BANDAI NAMCO GroupI N T E G R AT E D R E P O R T 2 0 1 9

The BANDAI NAMCO Group develops entertainment-related products and services
in a wide range of fields, including toys, network content, home video games,
amusement machines, amusement facilities, and visual and music content.

OUR MISSION STATEMENT

Dreams, Fun and Inspiration“Dreams, Fun and Inspiration” are the Engine of Happiness.
Through our entertainment products and services, BANDAI NAMCO will continue to provide“Dreams, Fun and Inspiration”
to people around the world, based on our boundless creativity and enthusiasm.

OUR VISION

The Leading Innovator in
Global Entertainment
As an entertainment leader across the ages, BANDAI NAMCO is constantly exploring
new areas and heights in entertainment. We aim to be loved by people who have fun andwill earn their trust as “the Leading Innovator in Global Entertainment.”

CONTENTS
02

THE BANDAI NAMCO Group —1 YEAR OF RESULTS (FY2019.3)

20

MESSAGES FROM THE PRESIDENTS OF
UNIT CORE COMPANIES04

OUR GROWTH TRACK

30

06

THE GROUP’S GREATEST STRENGTH —THE IP AXIS STRATEGYSPECIAL FEATURE—
Fostering evolution by taking on challenges with
the ALL BANDAI NAMCO concept

08

THE BANDAI NAMCO Group―
OUR VALUE CREATION PROCESS

47

10

MAJOR IP IN GROUP PRODUCTS AND SERVICES

12BOARD OF DIRECTORS AND AUDIT & SUPERVISORY
BOARD MEMBERS

ESG SECTIONMESSAGE FROM THE OFFICER IN CHARGE OF ESG /ROUNDTABLE DISCUSSION AMONG OUTSIDEDIRECTORS / CORPORATE GOVERNANCE /OVERVIEW OF OFFICERS / PERSONNEL STRATEGY /CSR INITIATIVES

14

OVERVIEW OF THE MID-TERM PLAN

70

FINANCIAL SECTION

16

PRESIDENT’S MESSAGE

109

CORPORATE DATA110OVERVIEW OF MAIN GROUP COMPANIESGROUP ORGANIZATION

Toys and Hobby Unit
Network Entertainment Unit
Real Entertainment Unit
Visual and Music Production Unit
IP Creation Unit
Affiliated Business Companies

IR

CSR

About Integrated Report 2019
In editing this report, we made reference to the International Integrated Reporting
Framework of the International Integrated Reporting Council (IIRC).
Forward-Looking Statements

Our website provides a variety of information about the BANDAI NAMCO Group,
such as IR information and CSR initiatives.
Please utilize the website in conjunction with this report.

www.bandainamco.co.jp/en/index.html

The forward-looking statements in this report are based on the information available tomanagement as of August 2019 and include various risks and uncertainties. Accordingly,
actual results may differ materially from these projections for a variety of reasons. Major
factors that could influence actual results include changes in the BANDAI NAMCO Group’s
operating environment, market trends, and exchange rate fluctuations.
Notes:
1. Figures in this report have been rounded down.
2. FY2019.3 represent the one-year period ended March 31, 2019.
3. Figures in this report are as of August 2019.

1

1 YEAR OF RESULTS

FY2019.3

THE BANDAI NAMCO Group —BANDAI NAMCO Holdings Inc. and Consolidated Subsidiaries
For the Fiscal Years Ended March 31

Net Sales

Operating Profit¥¥

732.3 billion
8.0%

YoY

565.4 575.5

84.0 billion

678.3

732.3

84.0
75.0

Operating
ProfitNet Sales(¥ billion)

22.4
16.7

12.0%

YoY

620.0

20.6

Overview of Results(¥ billion)

20.5

18.7

49.6
10.0

Operating
ProfitMarginOverseas
Sales
Proportion

63.2

56.3

8.6

10.2 11.1

11.5

(%)

(%)
2015

2016

2017

2018

2019

2015

2016

Segment Sales Ratio

2017

2019

2018

The BANDAI NAMCO Group implemented avariety of initiatives under the Mid-term Plan
that started in April 2018. These included
measures to further advance the IP* axis
strategy, to strengthen regional operations
and businesses with high growth potential,
and to leverage our comprehensive strengths
in areas around the world through the ALL
BANDAI NAMCO concept, under which all
Group businesses work together toward thesame goal.
In operations, each business recorded
favorable progress in core IP and products
and services, and Groupwide businesscollaboration generated solid results.
Consequently, for the second consecutive
year, we achieved record-high net sales andoperating profit in FY2019.3.

Segment Profit Ratio

IP Creation

Other

2.9%

IP Creation

3.8%

5.7%

Visual and Music
Production

5.8%

9.9%

31.0%

Toys and Hobby

24.5%

Real
Entertainment

Network
Entertainment

13.0%

1.4%

Visual and Music
Production

Toys and Hobby

RealEntertainment

Other

Network
Entertainment

4.8%

43.5%

53.7%

Notes: Percentage figures are calculated based on sales before elimination of inter-segment transactions.

Contributions to Net Sales byGeographic Region
Europe6.0%

Asia, excluding Japan

6.3%

Return on Equity(ROE)

Return on Assets
(ROA)

15.5%

15.1%

429.6

Americas

6.4%

303.5

Total Net
AssetsJapan

81.3%
Note: Percentage figures are calculated based on externalsales. Figures are estimates based on management
accounting.

2

612.9

387.3

13.2

317.3
11.2

540.4

348.7
13.3

14.7

15.5

441.7 448.3

Total
Assets(¥ billion)(¥ billion)

ROE

ROA

(%)

(%)

2015

2016

2017

2018

2019

14.0

488.0
13.5

14.7

15.1

11.4

2015

2016

2017

2018

2019

1 YEAR OF RESULTS

Free Cash Flows*

Shareholders’ Equity Ratio

54.9 billion

70.0%

¥

30.5

0.00 times

54.9

51.1

(¥ billion)

Debt/Equity Ratio*

429.3
394.1
304.1

34.6

Total
Shareholders’ 68.6
Equity

357.6

325.0

71.3 71.5

70.0

70.6

InterestBearing Debt(¥ billion)(¥ billion)

Shareholders’Equity Ratio

–8.2

Debt/
Equity Ratio*

(%)
2015

2016

2017

2019

2018

2015

2016

2017

2019

2018

* Free cash flows = Net cash provided by operating
activities + Net cash used in investing activities

Basic Earnings per Share¥¥

288.40

22

YoY

42.11

YoY

¥

¥

145

288.40

(Yen)

123*

3

246.29(Yen)

82*2 49.9

52

Total Payout
Ratio
2015

2016

2017

2018

2019

2015

2016

2017

2018

2019

Sales of IP* Products and Services (Group Total)

26.4 billion

2018

2019

29.3

¥

billionDRAGON BALL series
2018

97.9 billion¥

29.4 billion

¥

2018

2019

0.00

ESG
Number of Female Managers*

120

7Game Content R&D Investment andCapital Investment¥

68.3 billion

2019

¥

79.3

billion

81.5
71.0

NARUTO
2019

¥

129.0

2018

billionONE PIECE
2018

2017

Mobile Suit Gundam series

KAMEN RIDER series¥

2016* Figures are for five Unit core companies
in FY2019.3.

*1 FY2015.3 includes a special dividend of ¥10.
*2 FY2017.3 includes a special dividend of ¥20.
*3 FY2018.3 includes a special dividend of ¥25.

2018

0.01 0.00 0.00

2015

Number of Independent
Directors or Independent Audit &Supervisory Board Members

36.2 33.0

(%)

0.01

0.9

17.4%

171.10157.43

50.3

40.8

1.4
0.8

Ratio of Female Managers to
All Managers*

201.03

Cash Dividends
per Share
62*1(times)1.9* Debt/equity ratio = Interest-bearing debt /Total shareholders’ equity

Cash Dividends per Share

145

4.3

2019

¥

30.4

11.3 billion

¥

2019

¥

15.8

billion55.8 54.6* IP: Characters and other intellectual property

54.8

Game Content
R&D
Investment(¥ billion)

billion

59.0

22.2

22.0

21.3 19.5

CapitalInvestment(¥ billion)

2015

2016

2017

2018

2019

3

OUR GROWTH TRACK
The BANDAI NAMCO Group was created in September 2005 through the management integration of BANDAI CO., LTD.
and NAMCO LIMITED. After the integration, the Group moved quickly to leverage synergy effects by implementing
a range of internal measures. However, we were not able to respond adequately to changes in our markets andcustomers. Our operational speed declined, and we did not effectively utilize the strengths of each Group company.
As a result, our performance was sluggish. In response, in April 2010 we launched the Restart Plan with the objective oftransforming ourselves into a speedy Group under the IP axis strategy. The Group worked together to maximize theshared value of IP. Our performance recovered, and we set new record highs for net sales and operating profit in FY2019.3.

Restart!
Launched the Restart Plan and announced the IP axis
strategy in order to transform ourselves into a speedy Group,
improve our profitability, and strengthen our financial standing.

Management
Integration

450.8

Net
Sales

460.4

459.1

426.3

454.2

(¥ billion)

378.5

394.1

42.2

Operating
Profit

35.6

34.6

33.4

(¥ billion)

22.3
For the Fiscal Years
Ended March 31

16.3

1.8
2006

2007

2008
Reduction in speed
Unresponsive to operating
environment and trends

2007.3–2009.3 Mid-term Plan

4

2009

2011

2010

2012

Introduction of Restart Plan
2010.3–2012.3 Mid-term PlanOUR GROWTH TRACK

Achieved record-highoperating profit for threeconsecutive years.

Toward the NEXT STAGE
Registered record-high
net sales for sevenconsecutive years.

732.3

678.3

84.0

620.0
575.5
75.0

565.4

507.6
487.2

63.2
Transitioned from a system ofthree business segments to asystem of five Units,
including the newly establishedReal Entertainment Unit and
IP Creation Unit.

56.3

49.6

48.6
44.6

2013
Transformation
into a speedy
Group

Reorganized ourbusiness segments.
Established the Network
Entertainment and Visual andMusic Production Units.

2014
Organizational changes
Delegation of authority
Personnel exchanges

2015
Adoption of IP
axis strategy
by the Group2013.3–2015.3 Mid-term Plan

2016

2017

2018

2019

IP axis strategy:
From adoption to acceleration
2016.3–2018.3 Mid-term Plan

2019.3–2021.3 Mid-term Plan
5

THE GROUP’S GREATEST STRENGTH —THE IP AXIS STRATEGYThe IP axis strategy is the greatest strength of the BANDAI NAMCO Group, which has a diverse rangeof businesses and extensive know-how in the field of entertainment.
It is through the IP axis strategy that the Group works to maximize IP value by leveraging IP worldviews
and providing the optimal products and services in the optimal regions at the optimal times.
By advancing, promoting, and expanding the IP axis strategy, the BANDAI NAMCO Group is aiming
to achieve further growth in global markets.

Maximizing IP Value
The optimal

outletThe optimal

time

CONFECTIONERY
and FOODSTOYS

AMUSEMENTFACILITIESMOVIES

Acc

um

ula

ted

The optimal

regionLIVE ENTERTAINMENTNETWORKCONTENTHOME VIDEO
GAMES

CARDS

VIDEO ON
DEMAND(VOD)
CONTENT

PLASTICMODELS

VISUALand MUSIC
PACKAGEAMUSEMENT
MACHINES

Introducing products and services thatleverage the worldviews of IPs

kno
w-

ent

m
vest
IP in

how

Cultivation

Note: This illustration shows one example of IP axis development.

6

NEW
DEVICESCreation

Co-creation

FY2019.3 Results

Toys and Hobby Unit

Core Company: BANDAI CO., LTD.

Network Entertainment Unit

Core Company: BANDAI NAMCO Entertainment Inc.
Planning, developing, and distributing network content; planning, developing, andsales of home video games

Real Entertainment Unit

Core Company: BANDAI NAMCO Amusement Inc.
Real entertainment business, including planning, developing, production, andsales of amusement machines; planning and operation of amusement
facilities, etc.

Visual and Music Production Unit
Core Company: BANDAI NAMCO Arts Inc.

Planning, production, and sales of visual and music content and visual andmusic package software; and conducting live entertainment operations

IP Creation Unit

Core Company: SUNRISE INC.
Planning and production of animations; management and administration of
copyrights and other rights; production of music related to animations andplanning and use of music and masters related to animations

Operating Profit¥¥

Net Sales

Operating Profit¥¥

Net Sales

Operating Profit¥¥

Net Sales

Operating Profit¥¥

Net Sales

Operating Profit¥¥

242.8 billion

340.9 billion

101.4 billion

45.5 billion

22.4 billion

21.7 billion

THE IP AXIS STRATEGY

Planning, development, production, and sales of toys, capsule toys, cards,
confectionery and foods, apparel, sundries, plastic models, prizes,
stationery, and other products

Net Sales

47.5 billion

4.2 billion

8.7 billion

5.0 billion

Examples of IP Creation Initiatives

IP Strategy
Division

The IP Strategy Division was established in BANDAI NAMCO Holdings Inc. to strengthen the IP
axis strategy, which is aimed at driving the growth of the Group over the medium to long term.
This Division is currently implementing a variety of projects, including the worldwide roll-outsof established IP, such as the Mobile Suit Gundam and the DRAGON BALL series; the creationof new IP; and the roll-out of IP for women in the mature fan base.

BANDAI NAMCO
Content Fund

The BANDAI NAMCO Content Fund was established through investment by BANDAI NAMCO Holdings
and the five Unit core companies. The objective of the Fund is to support active Group investment invisual products and other content and to conduct production activities from a long-term viewpoint thatemphasizes overall optimization. The Fund works to rapidly invest in content in cooperation
with partners inside and outside the Group, to encourage the spirit of taking on challenges among
employees, and to create and nurture IP in close cooperation with Group products and services.

Internal andExternal
Recruiting
Systems• Original Star IP Office
The Original Star IP Office supports the creation of new IP by recruiting and evaluating original
IP developed by employees themselves.
• BANDAI NAMCO Accelerator
The BANDAI NAMCO Accelerator supports the operations of start-up businesses, integrates
Group resources, and rolls out innovative businesses and IP.
• DREAM SUPPORT PROJECTThe DREAM SUPPORT PROJECT supports the dreams of next-generation creators. In addition tofunding, the project provides educational support through workshops and a system for mentoring
by Group employees.

7THE BANDAI NAMCO Group —OUR VALUE CREATION PROCESSOur Mission Statement

Dreams, Fun and Inspiration
Our Vision

The Leading Innovator in Global Entertainment

INPUT (Key management resources)

BUSINESS MODEL (IP axis strategy)

Human resources

Maximizing IP Value

Corporate culture

Planning and development
capabilities

Introducing products andservices that leverage
the worldviews of IPs

Technical strengths

Partnerships

COMPLIANCE

CSR MANAGEMENTCORPORATE GOVERNANCE

8

The Group has a number of key management resources. These include our human resources, who are thedriving force for all of our operations, and our corporate culture, which encourages employees to take onchallenges. Moreover, our planning and development capabilities have been cultivated over many years
and our technical strengths give concrete shape to a wide range of products and services. We can also
draw on our extensive network comprising partnerships inside and outside the Group. By combining thesekey management resources, we are rolling out the IP axis strategy business model on a worldwide basis
and providing products and services that leverage the appeal of IP. Moving forward, through these typesof initiatives we will contribute to the creation of a world in which all IP fans can communicate in waysthat transcend the barriers of national borders and languages, and we will increase our corporate value.

OUR VALUE CREATION PROCESS

Leveraging IP to Foster Communication among People around the WorldOUTCOME (Value creation)

Local communities

Customers

Increasing the
Corporate Value of the
BANDAI NAMCO Group

Creating a world in which all
IP fans can communicate inways that transcend thebarriers of national borders
and languages

Shareholders

Employees
Partners

9

MAJOR IP IN GROUP PRODUCTS
AND SERVICES
This section introduces examples of the major IP for which the Group is rolling out products and services.

Units Implementing IP Business Development Initiatives
Toys and Hobby

10

Network Entertainment

Real Entertainment

Visual and Music Production

IP Creation

THE IDOLM@STER Series

IDOLiSH7

Centered on idol production
game content for smartphones
and home video games, this IP
has earned popularity among awide range of fans, including
both men and women. We arerolling out products and services on a Groupwide basis,such as music CDs, live music,
animations, comics, Web radio,
and a variety of merchandise.

Since the launch of a game forsmartphones in 2015, IDOLiSH7
has achieved a high level of
popularity, especially among
women. Focusing on further
expansion of the IP, the BANDAI
NAMCO Group is rolling out awide range of products andservices, including animations,music CDs, live events, andgoods.

Ultraman Series

Mobile Suit Gundam Series

Ultraman has earned the support of a wide range of age
groups, extending to two oreven three generations. The
BANDAI NAMCO Group provides
Ultraman products and services,such as toys and visual packaged products.

Since its launch in 1979, Mobile
Suit Gundam products have earned
support among a wide range ofage groups. Centered on visual
products, these include plastic
models, home video games, andnetwork content. In addition to
Japan, Mobile Suit Gundam initiatives are being rolled out aroundthe world, including appearancesin Hollywood films.

KAMEN RIDER Series

Super Sentai Series

The KAMEN RIDER series has
been popular among boys formore than 45 years and hasearned the support of a wide
range of age groups in Japanand overseas. The BANDAI NAMCO
Group provides various KAMENRIDER products and services,such as toys and home video
games.

Super Sentai has been popularamong boys for more than 40
years, and has also earned
strong support in Asia. The
BANDAI NAMCO Group provides
a wide range of Super Sentai
products and services, such as
toys and home video games.

PAC-MAN

Anpanman has been popularamong parents and children formany years. The BANDAI NAMCO
Group provides Anpanman
products and services, centered
on toys for infants.

In 2005, PAC-MAN was recognized by Guinness World
Records as the most successful
coin-operated amusement
machine. Today, this BANDAI
NAMCO Group original IP is still
popular around the world.

Tamagotchi Series

PRETTY CURE! SeriesThis original IP has been supported for more than 20 years
since it was created as a portable digital nursing game.
Through a variety of products
and services, this has become
an established IP that is popularwith two generations, parents
and their children.

The PRETTY CURE! series has
been popular among girls formore than 15 years. The BANDAI
NAMCO Group provides a wide
range of PRETTY CURE! products
and services, such as toys andhome video games.

DRAGON BALL Series

Love Live! Series

DRAGON BALL comics andanimations have earned the
support of customers for many
years in Japan and overseas.
The BANDAI NAMCO Group
provides a wide range of
DRAGON BALL products andservices, such as home video
games, network content, card
products, and figures.

This IP was created from a
project linking magazines,
visual products, and music.
In addition to magazine pages
and visual and music packaged
products, live events are also
highly popular.

BORUTO / NARUTOONE PIECE

Comics and animations havebeen popular for many years
in Japan and overseas. The
BANDAI NAMCO Group is providing a wide range of products
and services, centered on home
video games and network
content.

ONE PIECE comics and animations have been popular for
many years in Japan and overseas. The BANDAI NAMCO Group
provides a wide range of ONE
PIECE products and services,such as home video games,
network content, and figures.

MAJOR IP IN GROUP PRODUCTS AND SERVICES

Anpanman11

BOARD OF DIRECTORS AND AUDIT & SUPERVISORY BOARD MEMBERS
As of June 24, 2019

President andRepresentative Director

Mitsuaki Taguchi

12

Director

Director

Director (Part-time)

Shuji Ohtsu

Yuji Asako

Masaru Kawaguchi

Yasuo Miyakawa

Director (Part-time)

Hitoshi Hagiwara

Director (Part-time)

President andRepresentative Director of
BANDAI CO., LTD.

President andRepresentative Director of
BANDAI NAMCOEntertainment Inc.

President andRepresentative Director of
BANDAI NAMCO
Amusement Inc.

BOARD OF DIRECTORS AND AUDIT & SUPERVISORY BOARD MEMBERS

Director (Part-time)

Director (Part-time)

Kazumi Kawashiro

Makoto Asanuma

President andRepresentative Director of
BANDAI NAMCO Arts Inc.

President andRepresentative Director of
SUNRISE INC.

Director (Outside)

Director (Outside)

Director (Outside)

Director (Outside)

Yuzuru Matsuda

Satoko Kuwabara

Mikiharu Noma

Koichi Kawana

AUDIT & SUPERVISORY BOARD MEMBERS
Audit & Supervisory Board
Member (Full-time)

Audit & Supervisory Board
Member (Full-time, Outside)

Audit & Supervisory Board
Member (Outside)

Audit & Supervisory Board
Member (Outside)

Masataka Nagaike

Toru Shinoda

Osamu Sudoh

Katsuhiko Kamijo

13

OVERVIEW OF THE MID-TERM PLAN

Mid-term Plan of the BANDAI NAMCO Group (From April 2018 to March 2021)
The BANDAI NAMCO Group has been implementing the three-year Mid-term Plan since April 2018. Under the plan, theGroup will leverage the worldview and unique characteristics of its IPs and provide the optimal products and services in the
optimal regions at the optimal times. In this way, we will maximize IP value by further evolving the IP axis strategy andachieving penetration and expansion in global markets. In addition, we will drive the creation of new IP and regionallyoriented strategies by unifying the efforts in each region under the ALL BANDAI NAMCO concept. In this way, we aim to bea Group that is changing in all aspects to progress to the next stage without being bound by previous business models andestablished ideas.

MID-TERM VISION

The BANDAI NAMCO Group aims to achieve “CHANGE” to progress to the next stage
by continuing to empower, gain momentum, and accelerate evolution without
being bound by previous business models and established ideas.
The “CHANGE” concept encompasses change to an IP-creating company, change toa new business model, change to a unifying ALL BANDAI NAMCO concept, andchange to a corporate group centered on people.

14

MAIN STRATEGIES
Under the Mid-term Plan, we are promoting four main strategies.

ACCELERATE EVOLUTION IN IP AXIS STRATEGY
To further solidify the IP axis strategy, the Group’s greatest strength, we will drive the creationof new IP while fostering continued innovation with long-established IP.

Boost capability to create IP (structural changes)

BUSINESSSTRATEGY

Invest aggressively in IP creation

OVERVIEW OF THE MID-TERM PLAN

IP AXISSTRATEGYEMPOWER PUSH INTO NEW ENTERTAINMENT
To empower a push into new entertainment, we will upgrade and enhance our business
infrastructure, expand and strengthen our business fields, and promote incubation.

Establish and enhance business
infrastructure

REGIONSTRATEGY

Expand and strengthenbusiness fields

Promote incubation

GAIN MOMENTUM WITH ALL BANDAI NAMCO
The regional holding companies and the business companies in each Unit will form a unifying
ALL BANDAI NAMCO concept to advance the Group’s strategies autonomously on a regional
basis through their deep knowledge of the customer base in each region.

Make full-blown entry into Chinese market

PERSONNEL
STRATEGY

Establish system for ALL BANDAI NAMCO

MAKE PERSONNEL THE CORE OF THE GROUP
We have been working for some time on such initiatives as training the necessary global
personnel, actively enabling personnel exchange, and establishing systems for promoting
active participation of a diverse workforce. In addition, we will advance a proposal system for
employees to take up new challenges, as well as systems for supporting their endeavors.

Establish environment to optimize employees’ performance by tapping their individual strengths,
and to empower new ventures

15

PRESIDENT’S MESSAGE

With a consistent“customer-centric”
approach, we will strive
to anticipate changes inthe times and to achievesustained growth in the
global market.
Mitsuaki Taguchi
President and Representative Director
BANDAI NAMCO Holdings Inc.

EVALUATION OF RESULTS IN FY2019.3
Record-High Levels of Net Sales for
Seven Consecutive Years and Operating
Profit for Three Consecutive Years
In FY2019.3, BANDAI NAMCO’s employees maintained theirfocus in a changing external environment, and consequently we were able to achieve results that significantly
exceeded our plans at the beginning of the fiscal year. With
net sales of ¥732.3 billion and operating profit of ¥84.0
billion, we achieved record-high levels of net sales for theseventh consecutive year and operating profit for the third
consecutive year. In addition, the operating profit margin
and ROE both increased year on year, with the operating
profit margin reaching 11.5% and ROE rising to 15.5%.
I believe that this performance resulted from our search forthe optimal direction, our focus on customers, and ourconsistent “customer-centric” approach.
Every business has periods in which the trends of thetimes are favorable and products remain popular, and periods that are filled with challenges. In recent years, conditions have been favorable for the BANDAI NAMCO Group,
especially in the Network Entertainment Unit, which has
become the driver of our growth. In the previous fiscal year,
each Unit achieved satisfactory growth in performance, andwe have achieved a more-balanced earnings structure.
I would like to leverage this to further stabilize andstrengthen our business foundation going forward.

16

Page 2 THE BANDAI NAMCO GROUP — 1 YEAR OF RESULTS (FY2019.3)

MID-TERM PLAN
(APRIL 2018 TO MARCH 2021)
Steady Quantitative and Strategic Progressin the First Year
Strengthening Initiatives in Line with Four
Main Strategies
In April 2018, we commenced a new three-year Mid-term
Plan under the vision of “CHANGE for the NEXT: Empower,
Gain Momentum, and Accelerate Evolution.” This vision
incorporates the aim of achieving “CHANGE” to progress tothe next stage by continuing to empower, gain momentum,
and accelerate evolution without being bound by previous
business models and established ideas. We are promoting
four main strategies — the IP axis strategy, businessstrategy, region strategy, and personnel strategy.

