(As of March 31, 2009)

Prior Fiscal Year(As of March 31, 2008)
2. Principle reasons for significant differences between normal
effective statutory tax rate and the effective tax rate after
application of tax effect accounting:

2. Principle reasons for significant differences between normal
effective statutory tax rate and the effective tax rate after
application of tax effect accounting:(%)
Effective statutory tax rate
(Adjustments)(%)
Effective statutory tax rate

40.6

Amortization of goodwill

1.9

Permanent nondeductible expense such asentertainment expense

0.8

Inhabitants tax lump-sum payments

0.6

Directors’ bonuses

0.5(Adjustments)
Reversal of deferred tax liabilities for retained
earnings of foreign consolidated subsidiaries

40.6(17.2)

Amortization of goodwill

7.6

Increase (decrease) in valuation allowance
related to deferred tax assets

6.6

Income taxes for the previous period

5.5

Increase (decrease) in valuation allowance
related to deferred tax assets(14.1)(1.3)

Tax rate differential of foreign consolidated
subsidiaries(3.4)

Tax deductible testing and research expenses
Tax rate differential of foreign consolidated
subsidiaries(0.9)

Permanent nondeductible expense such asentertainment expense

1.6

Other

(0.6)

Inhabitants tax lump-sum payments

1.2

Other

0.4

Actual effective tax rate after applicationof tax effect accounting

27.5

Actual effective tax rate after applicationof tax effect accounting- 74 -

42.9

(Segment Information)a. By business segment
Prior Fiscal Year (From April 1, 2007 to March 31, 2008)(¥ million)
Toys and
Hobby
Business

Amusement
Facility
Business

Game
Contents
Business

NetworkBusiness

Visual andMusic
Content
Business

175,991

89,430137,946

11,68736,0199,397

460,473–

460,473

4,172

399

7,725

356

930

10,412

23,997(23,997)–

Other
Businesses

Total

Eliminations
Consolidated
andCorporate

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

180,164

89,829145,672

12,04436,94919,809484,471(23,997)

460,473

Operating expenses

165,855

88,198130,878

11,13933,117

19,056448,246(21,184)

427,062

Operating income

14,3091,631

14,793

904

3,832

753

36,224(2,813)33,411II Assets, depreciation
and amortization,
impairment loss
and capital
expenditure
Assets160,334

62,034

118,785

11,752

52,897

20,534426,339(13,316)

413,023

Depreciation andamortization

9,128

11,312

4,643

223

1,351

1,665

28,325(561)

27,763

Impairment loss

940

3,289

17

–

–

–

4,247

–

4,247

Capital expenditure

9,225

9,827

3,439

1,043

10,079484

34,101

14

34,115

Notes: 1.
2.

3.

4.

5.
6.

Business segment classifications are in accordance with classifications adopted for internal management
purposes.
Principal products in each business segment:(1) Toys and Hobby Business:
Toys, candy toys, production for vending machine, cards, plastic
models, apparel, sundries, stationery(2) Amusement Facility Business:
Amusement facilities operation(3) Game Contents Business:
Home-use video game software, commercial-use video gamemachines, prizes for amusement arcade machines(4) Network Business:
Mobile content(5) Visual and Music Content Business: Video products, visual software, on-demand video distribution(6) Other Businesses:
Transportation and storage of products, lease, real estate
management, printing, development and sales of environmental
devices
Operating expenses include an unallocatable amount of 3,253 million yen under eliminations and corporate.
This figure primarily consists of expenses related to management divisions at the Company and NAMCO
BANDAI Holdings (USA) Inc.
Assets include 26,151 million yen in corporate assets included in eliminations and corporate. This figure
primarily consists of surplus working capital (cash and time deposits), long-term investments (investment
securities), and assets, etc. related to management divisions.
Depreciation and amortization includes amortization of goodwill.
Changes in accounting policy- 75 -

Beginning with the fiscal year under review, as set forth in Item 4. (2) (i) of the “Important Information
Constituting the Basis for Preparation of Consolidated Financial Statements,” due to the revision of the
Corporation Tax Law, the Company and some of its domestic consolidated subsidiaries changed the method of
calculating the depreciation of property, plant and equipment acquired on or after April 1, 2007.
These changes had the following effect on operating income for each segment.
(¥ million)

Operating income(loss)

7.