IP Axis Strategy

Accelerate Evolution in IP Axis Strategy
In addition to innovation through products and services
drawing on established IP, such as Mobile Suit Gundam,
DRAGON BALL, and ONE PIECE, we are also focusing significant resources on creating and nurturing new IP. In IP
creation, we are advancing a range of initiatives for collaboration, both within the Group and with external partners.
In addition, we are planning ¥25.0 billion in strategic investment over the three-year period of the Mid-term Plan.
In the first year, we invested ¥6.0 billion in IP creation, IP
marketing, and other areas. From FY2020.3, we launched
the BANDAI NAMCO Content Fund as a new investment

framework. The Fund implements rapid investment fromthe perspective of Groupwide optimization, and more than
10 projects are already underway. Moreover, we are also
working to strengthen the creation function, such as
through alliance with an anime studio.
Page 6 THE IP AXIS STRATEGYBusiness Strategy

Empower Push into New Entertainment
The operating environment has reached a major turning
point, and in this setting we will advance collaboration ina variety of formats as the “Open BANDAI NAMCO.” Forexample, we will strengthen collaboration with a wide
range of partners inside and outside the Group, without
regard to whether or not we have a capital relationship,and launch a new network platform.
Furthermore, looking at the expansion of business tofields with potential, in the Toys and Hobby Unit we haveestablished a company specializing in business development for the mature fan base. We are working to expand
this business not only in Japan but also in Asia. Moving
forward, we will also work to foster business expansion in
North America and other regions. Furthermore, in the
Visual and Music Production Unit, we were able to achieve
growth in the live events business through synergies
achieved by initiatives unifying the three elements of visual
products, music, and live events. Moving forward, we willcontinue to reinforce measures for new targets and new
business areas, to continue R&D into new technologies,
and to create new entertainment.

PRESIDENT’S MESSAGEIn FY2020.3, the second year of the Mid-term Plan, we
will aggressively take steps to plant seeds for future
growth, including investment. These initiatives will include
taking steps to enhance our foundation in order to support
IP creation and global business development expansion andimplementing next-generation technical research. On theother hand, we are in a period of dramatic changes in theoperating environment, and I think that this could be called
an age of high-speed change. In this setting, I believe that it
will be difficult to formulate a plan that is simply an extension of past business practices, especially in the digitalfield. We continue to record favorable results, but wecannot allow ourselves to be overconfident. We must
respond rapidly to change, further bolster our businessfoundation so that we can achieve stable earnings without
regard to whether or not we have hit products, and strive toachieve sustained growth in the years ahead.

Page 20 MESSAGES FROM THE PRESIDENTS OF UNIT CORE COMPANIESRegion Strategy

Gain Momentum with ALL BANDAI NAMCO
In each region, businesses are working to meet the needs ofcustomers by unifying under the ALL BANDAI NAMCO concept. Japanese IP is very popular in China, which we havepositioned as a key market for BANDAI NAMCO. In FY2019.3,
we were able to grow our operations in China, centered on
the Toys and Hobby and Network Entertainment Units.
We have established a system comprising four businesscompanies under our holding company in Shanghai, andmoving forward we will work together to expand businessdevelopment initiatives as a Group.
Looking at North America, a distinctive feature of themarket is that once IP starts to garner popularity it canreally take off. In FY2019.3, we worked in collaboration withan external partner to implement a DRAGON BALL tour
visiting seven sites in North America. This Groupwide initiative was conducted in conjunction with the opening of the
DRAGON BALL movie. In FY2020.3, we will hold a tour that17

PRESIDENT’S MESSAGE

Correlation Diagram for Each Strategy
Business and regional coordination

IP axis strategy
Business strategy

Businesscoordination

Empower push into
new entertainment
Establish and enhancebusiness infrastructure
Expand and strengthenbusiness fields

IP creation andco-creation

Accelerate evolution
in IP axis strategy
Boost capability to create IP(structural changes)
Invest aggressively in IP creation

Regional
coordination

Region strategy
Gain momentum with
ALL BANDAI NAMCO

IP creation andco-creation

Make full-blown entry into
Chinese market
Establish system for
ALL BANDAI NAMCO

Promote incubation

Personnel strategy

Make personnel the core of the Groupwill visit eight cities around the world, starting in the
U.S. city of San Diego. In this way, we will work to promote
products and services for fans in the global market.
Page 30 SPECIAL FEATURE

Personnel Strategy

Make Personnel the Core of the Group
Human resources are our most important asset and are thedriving force behind the realization of growth in IP value.
Aiming to be a group centered on human resources management, particularly on entertainment and imagination, we
are working to establish environments that enhance themotivation of employees and to ensure respect for individualityand diversity. At the management level, in April 2019 the
President and Representative Director of SUNRISE INC.,
who had previously been working in the field of visual products,
became the President and Representative Director of
BANDAI NAMCO Entertainment Inc., while an executive
from the Network Entertainment Unit became the new
President and Representative Director of SUNRISE. The aimsof this personnel move are to help managers accumulate
experience with a variety of businesses and to promote thesharing of Unit know-how. We expect this to result in the
integration of know-how regarding visual products production and network entertainment and in the generation of
new synergies among Units, such as the creation of IP
based on new concepts and the expansion of IP worldviews.
Page 62 PERSONNEL STRATEGY18

CORPORATE GOVERNANCE
Adding Another Outside Director
Outside Director Chairs Personnel
Committee
From June 2019, we added another outside director.
As a result, 4 of 12 directors and 3 of 4 Audit & Supervisory
Board members are outside officers (Independent Directors
and Independent Audit & Supervisory Board Members).
These seven officers make up the Independent Directors
and Audit & Supervisory Board Members Committee.
The committee conducts an annual evaluation of Board of
Director effectiveness, and its opinions are rapidly addressedby those responsible for business execution. In these ways,
we are utilizing the plan, do, check, act (PDCA) cycle. All of theoutside officers are providing practical, independent, andobjective opinions. In addition, the Personnel Committee,
which is composed of the four outside directors and thepresident, provides advice regarding the appointment andcompensation of directors. From FY2020.3, the Personnel
Committee is chaired by an outside director, ensuring
further transparency and fairness. Also, for our successor
development plan, we are advancing measures to clarify
what will be required of the next leader and to establish adetailed development program.
Page 54 CORPORATE GOVERNANCE

Cash Dividends per Share and Total Payout Ratio
145
123

82

50.3

62
36.2

2015

2016

49.9
40.8

2017

2018

2019

For the Fiscal Years Ended March 31
FY2015.3 includes a special dividend of ¥10,
FY2017.3 includes a special dividend of ¥20,
and FY2018.3 includes a special dividend of ¥25.

SHAREHOLDER RETURN
Providing Returns with an Enhanced Focus
on Cost of Capital and ROE
Our basic policy for shareholder return calls for stabledividends over the long term and an enhanced emphasis on
cost of capital and ROE. Specifically, our policy is to implement shareholder return that targets a total return ratioof 50% or more based on stable dividend payments of 2%
of dividends on equity (DOE).
For the FY2019.3 annual dividend, on top of the basedividend of ¥36 per share, we added a performance-based
dividend of ¥109 per share, resulting in a dividend of ¥145
per share. The dividends for FY2020.3 will be considered inaccordance with the basic policy for shareholder returns as
described above.

PRESIDENT’S MESSAGE

33.0

Cash Dividends per Share(Yen)
Total Payout Ratio(%)

52

It is not possible to forecast the future with complete
accuracy. I believe that we need to continually take action
based on our forecasts for change, and to maintain a senseof humility as we focus on feedback from customers. When
we determine our future direction in this way, we must,at times, act without hesitation to change our previous waysof doing things. In an operating environment marked bydramatic change, we will take a rigorously customer-centric
approach to our businesses. First, we will work to turnchanges into opportunities. Then, we must continue rigorously striving to provide high-quality products and services.
I believe that we are in a period that will test the strength of
BANDAI NAMCO — our enduring commitment to the pursuitof quality as we work to address the changes of the times.
The world of Japanese manga and anime is surprisingly
diverse, including the Mobile Suit Gundam series, which hasreached its 40th anniversary. I think that Japan should be
proud about the cultural attitudes that enable these types ofartistic works to co-exist, without one eliminating the other.
The market presence of the BANDAI NAMCO Group involves
communicating the appeal of IP to people around the world
through products and services. In addition, the social valuethat we create entails building foundations to enable people
around the world to communicate through IP.
Accordingly, as we keep in mind the mission that we must
fulfill, we will continue to take on challenges and strive torealize growth and evolution toward becoming “the Leading
Innovator in Global Entertainment.” I would like to ask ourshareholders, investors, and other stakeholders for their
ongoing support of the BANDAI NAMCO Group as we
continue our sustained efforts to take on challenges inthe years ahead.
August 2019

Page 70 FINANCIAL SECTION

IN CLOSING
Building a Foundation to Enable People around
the World to Communicate through IP

Mitsuaki Taguchi
President and Representative Director
BANDAI NAMCO Holdings Inc.

In recent years, the BANDAI NAMCO Group has recorded
favorable results, but I have continually stressed to ouremployees the importance of always maintaining aforward-focused sense of crisis. Our operating environmentis undergoing dramatic changes, such as the diversificationof media and the shift to subscription-based business models
by a variety of businesses. In this environment, businessmodels and strengths that have been effective in the past,even up until very recently, might not be effective tomorrow.

19

MESSAGES FROM THE PRESIDENTS OF UNIT CORE COMPANIES

Toys and Hobby
MID-TERM VISION

Break Out of the Box. Wow the World!
The Toys and Hobby Unit is taking on the challenge of creating newentertainment so that we can provide products and services that astonish our fans around the world. In the first year of the Mid-term Plan,core IP products registered favorable performances, and we rapidly saw
results from the establishment of BANDAI SPIRITS CO., LTD., whichbolstered our roll-outs of products for the mature fan base. The Unit
achieved record-high profit, and we got off to a strong start that significantly surpassed the performance called for in the plan. In the second
year of the plan, we will target the NEXT STAGE as we actively advancethe plan’s main strategies.
To strengthen global roll-outs, we are implementing a variety of
initiatives to create buzz and promote business development measures.
These initiatives include products and services for the Mobile Suit Gundam
series, which has reached its 40th anniversary, and for DRAGON BALL.
In China, we are aiming for full-blown business development, andaccordingly we have established a new company in Shanghai, whichstarted business operations in April 2019. Through this new company,
we will strengthen cooperation with a wide variety of partners, including
businesses both inside and outside the Group, and take steps to appeal
to fans in the local market. In addition, we will work to further bolster
our roll-outs of products for a wide range of fans around the world.
To that end, we have established a new company to handle sales andmarketing of products for the mature fan base in North America, andthat company will commence full-scale operations.
In line with our Mid-term Vision, the Toys and Hobby Unit will work
to provide inspiration that transcends national borders by breaking
through existing concepts and creating new entertainment.

Masaru Kawaguchi
Director (Part-time)
BANDAI NAMCO Holdings Inc.
President and Representative Director of
BANDAI CO., LTD.

20

EXAMPLE OF A TOYS AND HOBBY UNIT BUSINESS MODEL

Customers
Promotion androlling out media
MESSAGES FROM THE PRESIDENTS OF UNIT CORE COMPANIESProvision of products and services

Stores / e-commerce

Media

TV
MoviesPublishing
Internetetc.

Provision of products and services
Sponsorship of programand promotion

Toys and Hobby
Unit

IP usageapproval

Merchandisingpermission

Rights holders

MAIN STRATEGIESFY2019.3 RESULTS AND RELATED DATA

Create, nurture, and obtain new IPs

Sales of IP Products and Services (Toys and Hobby Business in Japan)

Positioning and business growth

AnpanmanBreak into the Chinese market
Strengthen functions to maximize
business

FY2020.3 NUMERICAL TARGETS

250.0
21.0

Segment Sales ¥Segment Profit

¥

11.5

¥

Expand new business domains

billionUltraman series¥

4.4

Mobile Suit Gundam series

PRETTY CURE! series

¥

¥

32.5

billionSuper Sentai series

billion¥

6.0

billion

KAMEN RIDER series

DRAGON BALL series

¥

¥

27.3

billion

20.4

billion

10.1

billionPokémon¥

3.5

billionONE PIECE¥

5.6

billionbillionbillion21

MESSAGES FROM THE PRESIDENTS OF UNIT CORE COMPANIESNetwork Entertainment
MID-TERM VISION“Transnational Company”
Creating Value for Consumers
The Network Entertainment Unit is aiming to leverage its customercentric approach to establish a strong industry presence as a transnational company. In the first year of the Mid-term Plan, core network
content titles continued to record favorable results. In addition, in home
video games, both new titles and repeat titles registered solid sales. As
a result, we were able to achieve results that surpassed the forecast
made at the beginning of the fiscal year.
Going forward, the Unit will advance two major policies. First, we will
strive to achieve growth through high-quality game content that can beenjoyed for extended periods of time. Second, we will work to expand
entertainment operations other than the traditional game business. The
digital field is changing at a rapid pace, and in this environment thesimple extension of traditional business practices is no longer effective.
In the fields of music and visual products, the new mainstream is thesubscription-based business model, under which payment is made forusage over a specific period of time. The Unit’s businesses are no exception.
To survive and continue to grow in this environment, we must emphasize a customer-centric approach, both in the provision of high-quality
content that can be enjoyed for extended periods of time and in operations.
Moving forward, we will carefully consider the variety of possible
changes in the digital and network fields. On that basis, we will takesteps to address new technologies and new platforms and to foster
innovation in existing technologies. We will continue to emphasize acustomer-centric approach as we strive to determine what customers
want. In this way, we will create new products and services that maximize the appeal of IP.

Yasuo Miyakawa
Director (Part-time)
BANDAI NAMCO Holdings Inc.
President and Representative Director of
BANDAI NAMCO Entertainment Inc.

22

EXAMPLE OF A NETWORK ENTERTAINMENT UNIT BUSINESS MODEL

Customers
Promotion androlling out media

Game content

TV
MoviesPublishing
Internet
etc.

Media
Platforms

Download content
Hold events

Collaboration

Development partners

Game content

Network
Entertainment
Unit

MAIN STRATEGIES

Network content¥

billionFY2020.3 NUMERICAL TARGETS¥

Overseas sales ratio

28%billionbillionHome video games

102.1

¥

billionHome video games

Network content

Segment Profit

Rights holders

Sales by Major Category

211.1

Continued transformation into a“transnational company”

320.0
36.0

IP usageapproval

Promotion androlling out media

FY2019.3 RESULTS AND RELATED DATA

Shift to a customer-centric businessmindsetSegment Sales ¥Promotion androlling out media

MESSAGES FROM THE PRESIDENTS OF UNIT CORE COMPANIES

Download content
Hold events

Unit sales of home video games

27,611

thousandFull package download sales ratio

38

%

23

MESSAGES FROM THE PRESIDENTS OF UNIT CORE COMPANIESReal Entertainment
MID-TERM VISIONWe Create “Entertainment Experience
Here and Now” Worldwide
The Real Entertainment Unit has direct contact with customers, and weare leveraging that strength as we strive to transcend national borders
and provide people around the world with “entertainment experiences
only now and here” that make the most of BANDAI NAMCO’s distinctive
strengths. In the first year of the Mid-term Plan, we worked to establish
a system that seamlessly integrates our operations, from amusement
machine development to production, and from facility development tooperation. We introduced new amusement machines, launched newversions of existing machines, and rolled out new business formats foramusement facilities enabling customers to enjoy experiences that draw
on BANDAI NAMCO’s distinctive strengths. These initiatives have been
well regarded in the market, and consequently our results surpassed
the forecasts made at the beginning of the fiscal year.
In the second year of the plan, we will step up the pace as we take on
new challenges. For example, we will introduce multiple new amusement
machine, expand the virtual reality (VR) business, and open large-scale
facilities with new concepts that leverage our technologies and know-how.
I believe that the essence of real entertainment is the essence ofpeople’s daily lives. How can we provide value through the five senses?
This is the true spirit of the Unit, and it will be a decisive factor in the
future. In an environment marked by ongoing digitalization, we will aim
to create points of customer contact by offering bricks-and-mortar
venues. And we will use those venues to inspire customers by directly
providing IP value and worldviews to customers.

Hitoshi Hagiwara
Director (Part-time)
BANDAI NAMCO Holdings Inc.
President and Representative Director of
BANDAI NAMCO Amusement Inc.

24

EXAMPLE OF A REAL ENTERTAINMENT UNIT BUSINESS MODEL
Provision of
products andservices

Directly operated facilities

Customers

Provision of products
and services

Sales

Real
Entertainment
Unit

Facilities operated
by other companies

Collaboration

IP usage approval

Production partners

Rights holders

MAIN STRATEGIESFY2019.3 RESULTS AND RELATED DATA
Sales by Major Category

Building a real platform
Leveraging the distinctive strengthsof the BANDAI NAMCO Group

Amusement machines

35.6

¥

billionNumber of Amusement Facilities(Total of Japan and Overseas)
Directly managed facilities

292

Revenue-sharing facilities*

1,473

Amusement facilities

FY2020.3 NUMERICAL TARGETS

110.0
5.0

Segment Sales ¥Segment Profit¥

MESSAGES FROM THE PRESIDENTS OF UNIT CORE COMPANIES

Amusement machine development

¥

66.8

billion

Other

Total

billionbillion

9
1,774* Revenue-sharing facilities: Revenues from theoperation of amusement machines are shared.

25

MESSAGES FROM THE PRESIDENTS OF UNIT CORE COMPANIESVisual and Music Production
MID-TERM VISION

No. 1 Group in Visual, Music, and LiveThe Visual and Music Production Unit is aiming to achieve the Mid-term
Plan by building a system for seamless collaboration among threebusinesses — visual, music, and live — and working to advance its
business strategies. The Unit got off to a solid start in the first year of
the Mid-term Plan. We recorded favorable results with sales of core
IP packaged products and with live events and related activities.
From the current Mid-term Plan, we are implementing organizational
restructuring initiatives to promote IP creation and the discovery anddevelopment of artists, and we are advancing the delegation of authority
to the front lines in order to promote open creation. In addition, we havebuilt a strong presence in the live event business, where our annual
sales have surpassed ¥10.0 billion. By providing venues forgatherings of IP fans, this business has created a community and ismaking a significant contribution to maximizing IP value. Moving
forward, we will also work to expand our business base by taking on
the challenge of new types of live businesses.
In the second year of the plan, we will aim for No. 1 positions in thesethree businesses. We will strive to create an environment that supports
the development of a wide range of highly original IP and artists andencourages people to take on challenges with a high degree of focus.
The Visual and Music Production Unit aims to create new entertainment by further accelerating a strategy of integrating the visual, music,
and live businesses.

Kazumi Kawashiro
Director (Part-time)
BANDAI NAMCO Holdings Inc.
President and Representative Director of
BANDAI NAMCO Arts Inc.

26

EXAMPLE OF A VISUAL AND MUSIC PRODUCTION UNIT BUSINESS MODEL
Customers
Provision of products and services

Music

Coordination

Coordination

Packaged productsVideo on demand (VOD)
Goods
Music publishingetc.

Content
Artists
Creators

Coordination

Visual Products
Packaged productsVideo on demand (VOD)
Goods
etc.

Collaboration

Other companies

Lives

Coordination

Visual andMusic Production
Unit

MAIN STRATEGIESFY2019.3 RESULTS AND RELATED DATA

Strengthen capacity for creating hit IPs
Empower integrated IP production
focused on visual products, music, andlive performance
Promote IP use with a global vision

FY2020.3 NUMERICAL TARGETS

Segment Sales
Segment Profit

45.0
8.0

¥

¥

Planning and operation
Ticket sales
Goods
etc.

MESSAGES FROM THE PRESIDENTS OF UNIT CORE COMPANIESManagement
Artist development
Operation of fan clubs
etc.

billionVisual and Music Production Unit:
Number of Copyrighted Products(As of 2019.3)

Number of copyrighted products /Total number of hours
BANDAI NAMCO Arts Inc.

1,063
4,096

products
hours

Number of live tours*1

57

Number of performances*2

894

Number of musical works
BANDAI NAMCO Arts Inc.
Number of works withmaster license recordings

Approx.

43,000

Number of works publishedbillionNumber of Lives Held

Approx.

23,000*1 Number of live tours implemented
by BANDAI NAMCO Arts Inc.
*2 Number of performances held by
BANDAI NAMCO Live Creative Inc.

27

MESSAGES FROM THE PRESIDENTS OF UNIT CORE COMPANIESIP Creation
MID-TERM VISION

Evolving from an Animation Production
Company to IP Development
The most important mission of the IP Creation Unit is the continued
creation of IP itself, which is the core of the IP axis strategy. In the firstyear of the Mid-term Plan, we worked to create buzz with new visual
products leveraging core IP, and licensing revenues were favorable.
To enhance our IP creation capabilities, which is one of our main
strategies, SUNRISE BEYOND INC., a visual products production company, has joined the Group and is working to create high-end, original IP.
In addition, SUNRISE MUSIC Publishing Co., Ltd., was reborn as
SUNRISE Music INC., which produces IP from the viewpoint of music.
Moreover, we established SUNRISE SHANGHAI CO., LTD. in China inorder to leverage IP recognition and create products for the local market.
Moving forward, we will advance our main strategies and invest in IP
creation, and then use the earnings generated by that IP for further
investment. Through this cycle, we will strive to build strong, robust
business operations.
Without limiting ourselves to animations, we will continue to take on
the challenge of IP creation, using various modes of expression in linewith the needs of the times and the business environment. We will
create 1 from 0, in other words, create something from “thin air,” andthen, through collaboration with Group products and services, increase
the value of that 1 by 100 or even 1,000 times. In this way, we will strive
to maximize IP value.

Makoto Asanuma
Director (Part-time)
BANDAI NAMCO Holdings Inc.
President and Representative Director of
SUNRISE INC.

28

EXAMPLE OF AN IP CREATION UNIT BUSINESS MODEL

Customers

Provision of products

Media

Sales of products
IP usage approval

Other companies

Promotion androlling out media

TV
MoviesPublishing
Internetetc.

Provision of
products andservices

Promotion androlling out media

IP Creation Unit

Coordination

Other Units

MESSAGES FROM THE PRESIDENTS OF UNIT CORE COMPANIESProvision of products
and services

Promotion androlling out media

Collaboration

BANDAI NAMCO
Group

Creators / Production partners

MAIN STRATEGIESFY2019.3 RESULTS AND RELATED DATA
Number of Copyrighted Products

Improving creativity(As of 2019.3)

Improving communication

Number of copyrighted products /Total number of hours

Improving branding

SUNRISE INC. and BANDAI NAMCO Pictures INC.

331
2,697

products

FY2020.3 NUMERICAL TARGETS

Segment Sales
Segment Profit

20.0
5.0

¥

¥

hours

billionbillion29

SPECIAL FEATURE

Fostering evolution by taking o
the ALL BANDAI NAMCO concep
CONTENTS
32

Taking On the Challenge of Further
Increasing IP Value

Mobile Suit Gundam Series
34 Mobile Suit Gundam
40th Anniversary Project
36 Chief Gundam Officer (CGO)

38

Taking On the Challenge of Bolstering
Global Business Development

DRAGON BALL Series

40 Communicating to the World through theUse of YouTube
41 Groupwide Event Activities
42 Promotional Activities in France Leverage
Close Ties to Local Communities30

on challenges withpt
SPECIAL FEATURE

44

Addressing the Diversification ofCustomer Contact Points
44 The Music Business — Further Strengthening
Collaboration with Visual Products and Live Events
46 Taking On the Challenge of Developing
New-Format Facilities in theReal Entertainment Unit

31

SPECIAL Fostering evolution by taking on challenges
FEATURE with the ALL BANDAI NAMCO concept

Taking On the Challenge of Further Increasing IP Value

Mobile Suit Gundam Series

The Mobile Suit Gundam series has celebrated 40 years since its first TV broadcast in 2019. Mobile Suit Gundam is not
only original IP from the BANDAI NAMCO Group but also a representative example of established IP with value thathas been increased by careful nurturing over many years. Through close collaboration within the Group originatingin visual products operations, we are implementing integrated initiatives that extend from IP creation to theroll-outs of products and services.

Nurturing Popular IP that Appeals to
Multiple Generations by Continually
Implementing Business Development
Initiatives in Line with the Times
Over a period of 40 years, we have launched more than 60
visual products in the Mobile Suit Gundam series. We offer
visual products in forms that meet the needs of the times,
such as TV, films, packaged media, and Internet distribution.
At the same time, in alignment with the visual products we
rapidly roll out a wide range of other products and services
for the optimal outlets.
In this way, we have expanded the scope of Mobile Suit
Gundam fans. Today, the Mobile Suit Gundam IP has a wide
range of support, centered on males in their thirties to fifties
but also including younger consumers in their teens and twenties, women, and children. Moving forward, we will implementa variety of initiatives to further increase the global recognitionof Mobile Suit Gundam and develop it into a global IP.

Visual products related to the Mobile Suit Gundam 40th Anniversary Project

Mobile Suit Gundam Series Group Net Sales(¥ billion)

FY2019.3

80.2
76.7

79.3

¥

78.6
74.3

68.3
65.2

44.7
38.2
34.6

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

For the Fiscal Years Ended March 31

32

billionAdvancing the IP Axis Strategy for the Mobile Suit Gundam Series

Maximizing IP Value

LIVE EVENTS

SPECIAL FEATURECARD GAMESNETWORK CONTENTVIDEO ON DEMAND (VOD) CONTENT

AMUSEMENT MACHINES
VISUAL PRODUCTS

FACILITIESHOME VIDEO GAMESPLASTIC MODELS

IP creation

Mobile Suit Gundam Series
VISUAL PRODUCTS

33

SPECIAL Fostering evolution by taking on challenges
FEATURE with the ALL BANDAI NAMCO concept

Taking On the Challenge of Further Increasing IP Value

Mobile Suit Gundam
40th Anniversary Project

Under the Mobile Suit Gundam 40th Anniversary Project, we are aiming to maximize value by taking on thechallenge of implementing a variety of initiatives. The concept for the project is “BEYOND,” which incorporates themeaning of going further.