Toys and
Hobby
Business

Amusement
Facility
Business

Game
Contents
Business

NetworkBusiness

Visual andMusic
Content
Business

Other
Businesses

(681)

(3)

(175)

(13)

(105)

(9)

Total

(988)

Eliminations
Consolidated
andCorporate–(988)

Additional information
Beginning with the fiscal year under review, as set forth in Item 4. (2) (i) of the “Important Information
Constituting the Basis for Preparation of Consolidated Financial Statements,” due to the revision of the
Corporation Tax Law, the Company and some of its domestic consolidated subsidiaries, in respect of theproperty, plant and equipment acquired prior to March 31, 2007, are depreciating the amount of difference
between the memorandum value and an amount equivalent to 5% of the acquisition cost of the assets using thestraight-line method over a period of 5 years, from the consolidated fiscal year following the consolidated fiscal
year when the book value of the assets was depreciated to the amount equivalent to 5% of the acquisition costbased on the Corporation Tax Law prior to revision.
These changes had the following effect on operating income for each segment.
(¥ million)

Operating income(loss)

Toys and
Hobby
Business

Amusement
Facility
Business

Game
Contents
Business

NetworkBusiness

Visual andMusic
Content
Business

Other
Businesses

(160)

–

(20)

(3)

–

(2)

- 76 -

Total

(186)

Eliminations
Consolidated
andCorporate–(186)

Current Fiscal Year (From April 1, 2008 to March 31, 2009)(¥ million)
Toys and
Hobby
Business

Amusement
Facility
Business

Game
Contents
Business

NetworkBusiness

Visual andMusic
Content
Business

163,068

76,917

133,722

10,49933,6338,559

426,399–

426,399

2,656

352

5,683

391

1,004

10,44920,538(20,538)–

Other
Businesses

Total

Eliminations
Consolidated
andCorporate

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

165,725

77,269139,405

10,89034,63819,009446,938(20,538)

426,399

Operating expenses

154,191

76,876

128,465

10,221

34,59918,443422,798(18,746)

404,051

Operating income

11,533393

10,940

669

38

565

24,140(1,791)

22,348

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

54,400108,965

11,091

48,071

19,206372,139(8,695)363,444

Depreciation andamortization

8,972

9,570

3,766

307

3,113

926

26,65785

26,742

Impairment loss

63

776

–

–

13

77

930

22

953

Capital expenditure

6,723

6,712

2,527

82

885

385

17,316164

17,481

Notes: 1.
2.

3.

4.

5.

Business segment classifications are in accordance with classifications adopted for internal management
purposes.
Principal products in each business segment:(1)

Toys and Hobby Business:

Toys, candy toys, production for vending machine, cards, plastic
models, apparel, sundries, stationery(2)

Amusement Facility Business:

Amusement facilities operation(3)

Game Contents Business:

Home-use video game software, commercial-use video gamemachines, prizes for amusement arcade machines(4)

Network Business:

Mobile contents(5)

Visual and Music Content Business: Video products, visual software, on-demand video distribution(6)

Other Businesses:

Transportation and storage of products, lease, real estate
management, printing, development and sales of environmental
devices

Operating expenses include an unallocatable amount of 3,086 million yen under eliminations and corporate.
This figure primarily consists of expenses related to management divisions at the Company and NAMCO
BANDAI Holdings (USA) Inc.
Assets include 36,217 million yen in corporate assets included in eliminations and corporate. This figure
primarily consists of surplus working capital (cash and time deposits), long-term investments (investment
securities), and assets, etc. related to management divisions.
Depreciation and amortization includes amortization of goodwill.

- 77 -

b. By geographic segment
Prior Fiscal Year (From April 1, 2007 to March 31, 2008)(¥ million)

I

Eliminations
andCorporate

Consolidated

460,473–

460,473

23,206

39,119(39,119)–

46,39737,932499,593(39,119)

460,473

52,24739,56735,077463,109(36,047)

427,062

24,480

2,318

6,830

2,854

36,483(3,072)33,411

321,489

35,61948,86423,938429,912(16,889)

413,023Japan

Americas

Europe

Asia

Total

346,736

52,623

46,387

14,726

13,961

1,943

9

Total

360,697

54,566

Operating expenses

336,217

Operating income

Net sales and operating
incomeNet sales(1) To externalcustomers(2) Inter-segment sales
and transfers

II Assets
Notes: 1.

2.

3.

4.

5.

Methods for classifying geographic segments and principal countries and regions(1) The Company classifies geographic segments by such factors as degree of geographic closeness,similarities in economic activities, and mutual relationship of business activities.
(2) Principal countries and regions belonging to each geographic segmenta.

Americas:

United States and Canadab.

Europe:France, United Kingdom and Spain

c.