Communicating Appeal to Even Larger Numbers of People
As the person responsible for the visual content of the
Mobile Suit Gundam series, I am advancing the 40th Anniversary
Project while collaborating with each of the Units that are
rolling out products and services. Mobile Suit Gundam is
now at a turning point, expanding from the generation thatwatched the first Mobile Suit Gundam visual product to theirchildren and beyond. In addition, the popularity of Mobile
Suit Gundam content is expanding beyond Japan to global
markets.

Naohiro Ogata
Executive Officer
SUNRISE INC.
Joined SUNRISE in 1997.
Subsequently worked on a variety ofvisual production projects, including
the Mobile Suit Gundam series.

34

In consideration of these circumstances, the concept“BEYOND” was chosen for the 40th Anniversary Project,under which we will create products and implement
initiatives that transcend the limits of individual products,
generations, and national borders. We are aiming tocommunicate the appeal of the Mobile Suit Gundam series
to even larger numbers of people and to maximize thevalue of the Mobile Suit Gundam IP.

Taking On the Challenge of Global Markets
created a number of major global hits. This film will berolled out not only in North America but also in other markets around the world, and we believe that it will be a major
force accelerating the growth of Mobile Suit Gundam, which
has an overwhelming presence in Japan, into a global IP.

Advancing Group Collaborative Activities through Close Communications
For the Mobile Suit Gundam series, from the start of planning fora visual product we simultaneously commence planning ofother products and services. We have completed a system thatenables us to immediately roll out activities on a Groupwide
basis by the time broadcasting starts. This approach to working together fosters tremendous speed and scope.
What is important is close communications with others.
At SUNRISE, we have a system that incorporates the entire
Group. As we are making the visual product, we are continually exchanging information about the product’s content witha wide range of others in order to support the simultaneousroll-out of products and services. We hold about 20 to 30
periodic meetings within the Group. For the Gundam Project,which is centered on the Chief Gundam Officer (CGO), whooversees the IP, we meet about once every three months.
In addition, the CGO and I closely share information andexchange opinions. In this way, we have achieved a rapid andpowerful collaborative system between the visual productand other products and services.

SPECIAL FEATURE

The 40th Anniversary Project is being rolled out along fivevisual product axes, including SD Gundam World Sangoku
Soketsuden. For this ambitious product we focused on
China from the start of production and made the Chinese
market the main target. In the Chinese market, in conjunction with the roll-out of this product we will also promoteprevious products in this series. In this way, we will expand
initiatives for Gundam plastic models and other products
and services.
In addition, the live-action Hollywood feature film will bea key to global business development initiatives. SUNRISE
will co-produce this film with LEGENDARY, which has

Leveraging Strengths to Develop Worldwide IP
The strength of the BANDAI NAMCO Group is that we focus
on maximizing IP value, and we have the capabilities toachieve that goal. One example is the Gundam GLOBAL
CHALLENGE, a project aiming to make an 18-meter
Gundam that moves, with the opening to the general publicscheduled for summer 2020. This is a spectacular initiativethat leverages the distinctive strengths of the Group. Even
those of us who are working on the production of the visual
product could not have imagined this plan even just a few
years ago. These types of innovative initiatives also have amajor influence on the visual product, motivate the creators, and bolster visual product creation. With thisapproach, multiple staff members work hard on a single IP
and strive to realize their dreams as they motivate eachother. This is the appeal of the BANDAI NAMCO Group, andI feel that it is very worthwhile.
In 10 years we will reach the 50th anniversary of Gundam,and I hope that by then we will have reached the point
where the Mobile Suit Gundam series is popular in locations
around the world and new connections have been createdthat transcend generations and borders between countries
and regions through Gundam. To that end, moving forward
the Group will work together in cooperation with large
numbers of others to further increase the value of the
Mobile Suit Gundam IP.

In 2020, BANDAI NAMCO plans to exhibit a life-sized moving Gundam.

35

SPECIAL Fostering evolution by taking on challenges
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Taking On the Challenge of Further Increasing IP Value

Chief Gundam Officer (CGO)

As the control tower for initiatives to maximize the IP value of the Mobile Suit Gundam series, the Chief Gundam
Officer (CGO) is responsible for the IP axis strategy while overseeing initiatives on a Groupwide basis.

The CGO — A Pivot for Group Collaboration
In April 2019, I became the third person to serve as CGO.
In the same way as previous CGOs, I will have overall responsibility for the Mobile Suit Gundam IP as I indicate the directionof effective development activities based on collaboration
among various products and services, starting with thevisual products from SUNRISE INC. The Gundam Project isa horizontal framework for the implementation of thiscollaboration. We have established a committee for thisproject, and it is the job of the CGO to work as the control
tower for this committee. The Gundam Project functions
as a venue for sharing information Groupwide about theoverall roll-out of products and services, including thevisual product. Approximately 30 to 40 people meet once
every three months, centered on the people with front-line
responsibility in each Unit. Through the introduction of

Koji Fujiwara
Director, Chief Gundam
Officer (CGO)
BANDAI SPIRITS CO., LTD.
Joined BANDAI CO., LTD., in 1998.
Moved to current position in April
2019, after working as General
Manager of the Hobby Products
Department.

36

products and services that incorporate the worldview of thevisual product, these meetings are effective not only forsharing information but also for motivating each other.
From a Groupwide perspective, the IP Strategy Division has
been established within BANDAI NAMCO Holdings Inc., and acommittee made up of members centered on managers fromeach Unit meets periodically. At these meetings, deliberations
are conducted in regard to global roll-outs, our direction froma long-term perspective, and our overall policy for strategic
business development, such as for IP investment.
Through these types of committees and daily communications with the front lines, I strive to maintain a comprehensive understanding of the status of the IP and indicate
policies and directions. In this way, it is my mission to
generate significant business growth and development.

A Global Presence

SPECIAL FEATURE

The Mobile Suit Gundam series has solid recognition andpopularity in Japan, and the key to further growth in IP
value will be worldwide business development. Moving
forward, we will expand business development in Asia,
especially in China, and we will also focus on North America.
Of course, we will implement measures that leverage adifferent approach than in the past. We won’t simply send
IP from Japan to overseas markets. Rather, it will be
important to ensure that our actions are based on a solid
understanding of the preferences of local customers. As
one facet of measures to earn the acceptance of customers, it will also be necessary to create a new Mobile Suit
Gundam series worldview in line with local markets.
Accordingly, SD Gundam World Sangoku Soketsuden, a new
visual product that has been in development since summer
2019, is a symbolic initiative that has focused on the
Chinese market as its main target from the beginning ofproduction. Gundam plastic models, which were offeredthrough advance sales in the Asia region, have also
recorded highly favorable sales.

The Appeal of Gundam
The Mobile Suit Gundam series has maintained a consistently original worldview while continuing to provide visual
products, other products, and services that have themes
reflecting the times. This approach has generated sustained success for 40 years, giving diversity and depth to
the worldview of the IP and leading to the acquisition offans across generations.
In April 2019, Gundam plastic models surpassed 500
million cumulative total shipments. Moreover, for Gundam’s
40th anniversary we have implemented a variety of measures,such as sales of Gundam plastic models developed incollaboration with 12 professional baseball teams and salesof large-scale products related to the 40th anniversarycommemorative visual product. In these ways, the Mobile
Suit Gundam IP is being actively invigorated from the productside. In 2020, when the attention of the world will be on Tokyo,
we will mark the 40th anniversary of the launch of Gundam
plastic models.
Moving forward, I will strive to make full use of various
opportunities related to the IP and, as CGO, to leverage thecapabilities of the Group’s five Units. At the same time,
I will strive to further expand the possibilities of the Mobile
Suit Gundam series and enhance the IP’s presence on the
global stage.

Collaboration with 12 professional baseball teams

37

SPECIAL Fostering evolution by taking on challenges
FEATURE with the ALL BANDAI NAMCO concept

Taking On the Challenge of Bolstering Global Business Development

DRAGON BALL Series

The DRAGON BALL IP, which includes a comics serialized in a youth comics magazine from Shueisha Inc. as well asanimations based on the comics, has been supported by a wide range of customers around the world for more than
35 years. The IP has been popular on a global scale, and products and services have also continued to secure newfans in Japan and overseas.

RIGHTS HOLDERSDRAGON BALL series© バードスタジオ／集英社・フジテレビ・東映アニメーション

Merchandisingpermission

Coordination

GlobalCollaboration
on a New FilmBANDAI NAMCO Group
Theatrical version of DRAGON BALL SUPER Broly

Leveraging the Appealing Worldview, Which has Earned Global Support,
for Worldwide Roll-Outs
The BANDAI NAMCO Group is rolling out DRAGON BALL
products and services in a wide range of fields, including
network content, home video games, cards, and figures.
DRAGON BALL has earned worldwide popularity, andagainst this background we are implementing global development initiatives. In conjunction with the release of a newfilm from the end of 2018, we have advanced aggressive
promotions under the ALL BANDAI NAMCO concept. By
collaborating actively with partners holding copyrights andfostering interest in the film on a worldwide scale, we are
stepping up roll-outs of products and services.

DRAGON BALL Series

FY2010.3 Groupwide Net Sales (¥ billion)

12.5 billion

¥

38

+932%

FY2019.3 Groupwide Net Sales (¥ billion)

129.0

¥

billionPromotional Activities with the ALL BANDAI NAMCO concept

Promotional
Activities in France
Leverage Close Ties toLocal Communities— TGV wrapping anda large event at
shopping mall —— Promotions using
the Internet —Page 42

Page 40

SPECIAL FEATURE

Communicating
to the Worldthrough the Useof YouTube

Groupwide
Event Activities— DRAGON BALL NORTHAMERICA TOUR 2018 —Page 41

Deepening and Expanding Products and Services

HOME VIDEO GAMESNETWORK CONTENTCARD GAMESFIGURES FOR THE MATURE FAN BASE

TOYS

LOWER-PRICED FIGURES

39

SPECIAL Fostering evolution by taking on challenges
FEATURE with the ALL BANDAI NAMCO concept

Taking On the Challenge of Promotional Activities with the
ALL BANDAI NAMCO Concept

Communicating to the Worldthrough the Use of YouTube

In conjunction with the release of the theatrical version from the end of 2018, we took steps to expand recognitionof the IP, products, and services through the Internet. In partnership with rights holders, we implemented aYouTube masthead advertisement on the same day in nine countries around the world.

First Introduction of New Characters Appearing in the Film in Nine Countries
around the WorldFor the release of the theatrical version of DRAGON BALL
SUPER Broly from the end of 2018, we utilized a video
advertisement in the YouTube masthead format in order tocreate excitement on a worldwide basis. The objective of
masthead advertisements is to have the video watched by
all of the users who visit the YouTube top page. The video isshown in the position that is easiest to see on the top page,
and accordingly these ads can be expected to offer a very
high level of advertising effectiveness. We basically played
the same video on the same day in nine countries, which we
selected with consideration for the recognition of the visual

product and the scale of business operations.
In addition to the game overseen by my Unit, the video
also included cards, figures, and other products and services, centered on information about the film. In this way,
we conducted PR for products and services from acrossthe Group. With the understanding and cooperation of therights holders, the new characters appearing in the film
were introduced for the first time in this video. This becamea major focus of attention, and the video was played morethan 17 million times in a single day.

The Biggest Objective — Contributing
to the Excitement about the
DRAGON BALL IP
The factors behind this success were the respect for the IP
by all related parties, and the shared vision of contributing
to the excitement about the IP. Through this initiative, I
deepened my understanding of how creating excitement
about the entire IP, rather than just products or services
themselves, is the shortest route to enjoyment for customers, and how that goal is shared by everyone in the Group,in all Units. Moving forward, I would like to leverage thisexperience as we continue to take on global challenges.

Yohei Matsuura
Media Department
BANDAI NAMCO Entertainment Inc.
Joined Bandai Networks (currently, BANDAI NAMCOEntertainment Inc.) in 2008. After working in sales toplatformers and other positions, moved to current
position in 2015.

40

Masthead InitiativeToshiharu Kamei
Collectors Toy Department
BANDAI SPIRITS CO., LTD.
Joined BANDAI CO., LTD., in2009. After working in card andvendor departments, moved tocurrent position in 2016.

SPECIAL FEATURE

Groupwide
Event Activities
In conjunction with the release of the theatrical version, in 2018
we held a Groupwide tour event that visited seven sites in North
America. In 2019, we aim to further foster interest by holding
a tour that will visit eight cities around the world.

DRAGON BALL NORTH AMERICA TOUR 2018

Well-Received Tour of North America
The DRAGON BALL NORTH AMERICA TOUR 2018 was heldin conjunction with the release of the theatrical version of
DRAGON BALL SUPER Broly. This Groupwide event tour
created buzz with two points of focus — the visual productand other products and services. Starting with San Diego
Comic-Con, one of the world’s leading pop culture events,
the tour visited seven sites in North America. Our booth
exhibited figures, cards, home video games, network content, and other products in one location, and we alsooffered product sales and distributed novelties. Overall, thetour attracted more than 300,000 attendees, and sales oflimited-edition products were favorable. In addition, theeffects of the tour also extended to the popularity of products and services in the market. As a result, there weregrowing calls for an event from people throughout theworld, and in 2019 we advanced this initiative with the
DRAGON BALL WORLD ADVENTURE, which will visit eightcities around the world.

Sharing a Vision, Leading the Way to SuccessIn holding events, we work in close cooperation with a large
number of related parties, including partner companies
and Group companies. More than anything else, we focus
on sharing our vision. When a large number of relatedparties all work with the same ideas toward the same
goals, we can demonstrate power that surpasses the imagination. A lot of work goes into making an event a success,but it is a delight, and a major motivation, to receive thanks
directly from large numbers of fans. Going forward, I want
to work to further communicate the appeal of DRAGONBALL to the world while remembering the faces of individual fans that I met at event sites.

41

SPECIAL Fostering evolution by taking on challenges
FEATURE with the ALL BANDAI NAMCO concept

Taking On the Challenge of Promotional Activities with the
ALL BANDAI NAMCO Concept

Promotional Activities in France Leverage
Close Ties to Local Communities
DRAGON BALL enjoys support from a broad range of fans in France. Product and service roll-outs are increasing,and in this setting we implemented promotional activities aligned with the opening of the DRAGON BALL movie. The
central role in these activities was played by our base in France, which has the best understanding of local fans.

Promotions Generate Favorable Results for Related Products and Services
We worked not only to promote the opening of the
DRAGON BALL movie but also to enhance recognition ofrelated products and services. To that end, we organized aunique DRAGON BALL kick-off event for three days at a
shopping mall in the center of Paris. We leveraged collaboration across Unit boundaries in order to offer a comprehensive exhibit of Group products and services. Children,
young adults, and families gathered around a wide range ofthe Group’s DRAGON BALL products, including toys, figures,card games, and home video games. In addition, for the

first time in France, an entire TGV train (France’s highspeed train) was wrapped for several weeks on the routefrom Lille to Nice. Other TGV-related initiatives included ahome video game tournament using customer seating,outdoor advertising and movie posters in 13 train stations
across France, and photo sessions with official DRAGONBALL characters. The DRAGON BALL movie achieved
record-high box office revenues for an anime movie inFrance, and related products and services are also
recording favorable sales.

Targeting Further Business Growth
A noteworthy feature of this initiative is that it was not
limited to traditional advertising. Instead, we supported theIP with a new and innovative marketing mix combining avariety of tools. In particular, wrapping the TGV train was alarge-scale project implemented together with the French
National Railway Company. We faced some difficult issues,
but it was definitely a worthwhile challenge.

Among the ALL BANDAI NAMCO initiatives, we focusedon sharing objectives and information and on fostering aGroupwide sense of unity. Based on the shared recognition
that “together we are more,” the Group cooperated as asingle team and worked with speed. This was the key to thesuccess of this project. Moving forward, we will continue
striving to strengthen collaboration with other Group
members and to develop our businesses across Europe.

Mathilde Dezalys,CEO
BANDAI S.A.S.

Arnaud Muller,
COO
BANDAI NAMCOEntertainment Europe S.A.S.
In 2010, joined BANDAI NAMCOEntertainment Europe S.A.S.,
which handles sales of home video
games in Europe and Asia. Has
been in current position since 2019.

42

In 2016, joined BANDAI S.A.S.,
which conducts sales in Europeof toy-related products,
including products for themature fan base. Has been incurrent position since 2017.

Example of Worldwide Initiatives to Deepen and Expand Products and Services
In addition to Groupwide DRAGON BALL series initiatives implemented under the ALL BANDAI NAMCO concept, weare also aiming to deepen and broaden the DRAGON BALL IP worldview and deliver it to customers by bolstering
measures for each product and service.

Initiatives in Home Video Games through eSports
we plan to expand our initiatives in this area, including
holding tournaments and developing titles appropriate
for eSports.
SPECIAL FEATURE

In the home video game business, we are taking steps tobolster eSports initiatives. DRAGON BALL FighterZ surpassed 4 million cumulative worldwide shipments inapproximately a year and a half after its launch. It won“Best Fighting Game” at the Game Awards 2018, where theselections are made by the world’s game media. In addition, at EVO 2018, one of the largest fighting game eventsin the U.S., DRAGON BALL FighterZ was selected as a main
event title, and it was the most popular game among event
participants. In these ways, DRAGON BALL FighterZ is drawing global attention as an eSports title.
The BANDAI NAMCO Group considers these events to bevenues for fostering interest in eSports and valuable opportunities to hear feedback directly from fans. Moving forward,

EVO 2018

Card Game Initiatives for Overseas Markets
In the card game business, since summer 2017 we havebeen rolling out DRAGON BALL SUPER CARD GAME, which
was planned and developed for overseas markets. Thisleverages the appeal of many characters appearing in
DRAGON BALL, including original home video game andgame app characters, and the distinctive characteristics ofhighly collectible card products. In addition, we are holdingcard tournaments, principally in the U.S. but also in Europe
and Australia, and working to further increase excitement
about the IP through these products.

Card tournament in North America

Initiatives to Strengthen Overseas Sales and Marketing Functions
The BANDAI NAMCO Group’s highly collectible figures forthe mature fan base feature precision workmanship andcarefully reproduce the IP. They are highly regarded fortheir quality and are earning popularity in overseas markets. To further strengthen our overseas business initiatives in this field, in October 2018, together with a local
partner in North America, we established BANDAI NAMCO
Collectibles LLC (known as BLUEfin). This new company
handles sales and marketing of products for the mature fanbase in the North American region. Moving forward,
through this company we will distribute products to a wide
range of retailers, and will hold events that more closelyreflect the preferences of local fans.
Figure offered on a worldwide basis

43SPECIAL Fostering evolution by taking on challenges
FEATURE with the ALL BANDAI NAMCO concept

Addressing the Diversification of Customer Contact Points

The Music Business —Further Strengthening Collaboration
with Visual Products and Live Events

BANDAI NAMCO Arts Inc., which was created through the April 2018 merger of BANDAI VISUAL CO., LTD., andLantis Co., Ltd., is taking on the challenge of maximizing IP value in the music business through seamlesscollaboration with visual products and live events.

Developing the Music Business, Centered on IP
As the Division General Manager of the Music Production
Division at BANDAI NAMCO Arts, I am responsible for thedevelopment of the music business overall. Currently, themusic business is centered on the functions of a record
company but also includes artist development and othermanagement operations as well as production of activities
related to music, such as live events.
In addition, business development initiatives centered on
IP are a distinctive feature of our music business. For IP
such as Love Live! School idol project, THE IDOLM@STER, andIDOLiSH7, we contribute from the production stage andsupport all of the music portions of the visual product, suchas the timing of the use of inserted songs and the BGM
direction. We refer to this type of IP, which has an idol as
the lead character, as idol IP, and we develop it not only for
packaged product sales but also for live events. In this way,
we are working to maximize IP value through collaboration
among visual products, music, and live events.

Idol IP Supported by Fans
Love Live! School idol project is one example of the successful
fusion of visual products, music, and live events. In addition
to a promotional video made for an animation, we also took
on the challenge of producing a live event, based on theidea that the customers would really enjoy a live event withappearances by the voice actors. With the animation playing
in the background, the voice actors sang and danced before
the customers, in synchronization with the visual product,
and this experiment generated a very favorable reaction.
The driving force behind this success was the enthusiasmof the voice actors to take on the challenge of something
new. That was also a major reason for the acceptance ofLove Live! School idol project by customers.

Yuka Sakurai
Director
BANDAI NAMCO Arts Inc.
Joined Lantis Co., Ltd., in 2003,
became director in 2005. After working
in management of male voice actors
and GRANRODEO, moved to current
position in 2018.

44

Extending the Enthusiasm in Japan to Overseas Markets
In the music business, we are also implementing overseas
business development initiatives. Since 2016, we have held
the Anisong World Matsuri, an event that enables overseas
fans to experience authentic animation songs. In 2018, it
was held in Los Angeles, New York, and Shanghai. A total ofmore than 20,000 people attended, and the event received afavorable response in the local markets. In addition, forfans who are not able to travel to the event venues, we are
stepping up the provision of live viewings that everyone canenjoy in real time. This framework has already been introduced for Love Live! School idol project and other IP, and it
has been highly popular, with tickets selling out in Asia.
The success of live events overseas has led to a major
step toward the future. Moving forward, I want to take on
the challenge of implementing a wide range of initiatives
targeting the large numbers of animation fans who enjoy
our animation songs, especially in Asia and North America.

SPECIAL FEATURE

Live event overseas

Taking On the Challenge of Creating New IP Originating in Music and Integrated
with Visual Products
From 2018, BANDAI VISUAL CO., LTD., which handled visualcontent, and Lantis Co., Ltd., which handled music content,
became a single company — BANDAI NAMCO Arts Inc. —with its offices consolidated into a single location. On the
production floor, the employees in charge of visual products
and music work near each other and can freely engage inconversation. We expect this environment to foster synergies
among creators. Moving forward, we will also aggressively

take on the challenge of creating original IP starting frommusic and integrated with visual products.
The BANDAI NAMCO Group has professionals in a wide
variety of fields, and we would like to be the Group's professionals in the field of sound. With a mission of integratingmusic and visual products, I will maintain a sense of excitement as I work to create content that continually provides
surprises and inspiration.

Idol IP live event

Production floor

45

SPECIAL Fostering evolution by taking on challenges
FEATURE with the ALL BANDAI NAMCO concept

Addressing the Diversification of Customer Contact Points

Taking On the Challenge of Developing
New-Format Facilities in theReal Entertainment Unit

In the Real Entertainment Unit, we are taking on the challenge of developing new-format facilities by integrating
venues, which are customer contact points; technical development capabilities; and know-how in leveraging theworldview of IP.

At core company BANDAI NAMCO Amusement Inc., we are continually rolling out differentiated formats that are not limited
by previous ways of thinking. Especially popular are facilities that enable customers to experience original entertainment,such as through the use of advanced digital technologies in collaboration with BANDAI NAMCO Studio Inc. and BANDAI
NAMCO Amusement Lab Inc., and through the provision of activities in which customers move around. Going forward, we
will continue to leverage our real venues as we provide customers with facilities that offer multifaceted experiences drawing
on BANDAI NAMCO’s distinctive strengths.

Using VR Technologies

Next-Generation Athletic Facility

VR ZONESPACE ATHLETIC TONDEMI

This facility integrates VR technologies
with BANDAI NAMCO’s know-how in
sensory feedback machines. In addition to a large-scale flagship facility inOsaka, we are also opening multiple
small to medium-sized facilities inJapan and overseas under the name
VR ZONE Portal.

In addition to one of the largest trampoline areas in Japan, this large-scale
facility offers athletic activities thatcan be enjoyed by everyone fromchildren to adults, such as a climbing
wall and rope walk. We currently havethree of these facilities, which webegan to roll out from 2017.

Creating New Entertainment that Incorporates Digital Technologies

46

Multifaceted Sports Facility

Indoor Adventure Island Docodoco

MAZARIAThis facility offers sports activities such as
Nigekiru, which enables participants to compete with all their might over a short distanceas they try to outrun fierce animals that are
projected on the wall. Nigekiru has become
popular for its use of digital technology toprovide an activity with a new sensibility.

By combining indoor playground operations
know-how and projection mapping technologies, this facility enables customers to experience “the adventure of their dreams,” which
had previously not been possible.

In a multifaceted manner, this facility combines performances that utilize projection
mapping technologies and activities that use
VR technologies. In this way, we aim to provide excitement and surprise as if the customer had entered the world of animations
and games.

ESG

SECTION

This section introduces initiatives targeting the realization ofsustained growth and messages from key executives.

CONTENTS
48

MESSAGE FROM THE OFFICER IN
CHARGE OF ESG

50

ROUNDTABLE DISCUSSION AMONGOUTSIDE DIRECTORS54

CORPORATE GOVERNANCE

60

OVERVIEW OF OFFICERS62

PERSONNEL STRATEGY66

CSR INITIATIVES

47

MESSAGE FROM THE OFFICER IN
CHARGE OF ESG

Yuji Asako
Director
BANDAI NAMCO Holdings Inc.

With a strong sense of responsibility, we will continue
to implement initiatives that leverage BANDAI NAMCO’s
distinctive strengths.
From two perspectives — as Chief ecology Officer overseeing CSR activities and as Division General Manager of
the Corporate Planning Division overseeing the Group’s corporate governance — I am advancing a variety of initiatives
to strengthen the Group’s management foundation.