Asia:

Hong Kong, Thailand and South Korea

Operating expenses include an unallocatable amount of 3,253 million yen under eliminations and corporate.
This figure primarily consists of expenses related to management divisions at the Company and NAMCO
BANDAI Holdings (USA) Inc.
Assets include 26,151 million yen in corporate assets included in eliminations and corporate. This figure
primarily consists of surplus working capital (cash and time deposits), long-term investments (investment
securities), and assets, etc. related to management divisions.
Change in accounting policy
Beginning with the fiscal year under review, as set forth in Item 4. (2) (i) of the “Important Information
Constituting the Basis for Preparation of Consolidated Financial Statements,” due to the revision of the
Corporation Tax Law, the Company and some of its domestic consolidated subsidiaries changed the method of
calculating the depreciation of property, plant and equipment acquired on or after April 1, 2007.
As a result of this change, consolidated operating expenses in Japan in the fiscal year under review increased
988 million yen while operating income decreased by the same amount.
Additional information
Beginning with the fiscal year under review, as set forth in Item 4. (2) (i) of the “Important Information
Constituting the Basis for Preparation of Consolidated Financial Statements,” due to the revision of the
Corporation Tax Law, the Company and some of its domestic consolidated subsidiaries, in respect of theproperty, plant and equipment acquired prior to March 31, 2007, are depreciating the amount of difference
between the memorandum value and an amount equivalent to 5% of the acquisition cost of the assets using thestraight-line method over a period of 5 years, from the consolidated fiscal year following the consolidated fiscal
year when the book value of the assets was depreciated to the amount equivalent to 5% of the acquisition costbased on the Corporation Tax Law prior to revision.
- 78 -

As a result of this change, consolidated operating expenses in Japan in the fiscal year under review
increased 186 million yen while operating income decreased by the same amount.
Current Fiscal Year (From April 1, 2008 to March 31, 2009)(¥ million)

I

Eliminations
andCorporate

Consolidated

426,399–

426,399

23,85540,466(40,466)–

45,02037,377

466,866(40,466)

426,399

50,06038,77235,087

441,591(37,540)

404,051

15,863

872

6,248

2,289

25,274(2,926)22,348293,053

28,70337,035

19,397378,188(14,743)

363,444Japan

Americas

Europe

Asia

Total

319,535

48,33745,004

13,522

13,999

2,595

16

Total

333,534

50,933Operating expenses

317,670

Operating income

Net sales and operating
incomeNet sales(1) To externalcustomers(2) Inter-segment sales
and transfers

II Assets
Notes: 1.

2.

3.

Methods for classifying geographic segments and principal countries and regions(1) The Company classifies geographic segments by such factors as degree of geographic closeness,similarities in economic activities, and mutual relationship of business activities.
(2) Principal countries and regions belonging to each geographic segmenta.

Americas:

United States and Canadab.

Europe:France, United Kingdom and Spain

c.

Asia:

Hong Kong, Thailand, South Korea and China

In the fiscal year ended March 31, 2009, China was included in the segment of Asia following the newincorporation of BANDAI (SHENZHEN) CO., LTD.
Operating expenses include an unallocatable amount of 3,086 million yen under eliminations and corporate.
This figure primarily consists of expenses related to management divisions at the Company and NAMCO
BANDAI Holdings (USA) Inc.
Assets include 36,217 million yen in corporate assets included in eliminations and corporate. This figure
primarily consists of surplus working capital (cash and time deposits), long-term investments (investment
securities), and assets, etc. related to management divisions.

- 79 -

c. Overseas sales
Prior Fiscal Year (From April 1, 2007 to March 31, 2008)
Americas
I.

Overseas sales (¥ million)

II.

Consolidated sales (¥ million)

III. Overseas sales as a ratio ofconsolidated sales (%)
Notes: 1.
2.

Europe

Asia

Total

54,83547,855

20,232

122,923–––

460,473

11.9

10.4

4.4

26.7

Overseas sales represent the total of sales generated in countries and regions other than Japan by the Company
and its consolidated subsidiaries.
Methods for classifying geographic segments and principal countries and regions(1) The Company classifies geographic segments by such factors as degree of geographic closeness,similarities in economic activities, and mutual relationship of business activities.
(2) Principal countries and regions belonging to each geographic segmenta.

Americas:

United States, Canada and Latin Americab.

Europe:France, United Kingdom, Spain, the Middle East and Africa

c.

Asia:

Hong Kong, Singapore, Thailand, South Korea, Australia, China and Taiwan

Current Fiscal Year (From April 1, 2008 to March 31, 2009)
Americas
I.

Overseas sales (¥ million)

II.

Consolidated sales (¥ million)

III. Overseas sales as a ratio ofconsolidated sales (%)
Notes: 1.
2.

Europe

Asia

Total

50,61746,005

17,444

114,066–––

426,399

11.9

10.8

4.1

26.8

Overseas sales represent the total of sales generated in countries and regions other than Japan by the Company
and its consolidated subsidiaries.
Methods for classifying geographic segments and principal countries and regions(1) The Company classifies geographic segments by such factors as degree of geographic closeness,similarities in economic activities, and mutual relationship of business activities.
(2) Principal countries and regions belonging to each geographic segmenta.

Americas:

United States, Canada and Latin Americab.

Europe:France, United Kingdom, Spain, the Middle East and Africa

c.

Asia:

Hong Kong, Singapore, Thailand, South Korea, Australia, China and Taiwan- 80 -

(Related Party Information)
Prior Fiscal Year (From April 1, 2007 to March 31, 2008)
No items to report

Current Fiscal Year (From April 1, 2008 to March 31, 2009)(Additional information)
From this consolidated fiscal year, the “Accounting Standard for Related Party Disclosures” (ASBJ Statement No. 11,
issued October 17, 2006) and “Guidance on Accounting Standard for Related Party Disclosures” (ASBJ Guidance No. 13,
issued on October 17, 2006) have been adopted.
As a result, transactions with Happinet Corporation have been added to the scope of disclosure of transactions withrelated parties.

Transactions with Related Parties
Transactions with related parties by consolidated subsidiaries of the Company
Non-consolidated subsidiaries and affiliated companies, etc., of the Company

Type

Company

Location

Capital orContent ofContribution
Business or
to CapitalOccupation(¥ million)

Taito-ku,
Tokyo

Wholesaleof toys,video games
andamusement
products

Ratio ofRelationship
VotingWith
RightsRelatedOwnership
Parties(%)
Holding
directly
26.0

Sales
agencyContent

Sales ofproducts,
etc.
(Note 2)

Amount(¥ million)

Account
Items

Accounts

Affiliatedcompanies

Happinet
Corporation

Notes: 1.

The above transaction amount does not include consumption tax; the balance at the end of this term does
include consumption tax.
Transaction terms and policy for determining transaction terms:
For the transaction stated above, the products were sold on the same terms as in general transactions.

2.

2,751

indirectly
0.3- 81 -

Balance atthe end of
this Term(¥ million)

38,643

receivable-trade7,444

(Business Combination, etc.)
Prior Fiscal Year (From April 1, 2007 to March 31, 2008)(Transactions, etc. conducted by commonly controlled entities)
I. Making Bandai Visual Co., Ltd. a wholly owned subsidiary
1. Names and Business Content of Restructured Companies, Legal Form of Business Combination and Overview of theTransaction Including Transaction Objectives(1) Names and Business Content of Restructured Companies
a. Combining Company (Parent company after share exchange)
Name

NAMCO BANDAI Holdings Inc. (the Company)

Business content

Planning and implementation of management strategy and business management andinstruction of the group companies

b. Combined Company (Wholly owned subsidiary after share exchange)
Name

Bandai Visual Co., Ltd.

Business content

Planning, production, and sales of visual and music contents(2) Legal Form of Business Combination
A summary share exchange was conducted for the Company as stipulated in Article 796, Paragraph 3 of the Companies
Act, and a simplified share exchange was conducted for Bandai Visual Co., Ltd. (Bandai Visual) as stipulated in Article
784, Paragraph 1 of the Companies Act.
(3) Overview of the Transaction Including Transaction Objectives
The Company, with the goal of making Bandai Visual a wholly owned subsidiary, commenced a tender offer for Bandai
Visual shares during the period from November 9, 2007 to December 10, 2007. Consequently, as of December 17, 2007,
the Company acquired 134,824 shares in Bandai Visual, 93.63% of Bandai Visual’s outstanding shares. The Company andBandai Visual judged that making Bandai Visual a wholly owned subsidiary would promote (i) optimal efficiency indecision making under the Group’s medium- to long-term management strategy, (ii) business expansion by way of theeffective use of comprehensive capabilities through Group synergies, and (iii) maximization of the value of the Group
companies. Thus, as of December 17, 2007, both parties entered into a share exchange agreement to make Bandai Visual awholly owned subsidiary of the Company (“the share exchange agreement”), and on February 21, 2008, the share exchange
became effective, and Bandai Visual became a wholly owned subsidiary of the Company.