Working in Two Roles to Strengthen
the Group’s Management Foundation
In my two roles as Chief ecology Officer and Division
General Manager of the Corporate Planning Division,
I have overall responsibility for issues related to ESG at the
BANDAI NAMCO Group. BANDAI NAMCO is a corporategroup that provides products and services originating in thefield of entertainment, and accordingly the Group’s duties
include implementing activities that support coexistencewith society. In this setting, as Chief ecology Officer I am
responsible for the CSR activities of the Group. Furthermore,as Division General Manager of the Corporate Planning
Division, I am responsible for corporate governance andother operations related to the strengthening of the management foundation, which is the basis for the sustainability of the Group.

48

Strengthening Corporate GovernanceWith the appointment of directors at the Ordinary General
Meeting of Shareholders held in June 2019, the number ofoutside directors increased from three to four, and outside
directors now make up one-third of the Company’s Board of
Directors. All of the outside directors meet the conditions
for independent officers. The Independent Directors andAudit & Supervisory Board Members Committee, which iscomposed of independent outside directors and independent
outside Audit & Supervisory Board members, conducts
evaluations of the effectiveness of the Board of Directors.
Although evaluations concluded that the Company’s Boardof Directors was functioning effectively, with the objectiveof further strengthening the governance systems andincorporating new external viewpoints, we decided toincrease the number of outside directors.

BANDAI NAMCO Group CSR
As a group that provides “Dreams, Fun and Inspiration,”
BANDAI NAMCO strives to fulfill its distinctive roles inconnection with the natural environment and society. We
have incorporated that idea into our CSR concept — Fun
For the Future!—and as a guideline for specific activities,
we have formulated four important CSR themes. (For further
information, please refer to page 66.) On that basis, we are
implementing a variety of activities.
For example, in regard to the safety of products and services, we observe safety standards, including the laws andregulations in each country, and we implement thoroughtesting. In this way, we are doing our utmost to eliminate
risks from harmful chemical substances, etc. We are also
working together with partner companies to support the
production of healthy products. These initiatives include
Code of Conduct (COC) audits in supply chain management.
We are not only aiming to achieve business growth but also
working to implement environmental initiatives. In addition
to working to reduce CO2 emissions for the BANDAI NAMCO
Group as a whole, from the current Mid-term Plan we havestarted to implement management based on emissions
intensity* for each Unit. In these ways, we are promoting themanagement and analysis of emissions and the efficientuse of energy. (For further information, please refer topages 68 and 69.)

Steadily Advancing
Sustainable Activities

ESG SECTION

The reinforcement of our global business initiatives willbe the driver of our growth. Newly appointed Koichi Kawana
has extensive overseas experience and global management
knowledge, and accordingly we believe that Mr. Kawana will
provide significant support, including advice related to risk.
The three outside directors who were reappointed arealso providing the Group with necessary knowledge andexperience by fulfilling their roles in ways that leverage
their backgrounds. Accordingly, I believe that our current
group of outside directors is very well balanced.
In addition, accompanying the increase in the number ofoutside directors, we increased the percentage of outside
directors on the Personnel Committee. Outside directors
were already a majority of the committee members, butsince June 2019, the committee has a total of five members— four outside directors and the President and Representative
Director. The committee is chaired by outside director
Yuzuru Matsuda, who is the lead independent officer. As aresult, the objectivity and transparency of the committee
has been further enhanced.

In FY2019.3, we took steps to verify how our business andCSR activities are contributing to the Sustainable Development Goals (SDGs), which are the focus of increasing
concern in society. When we requested an analysis from athird-party institution, we obtained an evaluation statingthat we have already taken steps to address many of the
17 SDGs, and we were able to confirm that our direction isaligned with the demands of society. Moving forward, we
will continue to focus on the issue of how we are interactingwith society, act with clear intentions, and work with astrong sense of responsibility.
As President Taguchi has stated, we will work to build afoundation that facilitates communication among people
around the world through IP. On that basis, we will strive toimplement activities that address the demands of society
in each period from BANDAI NAMCO’s distinctive perspective.
I believe that this approach will earn the trust of society andwill enable BANDAI NAMCO to realize sustainability as acorporate group.

* CO2 emissions per employee or per unit of total floor space

In advancing CSR initiatives, we place the highest priority
on the “continuity of activities.” To realize a sustainable society,we must conduct activities on a continuing basis rather than
implementing temporary measures. Accordingly, I believe it
is important that we maintain a solid focus on implementing
initiatives that people on the business front lines can identify
with and independently implement through extensions ofour businesses.

SDGs for which third-party evaluation was received

49

ROUNDTABLE DISCUSSION AMONG OUTSIDE DIRECTORS

KoichiKawanaSatokoKuwabara

YuzuruMatsudaMikiharu
Noma

We will strive to implement appropriate monitoringand provide suitable advice in order to contribute togains in corporate value.
At the Ordinary General Meeting of Shareholders held in June 2019, BANDAI NAMCO Holdings transitioned to asystem in which one-third of its Board members — 4 out of 12 — are outside directors. In addition, from April
2019, the outside directors elect an outside director to serve as the chair of the Personnel Committee. In theseways, BANDAI NAMCO Holdings is advancing initiatives to strengthen corporate governance. The Company’s four
outside directors met in a roundtable format to discuss the governance system and other topics.

Evaluation of the First Year of the
Mid-term Plan
I am very impressed by the continued achievement of record-high results. On the other hand,President Taguchi has repeatedly stressed theneed to focus on what needs to be done next without
becoming overconfident. I think that the Company’s management is very well balanced. From a medium- to longterm perspective, looking ahead 5 or 10 years, it isextremely important that the Company follow an approachof taking the next step with a focus on the future, bothinternally and externally. This is especially true at thispoint, when results are favorable.
MatsudaConsidering the discussions at meetings of theBoard of Directors and the progress reports on
business plans, I haven’t seen any signs that theleadership is losing focus. Rather, with the operating environment undergoing significant change at this point, I think thateveryone shares an awareness that initiatives have to be
implemented with a focus on speed.
Kuwabara

50

From the current Mid-term Plan, the Company isconducting its business activities under a systemof five Units, and it is worth mentioning that multiple Units achieved significant gains in performance year
on year. This is a result of the effective functioning of thebusiness portfolio, and the friendly rivalry among the Units
has led everyone to aim higher for the Group as a whole.
Noma

I just became an outside director in June 2019.
However, I think that the favorable results in thefirst year of the Mid-term Plan are an indicationthat the Group is moving in an appropriate direction with IP
creation and enhancement, one of the main strategies, andwith measures to take on the challenge of new businessmodels. In addition, considering the important role playedby the hard work of all of the employees, I think that theseresults are worthy of high regard.
KawanaTargeting Sustainable Growth Over
the Medium to Long Term
MatsudaTechnical innovation in the digital field continues
to advance, including the network environment,
and in this setting I think there is a need to step
up initiatives to address technologies that have the potential to become business platforms in the future. At thesame time, it is also necessary to pay attention to legal
regulation in the digital field. The Group will have to continually pay attention to the potential influence of regulations on the business environment, including from theperspective of risk management.
Kuwabara

In terms of risk management with a focus on
growth, it will be important to look not only at
existing rival companies but also at trends among
companies in other industries. Around the world, the business environment is at a major turning point, and otherindustries are also facing the unexpected market entry ofcompanies from different fields. As a result, there are many
examples of strong companies losing their competitiveedge. The entertainment industry is also facing significant
changes in the operating environment, including the progress of digitalization. Consequently, as the Group considers
various issues, we will need to remain aware of the possibilityof new competition with companies from other industries.
Noma

Kuwabara

I believe that further reinforcing overseas business initiatives will lead to an increase in IP fansaround the world and significant business growth.
The expansion of overseas business activities will also leadto the emergence of risks that had not previously beenenvisioned. Due to a number of factors, global business isundergoing a transformation on a daily basis. The Groupwill need to respond to change in countries and regions
where it has already established a presence. And in countries and regions that are new to the Group, we must
respond appropriately to risks resulting from differences incultures, customs, and regulations. I look forward to drawing on my own experience in overseas business and global
management as we consider these issues going forward.
KawanaESG SECTION

I believe that the key to future growth for BANDAI
NAMCO will be the extent to which the Group cancreate new IP. A variety of measures are being
implemented in organizational and investment areas, andit will be important to see that they lead to steady results.
Also, another point will be how much growth the Group will
be able to generate in its overseas businesses. To that end,
as an entertainment company originating in Japan, BANDAI
NAMCO will need to implement aggressive initiatives thatleverage its strengths in ways that are more distinctive andoriginal. I think that rolling out the IP axis strategy in markets
around the world will be a fun challenge. There will also berisks, but nonetheless the Group will need to boldly take onchallenges to achieve growth.

The Group will have to continually
pay attention to the potential influence of legal regulations on thebusiness environment, includingfrom the perspective of risk
management.

Deliberations in the Personnel
Committee Regarding theManagement Succession Plan
As outside directors, we utilize a variety ofopportunities to monitor whether or not the
management framework that was built under
specific standards is functioning in a reliable manner, andwe evaluate if management processes are reasonable.
In addition, I think it is important to offer appropriate
comments and support.
KawanaThe Independent Directors and Audit &Supervisory Board Members Committee, which iscomposed of independent outside directors andindependent outside Audit & Supervisory Board members,offers advice about the evaluation of the effectiveness of
the Board of Directors. In the effectiveness evaluation
implemented in FY2019.3, the committee commented that
there is a need to strengthen the framework for the successor development process and monitoring of operational
status. Measures to develop successors are already being
advanced, and to build a framework that will support
growth over the medium to long term in order to increase
corporate value, further strengthening of monitoring has
been recognized as an important issue.
Noma

To build a framework thatwill support growth over the
medium to long term in order
to increase corporate value,further strengthening of monitoring has been recognized as
an important issue.
Noma

51

ROUNDTABLE DISCUSSION AMONG OUTSIDE DIRECTORS

Independent outside directors make up a majorityof the Personnel Committee, which is alsochaired by an independent outside director.
In regard to the successor development plan, the committee
is deliberating on such issues as what type of people will be
best for top management and how they should be developed.
For example, topics of discussion include the necessity ofexperience in multiple Units or experience in overseas
business. I think that these discussions will be a foundation
for the formulation of a succession plan that is highly
objective and transparent.
Kuwabara

I think that it is a very good idea to utilize backcasting in deliberations about issues such as theGroup’s vision for the medium to long term andwhat type of executive will lead the Group toward the realization of that vision, as Ms. Kuwabara stated. I have been serving as the chair of the Personnel Committee since April, andmoving forward I would like to provide support for more active
discussions regarding successor development and formeasures to ensure a highly transparent framework.
In addition, the topic of the Board of Directors’ effectivenessevaluation was raised a moment ago. I believe that the Board
engages in dynamic discussions that include the outside
directors. These are not empty discussions about issues thathave already been decided. I also think that the Board has
done a good job in regard to the opinions in the effectivenessevaluation, moving quickly and taking steps to resolve issues.
MatsudaI would like to provide support for more
active discussions regarding successor
development and for measures to ensure
a highly transparent framework.
MatsudaFuture Role of Outside Directors
With the internal directors pushing forward withbusiness execution, there is a need for theoutside directors to monitor the status of that
execution from a variety of angles and provide objective
comments that support increases in corporate value.
Recently, the social responsibilities of companies have been
the focus of growing attention. Rather than simply thegeneration of profits, it has become important to look at acompany’s presence in society. When working on business
Matsuda52

operations on the front lines, it is possible to lose sight ofa company’s merits and social value. I think that we havean important duty of asking questions about the BANDAI
NAMCO Group’s presence from the unique perspective ofoutside directors, who fulfill a role that does not involve
business execution.
My background is as an attorney specializing in
corporate legal affairs, and accordingly I would liketo make a contribution by continuing to draw on thatexperience. Also, a fresh perspective has been brought to theBoard of Directors with the new appointment of Mr. Kawana,
who has extensive management experience in overseas
business. This is very encouraging and I am looking forward
to his contributions. With the Company strengthening its
global business initiatives, I think that the opinions of someone speaking from a viewpoint backed by extensive experience will be extremely beneficial for the Board of Directors.
Kuwabara

Diversity of viewpoints and opinions is important
for a Board of directors. I believe that the additionof Mr. Kawana, who has a global frame of reference, will increase the diversity of viewpoints on the Board.
I myself will strive to provide solid monitoring and comments in accordance with the belief that the role of outside
directors is to work to increase corporate value fromthe shareholders’ point of view. My area of specialty is
accounting, and I also have experience in human resources
development. Accordingly, I would like to reflect that experience in the fulfillment of my role. In addition, in regard tocorporate governance, I served as a drafting member of the
Ito Review*, and have participated in governance committees for such institutions as METI and the Tokyo Stock
Exchange. Accordingly, I will strive to utilize that knowledge
to the greatest extent possible.
Noma* Competitiveness and Incentives for Sustainable Growth: Building Favorable
Relationships between Companies and Investors, released by METI in 2014. Mr.
Kunio Ito, Graduate School of Commerce and Management, Hitotsubashi University,
served as the chair of the project, and the report is commonly known as the “Ito Review.”

As the Group works to expand business initiatives
overseas, I think my global experience andknowledge are needed.
My experience to date involves construction and engineering in the field of energy, which is different from the world ofentertainment. However, I was posted overseas, where IP
from Japan is extremely popular, and I believe that entertainment is an important industry that enhances Japan’s presence. I would like to draw on my overseas experience andknowledge in the Group’s endeavors to expand this typeof entertainment on a worldwide scale, and on that basis
I accepted the position as outside director.
KawanaWhat the Company needs from directors, without regard towhether they are internal or outside officers, is a contribution
to increasing corporate value. Moreover, outside directors
need to contribute in the areas of risk visualization, from theshareholders’ viewpoint and from a medium- to long-term
perspective; fair and impartial judgment; and appropriate
advice. I think that, in this way, outside directors will contribute to progress in governance and, in turn, increases incorporate value.

I will contribute in the areas of risk
visualization, from the shareholders’viewpoint and from a medium- to longterm perspective; fair and impartial
judgment; and appropriate advice.
KawanaActivities of the Personnel Committee

Status of activities of the Personnel Committee in the decision-making process for the amounts of compensation
The composition of the Personnel Committee in the decision-making process for the amounts of compensation was
as follows.
From April 2018 toMarch 2019

4 people (1 internal and 3 outside)

Since April 2019

5 people (1 internal and 4 outside)*

Chair

President and Representative Director (Internal)
Mitsuaki Taguchi

Chair

Director (Outside) Yuzuru Matsuda

Members

Director (Outside) Yuzuru Matsuda
Director (Outside) Satoko Kuwabara
Director (Outside) Mikiharu Noma

Members

President and Representative Director (Internal)
Mitsuaki Taguchi
Director (Outside) Satoko Kuwabara
Director (Outside) Mikiharu Noma
Director (Outside) Koichi Kawana*

ESG SECTION

Composition of the Personnel Committee / Committee Chair
The Company’s Personnel Committee has seven members in addition to the chair, with outside directors making up
a majority of the members. From April 2019, the chair of the committee is an outside director elected by theoutside directors.

* After Koichi Kawana was appointed as an outside director at the 14th Ordinary General Meeting of Shareholders held on June 24, 2019, with the approval of the Boardof Directors, Mr. Kawana was appointed as a member of the Personnel Committee.

In FY2019.3, deliberations in the Personnel Committee were held a total of five times — in May and November 2018
and in January, February, and March 2019. The chair and the members all attended on each of these occasions, andthe attendance rate was 100%. The major agenda items were as follows.
May 28, 2018

Payment amounts for performance-based bonuses and performance-based stock compensation for the Company, Unit core companies, etc.
Next-generation managers development plan

November 28, 2018

Rules for the treatment of Group officers
Next-generation managers development plan

January 21, 2019

Officer-related personnel issues for the next fiscal year (the Company, Unit core companies, etc.)
Interviews with new director candidates

February 6, 2019

Accompanying the next fiscal year new officer system, the officer remuneration framework for the Company, Unit core companies, etc.
Interviews with new director candidates

March 12, 2019

Accompanying the next fiscal year new officer system, the officer remuneration framework for affiliated business companies
Next-generation managers development plan

Message from the Chair of the Personnel Committee
I have been serving as the chair of the Personnel Committee since April 2019. I believethat having an outside director serve as the chair of this committee will ensure fairness
and transparency from the shareholders’ perspective and contribute to the reinforcementof the Group’s corporate governance.
The committee conducts deliberations related to personnel and compensation matters.
In regard to personnel issues, we work to clarify how well current initiatives in the
Company are functioning, and for areas that need improvement, the committee has
provided comments regarding the establishment of new frameworks and the need for
greater transparency in human resources development processes. In response to inquiries
from the Board of Directors, the Personnel Committee is conducting deliberations inregard to the establishment of a successor plan, such as the abilities that will be needed
in officers and the formulation of standards.

Yuzuru Matsuda
Director (Outside)

53

CORPORATE GOVERNANCE

The Company and the Group sufficiently understand the importance of various stakeholders related to the Company
and have a basic management policy of maximizing the corporate value of the Company and its shareholders’common interests over the medium to long term. In addition, the Company believes that construction of a solidmanagement foundation (corporate governance) is absolutely essential in order to emerge victoriously in the global
competition of the fast-changing world of entertainment. In accordance with this philosophy, the Company has
established a Basic Philosophy on Corporate Governance. Furthermore, we truly embrace the intent and spirit ofJapan’s Corporate Governance Code, and our initiatives on each principle of the Code are disclosed in “Initiatives
Related to Japan’s Corporate Governance Code.*”* For more information, please visit the Company’s website.

https://www.bandainamco.co.jp/social/en/
governance/index.html

Corporate Governance System
Strengthen the Management Oversight Function

Clarify the Responsibilities of Directors

NUMBER OF OUTSIDE DIRECTORS

4/12

Term of Directors
NUMBER OF INDEPENDENTDIRECTORS OR INDEPENDENT AUDIT &SUPERVISORY BOARD MEMBERS

NUMBER OF OUTSIDE AUDIT &SUPERVISORY BOARD MEMBERS

3/4

7

Organization

All outside directors and outside Audit & Supervisory Board members meet the“Standards for the Independence of Outside Directors and Outside Audit &Supervisory Board Members” established by the Company.

1Year or Less

Company with Company Auditors

The Company believes that the auditing system based on the Audit & Supervisory
Board, including outside Audit & Supervisory Board members, is an effectivemeans of implementing the management oversight function.

General Meeting of Shareholders
Appointment /Dismissal

Appointment /Dismissal

Audit & Supervisory
Board Members
Audit & Supervisory Board

Board of Directors

12 directors(of whom 4 are outside directors)

Auditing

Independent Auditors

Dismissal

4 Audit & Supervisory Board members(of whom 3 are outside Audit &Supervisory Board members)

Appointment /Dismissal /Supervision

Appointment /Dismissal

Account Auditing /Reports on
Results

Independent Directors andAudit & Supervisory Board
Members Committee

Auditing

Representative Director

Personnel Committee

Directions
Directions

Reports

Reports

Reports

Cooperation

Committees

Internal Auditing Division

Group CSR Committee
Group Risk Compliance Committee

Group Business Report MeetingGroup Management Meeting
Content Business Strategy Meeting

Support

Auditing

Group Information Security Committee
Internal Control Committee

IP Strategy Division Meeting
Policy Directions

Reports

Policy Directions

BANDAI NAMCO Group Companies
As of June 24, 201954

Board of Directors

The Company is a pure holding company, and the representative directors of the Unit core companies concurrently
serve as directors of the Company. Therefore, directors areable to deliberate on measures to address issues which
overlap among the multiple business domains of Group
companies, and quickly ascertain specific problems andaddress them.
The Company’s Board of Directors decides importantmatters related to the Company and the Group, such as
matters stipulated in laws and regulations or in the Articles
of Incorporation, M&As, organizational restructuring, theelection of major subsidiaries’ directors and Audit &Supervisory Board members, and the acquisition and

In regard to audits by the Audit & Supervisory Board, thefour Audit & Supervisory Board members (of whom two are
full-time Audit & Supervisory Board members and three
are outside Audit & Supervisory Board members) attend
important meetings, such as meetings of the Board of
Directors. In addition, in conformance with the Audit &Supervisory Board regulations determined by the Audit &Supervisory Board, the audit standards for the Audit &Supervisory Board, and the implementation standards andauditing plans related to internal control systems, and inaccordance with audit plans determined by the Audit &Supervisory Board, the Audit & Supervisory Board

members conduct audits regarding the status of businessexecution by the directors. In addition, Audit & Supervisory
Board members work together with Audit & Supervisory
Board members of Group companies, and in this way theeffectiveness of audits for the Group as a whole is heightened.
The Audit & Supervisory Board members, the independent
auditors, and the Internal Auditing Division continually
exchange opinions and maintain close ties. The status of
the Group’s business operations is monitored, issues are
identified and understood, and recommendations forresolving those issues are provided.

ESG SECTION

Audit & Supervisory Board

disposal of assets with large monetary value. Concerning
matters resolved by the Company’s Board of Directors andmatters delegated the authority as the business executionof subsidiaries, rules for criteria for matters on the Boardof Directors’ meeting agenda, etc., have been preparedand clarified. The Chairman of the Board of Directors is
President and Representative Director Mitsuaki Taguchi.
In addition, with the objectives of heightening the effectiveness of the Board of Directors and increasing corporate
value, evaluations of the effectiveness of the Board of
Directors are conducted periodically by the Independent
Directors and Audit & Supervisory Board Members
Committee.

Independent Directors and Audit & Supervisory Board Members Committee
To evaluate from an objective standpoint whether the Boardof Directors is functioning appropriately, the Company has
formed the Independent Directors and Audit & Supervisory
Board Members Committee. This committee is comprisedof just four independent outside directors and three

independent outside Audit & Supervisory Board members,
and its secretariat function has been established within athird-party specialist organization. This arrangement facilitates the maintenance of a more effective oversight function in the Board of Directors.

Main Top Management Meetings

As shown in the table below, the Company holds a variety of top management meetings and has established a system thatfacilitates rapidly tracking and responding to Group management information.
Meeting Name

Chair

Schedule

Agenda / Purpose

Participants

Board of Directors

President andRepresentative Director
Mitsuaki Taguchi
Director
Division General
Manager of the
Corporate Planning
Division
Yuji Asako
President andRepresentative Director
Mitsuaki Taguchi

Monthly andotherwise asneededQuarterly

Decisions / reports on matters stipulated by law, items to be resolvedin accordance with authority standards, reports on the status of businessexecution, reports regarding CSR, crisis management, and compliance
Consolidated numerical reports, Unit reports, other items to bereported

Directors, Audit & Supervisory Board
members, other designatedemployees
Directors, Audit & Supervisory Board
members, other designatedemployees

11 timesa yearDeliberations regarding issues extending across Units, other Groupmanagement issues, strategic deliberations

Directors (excluding outside directors),
other designated employees

Sharing of information about each Unit initiatives related to theGroup’s important IP

Directors with related
responsibilities, directors from major
subsidiaries with related responsibilities, other designated employees

Discussions for the purpose of formulating / advancing the Group’s
IP axis strategy over the medium to long term

Directors with related
responsibilities, other designatedemployees

Deliberations and information sharing regarding the Group’s important
CSR strategies, consideration of resolutions, items to be reported, anddeliberations at meetings of the Board of Directors, overall supervisionof Group CSR subcommittees, overall supervision of progress ofimportant items for each Unit and affiliated business company
Weekly reports regarding the departments for which directors are
responsible

Directors (excluding outside directors),
other designated employees

Group Business
Report MeetingGroup Management
Meeting(including off-site
meetings)
Content Business
Strategy Meeting

IP Strategy Division
Meeting

Group CSR
Committee

Waigaya Meeting

Quarterly
Executive Officer
Division General
Manager of IP Strategy
Division
Yoshitaka Tao
Quarterly
Executive Officer
Division General
Manager of IP Strategy
Division
Yoshitaka Tao
Semiannually
President andRepresentative Director
Mitsuaki Taguchi
WeeklyPresident andRepresentative Director
Mitsuaki Taguchi

Directors (excluding outside directors),
other designated employees

Note: Planned to be held in FY2020.3

55

CORPORATE GOVERNANCE

Electing Directors and Audit & Supervisory Board Members
When electing candidates for director, the Company considers
the necessary abilities, experience, personality, and others
according to the role, and decisions are made by the Boardof Directors following discussions and recommendations by
the Personnel Committee, as well as following interviewsby outside directors. When electing candidates for Audit &Supervisory Board members, the Personnel Committee
considers the necessary abilities, experience, personality,
and others according to the role and makes proposals, anddecisions are made by the Board of Directors after receiving consent from the Audit & Supervisory Board.
The election of directors is based on candidates possessing
broad knowledge and experience required for decision-making

on company management, as well as possessing the trackrecord and insight in the fields and businesses they haveexperience in which are required in order to provide management oversight. The Articles of Incorporation stipulatethat the basic policy is to appoint at least two independent
outside directors.
Specifically, the election of outside directors is made withconsideration for an appropriate balance of individuals who
possess a wealth of experience as corporate managers,
individuals who possess deep academic knowledge on
corporate strategy, and attorneys-at-law and other individuals who have thorough knowledge regarding complianceand other aspects of internal control.

Outside Directors and Outside Audit & Supervisory Board Members
Of the Company’s 12 directors, four meet the conditions foroutside directors. The Company is working to strengthen
the management oversight function. In addition, of the four
Audit & Supervisory Board members (including two fulltime Audit & Supervisory Board members), three meet theconditions for outside Audit & Supervisory Board members.
They work together and monitor the Company’s internal
control situation on a daily basis.
The Company has established "Standards for the
Independence of Outside Directors and Outside Audit &Supervisory Board Members," and outside directors andoutside Audit & Supervisory Board members are appointed
in accordance with those standards. In the Company’s
judgment, the outside directors and outside Audit &Supervisory Board members meet those standards, there
is no concern that they will have a conflict of interest withgeneral shareholders, and they possess high levels of independence. Accordingly, the Company has notified the Tokyo
Stock Exchange (TSE) that they are all independent directors or independent Audit & Supervisory Board membersin accordance with TSE regulations.
The status of audits by internal auditors, audits by the
Audit & Supervisory Board members, and audits by the
independent auditors are reported to the Board of
Directors. By attending meetings of the Board of Directors,
the outside directors track the status of these audits andwork to maintain close ties.