2. Overview of Accounting Process
The accounting process for the non-consolidated financial statements and consolidated financial statements washandled in accordance with the provision of “Accounting for transactions conducted by commonly controlled entities, etc.”
of Article 3, Paragraph 4 of “the Accounting Standards for Business Combinations”.

3. Additional Acquisitions of Subsidiaries’ Shares(1) Acquisition Cost Detail
The acquisition cost was 1,866 million yen, which was paid solely from treasury stock.
(2) Type of Shares
Common stock- 82 -

(3) The Share Exchange Ratio, Basis of Calculation, Number of Shares Delivered, and their Valuation Amounta. Share Exchange Ratio
156 shares in the Company were delivered for one (1) share in Bandai Visual.
b. Basis of Calculation
To arrive at the above share exchange ratio, the market value method was used for the Company’s shares; thediscounted cash flow method, market value method, and comparable companies method were used for Bandai Visual’sshares; and upon prudent consideration of the results of the evaluation so calculated and mutual deliberation, both parties
agreed to the share exchange ratio stated above.
The Company and Bandai Visual chose as the third-party advisor, Daiwa Securities SMBC Co. Ltd. and Nomura
Securities Co., Ltd., respectively.
c. Number of Shares Delivered and their Valuation Amount
Number of shares

1,431,456 shares

Valuation amount

1,866 million yen(4) Amount, Source, Method and Period of Amortization of Goodwill Incurreda. Amount of Goodwill:

1,064 million yen

b. Source
The difference between the cost of acquiring additional shares of Bandai Visual and the decreased amount of minority
interests was handled as goodwill.
c. Method and Period of Amortization:

Straight-line method, 5 years

II. Making Bandai Networks Co., Ltd. a wholly owned subsidiary
1. Names and Business Content of Restructured Companies, Legal Form of Business Combination and Overview of theTransaction Including Transaction Objectives(1) Names and Business Content of Restructured Companies
a. Combining Company (Parent company after share exchange)
Name

NAMCO BANDAI Holdings Inc. (the Company)

Business content

Planning and implementation of management strategy and business management andinstruction of the group companies

b. Combined Company (Wholly owned subsidiary after share exchange)
Name

Bandai Networks Co., Ltd.

Business content

Distribution of content for mobile phones, consignment of website development, mailorder sales, etc.

(2) Legal Form of Business Combination
A summary share exchange was conducted for the Company as stipulated in Article 796, Paragraph 3 of the Companies
Act, and a simplified share exchange was conducted for Bandai Networks Co., Ltd. (Bandai Networks) as stipulated in
Article 784, Paragraph 1 of the Companies Act.
(3) Overview of the Transaction Including Transaction Objectives
The Company, with the goal of making Bandai Networks a wholly owned subsidiary, commenced a tender offer for
Bandai Networks shares during the period from November 9, 2007 to December 10, 2007. Consequently, as of December
17, 2007, the Company acquired 177,951 shares in Bandai Networks, 92.00% of Bandai Networks’ outstanding shares. The- 83 -

Company and Bandai Networks judged that making Bandai Networks a wholly owned subsidiary would promote (i)optimal efficiency in decision making under the Group’s medium- to long-term management strategy, (ii) businessexpansion by way of the effective use of comprehensive capabilities through Group synergies, and (iii) maximization of thevalue of the Group companies. Thus, as of December 17, 2007, both parties entered into a share exchange agreement tomake Bandai Networks a wholly owned subsidiary of the Company (“the share exchange agreement”), and on February 21,
2008, the share exchange became effective, and Bandai Networks became a wholly owned subsidiary of the Company.

2. Overview of Accounting Process
The accounting process for the non-consolidated financial statements and consolidated financial statements washandled in accordance with the provision of “Accounting for transactions conducted by commonly controlled entities, etc.”
of Article 3, Paragraph 4 of “the Accounting Standards for Business Combinations”.

3. Additional Acquisitions of Subsidiaries’ Shares(1) Acquisition Cost Detail
The acquisition cost was 666 million yen, which was paid solely from treasury stock.
(2) Type of Share
Common stock(3) The Share Exchange Ratio, Basis of Calculation, Number of Shares Delivered, and their Valuation Amounta. Share Exchange Ratio
33 shares in the Company were delivered for one (1) share in Bandai Networks.
b. Basis of Calculation
To arrive at the above share exchange ratio, the market value method was used for the Company’s shares; thediscounted cash flow method, market value method, and comparable companies method were used for Bandai Networks’shares; and upon prudent consideration of the results of the evaluation so calculated and mutual deliberation, both parties
agreed to the share exchange ratio stated above.
The Company and Bandai Networks chose as the third-party advisor, Daiwa Securities SMBC Co. Ltd. and PwC
Advisory Co., Ltd., respectively.
c. Number of Shares Delivered and their Valuation Amount
Number of shares

510,972 shares

Valuation amount

666 million yen(4) Amount, Source, Method and Period of Amortization of Goodwill Incurreda. Amount of Goodwill:

39 million yen

b. Source
The difference between the cost of acquiring additional shares of Bandai Networks and the decreased amount ofminority interests was handled as goodwill.
c. Method and Period of Amortization:

Straight-line method, 5 years- 84 -

Current Fiscal Year (From April 1, 2008 to March 31, 2009)(Transactions, etc. conducted by commonly controlled entities)
Organizational Restructuring of the Domestic Group
1. Names and Business Content of Restructured Companies, Legal Form of Business Combinations, and Overview of theTransaction Including Transaction Objectives(1) Names and Business Content of Restructured Companies
a. NAMCO BANDAI Games Inc.

Planning, development, and sales of home video game softwareand arcade game machines, etc.

b. NAMCO LIMITEDManagement of amusement facilities, etc.

c. Banpresto Co., Ltd. (a newly-incorporated company

Planning, development, and sales of prizes, etc., for arcade

in an incorporation-type company split)

game machines.

d. Bandai Co., Ltd.

Manufacturing and sales of toys, apparel, and related products.

e. NAMCO BANDAI Holdings Inc. (the Company)

Planning and implementation of management strategy andbusiness management and instruction of the group companies.

(2) Legal Form of Business Combinations
a. An incorporation-type company split of Banpresto Co., Ltd., with the establishment of a subsidiary (the new Banpresto
Co., Ltd.).
b. An absorption-type company split in which Banpresto Co., Ltd. is the split company and NAMCO LIMITED is the
successor company.
c. An absorption-type company split in which Banpresto Co., Ltd. is the split company and the Company is the successor
company.
d. An absorption-type merger in which Banpresto Co., Ltd. is the merged company and NAMCO BANDAI Games Inc. is
the surviving company.
e. An absorption-type company split in which Bandai Co., Ltd. is the split company and the Company is the successor
company.
(3) Overview of Transaction Including Transaction Objectives
An organizational restructuring of the group companies in Japan was carried out as of April 1, 2008, to maximize thevalue of the group companies.
a. Transfer and Integration of Game Operations of Banpresto Co., Ltd.
The game operations of Banpresto Co., Ltd., which planned and developed home video game software and arcade
game machines, was transferred to NAMCO BANDAI Games Inc., which integrates the Group game operations;
Pleasure Cast Co., Ltd., and Hanayashiki Co., Ltd., engaged in operating amusement facilities, as subsidiaries ofBanpresto, were made subsidiaries of NAMCO LIMITED, which integrates the amusement facilities operation businessof the Group. Banpresto Co., Ltd. was redefined as focusing on the prize business, with an emphasis on prizes for arcade
game machines.
b. Consolidation of Subsidiaries with Group Support Functions
As of April 1, 2008, a Shared Services Division was established within the Company and the share management
operations for NAMCO BANDAI Business Services Inc., and Artpresto Co., Ltd., which had been carried out by Bandai
Co., Ltd., and Banpresto Co., Ltd., were transferred to the Company.
- 85 -

2. Overview of Accounting Process
The accounting process for the consolidated financial statements was conducted as transactions conducted bycommonly controlled entities, handled in accordance with the provisions of the “Accounting Standard for Business
Combinations” (issued by the Business 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).

(Per Share Data)
Prior Fiscal Year

Current Fiscal Year

(From April 1, 2007 to March 31, 2008)(From April 1, 2008 to March 31, 2009)

Net asset per share¥1,127.72

Net asset per share¥1,067.71

Net income per share¥128.65

Net income per share¥47.95

Diluted net income per share¥128.47

Diluted net income per share¥47.88

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

Prior Fiscal Year

Current Fiscal Year

(From April 1, 2007 to March 31, 2008)(From April 1, 2008 to March 31, 2009)

32,67911,830––32,67911,830254,024,711

246,743,204––

Increase in number of common stock(shares)

341,026

312,908[Stock subscription rights][341,026][312,908]

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

Summary of potential shares not includedin the calculation of diluted net income
per share as they do not have a diluting
effect.