In addition to tracking the status of internal audits
reported at meetings of the Board of Directors, outside
Audit & Supervisory Board members track the status ofaudits by the Audit & Supervisory Board members at meetings of the Audit & Supervisory Board and maintain cooperative relationships with the internal auditors and theother Audit & Supervisory Board members. In addition, allmembers of the Audit & Supervisory Board, including outside
Audit & Supervisory Board members, receive explanations
from the independent auditors of the status of accountaudits on a quarterly basis. In this way, they track the statusof these audits and maintain cooperative relationships with
the independent auditors.
Furthermore, through matters brought to the Board of
Directors, outside directors and outside Audit & Supervisory
Board members track the status of internal control departments (all of the Company’s departments). In addition, theyattend the Group Business Report Meeting, where reportson the status of the Group’s operations are made; confirm
the status of business execution; and provide advice as needed.
Moreover, as an information access support system, theCorporate Planning Division supports outside directors andoutside Audit & Supervisory Board members. In regard to
the communication of information from the Corporate
Planning Department, principally, materials are sent prior
to meetings of the Board of Directors and explanations areprovided as needed.

Roles and Duties of the Personnel Committee Related to Officer Remuneration, Etc.
The Company’s Personnel Committee, which is chaired byan outside director, holds appropriate deliberations about
the validity of systems for officer remuneration, including
the basic policy for the Group’s officer remuneration system,
the remuneration framework, the variable remuneration
framework, etc. These deliberations are based on objective
information related to officer remuneration (most recent
system status, trends at other companies, etc.). The committee then submits a report to the Board of Directors.
The Company’s Board of Directors accepts the report andmakes the final decision on the details of the officer
remuneration system. In addition, in the same way, theboard of directors for each of the Unit core companies, etc.,
accepts the decision of the Company’s Board of Directors
and makes the final decision on the details of the officer

56

remuneration system for the Unit core company, etc.
In some cases, as necessary in the conduct ofdeliberations, external remuneration consultants, etc.,
attend meetings of the Personnel Committee or provide
information to the committee. This is intended to provide
support for effective deliberations and consensus formation.
Opinions, etc., as to appropriateness regarding the detailsof the report to the Board of Directors are not received.
KPI targets / results for performance-based remunerationin the most recent fiscal year
The standard results for performance-based bonuses(results for which the standard amount will be paid) andthe decision standard for determining whether or not
performance-based stock compensation will be paid areboth set at consolidated operating profit of ¥60,000 million.

In FY2019.3, consolidated operating profit was ¥84,045
million, or 140% of the standard results. The performancebased bonus payment ratio (evaluation portion of the Group’s

consolidated operating profit) was 200%, and the performancebased stock compensation payment ratio was 100%.

Policy Regarding Compensation of Directors and Audit & Supervisory Board Members

Remuneration framework
From the viewpoint of promoting the sharing of values withshareholders, steadily improving results each fiscal year,
and supporting an appropriate level of risk-taking toenhance the Company’s corporate value over the medium
to long term, the specific remuneration framework comprises fixed remuneration consisting of base remuneration(including remuneration whereby a fixed proportion of thebase remuneration is contributed to the shareholding association for directors and officers to buy back the Company’s
shares and hold such shares for the duration of the tenureof the relevant director) and variable remuneration consisting of performance-based bonuses and performance-based
stock compensation.
Each director contributes a fixed proportion of the baseremuneration to the shareholding association for directors
and officers to purchase the Company’s shares. During his
or her term of office, each director continues to hold suchshares, as well as shares acquired through performancebased stock compensation.
Remuneration standards are determined by utilizing amanagement remuneration database with which data on
remunerations are aggregated and analyzed by an external
specialist organization, setting objective benchmarks inlight of the scales of the Company’s business operations
and other factors, and comprehensively taking into
consideration the proportion of medium- and long-term
performance-based remuneration within annual total
remuneration and the level of difficulty of achieving
business performance targets. Where the standard
performance for the period of the Mid-term Plan has

been achieved, the ratio of fixed remuneration to variable
remuneration within annual total remuneration shall be
about 50:50. Also, each director contributes a fixed proportion of the base remuneration to the shareholding association for directors and officers, and the ratio of share-type
remuneration which is the added amount of this contribution and the performance-based stock compensation shallbe slightly more than 20%.
Variable remuneration framework
In regard to the Company’s variable remuneration, with theobjectives of clearly linking the numerical targets in the
Mid-term Plan and remuneration and of directly reflecting
evaluations of the management efforts of the Group’s
managers in remuneration payment amounts, the Group’s
consolidated operating profit is used as the indicator forboth performance-based bonuses and performance-based
stock compensation.
Performance-based bonuses
In regard to the Company’s performance-based bonuses,
the payment amount is decided based on the Group’s
consolidated operating profit each fiscal year, within therange of 0% to 200% of the predetermined standard
amount. The payment amount is limited to the smaller ofthe ¥450 million limit for cash bonuses based on a resolution of the Company’s 10th Ordinary General Meeting of
Shareholders or 1.5% of profit attributable to owners ofparent. For executive directors other than the President
and Representative Director, in addition to the evaluation
portion of the Group’s consolidated operating profit, an
individual evaluation portion (operating profit in the units
for which the director is responsible, etc.) is included.
Performance-based stock compensation
Performance-based stock remuneration (corresponding toperformance-based compensation as stipulated in the
Corporation Tax Act) is provided only when the Group’s
consolidated operating profit is ¥60,000 million or higher.
Whether or not performance-based stock compensation
will be paid and the level of payment is decided each fiscal
year during the period of the Mid-term Plan. The framework
is as follows. In accordance with position, the reference
number of share units is determined in advance. The
common stock of the Company and cash are delivered orprovided in accordance with the number of provided share
units, as decided according to the degree of attainment of
the performance target for consolidated operating profit.
The policy for remuneration, the remuneration
framework, and the structure for performance-based
remuneration for directors, excluding outside directors,
shall be decided at Board of Directors’ meetings after
receiving opinions from the Personnel Committee, in order
to elicit outside directors’ adequate participation andappropriate advice. In the course of deliberations by thiscommittee, sufficient information is provided to the outside
directors so that they are able to perform their analysis,
including for instance by asking for advice from external
specialist organizations where necessary.

ESG SECTION

The basic policy of the remuneration system for theCompany’s directors, excluding outside directors, is to createa remuneration framework that promotes the Company’s
continuous growth and improves the Company’s corporate
value over the medium to long term by promoting the sharing of values with shareholders, ensuring objectivity andtransparency so that the Company can adequately fulfill its
accountability obligations, and fostering a healthy sense ofentrepreneurship in the directors while taking into accountthe level of remuneration that will enable the Company tosecure and retain top-grade personnel.
Specifically, to strengthen awareness regarding theachievement of the numerical targets in the BANDAI NAMCO
Group Mid-term Plan (April 2018 – March 2021), which covers
the three-year period starting in April 2018; to clearly linktarget results and remuneration; and to strengthen awareness regarding shareholder return, under this frameworkchanges in the stock price from that in the first fiscal yearof the Mid-term Plan are reflected directly in remuneration.
Furthermore, the same basic policy applies to the directors of the five core companies of the Group’s Units:
BANDAI CO., LTD., BANDAI NAMCO Entertainment Inc.,BANDAI NAMCO Amusement Inc., BANDAI NAMCO Arts
Inc., and SUNRISE INC., as well as to the directors of
BANDAI SPIRITS CO., LTD.

57

CORPORATE GOVERNANCE

In regard to the method of calculating performancebased stock compensation, the matter is submitted to
the Personnel Committee. A precondition is that among
committee members, executive directors do not participate
in deliberations regarding decisions on performance-based
stock compensation. When all independent outside
directors have agreed on performance-based compensation,
the decision is made through a resolution of the Board of
Directors. In addition, at the Unit core companies, etc., in
accordance with decisions based on the resolution of theCompany’s Board of Directors, decisions are made throughresolution of each company’s board of directors.

Shareholdings

Standards for and approach to the classification of
investment shares
The Company holds as investment shares only crossshareholdings that can be recognized to contribute toincreasing the corporate value. The Company does nothold investment shares for pure investment purposes(investment shares held exclusively with the objective ofobtaining profits through stock price fluctuations or stockrelated dividends).
Investment shares held for purposes other than pureinvestment
The Company has a basic policy of implementing crossshareholdings on a strategic, limited basis, provided thatholding such shares can be recognized to contribute toincreasing the Company’s corporate value by further
bolstering business partnerships and by maintaining and/or strengthening the stable business relationship withsuch companies. Such a determination is based on factors
including the companies’ business developments, thestatus of business with the companies, and the market
price of the shares.
Also, each year, the Company shall implement a
sufficient review, including whether or not to continue tohold cross-shareholdings, by the Board of Directors of all
cross-shareholdings from a medium- to long-term
perspective, taking into consideration the economic
rationale and importance of the cross shareholdings, suchas the associated risks and returns, business relationships,
the cost of capital, etc. The Company shall also reflect theresults of these reviews in explanations regarding theobjectives of the cross-shareholdings, etc. As a result of
the review in FY2019.3, the Company confirmed theCompliance and Risk Management

In order to ensure abidance of laws, respect of ethicalbehavior, and compliance with internal regulations, theCompany has set in place the BANDAI NAMCO Group
Compliance Charter to define behavioral guidelines for
directors, etc., and employees of the Company and its
subsidiaries, and is working to ensure that they are familiar
with the Charter, through putting up posters and distributing a Compliance Book. In addition, the director in chargeof compliance of the Company strives to strengthen thecompliance systems by carrying out management of theoverall compliance of the Group and periodical training
using e-learning tools and other programs. The Company

58

FY2019.3
Total amount ofcompensation,etc., by type(¥ million)

Total amount of compensation, etc.,
by type (¥ million)
Basic
compensation

Performancebased stockcompensation

Number of
eligible officers(People)

486

193

292

4

Audit &
Supervisory
Board members

24

24

—

2

Outside officers

82

82

—

7

Officer category

Directors(excluding outside
directors)(excluding outside
Audit & Supervisory
Board members)

appropriateness of holding all of the shares held.
In exercising the voting rights of cross-shareholdings,
the Company does not unconditionally agree with theproposals of the companies whose shares it owns. Rather,voting rights are exercised based on whether or not the
proposals will contribute to increasing the Company’s
corporate value through the maintenance and/or bolsteringof the business partnership and business relationship withsuch companies.
Number of issues and carrying amount on balance sheet
Number of issues

Total carrying amount onbalance sheet (¥ million)

Unlisted shares

8

1,329

Shares other than unlisted
shares36

50,428Issues for which the number of shares increased in FY2019.3

Number of issues

Total acquisition cost
related to the increasein the number of shares(¥ million)

Unlisted shares——

Shares other than unlisted
shares2

1,476

Issues for which the number of shares decreased in FY2019.3

Number of issues

Total selling price related
to the decrease in thenumber of shares(¥ million)

Unlisted shares

1

13

Shares other than unlisted
shares2291also investigates the degree of actual awareness throughdistributing surveys on compliance awareness to all
employees of the Company and its major subsidiaries andstrives to strengthen the compliance systems by sharing
the results of the survey with each subsidiary director in
charge of compliance. Furthermore, the Company has
BANDAI NAMCO Group Compliance Charter

The Charter brings together matters that need to be strictly observed in businessexecution by all Group officers and employees. Rules related to appropriate products and services / fair dealings, respect for all employees, information disclosure,respect for and usage of intellectual property, protection of information andresources, rejection of anti-society groups, harmony with the environment, andharmony with society are clearly expressed.

established and operates a whistleblowing system toprovide a point of contact for internal and external consultations and an Audit & Supervisory Board Members Hotline toallow direct reporting to Audit & Supervisory Board members.
The Company and its major subsidiaries have also included
provisions in their internal regulations to ensure the protectionof whistleblowers.
For risk management, the Company and its subsidiaries
have established guidelines on risk management and haveformulated and operate a Business Continuity Plan (BCP)
and a Business Continuity Management (BCM) system for

Takeover Defenses

In concrete terms, in the event an inappropriate bidder
emerges, the management team will not take steps toguard its own interests against the takeover offer by thebidder, but will sufficiently deliberate the matter at theBoard of Directors’ meetings after referring the matter tothe Independent Directors and Audit & Supervisory Board
Members Committee for their review from objective viewpoints, to enable the Company to make a judgment fromthe perspective of improving corporate value first. The
Company will also work to collect sufficient informationand secure necessary time, so as to be conducive to appropriate judgment by the shareholders.

ESG SECTION

At present, the Company has taken no specific measures
as takeover defenses. The Group regards implementing its
management and business strategies in accordance withthe measures to increase the corporate value of the Groupand aiming to increase the corporate value of the Group
as a whole as a substantial defense against inappropriate
takeovers.
That said, since the Group is entrusted by shareholders
as the management of the Group, we will work on studying
and develop a system of takeover defenses, with a close eyeon legal and social trends, in anticipation of situations inwhich an inappropriate entity or person might emerge tohave decision-making power over the Company’s financial
and business policies.

the Group. The Company is working to ensure that
directors, etc., and employees of the Company and its subsidiaries are well aware of these guidelines and systems.
Should violations of compliance occur or risk arise, a meeting of the Group Risk Compliance Committee, chaired by
the President and Representative Director, is convened
immediately to ensure a quick and appropriate response.
Each month, the Group Compliance Committee Secretariat
reports to the Board of Directors any information on compliance and risk and how they have been managed in the
Company and its subsidiaries.

Initiatives Related to Respect for the Viewpoints of Stakeholders
Rules related to respect for the viewpoints of stakeholders through internal regulations
To meet the expectations of the Company’s various stakeholders and maximize corporate value, we have formulated the BANDAI NAMCO
Group Compliance Charter, which stipulates that the Company will respect the viewpoints of stakeholders.
Implementation of environmental conservation activities and CSR activities
In regard to CSR, we have established the “Important CSR Themes” section on the Company’s website. We also hold meetings of the GroupCSR Committee (chairperson: president) and the Group CSR Subcommittee, which is a subordinate organization under the Group CSR
Committee. In these ways, we are implementing initiatives to strengthen CSR on a Groupwide basis. Also, in regard to the details of these
initiatives we issue a CSR activity publication and disclose initiatives on the Company’s website.
Formulation of policies related to the provision of information to stakeholders
We have formulated an IR policy that is available on the Company’s website. This policy covers such matters as benchmarks for disclosureof information and the strengthening of IR opportunities.

IR Activities

Aiming to enhance corporate value, BANDAI NAMCO
Holdings is implementing a variety of investor relations (IR)activities in accordance with the IR policy. In addition, thestatus of IR activities and the reactions of investors andanalysts are shared with directors and continually communicated as feedback to the Unit core companies andthroughout the Group.

As well, BANDAI NAMCO aims to be a highly transparent
company that clearly communicates management strategies and business policies to shareholders and investors.
Accordingly, the Company works to enhance opportunities
for executives to speak directly to individual investors,
institutional investors, and securities analysts, such as
corporate presentations and results presentations.

Results of Major IR Activities in FY2019.3
Results presentations for investors and analysts

2 (172 people)

Results telephone conferences for investors
and analysts

2 (176 people)

Overseas IR

3 (3 regions)

Separate meetings for investors and analysts

309 people

Presentations for individual investors in Japan

3 times (508 people)

In presentations forinvestors and analysts,
explanations are provided
directly by the representative director, full-time
directors, and presidentsof Unit core companies who
are directors of BANDAI
NAMCO Holdings.

59

OVERVIEW OF OFFICERS
As of June 24, 2019

President and Representative Director

Director
Director in charge of the Network Entertainment Unit

Mitsuaki Taguchi

Yasuo Miyakawa

Number of Company shares owned: 74,800 shares
Attendance at meetings of the Board of Directors:
18 / 18 meetings

Number of Company shares owned: 13,550 shares
Attendance at meetings of the Board of Directors:
14 / 14*1

Reasons for Appointment: Mr. Taguchi has supervised thebusiness appropriately since he was appointed as President
and Representative Director of the Company in 2015, and heachieved the previous Mid-term Plan through his leadershipskills based on extensive business experience and broad
knowledge. He was nominated for director as the Company
considers him capable of ensuring that the Group continues
to grow.

Reasons for Appointment: Mr. Miyakawa possesses extensive experience, achievements, and knowledge from his
wide-ranging involvement in multiple businesses in theGroup. He has driven the business forward as the President
and Representative Director of BANDAI NAMCOEntertainment Inc., which is the core company of the
Network Entertainment Business in the Group, since 2019.
He was nominated for director as the Company considers
him capable of building closer ties between the Network
Entertainment Business and Group management.

Director

Director
Division General Manager of theGroup Administrative Headquarters

Director in charge of the Real Entertainment Unit

Number of Company shares owned: 36,200 shares
Attendance at meetings of the Board of Directors:
18 / 18 meetings

Number of Company shares owned: 17,200 shares
Attendance at meetings of the Board of Directors:
14 / 14*1

Reasons for Appointment: Mr. Ohtsu possesses specialist
expertise as a certified public accountant, as well as
extensive experience and achievements as Division General
Manager of the Group Administrative Headquarters of theCompany. He was nominated for director as the Company
considers him capable of strengthening Group management
structures and ensuring highly transparent management.

Reasons for Appointment: Mr. Hagiwara possesses extensive
experience, achievements, and knowledge in the RealEntertainment Business. He has driven the business forward as
the President and Representative Director of BANDAI NAMCO
Amusement Inc., which is the core company of the RealEntertainment Business in the Group, since 2014. He wasnominated for director as the Company considers him capableof building closer ties between the Real Entertainment
Business and Group management.

Shuji Ohtsu

Director

Hitoshi Hagiwara

Director
Division General Manager of the
Corporate Planning Division

Director in charge of the Visual andMusic Production Unit

Number of Company shares owned: 37,900 shares
Attendance at meetings of the Board of Directors:
18 / 18 meetings

Number of Company shares owned: 25,100 shares
Attendance at meetings of the Board of Directors:
18 / 18 meetings

Reasons for Appointment: Mr. Asako possesses extensive
experience, achievements, and knowledge relating tomanagement and administration, including businessplanning and accounting, and also has experience in roles
where he was responsible for internal and external
communications, such as IR, PR, SR, and CSR. He wasnominated for director as the Company considers him
capable of implementing the Group’s management strategies
and seeking a sustained increase in corporate value.

Reasons for Appointment: Mr. Kawashiro possesses
extensive experience, achievements, and knowledge in the
Visual and Music Production Business. He has driven thebusiness forward as the President and Representative
Director of BANDAI NAMCO Arts Inc., which is the corecompany of the Group’s Visual and Music Production
Business, since 2012. He was nominated for director as
the Company considers him capable of building closer ties
between the Visual and Music Production Business andGroup management.

Yuji Asako

Director

Kazumi Kawashiro

Director
Director in charge of the Toys and Hobby Unit

Director in charge of the IP Creation Unit

Number of Company shares owned: 44,500 shares
Attendance at meetings of the Board of Directors:
18 / 18 meetings

Number of Company shares owned: 12,700 shares
Attendance at meetings of the Board of Directors: —*2

Masaru Kawaguchi

Reasons for Appointment: Mr. Kawaguchi possesses
extensive experience, achievements, and knowledge in
the Toys and Hobby Business and has driven the businessforward as the President and Representative Director of
BANDAI CO., LTD., which is the core company of the Group’s
Toys and Hobby Business, since 2015. He was nominated for
director as the Company considers him capable of building
closer ties between the Toys and Hobby Business and Groupmanagement.

Makoto Asanuma

Reasons for Appointment: Mr. Asanuma possesses extensive
experience, achievements, and knowledge from his wideranging involvement in multiple businesses in the Group.
He has driven the business forward as the President andRepresentative Director of SUNRISE INC., which is the corecompany of the IP Creation Business in the Group, since2019. He was nominated for director as the Company
considers him capable of building closer ties between the
IP Creation Business and Group management.

Note: Number of shares held is as of the end of March 2019. Attendance rates at meetings of the Board of Directors are for FY2019.3*1 Mr. Yasuo Miyakawa and Mr. Hitoshi Hagiwara were elected at the 13th Ordinary General Meeting of Shareholders held on June 18, 2018, and accordingly the number ofBoard of Directors’ meetings on which the attendance rate is based differs from that of other directors.
*2 Mr. Makoto Asanuma and Mr. Koichi Kawana were elected at the 14th Ordinary General Meeting of Shareholders held on June 24, 2019, and accordingly did not attend
meetings of the Board of Directors, etc., in FY2019.3.

60

Audit & Supervisory Member

Outside Director

Yuzuru Matsuda

Masataka Nagaike

Honorary Director of Kato Memorial Bioscience
Foundation
Outside Director of KUBOTA Corporation
Outside Director of JSR Corporation
Attendance at meetings of the Board of Directors:
18 / 18 meetings(Full-time)
Number of Company shares owned: 2,800 shares
Attendance at meetings of the Board of Directors: 14 / 14*3
Attendance at meetings of the Audit & Supervisory Board:
9 / 9*3

Reasons for Appointment: Given Mr. Matsuda’s extensive
experience in corporate management and his excellent
character and insight, the Company anticipates that he will
be able to further strengthen management oversight andchecking functions, and introduce a broader managerial
perspective, and thus believes that he will be able toperform the duties of an outside director appropriately.

Reasons for Appointment: Given his many years of experiencein engaging in work in the administration divisions, andmastering corporate legal affairs, the Company expects
Mr. Nagaike to utilize his knowledge and experience for theaudit & supervisory system of the Company.

Satoko Kuwabara

Toru Shinoda

Attorney of Law
Partner at Mori Hamada & Matsumoto
Attendance at meetings of the Board of Directors:
18 / 18 meetings(Full-time)
Attendance at meetings of the Board of Directors: 14 / 14*3
Attendance at meetings of the Audit & Supervisory Board:
9 / 9*3

Reasons for Appointment: Although Ms. Kuwabara has notbeen involved in corporate management other than throughserving as an outside director, given her many years ofexperience as an attorney-at-law, the Company believes that
she will be able to further strengthen management oversight and checking functions, mainly from a legal risk
perspective, and thus believes that she will be able toperform the duties of an outside director appropriately.

Reasons for Appointment: Given his many years mastering
the audit practices, and given he is a certified public
accountant, the Company expects Mr. Shinoda to utilize his
wealth of knowledge and experience in accounting andauditing for the audit & supervisory system of the Company.

Outside Director

ESG SECTION

Outside Audit & Supervisory Member

Outside Director

Outside Audit & Supervisory Member

Mikiharu Noma

Osamu Sudoh

Professor, Graduate School of Business Administration,
Hitotsubashi University Business School
Attendance at meetings of the Board of Directors:
18 / 18 meetings

Attorney of Law
Partner in Sudoh & Partners
Outside Audit & Supervisory Board Member of
MITSUI-SOKO HOLDINGS Co., Ltd.
Outside Corporate Auditor of PRONEXUS INC.
Statutory Auditor of Keikyu Corporation
Number of Company shares owned: 10,200 shares
Attendance at meetings of the Board of Directors:
18 / 18 meetings
Attendance at meetings of the Audit & Supervisory Board:
14 / 14 meetings

Reasons for Appointment: Although Mr. Noma has not been
involved in corporate management other than throughserving as an outside director, given his profound scholarly
knowledge accumulated throughout his study and teachingactivities in the field of corporate strategy, especiallyaccounting and financial affairs, the Company anticipatesthat he will be able to further strengthen management
oversight and checking functions, and thus believes that hewill be able to perform the duties of an outside director
appropriately.

Outside Director

Reasons for Appointment: Given his many years of experience as
an attorney-at-law, the Company expects Mr. Sudoh to utilize his
wealth of knowledge and experience in legal affairs for the audit& supervisory system of the Company.

Outside Audit & Supervisory Member

Koichi Kawana

Katsuhiko Kamijo

Vice Chairman of JGC CORPORATION
Outside Director of TOKYO ELECTRON DEVICE LIMITED
Attendance at meetings of the Board of Directors: —*2

Professor at Faculty of Law of Teikyo University
Outside Audit & Supervisory Board Member of
The Resolution and Collection Corporation
Attendance at meetings of the Board of Directors:
18 / 18 meetings
Attendance at meetings of the Audit & Supervisory
Board: 14 / 14 meetings

Reasons for Appointment: Mr. Kawana possesses extensive
knowledge and experience in corporate management.
The Company anticipates that he will be able to further
strengthen management oversight and checking functions,and introduce a global managerial perspective based on his
extensive experience working overseas, and thus believes
that he will be able to perform the duties of an outside
director appropriately.

Reasons for Appointment: Given his many years mastering tax
affairs, and given that he is a certified public tax accountant,
the Company expects Mr. Kamijo to utilize his wealth ofknowledge and experience in tax affairs for the audit &supervisory system of the Company.

*3 Mr. Masataka Nagaike and Mr. Toru Shinoda were elected at the 13th Ordinary General Meeting of Shareholders held on June 18, 2018, and accordingly the numberof Board of Directors’ meetings and Audit & Supervisory Board meetings differs from that of other Audit & Supervisory Board members.