(the Company):(the Company):

Pursuant to resolution of the Ordinary
General Meeting of Shareholders of June
26, 2006, proposal No. 9: series 3 stock
subscription rights for 1,805,000 shares ofcommon stock;Pursuant to resolution of the Ordinary
General Meeting of Shareholders of June
26, 2006, proposal No. 9: series 3 stock
subscription rights for 1,776,000 shares ofcommon stock;Pursuant to resolution of the Ordinary
General Meeting of Shareholders of June
26, 2006, proposal No. 9: series 4 stock
subscription rights for 579,000 shares ofcommon stock;Pursuant to resolution of the Ordinary
General Meeting of Shareholders of June
26, 2006, proposal No. 9: series 4 stock
subscription rights for 572,000 shares ofcommon stock

Pursuant to resolution of the Ordinary
General Meeting of Shareholders of June25, 2007, proposal No. 3: series 2–1 stock
subscription rights for 92,600 shares ofcommon stock- 86 -

Prior Fiscal Year

Current Fiscal Year

(From April 1, 2007 to March 31, 2008)(From April 1, 2008 to March 31, 2009)(Affiliate)
Bandai Networks Co., Ltd.
Stock options agreed at the annual
general meeting of shareholders on June23, 2004 (245 stock subscription rights)
1,225 common stock(Significant Subsequent Events)
Prior Fiscal Year

Current Fiscal Year

(From April 1, 2007 to March 31, 2008)(From April 1, 2008 to March 31, 2009)(Transactions conducted by commonly controlled entities, etc.)
Organizational restructuring of the domestic Group
1. Overview of the transaction including transaction objectives,
names and business content of restructured companies, and legal
form of business combinations(Transactions conducted by commonly controlled entities, etc.)
The merger of subsidiaries and succession to part of thebusinesses of subsidiaries due to a company split in the course of
the restructuring of the Group’s businesses(1) Overview of transaction including transaction objectives
An organizational restructuring of the group companies inJapan was carried out as of April 1, 2008, to maximize thevalue of the group companies.
a. Transfer and integration of game operations of Banpresto
Co., Ltd.
The game operations of Banpresto Co., Ltd., whichplanned and developed home video game software andarcade game machines, was transferred to NAMCO
BANDAI Games Inc., which integrates the Group game
operations; Pleasure Cast Co., Ltd., and Hanayashiki Co.,
Ltd., engaged in operating amusement facilities, as
subsidiaries of Banpresto, were made subsidiaries of
NAMCO LIMITED, which integrates the amusement
facilities operation business of the Group. Banpresto Co.,
Ltd. was redefined as focusing on the prize business, with
an emphasis on prizes for arcade game machines.
b. Consolidation of subsidiaries with group support functions
As of April 1, 2008, a Shared Services Division wasestablished within the Company and the share management
operations for NAMCO BANDAI Business Services Inc.,
and Artpresto Co., Ltd., which had been carried out by
Bandai Co., Ltd., and Banpresto Co., Ltd., were transferredto the Company.

On April 1, 2009, NAMCO BANDAI Games Inc. merged withand absorbed Bandai Networks Co., Ltd. due to an absorption-typemerger. Also, the Company succeeded to a part of the share
management business that had been carried out by Bandai
Networks Co., Ltd., due to the company split (absorption-typecompany split) on the same date.
1. Names and business content of combined companies, legal formof business combination, and overview of transaction includingtransaction objectives(1) Names and business content of combined companies
a. NAMCO BANDAI Games Inc.
Planning, development, and sales of home video gamesoftware and arcade game machines, etc.
b. Bandai Networks Co., Ltd.
Distribution of content for mobile phones, consignmentof website development, e-commerce, etc.
c. NAMCO BANDAI Holdings Inc. (the Company)
Planning and implementation of management strategy
and business management and instruction of the groupcompanies.
(2) Legal form of business combination
a. A merger in which Bandai Networks Co., Ltd. is the merged
company; and NAMCO BANDAI Games Inc. is thesurviving company in the absorption-type merger.
b. An absorption-type company split in which Bandai
Networks Co., Ltd. is the split company; and the Company
is the successor company.