61

PERSONNELSTRATEGY

Make Personnel the Core of the GroupMoving Forward to an ALL BANDAI NAMCO
System that Realizes Synergies from Diversity
Employment Process Centered On
Individuals
The operations of the BANDAI NAMCO Group extend over abroad span of business areas, and Group companies need awide range of diverse employees. Our approach to making
employment decisions is based on the Group’s corporate
philosophy and the personnel strategy in the Mid-term
Plan. On that foundation, each Unit and company determines what type of people it needs and then takes the leadin employment initiatives.
In addition, for the selection of employees, we are working
to implement an employment process centered on individuals, with points of focus on enhancing communications
through briefings and interviews and on reaching mutual
agreement. For example, one Group company has established a system in which the applicants themselves directly
bring the necessary documents.

Creating Environments that Enable
Employees to Take On Challenges

We consider providing experience across a wide range ofGroup businesses to be an effective means of supporting
the development of human resources who take on challenges. Utilizing career plan sheets, which help employees
to independently design their own careers, we are achieving
effective personnel reassignments within the Group. Our
frequent use of reassignments that extend across regionaland business boundaries is contributing to activating theorganization and increasing employee motivation.

Implementing Working-Style
Reforms and Promoting
Active Careers for Women
The regulation of overtime work was strengthened in April
2019 in Japan. The BANDAI NAMCO Group acts in accordance with the law and has also established its own original guidelines to enable employees to work in a healthymanner. Through initiatives to limit overtime to 45 hours
per month (up to 75 hours per month 6 times per year);secure intervals between work of 10 hours or more; prohibit overtime after 10:00 pm, in principle; and achieve an

As an entertainment group, we need to continually provide
the world with new value. Accordingly, a culture that placesa priority on taking on challenges without fearing failure
has been established throughout the Group.
In our personnel evaluations, we have established an
item for “the spirit of taking on challenges,” and this issomething that our framework always emphasizes. In addition, our Group and individual company recognition systems
evaluate not just contributions to results but also the spiritof taking on challenges.

Naomi Tobita
BANDAI NAMCO Holdings Inc.
Executive Officer
Deputy Division General Manager of
Administrative Headquarters
Joined BANDAI CO., LTD., in 1986. Engaged
in planning and development in the girls toy
department and the digital department, etc.
Moved to current position after working as directorof BANDAI CO., LTD.

62

BANDAI NAMCO seeks to be “a group centered on human resources management, with a focus on entertainment
and imagination,” where companies and employees with a wide range of individual characteristics can work withmotivation and energy. With an emphasis on diversity and unity, we are aiming for the next stage of growth andimplementing human resources initiatives to support the full use of the comprehensive strengths of the
BANDAI NAMCO Group.

Achieving Both Diversity anda Sense of Unity
The BANDAI NAMCO Group has worked to discover anddevelop employees with abundant individuality and a spiritof taking on challenges to create work environments inwhich all employees are healthy in mind and body, and toleverage active personnel exchanges in order to cultivate
a sense of unity through the ALL BANDAI NAMCO concept.
In addition to the training at each company, we offer
Groupwide training by age and rank; Global Training, inwhich employees from various regions discuss the IP axis
strategy; and other training programs. These provide
opportunities to meet and deepen mutual understanding
about the diverse individuals in the Group. There are also
cases in which the personal contacts have led to subsequent business growth. This training has created greaterawareness among participants, including surprise about
the diversity of the individuals in the Group and confirmation that everyone was really thinking in the same way.
We believe that the theme of achieving both diversity and asense of unity, as seen in these answers, will be an indispensable element in the Group’s further growth.
Moving forward, we will continue working at the Groupand business-company levels to realize growth and evolution toward a Group centered on people.

ESG SECTION

annual planned utilization rate for paid leave of 70% or
more, we are steadily reducing overall work hours. At thesame time, business results are favorable, and we areseeing the effects of these initiatives, both from the perspective of realizing work-life balance and from the perspective of increasing labor productivity. In addition, thesetypes of initiatives have enabled people to secure the timeto engage with a variety of entertainment, which is essential for the human resources of an entertainment group.
Also, in recent years the promotion of active careers for
women has become a focus issue in society. The Group has
worked to address a variety of issues faced by women ineach generation. Through systems, training, and otheropportunities, we have taken steps to support female
employees, and we have worked to increase their motivation. The attitudes of female employees are changing, andwe are seeing steady increases in female employees whoare eager to take on the challenges of promotion and do notview life events such as marriage and childbirth as obstacles.
As result, step by step, we are starting to see increases in
the Group’s ratio of female managers.

Koji Hamano
BANDAI NAMCO Holdings Inc.
General Manager of Human Resources
Administrative Headquarters

Joined NAMCO LIMITED (currently, BANDAI
NAMCO Entertainment Inc.) in 1996. Moved tocurrent position after working in amusement
facility operations and in personnel at various
companies.

63

PERSONNELSTRATEGY

Make Personnel the Core of the Group

Group Human Resources Initiatives
The BANDAI NAMCO Group believes that human resources are its most important asset. Accordingly, we are striving to establish an environment in which employees can work energetically and with peace of mind while enjoying
their work. We are also aiming to foster respect for the diverse individuality of our employees and to ensure that
we have a diverse workforce. At the same time, we are focusing on the development of human resources who canadapt to dramatic change and actively advance the IP axis strategy.

Initiatives to Support Employees Who Take On Challenges
Principal companies in the BANDAI NAMCO Group have introduced
performance-linked remuneration frameworks that correlate a company’s operating profit with employee profit sharing. In addition, we
have established the Groupwide IP recruitment system, idea proposal
systems for units and companies, and other systems. In these ways,
we have established frameworks that transcend boundaries between
companies and departments and enable employees to make their own
proposals. Furthermore, by introducing systems that give recognition
to departments and employees for taking on challenges, we areworking to establish foundations and a corporate culture that makeit easier to address challenges with a positive attitude.

Groupwide recognition system: BANDAI NAMCO Awards

Initiatives to Support Challenges with Outside Partners
To support people who are taking on challenges, including not only
employees but also external partners, we are implementing initiatives that involve the co-creation of IP and businesses. These
include the BANDAI NAMCO Accelerator, which accepts businessplans from external companies and facilitates co-creation initiatives targeting their realization, and the Dream Support Project,which aims to support the dreams of external creators by assistingthem with skill enhancement and funding.
BANDAI NAMCO Accelerator

Initiatives to Cultivate Global Human Resources
The cultivation of global human resources is essential for the Groupto achieve sustained growth over the medium to long term. In addition
to actively implementing personnel rotations that transcend theboundaries between regions, we are also operating the Global
Training, a program for employees at overseas Group companies.
Under this program, we are taking steps to promote understandingof the IP axis strategy, such as through observation of development
bases and discussions with employees in Japan. In addition, we areworking to cultivate an awareness of the ALL BANDAI NAMCO
concept and to foster the spirit of taking on challenges.

Global Training

Initiatives that Use Stock
We introduced an employee stock ownership plan with the objectives of fostering interest among employees in the activities of theentire Group from the perspective of shareholders, as well as
cultivating a sense of unity within the Group. Moreover, Group
employees in Japan who agreed to contribute a set amount or64

more each month for three years or more from April 2018, when
the Mid-term Plan started, received 50 shares of BANDAI NAMCO
Holdings stock. In addition, proposal briefings are provided to
employee shareholders to explain the importance of the shareholders’ meetings and the details of proposals.

Working-Style Reform Initiatives
We are implementing a variety of initiatives so that employees canwork while remaining healthy in body and mind. As countermeasures to long work hours, we have taken such steps as establishinga limit for overtime hours and implementing working hour intervals.
Moreover, as a mental health measure, we have implemented

stress checks and established a system for personal consultations
with industrial physicians. Moving forward, in addition to reducing
work hours we will advance initiatives to increase productivity as aGroup that provides “Dreams, Fun and Inspiration.”

Initiatives to Achieve Work-Life Balance
support childbirth and childcare; provided facilities to day carecenters certified by Tokyo Prefecture; and introduced Satellite
Offices. In addition, we have introduced a lifestyle-support systemthat facilitates acquisition of leave time, shorter working hours,
and flextime in order to address family circumstances, including
not only child-rearing but also family nursing and caregiving, etc.

Examples of Systems to Promote Achievement of Work-Life Balance (Programs that surpass legal requirements)
SystemOverview

Childcare leave

Can be taken until the day the child turns two years old.
Available until the child completes sixth grade. In addition to shorter working hours, includes exemption from overtime andlate-night work.
Male employees can take up to five days of paid leave when their wife gives birth.
Normal working hours are determined not on a daily basis but on a monthly basis.
Up to the point when children graduate from sixth grade, core time can be adjusted in line with child-rearing
circumstances.
Provision of ¥200,000 at the birth of each of the first and second children.
Provision of ¥2,000,000 at the birth of each of the third and subsequent children.
(Acquisition of childcare leave for one continuous week or more is a requirement for the receipt of this support.)
Introducing lifestyle-support system with the objective of establishing supportive environments for employees in a variety ofhousehold circumstances.
Offering 30-day leaves as well as shorter working hours / flextime, in accordance with the reason.
Examples of reasons: (1) truant children, (2) infertility treatment, (3) family nursing or caregiving for spouses and 1st and 2nd
degree relatives of employees, and (4) receiving outpatient care at medical facilities due to disease

Childcare support
Childbirth leave for male employees
Flextime system
Child-rearing flextime system
Provision of support funds forchildbirth and childcare

Lifestyle-support system

ESG SECTION

We have introduced a variety of systems to establish workplaceenvironments that support the achievement of work-life balance.
We are operating a variety of systems to support child-rearing withpeace of mind. For example, we have instituted flexible working
arrangements using childcare leave, flextime systems, and shorter
working hours; introduced a childbirth allowance benefit system toNote: Systems used by Group companies are different.

Initiatives to Facilitate Active Participation by Diverse Human Resources
The BANDAI NAMCO Group is working to create environments inwhich diverse human resources with abundant individuality canwork energetically. We offer programs to develop employees in linewith a wide range of positions and characteristics. In addition,
promotions are not influenced by gender, age, work experience,nationality, or cultural background.
Example of Initiatives• Training programs (Training for new hires, Fifth-year training, Nextgeneration managers development training, Training for new directors, Training to promote active careers for women, etc.)• Establishment of special subsidiary for promoting the employmentof people with disabilities• Employment of seniors (hiring people who are past the retirement
age but want to continue working as senior employees, introducing
a retirement age of 65 in certain companies)

Number of Female
Managers*

120
2019

Ratio of Female Managers to
All Managers*

17.4%

For the Fiscal Years Ended March 31* Figures are for five Unit core companies

2019

Training to promote
active careers forwomen

Establishment of special subsidiary for promoting theemployment of people with disabilities

Employment Ratio for People with Disabilities*

2.04%
2018

2.10%
2019

For the Fiscal Years Ended March 31* For consolidated subsidiaries that use the services of special
subsidiary BANDAI NAMCO Will Co., Ltd.

65

CSR INITIATIVES

To realize the provision of “Dreams, Fun and Inspiration,”the BANDAI NAMCO Group conducts CSR activities in accordance with theconcept of “Fun For the Future!”

BANDAI NAMCO Group CSR Management

The BANDAI NAMCO Group has identified the Groupwide CSR Initiatives, which incorporate environmental and social
responsibilities, economic responsibilities, and legal and ethical responsibilities. In addition, we have formulated the BANDAI
NAMCO Group’s Important CSR Themes, which require special initiatives. Furthermore, each Unit and affiliated business company
formulates its own CSR Major Initiative Themes and leverages the special characteristics of its operations to implement activities inaccordance with those themes.

BANDAI NAMCO Group’s CSR Policy

Mission“Dreams, Fun and Inspiration”
CSR Action Concept

Fun For the Future!
The Group’s CSR Initiatives
1 Environmental and Social

Responsibilities

2 Economic Responsibilities

Safety and Cleanliness of
Products and Services

3 Legal and Ethical Responsibilities

Environmental Consideration

The Group strives to further enhance the safety and cleanlinessof its products and services, which are the foundation of theprovision of “Dreams, Fun and Inspiration,” so that customers
can enjoy them with peace of mind.

To ensure ongoing “Dreams, Fun and Inspiration” for the next
generation, the Group is working to show consideration for theenvironment, to reduce energy consumption in its operating
activities, and to reduce the use of resources in its products
and services.

BANDAI NAMCO Group’s
Important CSR Themes
Policies Regarding Influence on
Society of the Group’s Content and Products
To provide “Dreams, Fun and Inspiration” to people around theworld, we value freedom of expression, and are working toappropriately provide customers with a wide range of content
and products.

Supply Chain Management
To achieve qualitative improvements in the “Dreams, Fun andInspiration” that we provide, the Group is working to enhance
supply chain management in each of its business areas.

Each Unit and affiliated business company sets up priority initiatives and works through its
businesses to implement activities in line with the Group’s Important CSR Themes.

66Formulation of Important CSR Themes

Aiming to further enhance the effectiveness of CSR activities, we formulated the BANDAI NAMCO Group’s Important
CSR Themes through the Group CSR Committee. These
themes have been in use since 2010 and are periodicallyreviewed. With consideration for the influence that companies have on society in addressing the various social issues
that surround the Group, we implemented multifaceted

initiatives to identify and evaluate themes that require
special initiatives. In this way, we formulated the BANDAI
NAMCO Group’s Important CSR Themes. As a company
that provides “Dreams, Fun and Inspiration” to customers
around the world, we will work toward the resolution ofsocial issues.

Important CSR Theme Formulation Process<Important Viewpoints for the Formulation of the Themes><Opinions and Approaches that We Referenced for the
Formulation of the Themes>
Opinions of Stakeholders
Interviews with outside experts
Third-party opinions in CSR reports
Reports on investigations conducted by external organizations(Sustainable Brand Survey, Global NGO Survey (E-Square Inc.), etc.)

ESG SECTION

In formulating the BANDAI NAMCO Group’s Important CSR
Themes, we advanced through a process of reconfirming
which CSR themes are the most important from the perspective of the BANDAI NAMCO Group and its stakeholders.
First, we interviewed four outside experts to identify theneeds of society surrounding the Group. Next, based on avariety of information, such as reports on investigations
conducted by external organizations, we then compiled 68
specific items related to CSR activities. We evaluated these
items from the perspectives of the Mid-term Plan, guidelines, and the other sources listed below, and subsequently
organized and classified them. Through this process, weestablished the four Important CSR Themes.
The appropriateness of the Important CSR Themes isevaluated for each Mid-term Plan, and related measures
are implemented after we confirm that there are no inconsistencies between the Group’s direction and the demandsof society.

The BANDAI NAMCO Group’s Policies
BANDAI NAMCO Group Corporate Philosophy
BANDAI NAMCO Group Compliance Charter
CSR Initiatives
BANDAI NAMCO Group Environmental Policy
BANDAI NAMCO Group Environmental Vision
BANDAI NAMCO Group Basic Policy on Social Contribution<Perspectives that Are Referenced during Verification>

1 BANDAI NAMCO Group guidelines related to CSR

Trends in Japan and overseas / demands of society

2 BANDAI NAMCO Group Mid-term Plan

Interviews with outside experts

3 Standards such as the GRI Guidelines, ISO 26000

BANDAI NAMCO Group Mid-term Plan

(Japanese translation), and the Ministry of theEnvironment’s Environmental Reporting Guidelines
4 Initiatives of corporations with innovative CSR activities
5 Opinions of outside experts

Important CSR Themes — Establishment and Process Steps

Implementation of measures

Implemented every three years
STEP

1Gain understandingof society’s
expectations throughinterviews withoutside experts, etc.
(Selection of specificitems related to CSR
activities)

STEP

2

Evaluate theimportance of thespecific items related
to CSR activities

STEP

3

Organize and classify
high-importancespecific items related
to CSR activities andconsolidate themwithin the four
important themes

STEP

Establishment of
the Group’s
Important CSR
Themes4

Individual Units decidemajor initiative themes
based on the important
themesSTEP

5

Promote initiatives
based on major
initiative themes inaccordance with the
CSR concept

Periodic verification of important themes

67

CSR INITIATIVESBANDAI NAMCO Group’s CSR Promotion System

The Group CSR Committee mainly comprises the presidents of BANDAI NAMCO Holdings and the Unit core companies.
In this way, the Group is making decisions rapidly and advancing CSR activities in a manner that is integrated with operations.
In addition, the status of activities is periodically reported to the Company’s Board of Directors.
Deliberating / Reporting on Matters Related to CSR
Board of Directors (CSR matters reported as needed)
Supervision

Reports

Group CSR Committee (Semiannually) * Committee chair: President and Representative Director of BANDAI NAMCO Holdings Inc.

Group CSR Subcommittee (Quarterly)

Unit CSR Projects

Examples of Initiatives Addressing Important CSR Themes

Safety and Cleanliness of Products and Services
Pursuing product designs and materials with consideration for safety
also conduct internal analysis and inspection to confirm
For each product, the BANDAI NAMCO Group anticipatesthat the products do not include poisonous heavy metals or
misuse by children and a wide range of customer needs,
regulated chemical substances that have the potential toand is working to further enhance safety management
harm the human body.
systems. As one part of those initiatives, BANDAI CO., LTD.,
conducts necessary tests in accordance with such factors
as product characteristics, selecting from among testing
standards (approximately 370 items) to confirm productsafety, strength, durability, etc. For example, with the Super
Sentai series combination robot, we implement rigorous
Using gas chromatography–mass
testing, inspection, and confirmation of more than 200
spectrometry equipment,
items, and we confirm product quality from a variety ofinspections are conducted toperspectives. In addition, standards related to the safety ofdetermine the presence orabsence of regulated chemicalmaterials include more than 20 items. In addition to acquirsubstances that have the potening certification from third-party inspection institutions, wetial to harm the human body.

Environmental Consideration
Initiatives to reduce CO2 emissions and conserve energy
The BANDAI NAMCO Group is working to reduce CO2 emissions and has set objectives for the reduction of CO2 emissions
each year in each Unit. Consequently, Groupwide emissions
in FY2019.3 were down approximately 7% from FY2015.3, to
59,551 tons of CO2. From FY2019.3, in addition to total
emissions management, we are also working to control CO2
emissions through the introduction of management based onemissions intensity for each Unit.
In addition, as one part of our initiatives to conserve energy,
in amusement machines and store lighting at amusement
facilities we are converting from halogen lamps and fluorescent lighting to LED lamps. The Group is also implementing
a range of other initiatives, such as increasing operational
efficiency at plants, aggressively utilizing LEDs at live events,
recycling materials, and promoting eco-driving.

BANDAI NAMCO Group CO2 Emissions(t-CO2)64,254
61,79559,043

2015

2016

59,55120182019

For the Fiscal Years Ended March 31

Electricity Use Reduction for Amusement
Facility Amusement Machines (FY2019.3)

2,000Lighting foramusement machinesconverted to LEDs

68

2017

59,55046% reduction inelectricity use in comparison
with fluorescent lights

Policies Regarding Influence on Society of the Group’s Content and Products
Implementing timely training and collecting and sharing
information regarding ethical expression
Each Unit implements a variety of employee training related
to ethical expression in order to facilitate the provision of
products and services in accordance with appropriate
expression. In addition, the Group is taking steps to advancethe sharing of information related to ethical expression. For
example, based on the latest information and past examples,
we are distributing mail magazines to employees andholding study sessions.

jointly with game-related media to implement online radio
broadcasts aiming to increase IP awareness. In addition,
as one facet of measures to address counterfeit products,
BANDAI SPIRITS CO., LTD., began to utilize specialspecification hologram seals with forgery prevention
processing. These seals, which are now being applied to all
TAMASHII NATIONS brand figures for the mature fan base,are used to verify that a product is genuine.

ESG SECTION

IP protection initiatives
The BANDAI NAMCO Group is working closely with partners
inside and outside the Group and with governments to protect
the image of its IP and to ensure that its customers canenjoy worry-free use of safe products. We are implementing measures targeting counterfeit goods. We monitor
Japanese and overseas markets, including the online market,
and ask customs authorities to prohibit the import of counterfeit products. In these ways, we are working to promptly
detect counterfeit products, to prevent their appearance on
the market, and to secure their prompt removal if found.
In addition, as a member of the International Intellectual
Property Protection Forum, we are working in collaboration
with government institutions and related organizations ineach country to implement effective countermeasures.
In FY2019.3, BANDAI NAMCO Holdings CHINA CO., LTD.,
took steps to promote education in this area, such as working

Study session related to
ethical expression

Hologram seals are applied to
TAMASHII NATIONS products.

Supply Chain Management
Implementing a variety of audits
The BANDAI NAMCO Group strictly observes the laws andregulations of each country. We also establish our own
standards. In this way, the Group is working to strengthen
supply chain management.
As well, BANDAI CO., LTD., implements BANDAI Factory
Audits (BFAs), which combine new plant audits and Codeof Conduct (COC) audits, at overseas final packaging plantsthat make BANDAI products (168 plants in FY2019.3). The
basic policy for BFAs is the BANDAI Code of Conduct, whichcalls for strict observance of eight COC standards regarding
such issues as forced labor. Audits are conducted in accordance with our original BFA manual.
In addition, when it starts to do business with a supplier,
BANDAI NAMCO Amusement Inc. implements a CSR
Procurement Questionnaire related to seven major items— overall CSR; human rights (prevention of forced labor,
discrimination, harassment, etc.); safety (work environment, emergency response, etc.); the environment(management of chemical substances in products, waste

CSR

management, etc.); fair trade and ethics; quality and safety;
and information security. BANDAI NAMCO Amusement Inc.
only conducts business with suppliers that do not haveissues with illegal activity. (There were no new transaction
relationships in FY2019.3.) Furthermore, audits of plant line
production management systems, etc., are conducted atamusement machine assembly plants that are starting a newtransaction relationship with BANDAI NAMCO Amusement.
(There were no new transaction relationships in FY2019.3.)

Audit at plant in China

For further information about CSR initiatives, please see the following: https://www.bandainamco.co.jp/en/social/index.html

69

FINANCIAL
SECTIONCONTENTS
71

CONSOLIDATED SIX-YEAR FINANCIAL SUMMARY72

FINANCIAL REVIEW76

CONSOLIDATED BALANCE SHEETS

78

CONSOLIDATED STATEMENTS OF INCOME ANDCONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

79

CONSOLIDATED STATEMENTS OF CHANGES IN
NET ASSETS

80

CONSOLIDATED STATEMENTS OF CASH FLOWS

81

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

108

INDEPENDENT AUDITOR’S REPORT(Note) From this fiscal year, the method of handling fractional amounts of money has changed fromrounding to the nearest unit to rounding down. To make comparisons easier, figures for previous
fiscal years have also been rounded down.

70

CONSOLIDATED SIX-YEAR FINANCIAL SUMMARYBANDAI NAMCO Holdings Inc. and Consolidated Subsidiaries
For the Fiscal Years Ended March 31

Millions of yen, except per share data and main financial indicators

2014

2015

2016

2017

2018

2019

Net sales¥507,679¥565,486¥575,504¥620,061¥678,312¥732,347

Gross profit

190,829

213,112

202,600

223,759

241,581262,555

Selling, general and administrative expenses

146,156

156,791

152,959

160,520

166,557

178,510

Operating profit

44,67256,32049,641

63,23875,024

84,045Recurring profit

47,45659,38350,77463,29075,38086,863

Profit attributable to owners of parent

25,05437,58834,58344,15954,10963,383Comprehensive income

32,63343,35627,377

43,10456,02469,952

Capital expenditures

28,97927,761

26,98625,01660,50129,016

Depreciation and amortization

21,72523,712

21,626

21,85423,545

21,370Cash flows from operating activities

41,291

50,10358,04964,13655,13879,811

Total assets¥405,092¥441,763¥448,336¥488,032¥540,490¥612,955

Total current assets

284,398

317,516

322,176

357,782

350,618

397,951

Total current liabilities

120,134

123,136

114,333

126,110

136,202

163,893

Total net assets

267,951

303,512317,304

348,784

387,354429,644¥114.05¥171.10¥157.43¥201.03¥246.29¥288.40

35.00

62.00

52.00

82.00

123.00145.00Return on equity (ROE)*2 (%)

9.7

13.2

11.2

13.3

14.7

15.5

Return on assets (ROA)*3 (%)

12.2

14.0

11.4

13.5

14.7

15.1

Selling, general and administrative expenses to
net sales (%)

28.8

27.7

26.6

25.9

24.6

24.4

Operating profit margin (%)

8.8

10.0

8.6

10.2

11.1

11.5

Profit attributable to owners of parent margin (%)

4.9

6.6

6.0

7.1

8.0

8.7

Shareholders’ equity ratio (%)

66.0

68.6

70.6

71.3

71.5

70.0

Debt/equity ratio (Times)

0.03

0.01

0.01

0.00

0.00

0.00

For the Year:*1

FINANCIAL SECTIONAt Year-End:Per Share Data (Yen):
Basic earnings per share
Cash dividends

Main Financial Indicators:

Notes:*1 Recurring profit is a Japanese accounting term denoting income before extraordinary items.
*2 ROE = Profit attributable to owners of parent / Average total shareholders’ equity (= Total net assets – Stock acquisition rights – Non-controlling interests)*3 ROA = Recurring profit / Average total assets

71

FINANCIAL REVIEWOverview of Performance in the
Fiscal Year Ended March 31, 2019

Cost of Sales

During the fiscal year ended March 31, 2019, the economy continued

net sales decreased to 64.1%, a decrease of 0.3 percentage points

to moderately recover both in Japan and overseas. However, thefrom the previous fiscal year. As a result, gross profit was ¥262,555

outlook for the overall economy remained uncertain.

million, and the gross profit margin was 35.9%, an increase of 0.3

Cost of sales was ¥469,791 million, and the ratio of cost of sales topercentage points from the previous fiscal year.

In this environment, the BANDAI NAMCO Group (“the Group”)
started a three-year Mid-term Plan in April 2018, under the
Mid-term Vision of “CHANGE for the NEXT: Empower, Gain

SG&A Expenses

Momentum, and Accelerate Evolution,” which reflects our aspiration

Selling, general and administrative (SG&A) expenses were ¥178,510

to achieve changes in all aspects to progress to a next stage without

million (year-on-year increase of 7.2%), and the ratio of SG&A

being bound by previous business models and established ideas.

expenses to net sales declined to 24.4%, from 24.6% in the previous

Aiming for medium- and long-term growth, the Group has beenfiscal year. Principal items included advertising expenses of ¥44,491

promoting a range of measures. As one of these initiatives, we havemillion, directors’ remuneration and employees’ wages of ¥47,278

been taking advantage of the worldview and unique characteristics

million, employees’ retirement and severance benefits of ¥2,830

of IP (Intellectual Property: meaning characters and other intellec-

million, provision for directors’ bonuses of ¥1,786 million,

tual property) to further evolve the “IP axis strategy” that aims toand research and development expenses of ¥19,811 million.

maximize IP value through the provision of the optimal products andservices at the optimal possible times. The measures also include

Operating Profit

an initiative to strengthen development in regions and businesses

Operating profit was ¥84,045 million (year-on-year increase ofwith high growth potential and an initiative to realize the total

12.0%), and the operating profit margin increased to 11.5%, fromcapabilities of the Group in regions around the world under the

11.1% in the previous fiscal year.

ALL BANDAI NAMCO concept.
During this fiscal year, the key IP and products and services ineach business segment performed favorably, and business collaboration across the Group was highly effective.

Other Income (Loss)
In other income (loss), loss on impairment of fixed assets was¥954 million, while gain (loss) on sales and disposal of fixed assets,
net was ¥1,753 million. As a result, there was a net other income

Net Salesof ¥2,793 million.

On a consolidated basis, the Group’s net sales were ¥732,347 million(year-on-year increase of 8.0%)

Profit Attributable to Owners of Parent
The Group recorded profit attributable to owners of parent of¥63,383 million (year-on-year increase of 17.1%). The profit attributable to owners of parent margin was 8.7%, and basic earnings per
share increased to ¥288.40, from ¥246.29 in the previous fiscal year.

Results by Segment

72

Millions of yen

Millions of yen

Net sales

Segment profit

2019

2018

Year on year

2019

2018

Year on year

Toys and Hobby¥242,865¥222,417¥20,448¥21,710¥14,476¥ 7,234

Network Entertainment

340,927

326,537

14,38947,53450,150(2,615)

Real Entertainment

101,493

90,54910,944

4,264

3,168

1,095

Visual and Music Production

45,51840,691

4,827

8,797

6,618

2,179

IP Creation

22,464

16,970

5,494

5,020

5,264

(243)

Other

29,764

27,640

2,124

1,197

767

430

Toys and Hobby Business

IP Creation Business

As for the Toys and Hobby Business, in Japan and overseas, products

As for the IP Creation Business, we stirred up public attention

for the mature fan base such as plastic models of the Mobile Suitthrough releases of new IP movies such as the Mobile Suit Gundam

Gundam series and collectible figures and card-related products forseries, LoveLive! Sunshine!!, and the Aikatsu! series, leading to those

DRAGON BALL series gained in popularity. In Japan, products for theseries gaining popularity. In other initiatives, we took steps tomature fan base performed favorably, along with long-established IP

strengthen our structure and create new products with a view to

products such as the DRAGON BALL series, the KAMEN RIDER series,

enhancing IP creation.

and the PRETTY CURE! series. Overseas, in the Asian region, products

As a result, net sales in the IP Creation Business were ¥22,464

such as the Mobile Suit Gundam series and ULTRAMAN series gained

million (year-on-year increase of 32.4%), and segment profit wasin popularity, and we took steps aimed at strengthening business¥5,020 million (year-on-year decrease of 4.6%).

development in the Chinese market. In Americas and Europe, we
continued with the roll-out of products for the mature fan base, such

Other Businesses

as collectible figures and DRAGON BALL series card products.

Other Businesses consist of companies that conduct businesses

As a result, net sales in the Toys and Hobby Business weresuch as logistics support, printing, and other kinds of administration¥242,865 million (year-on-year increase of 9.2%), and segment profit

and operational support for each of the Group companies. We arewas ¥21,710 million (year-on-year increase of 50.0%).

making efforts to manage such operations related to Group support
in an efficient manner.
Net sales in the Other Businesses were ¥29,764 million

As for the Network Entertainment Business, in network content, key(year-on-year increase of 7.7%), and segment profit was ¥1,197

titles being distributed worldwide such as the DRAGON BALL series

million (year-on-year increase of 56.1%).

and ONE PIECE, and key titles in Japan such as The iDOLM@STER
series, continued to perform favorably due to ongoing measurestargeting users. We also undertook initiatives to create new services,

Financial Position
As of March 31, 2019, total assets stood at ¥612,955 million, an

such as launching a new platform. In home video games, in addition

increase of ¥72,465 million from the end of the previous fiscal year.

to sales of new titles such as SOULCALIBUR VI, ACE COMBAT 7: SKIESThe main factors were increases of ¥28,334 million in cash and time

UNKNOWN, and JUMP FORCE for worldwide distribution, repeat sales

deposits, ¥5,021 million in trade receivables, ¥9,388 million in inven-of existing titles and sales of mainly new Japanese titles were favorable.

tories, and ¥17,528 million in investment securities.

As a result, net sales in the Network Entertainment BusinessTotal liabilities amounted to ¥183,311 million, an increase of

were ¥340,927 million (year-on-year increase of 4.4%), and segment¥30,175 million from the end of the previous fiscal year. The main

profit was ¥47,534 million (year-on-year decrease of 5.2%).

factors were increases of ¥5,249 million in trade payables andReal Entertainment Business¥8,898 million in accrued income taxes.
Total net assets stood at ¥429,644 million, an increase of ¥42,289

As for the Real Entertainment Business, in regard to arcade games,

million from the end of the previous fiscal year. The main factors

sales of MOBILE SUIT GUNDAM EXTREME VS. 2 and other games

were increases of ¥35,051 million in retained earnings due to thewere favorable. In amusement facilities, performance in existing

recording of ¥63,383 million in profit attributable to owners of parent,

facilities in Japan did not reach the level seen in the previous fiscaland ¥8,494 million in valuation difference on available-for-saleyear; however, the facilities in new business formats that provide

securities, net of tax, despite cash dividends paid of ¥28,366 million.

spaces where customers are able to enjoy experiences thatAs a result, the shareholders’ equity ratio became 70.0%,

only BANDAI NAMCO can offer, among other initiatives,compared with 71.5% at the end of the previous fiscal year. The

performed favorably.

current ratio*1 was 242.8%, compared with 257.4% at the end of the

As a result, net sales in the Real Entertainment Business wereprevious fiscal year; the quick ratio*2 was 187.3%, compared with

¥101,493 million (year-on-year increase of 12.1%), and segment

200.9%; and the interest coverage ratio*3 was 2,180.5 times,

profit was ¥4,264 million (year-on-year increase of 34.6%).

compared with 1,468.2 times.

Visual and Music Production BusinessNotes:*1 Current ratio = Total current assets / Total current liabilities*2 Quick ratio = (Cash and time deposits + Trade receivables) / Total current liabilities*3 Interest coverage ratio = Cash flows from operating activities / Interest paid

As for the Visual and Music Production Business, products such as

FINANCIAL SECTION

Network Entertainment Businessvisual and music package software of Love Live! Sunshine!! and The
iDOLM@STER series gained in popularity. Meanwhile, IP live events
such as IDOLiSH 7 and associated product sales and sales of live
visual package software performed favorably.
As a result, net sales in the Visual and Music Production Businesswere ¥45,518 million (year-on-year increase of 11.9%), and segment
profit was ¥8,797 million (year-on-year increase of 32.9%).

73

Cash Flows

Targets and Management Performance Indicators

As of the end of the fiscal year, cash and cash equivalents (“funds”)

The Group aims to increase profitability and capital efficiency andremaining on hand had increased by ¥25,438 million from the end ofemphasizes return on equity (ROE) as a management performancethe previous fiscal year to ¥206,270 million.

indicator. Under the three-year Mid-term Plan that started from April

Below is the breakdown of cash flows by activities.

2018, the Company will continue working to achieve revenue growthand higher capital efficiency by advancing its main strategies. We will

Cash Flows from Operating Activities

aim to build a business foundation that can achieve results without

The amount of funds provided by operating activities totaled ¥79,811

being overly influenced by changes in the operating environment and to

million (year-on-year increase of 44.7%). As a breakdown of funds

achieve ROE of 10% or more.

used, income taxes paid was ¥21,186 million (compared with
¥19,709 million in the previous fiscal year). However, overall, there

Outlook for the Fiscal Year Ending March 31, 2020

was a net increase in funds due to profit before income taxes of

Looking ahead, although Japanese and overseas economic trends¥86,838 million (compared with ¥72,497 million in the previous fiscal

remained steady, the business environment is expected to remainyear) and depreciation and amortization of ¥21,370 million

beset by uncertainties, including the impact on personal consump-(compared with ¥23,545 million in the previous fiscal year).

tion from uncertainties in the overall society and the overall
economy, as well as overseas political trends. Such factors are also

Cash Flows from Investing Activities

expected to have an impact on the entertainment industry, in which

The amount of funds used in investing activities totaled ¥24,899

the Group is extensively involved, resulting in ongoing uncertainty

million (year-on-year decrease of 60.7%). The main breakdown ofin this business environment, and also, even severe changes in thefunds used was purchases of property, plant and equipment andmarket environment and user preferences.

intangible assets totaling ¥15,341 million (compared with ¥48,243

Facing these circumstances, the Group started a three-year

million in the previous fiscal year) and purchase of shares of subsid-

Mid-term Plan in April 2018, under the Mid-term Vision of “CHANGE

iaries and associates of ¥4,018 million (compared with ¥80 million infor the NEXT: Empower, Gain Momentum, and Accelerate Evolution”

the previous fiscal year).

which reflects our aspiration to achieve changes in all aspects toprogress to a next stage without being bound by previous business

Cash Flows from Financing Activities

aim to evolve “IP axis strategy” further to maximize IP value throughmillion (year-on-year increase of 69.6%). The main breakdown oftaking advantage of the worldview and unique characteristics of its

funds used was cash dividends paid of ¥28,366 million (comparedwith ¥18,023 million in the previous fiscal year).

Basic Policy on the Distribution of Profits
The Company ranks the return of profits to shareholders as oneof its highest priorities in its management. The Company aims
to further strengthen the Group’s competitiveness and, while
maintaining a sound financial status, to achieve regular distributions of dividends and improvement in the Company’s corporate
value. Specifically, the Company follows a basic policy of providing a
return to shareholders that targets a total return ratio of 50% ormore based on stable dividend payments of 2% of DOE (dividends onequity). Under this policy, the Company strives to maintain longterm and stable dividend levels and be more aware of capital cost.
For the annual cash dividend per share for the fiscal year ended
March 31, 2019, a performance-based dividend of ¥109 will be
added to a base dividend of ¥36. In total, the annual cash dividend
for the fiscal year will be ¥145 per share. Since the Company paid
an interim dividend of ¥18 per share on December 7, 2018, theyear-end dividend will be ¥127 per share. The Company’s annual
dividend forecast for the fiscal year ending March 31, 2020 is ¥40
per share, which is the base dividend set in accordance with theCompany’s basic policy on the distribution of profits.
The year-end cash dividend for the fiscal year ending March 31,
2020 will be considered by the Company based on the basic policyon the distribution of profits.

74

models and established ideas. In the Mid-term Plan, the Group will

The amount of funds used in financing activities totaled ¥28,972

IPs and providing the optimal products and services at the optimal
possible times, thereby achieving penetration and expansion in
global markets. At the same time, we will also strengthen development in regions and businesses with high growth potential.
Furthermore, we will drive creation of new IP and pursue strategies
by unifying the efforts in each region across the Group under the
ALL BANDAI NAMCO concept.
We will implement the following four strategies as the main
strategies in the Mid-term Plan:
1. IP axis strategy; “Accelerate evolution in IP axis strategy”
Boost capability to create IP (structural changes) / Invest
aggressively in IP creation
2. Business strategy; “Empower push into new entertainment”
Establish and enhance business infrastructure / Expand andstrengthen business fields / Promote incubation
3. Region strategy; “Gain momentum with ALL BANDAI NAMCO”
Make full-scale business expansion in the Chinese market /Establish system for ALL BANDAI NAMCO
4. Personnel strategy; “Make personnel the core of the Group”
Establish environment to optimize employees’ performanceby tapping their individual strengths, and to empower new
venturesBy implementing these main strategies, we aim to further
strengthen the Group’s foundation so that we can make steadyprogress in an operating environment marked by dramatic change,
and achieve growth in global markets.

Starting April 2018, the Group has changed its organizational

Consolidated Plan for the Fiscal Year Ending March 31, 2020

structure to promote the advancement of each of the strategies ofMillions of yen

the Mid-term Plan. The name of the units of aggregated business

Segments

companies that are to execute the respective business strategies

Net sales

Segment profit

Toys and Hobby¥250,000¥21,000

Network Entertainment

320,000

36,000Real Entertainment

110,000

5,000

Visual and Music Production

45,0008,000

IP Creation

20,0005,000

reorganized into the Network Entertainment Unit, which develops

Other

30,0001,000

business in fields such as network content and home video games,

Adjustments(55,000)(6,000)and the Real Entertainment Unit, which provides content for real-

Consolidated¥720,000¥70,000

has been changed from “SBUs” (Strategic Business Units) to“Units.” In addition, to enable swifter advancement of the main
strategies for each mission stated in the Mid-term Plan, the Group
has shifted from its previous three-SBU structure to a five-Unit
structure. Specifically, the Network Entertainment SBU has been

world based facilities, services, equipment, and so forth, unique tothe Group. Moreover, the IP Creation Unit has been established as

Forward-Looking Statementsa spin-off from the Visual and Music Production SBU to focus on

Forecasts for the next fiscal year and other future projections in thiscreating new IP.

report are based on information available to the Group at the time theyIn the fiscal year ending March 31, 2020, in light of the progress

were made and are therefore subject to various risks and uncertainties.
Actual results therefore may differ materially from projections due tocontinue to push forward implementation of main strategies of thea variety of factors. Major factors that could influence results include

Mid-term Plan. As part of the initiatives to be implemented acrosschanges in the Company and the Group’s operating environment,

the Units, we will strengthen our capability for new IP creation andmarket trends, and exchange rate fluctuations.

cultivation in various ways including creation of product and serviceoriginated IP and visual product-originated IP, utilization of aninternal idea posting system, collaboration with partner companies,

FINANCIAL SECTION

made during the fiscal year ended March 31, 2019, the Group will

and making strategic investments. The Group also plans to pushforward cross-Unit initiatives in preparation for a full-scale businessexpansion in the Chinese market. In the Toys and Hobby Unit, we
will maintain and expand our domestic market share whilestrengthening the roll-out of products for the mature fan base inJapan and overseas. In the Network Entertainment Unit, we willfurther accelerate the worldwide roll-out of network content andhome video games, and also strengthen initiatives for creating newentertainment. In the Real Entertainment Unit, we will strengthen
our capability of providing venues, services and content leveraging
unique strength of the Group. In the Visual and Music Production
Unit, we will promote the IP expansion with visuals, music and live
performance integrated. In the IP Creation Unit, we will strengthen
new IP creation through collaboration among Units over respective
products and services.
We will strengthen the foundation for growth under the Mid-term
Plan by implementing these initiatives. In light of the above considerations, the consolidated projections of the fiscal year ending
March 31, 2020 are as follows: net sales of ¥720,000 million(year-on-year decrease of 1.7%), operating profit of ¥70,000 million(year-on-year decrease of 16.7%), and profit attributable to ownersof parent of ¥50,000 million (year-on-year decrease of 21.1%).

75

CONSOLIDATED BALANCE SHEETSBANDAI NAMCO Holdings Inc. and Consolidated Subsidiaries
As of March 31, 2018 and 2019

Millions of yen

Thousands of
U.S. dollars (note 3)

2018

2019

2019

¥ 185,517¥ 213,851$ 1,926,764

Trade receivables (notes 6 and 12)

88,061

93,083

838,665

Allowance for doubtful receivables(1,172)(890)(8,024)Inventories (note 7)

55,68265,070586,275

Other current assets (notes 4, 5 and 12)

22,52926,836

241,794

350,618

397,951

3,585,474

56,49574,023666,942

117

147

1,325

Deferred tax assets (note 13)

22,246

24,819223,615

Other investments and assets (notes 8 and 22)

16,827

16,941

152,640

Allowance for doubtful receivables(1,394)(366)(3,306)

94,292

115,564

1,041,217

Buildings and structures (note 8)

30,122

31,152

280,676

Amusement facilities and machines (note 8)

63,00872,882656,657

Land (note 8)

43,42042,677384,515

Other property, plant and equipment (note 8)

118,868

106,660

960,992

255,418

253,372

2,282,841(169,314)(165,778)(1,493,636)

86,10487,593

789,204

9,475

11,845

106,722¥ 540,490¥ 612,955$ 5,522,620

AssetsCurrent assets:
Cash and time deposits (notes 4, 12 and 22)

Total current assets

Investments and other assets:
Investment securities (notes 5 and 12)
Net defined benefit asset (note 11)

Total investments and other assets

Property, plant and equipment:

Total
Less accumulated depreciation
Net property, plant and equipment

Intangible assets:
Total intangible assets (note 8)
Total assets
See accompanying Notes to Consolidated Financial Statements.

76Millions of yen

Thousands of
U.S. dollars (note 3)

2018

2019

2019

Trade payables (notes 10 and 12)¥ 69,555¥ 74,804$ 673,979

Accrued income taxes (note 12)

8,597

17,495

157,633

Other current liabilities (note 9)

58,04971,593645,041

136,202

163,893

1,476,654

Net defined benefit liability (note 11)

8,485

10,38393,551

Deferred tax liabilities (note 13)

1,648

2,453

22,109Other long-term liabilities (note 9)

6,798

6,580

59,288

Total long-term liabilities

16,933

19,417

174,949

Total liabilities

153,135

183,311

1,651,603

10,00010,00090,098

Capital surplus

52,19652,308471,291

Retained earnings (note 17)334,264

369,315

3,327,467(2,326)(2,298)(20,705)

394,133

429,326

3,868,150

11,69620,190181,915

Deferred gains or losses on hedges, net of tax

(300)

5

52

Revaluation reserve for land, net of tax (note 18)(5,887)(5,920)(53,345)

Foreign currency translation adjustments(8,330)(8,864)(79,870)

Remeasurements of defined benefit plans, net of tax (note 11)(4,756)(5,705)(51,402)(7,577)(294)(2,651)

797

612

5,518

Total net assets

387,354429,644

3,871,016

Total liabilities and net assets¥540,490¥612,955$5,522,620

Liabilities and net assets
Current liabilities:

Total current liabilities

Long-term liabilities:

FINANCIAL SECTION

Net assets:
Shareholders’ equity:
Common stock (note 19)
Authorized: 1,000,000,000 shares
Issued: 222,000,000 shares

Treasury stock, at cost; 2,239,901 shares in 2018 and 2,209,402 shares in 2019 (note 19)
Subtotal
Accumulated other comprehensive income (note 15):
Valuation difference on available-for-sale securities, net of tax (note 5)

Subtotal
Non-controlling interests

77

CONSOLIDATED STATEMENTS OF INCOME ANDCONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
BANDAI NAMCO Holdings Inc. and Consolidated Subsidiaries
Years Ended March 31, 2018 and 2019

Consolidated Statements of Income
Millions of yen

Thousands of
U.S. dollars (note 3)

2018

2019

2019

Net sales¥678,312¥732,347$6,598,317

Cost of sales

436,730

469,791

4,232,740

241,581262,555

2,365,576

166,557

178,510

1,608,343

75,024

84,045757,233

Interest and dividend income

603

1,121

10,101

Interest expense

(37)

(36)

(329)

1

226

2,038

Gross profit
Selling, general and administrative expenses (note 14)
Operating profit
Other income (loss):

Gain (loss) on sales of investment securities, net
Loss on valuation of investment securities

(52)

(11)

(103)

Gain (loss) on sales and disposal of fixed assets, net

(734)

1,753

15,798(1,463)(954)(8,596)

(844)

694

6,256

(2,526)

2,793

25,165

Profit before income taxes

72,497

86,838782,398

Income taxes (note 13)

18,60924,205

218,089

Profit53,88862,632564,309

(220)

(751)

(6,768)¥ 54,109¥ 63,383$ 571,077

Yen

U.S. dollars (note 3)

2018

2019

2019

¥1,758.99¥1,952.00$17.59Basic

246.29288.402.60

Diluted246.23——123.00145.001.31

Millions of yen

Thousands of
U.S. dollars (note 3)

Loss on impairment of fixed assets (note 8)
Other

Loss attributable to non-controlling interests
Profit attributable to owners of parent

Per share data (note 16):
Net assets at March 31
Earnings per share:

Cash dividends applicable to period (note 17)
See accompanying Notes to Consolidated Financial Statements.

Consolidated Statements of Comprehensive Income
2018

2019

2019

¥53,888¥62,632$564,309

Valuation difference on available-for-sale securities, net of tax (note 5)

3,611

8,685

78,252

Deferred gains or losses on hedges, net of tax

(509)

305

2,751

Foreign currency translation adjustments

395

(531)

(4,786)(1,560)(948)(8,548)

199

(190)

(1,718)

ProfitOther comprehensive income (note 15):

Remeasurements of defined benefit plans, net of tax (note 11)
Share of other comprehensive income of associates accounted forusing equity method
Total other comprehensive income
Comprehensive income

2,136

7,319

65,950¥56,024¥69,952$630,259¥56,245¥70,700$636,998

(220)

(747)

(6,738)Comprehensive income attributable to:
Owners of parent
Non-controlling interests
See accompanying Notes to Consolidated Financial Statements.

78

CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETSBANDAI NAMCO Holdings Inc. and Consolidated Subsidiaries
Years Ended March 31, 2018 and 2019Year ended March 31, 2018
Millions of yen
Shareholders’ equity

Balance at beginningof yearCommonstock(note 19)

CapitalsurplusRetainedearnings(note 17)

¥10,000¥52,064¥297,984

Accumulated other comprehensive income

Treasurystock(note 19)¥(2,423)

Total
shareholders’equityValuationdifference on
availablefor-salesecurities,
net of tax(notes 5
and 15)

Deferred
gains orlosses onhedges,net of tax(note 15)

Revaluation
reserve forland,
net of tax(note 18)

¥357,626¥ 7,884¥ 210¥(5,693)

ForeignTotal
currency Remeasurements accumulatedtranslation of defined benefit
otheradjustments plans, net of tax comprehen(notes 11 and 15) sive income(note 15)¥(8,725)¥(3,195)¥(9,519)

Subscription
Nonrights to controllingsharesinterests

¥ 99

¥577

Total net
assets atend of year

¥348,784

Cash dividends(18,023)(18,023)(18,023)

Profit attributable toowners of parent

54,10954,10954,109Change on scope of
consolidation

(0)

(0)

(0)

Change on scope of
consolidation - foreign
currency translation
adjustment(7)

Purchase of treasury stock
Disposal of treasury stock

131

(4)

100

232

232

0

0

0

193

¥10,000¥52,196¥334,264¥(2,326)¥394,133

(193)

—

(193)

3,811

(510)

—

403

(1,560)

2,144

(99)

220

2,264

¥11,696¥(300)¥(5,887)¥(8,330)¥(4,756)¥(7,577)

¥ —

¥797

¥387,354

Year ended March 31, 2019

FINANCIAL SECTION193

Net changes of items
other than shareholders’equityBalance at end of year

(7)

(4)

Changes in treasury stock
accompanying changes
to holdings in companies
to which the equity
method is applied
Reversal of revaluation
reserve for land

(7)

(4)

Millions of yen
Shareholders’ equity

Commonstock(note 19)

Balance at beginningof yearAccumulated other comprehensive income

CapitalsurplusRetainedearnings(note 17)

Treasurystock(note 19)

¥10,000 ¥52,196¥334,264¥(2,326)

Cash dividends(28,366)

Profit attributable toowners of parent

63,383Purchase of treasury stock
112

Disposal of treasury stock

Deferred
gains orlosses onhedges,net of tax(note 15)

Revaluation
reserve forland,
net of tax(note 18)

¥394,133¥11,696¥(300)¥(5,887)¥(7,577)

¥—

¥ 797

¥387,354(28,366)

63,38363,383
(5)

33

145

145

0

0

0

33

(33)

8,494
¥369,315¥(4,756)

Total net
assets atend of year

(5)

33

¥10,000 ¥52,308¥(8,330)

Subscription
Nonrights to controllingsharesinterests(28,366)

Net changes of items
other than shareholders’equityBalance at end of year

ForeignTotal
currency Remeasurements accumulatedtranslation of defined benefit
otheradjustments plans, net of tax comprehen(notes 11 and 15) sive income(note 15)

(5)

Changes in treasury stock
accompanying changes
to holdings in companies
to which the equity
method is applied
Reversal of revaluation
reserve for land

Total
shareholders’equityValuationdifference on
availablefor-salesecurities,
net of tax(notes 5
and 15)¥(2,298)

¥

—

(33)

305

—

(534)

(948)

7,316

—

(185)

7,131

5

¥(5,920)¥(8,864)¥(5,705)¥ (294)¥—¥ 612¥429,644¥429,326¥20,190

Treasurystock(note 19)

Total
shareholders’equityValuationdifference on
availablefor-salesecurities,
net of tax(notes 5
and 15)

Deferred
gains orlosses onhedges,net of tax(note 15)

Revaluation
reserve forland,
net of tax(note 18)$(20,961)$3,551,074$105,385$(2,704)$(53,041)

Year ended March 31, 2019
Thousands of U.S. dollars (note 3)
Shareholders’ equity

Commonstock(note 19)

Balance at beginningof yearCapitalsurplusRetainedearnings(note 17)

$90,098 $470,278 $3,011,659

Cash dividends(255,573)

Profit attributable toowners of parent

571,077

Purchase of treasury stock
Disposal of treasury stock

1,012

Accumulated other comprehensive income$(68,268)$—$ 7,189$3,489,995(255,573)

571,077

571,077

(45)

(45)

300

1,313

1,313

0

0

0

304

304

(304)

76,529$90,098 $471,291 $3,327,467$(42,853)

Total net
assets atend of year

(255,573)

Net changes of items
other than shareholders’equityBalance at end of year$(75,053)

Subscription
Nonrights to controllingsharesinterests(45)

Changes in treasury stock
accompanying changes
to holdings in companies
to which the equity
method is applied
Reversal of revaluation
reserve for land

ForeignTotal
currency Remeasurements accumulatedtranslation of defined benefit
otheradjustments plans, net of tax comprehen(notes 11 and 15) sive income(note 15)$(20,705)$3,868,150$181,915

$

—

(304)

2,756

—

(4,817)(8,548)65,920—(1,671)64,24952$(53,345)$(79,870)$(51,402)$ (2,651)$—$ 5,518$3,871,016

See accompanying Notes to Consolidated Financial Statements.