- 87 -

Prior Fiscal Year

Current Fiscal Year

(From April 1, 2007 to March 31, 2008)(From April 1, 2008 to March 31, 2009)(2) Names and business content of restructured companies
a. NAMCO BANDAI Games Inc.
Planning, development, and sales of home video gamesoftware and arcade game machines, etc.
b. NAMCO LIMITEDManagement of amusement facilities, etc.
c. Banpresto Co., Ltd. (a newly-incorporated company in anincorporation-type company split)
Planning, development, and sales of prizes, etc., forarcade game machines.
d. Bandai Co., Ltd.
Manufacturing and sales of toys, apparel, and related
products.
e. NAMCO BANDAI Holdings Inc.
Planning and implementation of management strategy
and business management and instruction of the groupcompanies.
(3) Legal form of business combinations and split of operations
a. An incorporation-type company split of Banpresto Co.,
Ltd., with the establishment of a subsidiary (the new
Banpresto Co., Ltd.).
b. An absorption-type company split in which Banpresto Co.,
Ltd. is the split company and NAMCO LIMITED is the
successor company.
c. An absorption-type company split in which Banpresto Co.,
Ltd. is the split company and the Company is the successor
company.
d. An absorption-type merger in which Banpresto Co., Ltd. is
the merged company and NAMCO BANDAI Games Inc. is
the surviving company.
e. An absorption-type company split in which Bandai Co.,
Ltd. is the split company and the Company is the successor
company.
2. Overview of accounting process(3) Overview of transactions including transaction objectives
The Group has considered what its optimal organizational
structure would be to work for further growth in the
network-related market, which includes distributing content
for mobile phones: this is a market for which technologicalprogress and other factors have produced drastic changes inthe environment and in which competition is becoming
increasingly intense on a global scale. Thus far, NAMCO
BANDAI Games Inc. has strengths in leveraging its in-house
technical development capabilities and effectively utilizing
content for each platform, including home video gamesoftware, arcade game machines, and mobile phones. Also,
Bandai Networks Co., Ltd. has strengths in the comprehensive
development of operations, centered on the distribution ofmobile phone content and the provision of technical solutions
as well as e-commerce services. NAMCO BANDAI Games
Inc., and Bandai Networks Co., Ltd., have each worked to
grow their businesses by leveraging their respective strengths.
This time, the merger of these two companies and theestablishment of a new division within NAMCO BANDAI
Games Inc. are designed to reinforce the total power of the
network business within the Group and to create new content
and businesses through the synergistic fusion of variedstrengths.
In addition, upon this restructuring within the Group, theCompany has succeeded to part of the share managementbusiness that had been carried out by Bandai Networks Co.,
Ltd., due to the company split (absorption-type company
split).

The accounting process for the consolidated financial statements
was handled in accordance with the provisions of “Accounting fortransactions conducted by commonly controlled entities, etc.” ofArticle 3, Paragraph 4 of the “Accounting Standard for Business
Combinations”.

2. Overview of accounting process
The accounting process for the consolidated financial statements
was conducted as transactions conducted by commonly controlled
entities, handled in accordance with the provisions of the“Accounting Standard for Business Combinations” (issued by theBusiness Accounting Council on October 31, 2003) and “Guidanceon Accounting Standard for Business Combinations andAccounting Standard for Business Divestitures” (ASBJ GuidanceNo. 10, final revision issued on November 15, 2007).
(Capital increase in subsidiary)
As of April 27, 2009, the Company carried out a paid-in capitalincrease of 50 million euros in BANDAI S.A., a subsidiary of theCompany.
1. Reason for the capital increase
To secure the funds for the acquisition of shares in Distribution
Partners S.A.S. from Atari Europe S.A.S. by NAMCO BANDAI
Games Europe S.A.S., a subsidiary of BANDAI S.A.
2. Use of the funds
The funds were used to make a capital increase in NAMCO
BANDAI Games Europe S.A.S.

- 88 -

5. Other(1) Changes in Directors and Corporate Auditors
a. Change in Representative
No items to reportb. Other Changes in Directors and Corporate Auditors (Effective June 22, 2009)
Candidate for Director
Director (Outside)

Manabu Tasaki (current position: Business Advisor to the Company)

Retiring Directors
Director

Masahiro Tachibana

Director

Satoshi Oshita

Director

Kazumi Kawashiro

c. Responsible Area of Directors (Effective June 22, 2009)
Takeo Takasu

Chairman and Representative Director

Shukuo Ishikawa

President and Representative Director

Jun Higashi

Director in charge of the Strategic Business Units Overall and Affiliated BusinessCompanies

Shuji Ohtsu

Director in charge of Overseas Operations, Administrative Headquarter and Internal
Auditing Division

Yusuke Fukuda

Director in charge of Corporate Planning Division

Kazunori Ueno

Director (Part-time) in charge of Toys and Hobby Strategic Business Unit

Masatake Yone

Director (Outside)

Kazuo Ichijo

Director (Outside)

Manabu Tasaki

Director (Outside)- 89 -