79

CONSOLIDATED STATEMENTS OF CASH FLOWSBANDAI NAMCO Holdings Inc. and Consolidated Subsidiaries
Years Ended March 31, 2018 and 2019

Millions of yen

Thousands of
U.S. dollars (note 3)

2018

2019

2019

¥ 72,497¥ 86,838$ 782,398

Depreciation and amortization

23,545

21,370

192,546

Loss on impairment of fixed assets

1,463

954

8,596

Loss (gain) on sales and disposal of fixed assets, net

734(1,753)(15,798)

Loss on disposal of amusement facilities and machines

533

161

1,456

(1)

(226)

(2,038)Cash flows from operating activities:
Profit before income taxes

Loss (gain) on sales of investment securities, net
Decrease (increase) in trade receivables(13,048)(4,965)(44,740)

Decrease (increase) in inventories(9,008)(7,689)(69,283)

Acquisition of amusement facilities and machines(7,349)(10,187)(91,791)

Increase (decrease) in trade payables

5,412

5,270

47,484

Increase (decrease) in other current liabilities

3,280

13,593

122,471

Other(3,783)(3,419)(30,811)74,27599,945

900,489

Interest and dividends received

610

1,088

9,808

Interest paid

(37)

(36)

(329)

(19,709)(21,186)(190,884)

55,13879,811

719,083

Subtotal

Income taxes paid
Net cash provided by operating activities
Cash flows from investing activities:
Decrease (increase) in time deposits, net(3,940)(3,027)(27,276)

Purchases of property, plant and equipment(42,850)(10,093)(90,943)

601

2,980

26,850Purchases of intangible assets(5,392)(5,247)(47,283)

Purchases of investment securities(14,188)

Sales of property, plant and equipment(11,461)(1,574)

Sales of investment securities

53

347

3,129

Purchases of shares of subsidiaries and associates
Proceeds from purchases of shares of subsidiaries resulting in change
in scope of consolidation (note 4)
Payment for acquisition of businesses(80)(4,018)(36,208)

385

—

—

—

(1,991)(17,940)

Payments of loans receivable(2,273)(1,385)(12,478)

Collection of loans receivable

2,727

892

8,037

Payments of guarantee money deposited(1,703)(2,135)(19,244)

Collection of guarantee money deposited

633

541

4,880

Other

(36)

(185)

(1,669)(63,338)(24,899)(224,335)

Net cash used in investing activities
Cash flows from financing activities:

5

94

849

Proceeds from long-term loans payable

790

639

5,757

Repayments of long-term loans payable(217)(1,266)(11,413)

Repayments of lease obligations

(77)

(67)

(607)
(45)

Net increase (decrease) in short-term loans payable

Decrease (increase) in treasury stock, net

(4)

(5)

441

—

—

(18,023)(28,366)(255,573)(17,086)(28,972)(261,034)

351

(501)

(4,518)Net increase (decrease) in cash and cash equivalents(24,935)

25,438229,195

Cash and cash equivalents at beginning of year

205,667

180,831

1,629,263

99

—

—

¥180,831¥206,270$1,858,458

Proceeds from share issuance to non-controlling shareholders
Cash dividends paid
Net cash used in financing activities
Effect of exchange rate changes on cash and cash equivalents

Increase in cash and cash equivalents from newly consolidated subsidiary
Cash and cash equivalents at end of year (note 4)
See accompanying Notes to Consolidated Financial Statements.

80

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
BANDAI NAMCO Holdings Inc. and Consolidated Subsidiaries

1 Basis of Presentation
BANDAI NAMCO Holdings Inc. (“the Company”) and its consolidated

GAAP and filed with the appropriate Local Finance Bureau of thesubsidiaries have prepared their financial statements in accordance

Ministry of Finance as required by the Financial Instruments andwith the provisions set forth in the Japanese Financial Instruments

Exchange Act.

and Exchange Act and its related accounting regulations, and inSome supplementary information included in the statutory

conformity with accounting principles generally accepted in Japan

Japanese-language consolidated financial statements that is not(Japanese GAAP), which are different in certain respects as to applica-

required for fair presentation is not presented in the accompanying

tion and disclosure requirements of International Financial Reporting

consolidated financial statements.

Standards (IFRSs).

In preparing the accompanying consolidated financial statements,

The accounts of foreign subsidiaries are based on their accounting

certain reclassifications have been made to the consolidated financial

records maintained principally in conformity with IFRSs or accounting

statements issued in Japan in order to present them in a form that isprinciples generally accepted in the United States (U.S. GAAP).

more useful to readers outside Japan.

The accompanying consolidated financial statements have been

Certain reclassifications have been made to the prior year’s

prepared and translated into English from the consolidated financial

consolidated financial statements to conform to the presentation

statements of the Company prepared in accordance with Japanese

used for the fiscal year ended March 31, 2019.

(a) Principles of Consolidation(d) Accounting Standards for Income and Expenses

The accompanying consolidated financial statements include

Video Game Software Revenue Recognition:

the accounts of the Company and its significant subsidiaries. Consolida-

Consolidated subsidiaries operating in the United States recognize

tion of the remaining subsidiaries would have had no material effect onrevenue in accordance with “Software Revenue Recognition” of

the accompanying consolidated financial statements. Investments in

Financial Accounting Standards Board (FASB) Accounting Standards

significant affiliates are accounted for using the equity method.

Codification No. 985-605, treating video game software with online

Investments in unconsolidated subsidiaries and certain affiliates

functions as software products with multiple-element arrangements.

other than those accounted for using the equity method are stated

Recording of revenue attributable to video game software is deferred

at cost. If the equity method had been applied to the investments in

until the undelivered elements are recognized as delivered.

FINANCIAL SECTION

2 Summary of Significant Accounting Policies

these companies, there would have been no material effect on theaccompanying consolidated financial statements.
All significant inter-company accounts and transactions have been
eliminated in consolidation.

Accounting for Video Game Software Production Expenses:
A distinctive characteristic of video game software is the process
through which the software is highly integrated with content thatcannot be separated into identifiable components.

(b) Cash and Cash Equivalents

The content is considered to be an important component of each

In reporting cash flows, the Company considers cash on hand,video game title, which includes the game content and visual/music

demand deposits, and all highly liquid investments with originaldata. Once management makes a decision to go forward in distrib-

maturities of three months or less to be cash and cash equivalents.

uting a title, the Company records the software and content development costs as inventories.

(c) Foreign Currency Translation
Foreign currency transactions are translated into yen at rates in effect

The capitalized production costs are amortized to cost of sales
based on projected sales volumes.

at the dates they are transacted, and the gains or losses arising fromthe settlement of the related receivables or payables are included in(e) Marketable Securities and Investment Securities“Other income (loss)” in the consolidated statements of income.

Available-for-sale securities with market quotations are principally

Receivables and payables denominated in foreign currencies at

carried at fair value. The difference, net of tax, between the acquisition

the balance sheet date are translated at the rates in effect as of thecost and the carrying amount of available-for-sale securities withbalance sheet date and the unrealized gains or losses are included

market quotations is recognized in “Valuation difference on available-

in “Other income (loss)” in the consolidated statements of income.

for-sale securities, net of tax” in “Net assets” in the consolidated

The assets and liabilities of foreign consolidated subsidiaries andbalance sheets until realized. Available-for-sale securities without

affiliates are translated into yen at the rates of exchange in effect at

market quotations are principally carried at cost. The cost of available-

the balance sheet date. Revenue and expenses of foreign consoli-

for-sale securities sold is principally computed based on the moving-

dated subsidiaries and affiliates are translated into yen at the average

average method. Investments in investment limited partnerships or

rates of exchange during the fiscal year. Gains and losses, resulting

similar associations (investments that are deemed to be securities

from the translation of foreign currency financial statements areunder the Financial Instruments and Exchange Act, Article 2, Clausegenerally excluded from the consolidated statements of income and2) are carried at the net amount proportionate to the Company’s

are included in “Foreign currency translation adjustments” in “Netownership interests, based on the most recent financial statements

assets” in the consolidated balance sheets.

available in accordance with the financial reporting date specified
in the partnership agreement.

81

(f) Allowance for Doubtful Receivables(k) Leased Assets

The allowance for doubtful receivables is provided for possible losses

Depreciation of leased assets is computed by the straight-line

on unrecoverable receivables. For ordinary receivables, the amount ofmethod over the period of the lease with a residual value of zero.

the allowance is based on the historical rate of loss. For receivablesfrom debtors at risk of bankruptcy and receivables from debtors in(l) Derivatives and Hedging Activities

bankruptcy or under reorganization, the amount of the allowance is

The Company and its consolidated subsidiaries use derivative instru-

based on individually estimated unrecoverable amounts.

ments, such as forward foreign exchange contracts and currency(g) Inventories

in foreign exchange rates and interest rates. The Company and its

Domestic Consolidated Subsidiaries:

consolidated subsidiaries use these derivative instruments solely for

Generally, inventories are stated at cost determined by the average-

the purpose of reducing the risks resulting from such fluctuations tocost method. The value stated in the consolidated balance sheets

which they are exposed in the course of their ordinary businessis calculated by writing down the carrying amount based on

activities. Accordingly, the Company and its consolidated subsidiaries

declining profitability.

do not use derivative instruments or other financial instruments for

option contracts, to reduce market risks arising from fluctuations

speculative purposes.
Foreign Consolidated Subsidiaries:

The Company and its consolidated subsidiaries’ counterparties for

Generally, inventories are stated at the lower of cost, determined

derivative instruments are all highly creditworthy financial institutions

principally by the average-cost method, or net realizable value.

and, therefore, the Company believes that it is exposed to almost
no counterparty risk. Derivative transactions are conducted in

Both domestic and foreign consolidated subsidiaries state gamesoftware work in process by the specific-cost method. The value
stated in the consolidated balance sheets is calculated by writing
down the carrying amount based on declining profitability.

accordance with internal rules that specify transaction authority
and transaction amount limits.
As a general rule, derivative instruments are stated at fair value.
For derivative instruments that meet the criteria for hedge
accounting, recognition of unrealized gains or losses is deferred.

(h) Income Taxes

In cases where forward foreign exchange contracts meet certain

Current income taxes are accounted for based on income. Deferredhedging criteria, the hedged receivables and payables are translated

income taxes are accounted for under the asset and liability method.

at the corresponding forward foreign exchange contract rate (theDeferred tax assets and liabilities are recognized for future tax conse-“Allocation Method”).

quences attributable to differences between the financial statement

The Company and its consolidated subsidiaries assess the effec-

carrying amounts of existing assets and liabilities and their respective

tiveness of hedging transactions from the start of the transaction

tax bases and operating loss and tax credit carryforwards. Deferred tax

to the point at which effectiveness is assessed by comparing theassets and liabilities are measured using enacted tax rates expected tocumulative changes in the fair value or the cumulative changes inapply to taxable income in the years in which those temporary differ-the cash flows of the hedged item with the cumulative changes in theences are expected to be recovered or settled. The effect on deferredfair value or the cumulative changes in the cash flows of the hedging

tax assets and liabilities of a change in the tax rate is recognized in

instrument. In the event that critical terms are the same for theincome in the period that includes the date enacted by the Diet.

hedging instrument and the hedged assets, liabilities, or scheduled

The Company and some of its domestic consolidated subsidiaries

transaction, it is assumed that the hedge is 100% effective, so thehave applied the consolidated taxation system.

assessment of effectiveness is not performed.

(i) Property, Plant and Equipment

is no longer applied and the recognition of the gains or losses on the

The Company and Its Domestic Consolidated Subsidiaries:

hedge transaction is no longer deferred.

In the event that a hedge becomes ineffective, hedge accounting

Depreciation of property, plant and equipment is principally computedby the declining-balance method based on estimated useful lives.

(m) Retirement and Severance Benefits

The straight-line method is used for buildings (except for building

The Company and certain domestic consolidated subsidiaries havefixtures) acquired since April 1, 1998. The estimated useful lives forestablished a defined benefit corporate pension plan, a defined

Buildings and structures and Amusement facilities and machines are

benefit retirement lump-sum benefit system plan, and a defined

3–50 years and 3–15 years, respectively.

contribution pension plan. Retirement benefits trusts have been
established for certain defined benefit corporate pension plans.

Foreign Consolidated Subsidiaries:

Other domestic consolidated subsidiaries (excluding domestic

Depreciation of property, plant and equipment is principally computed

consolidated subsidiaries with no retirement benefit system) haveby the straight-line method based on estimated useful lives. The

established a defined benefit corporate pension plan and a defined

estimated useful lives for Buildings and structures and Amusement

benefit retirement lump-sum benefit system. Certain consolidated

facilities and machines are 5–50 years and 3–7 years, respectively.

subsidiaries have established a defined contribution pension plan
and a defined contribution smaller corporate retirement allowance(j) Intangible Assets

mutual aid system. Certain foreign consolidated subsidiaries haveAmortization of intangible assets is computed by the straight-line

established defined benefit pension plans, retirement lump-sum

method based on estimated useful lives. Software for internal use isbenefit systems, and defined contribution pension plans. Moreover,amortized over 1–5 years.

additional benefits may be paid at retirement.

Goodwill is amortized over 5 years using the straight-line method.

82

In calculating the retirement benefit obligations, the benefit
formula basis is principally used to attribute expected benefit
payments to the period extending up to the end of the current fiscal(2) Planned date of application
Application will start from the fiscal year ending March 31, 2022.
(3) Impact of the application of the standard and guidance

year. Prior service costs are amortized from the time they are incurred

The impact on the consolidated financial statements resulting

by the straight-line method for a certain number of years (10 years)

from the application of the “Accounting Standard for Revenue

within employees’ average remaining years of service. Actuarial gains

Recognition,” etc., is currently under evaluation.

or losses are amortized from the consolidated fiscal year following
the year in which the gain or loss is incurred by the straight-line

Foreign Consolidated Subsidiaries:

method for a certain number of years (9–19 years) not longer than

• ASU 2014-09 “Revenue from Contracts with Customers”

employees’ average remaining years of service. The Company and(1) Overview

certain consolidated subsidiaries use a simplified method in calcu-

Under this accounting standard, at the point when a company

lating net defined benefit asset, net defined benefit liability, andtransfers promised goods or services to the customer, theperiodic pension cost under which retirement benefit obligations

company should recognize revenue in an amount that reflects theare principally based on accrued benefits at the end of the year.

consideration to which the company is entitled in exchange for the
goods or services.

(n) Appropriation of Retained Earnings
Retained earnings with respect to a given financial period are appro-

Application will start from the fiscal year ending March 31, 2020.
(3) Impact of the application of the guidance

held subsequent to the close of such financial period. The accounts

At the beginning of the next fiscal year, retained earnings increase

for that period do not, therefore, reflect such appropriations.

¥936 million.

(o) Per Share Data

• IFRS 16 “Leases” and ASU 2016-02 “Leases”

In computing basic earnings per share, the average number of shares(1) Overview

outstanding during each year has been used. Diluted earnings per

Under these accounting standards, in principle, lessees areshare assumes the dilution that could occur if securities or otherrequired to record assets or liabilities for all leases on the balance

contracts to issue common stock were exercised or converted into
common stock, or resulted in issuance of common stock.
Cash dividends per common share are computed based on
dividends declared with respect to the income for the year.

FINANCIAL SECTION

priated by resolution of the shareholders at a general meeting to be(2) Planned date of application

sheet. There are no significant changes in lessor accounting.
(2) Planned date of application
IFRS 16 will be applied from the fiscal year ending March 31, 2020,
and ASU 2016-02 will be applied from the fiscal year ending
March 31, 2021.

(p) New Accounting Standards Not Yet Applied(3) Impact of the application of the standards

The Company and Its Domestic Consolidated Subsidiaries:

At the beginning of the next fiscal year, total assets increase• “Accounting Standard for Revenue Recognition” (ASBJ Statement¥3,815 million, total liabilities increase ¥3,803 million, and retained

No. 29; March 30, 2018; Accounting Standards Board of Japan)

earnings increase ¥12 million.

• “Implementation Guidance on Accounting Standard for Revenue
Recognition” (ASBJ Guidance No. 30; March 30, 2018; Accounting(q) Changes in Presentation Method

Standards Board of Japan)

Changes due to adoption of “Partial Amendments to Accounting(1) Overview

Standard for Tax Effect Accounting”

The International Accounting Standards Board (IASB) and the U.S.

Upon application of “Partial Amendments to Accounting Standard for

Financial Accounting Standards Board (FASB) jointly developed

Tax Effect Accounting” (ASBJ Statement No. 28, February 16, 2018

comprehensive accounting standards related to revenue recogni-(hereinafter, “Statement No. 28”)) from the beginning of this fiscal

tion. In May 2014, “Revenue from Contracts with Customers” (IASB

year, the Company and its consolidated subsidiaries changed the

IFRS 15 and FASB Topic 606) were published. IFRS 15 is to bepresentation and related notes of deferred tax assets and deferred tax

applied from fiscal years starting on or after January 1, 2018, andliabilities, such that deferred tax assets and deferred tax liabilities are

Topic 606 is to be applied from fiscal years starting afterclassified as part of investments and other assets and long-term

December 15, 2017. Accordingly, the Accounting Standards Board

liabilities, respectively.

of Japan has developed comprehensive accounting standards

As a result, deferred tax assets of ¥8,995 million classified as

related to revenue recognition, which have been published incurrent assets have been included in deferred tax assets ¥22,246

conjunction with implementation guidance.

million in investments and other assets, and deferred tax liabilities ofFrom the viewpoint of comparability among financial statements,¥70 million classified as current liabilities have been included inwhich is one of the benefits of ensuring consistency with IFRS 15,

deferred tax liabilities ¥1,648 million classified as long-term liabilities

the basic policy of the Accounting Standards Board of Japan inin the balance sheet as of the end of the previous fiscal year.

regard to the development of accounting standards related to

The notes related to tax effect accounting additionally included

revenue recognition is to determine the accounting standards by

those described in notes 8 (excluding total amount of valuation allow-

starting with the incorporation of the basic principles of IFRS 15.

ance) and 9 of “Accounting Standard for Tax Effect Accounting”, which

Furthermore, if there are items that should be taken into accountare required in paragraphs 3 to 5 of Statement No. 28. However, thisregarding practices, etc., that have been implemented to date inadditional information corresponding to the previous fiscal year is not

Japan, then alternative accounting treatments are added, given

disclosed, in accordance with the transitional treatments prescribedthat this addition will not cause a loss of comparability.

in paragraph 7 of Statement No. 28.

83

3 Financial Statement Translation
The consolidated financial statements are expressed in yen. However, solely for the convenience of the reader, the consolidated financial statements as of and for the fiscal year ended March 31, 2019 have been translated into U.S. dollars at the rate of ¥110.99=U.S.$1, the approximate
exchange rate on the Tokyo Foreign Exchange Market on March 31, 2019.
This translation should not be construed as an indication that the amounts shown could be converted into U.S. dollars at such rate.

4 Cash and Cash Equivalents
Reconciliations of cash and cash equivalents as of March 31, 2018 and 2019 between the amounts shown in the consolidated balance sheets andthe consolidated statements of cash flows are as follows:
Millions of yen

Cash and time deposits

2018

2019

2019

¥185,517¥213,851$1,926,764

773

738

6,655

Marketable securities included in other current assets under current assets
Time deposits with maturities in excess of three months
Cash and cash equivalents

Thousands of
U.S. dollars(5,458)(8,319)(74,961)¥180,831¥206,270$1,858,458

The breakdowns of major assets and liabilities of companies that newly became consolidated subsidiaries due to the acquisition of sharesare as follows:
Fiscal year ended March 31, 2018
As of the start of consolidation of Actas Inc. due to the acquisition of shares, the breakdown of major assets and liabilities and the relationshipbetween the acquisition cost of the shares of Actas Inc. and the net proceeds from the acquisition were as follows:
Current assets¥562 million

Fixed assets¥ 31 million

Goodwill¥ 75 million

Current liabilities–¥599 million

Long-term liabilities–¥ 40 million

Acquisition cost of the shares of Actas Inc.

¥ 30 million

Actas Inc.’s cash and cash equivalents–¥415 million

Net proceeds from acquisition of Actas Inc.

–¥385 million

Fiscal year ended March 31, 2019
None

84

5 Marketable Securities and Investment Securities
Marketable securities and investment securities as of March 31, 2018 and 2019 are summarized as follows:
Thousands of
U.S. dollars

Millions of yen

2018

2019

2019

¥38,249¥52,231$470,597

Securities without market quotations

2,829

2,815

25,370Investments in non-consolidated subsidiaries and affiliated companies

15,792

19,314

174,022

397

400

3,607

¥57,268¥74,762$673,597

Securities with market quotations

Contributions to investment partnerships
Total

The original cost, carrying amount (fair value), and gross unrealized gain (loss) for securities with market quotations as of March 31, 2018 and2019 are summarized as follows:
Millions of yen

2018
Gross unrealized Gross unrealized Carrying amount
Original cost
gain
loss
(fair value)

Equity securities
Other
Total

¥21,572¥16,622¥(719)¥37,476

773

—

—

773

¥22,345¥16,622¥(719)¥38,249

FINANCIAL SECTION

Securities with market quotations:

Millions of yen

2019
Gross unrealized Gross unrealized Carrying amount
Original cost
gain
loss
(fair value)

Securities with market quotations:
Equity securities
Other
Total

¥23,038¥29,084¥(630)¥51,492

738

—

—

738

¥23,777¥29,084¥(630)¥52,231

Thousands of U.S. dollars

2019
Gross unrealized Gross unrealized Carrying amount
Original cost
gain
loss
(fair value)

Securities with market quotations:
Equity securities
Other
Total

$207,575$262,047$(5,681)

6,655

—

—

6,655

$214,230$262,047$(5,681)$470,597$463,942

85

The following is a summary of the carrying amount of securities without market quotations as of March 31, 2018 and 2019:
Millions of yen

Thousands of
U.S. dollars

2018

2019

2019

Carrying amount

Carrying amount

Carrying amount¥2,829¥2,815$25,370¥2,829¥2,815$25,370

Securities without market quotations:
Unlisted securities
Total

Proceeds and gross realized gains and losses from the sales of securities in the fiscal years ended March 31, 2018 and 2019 are as follows:
Millions of yen

Equity securities

Thousands of
U.S. dollars

2018

2019

2019

¥34

¥305

$2,750

Other

19

—

—

Proceeds from the sales of securities

¥53

¥305

$2,750Gross realized gains from the sales of securities

1

231

2,085

Gross realized losses from the sales of securities

—

5

47

Millions of yen

Thousands of
U.S. dollars

6 Trade Receivables
Trade receivables as of March 31, 2018 and 2019 are summarized as follows:

Notes receivable
Accounts receivable–trade
Total

2018

2019

2019

¥ 3,324¥ 5,073$ 45,712

84,73788,009792,952¥88,061¥93,083$838,665

Millions of yen

Thousands of
U.S. dollars

7 Inventories
Inventories as of March 31, 2018 and 2019 are summarized as follows:

2018

2019

2019

Finished goods and merchandise¥14,780¥19,062$171,748

Work in process

37,68442,428382,271

Raw materials and supplies

3,216

3,580

32,255¥55,682¥65,070$586,275

Total

86

8 Loss on Impairment of Fixed Assets
For the Company and consolidated subsidiaries, evaluation of impairment is performed by grouping assets according to management accountingclassifications based on Units, excluding significant idle assets, assets scheduled for disposal, and assets for lease. In the amusement facility
operations of the Real Entertainment Business, the individual facility is the smallest unit used in management accounting and is the basic unit forevaluating impairment.
The carrying amounts of the following assets, which exclude reusable assets, were reduced to the recoverable amount. The reduction amounts
were recorded as loss on impairment in other income (loss).
Also, the Unit classifications have changed from this fiscal year. Accordingly, the previous fiscal year’s Strategic Business Unit classifications
have been reorganized to the Unit classifications of this fiscal year.
Millions of yen

2018

2019

56

¥ —

Other property, plant and equipment
Intangible assets
Intangible assets

281
26
49

—
—
—

—
—
—

Buildings and structures

81

—

—

Other property, plant and equipment
Intangible assets
Buildings and structures

7
0
62

—
—
—

—
—
—

Amusement facilities

Other property, plant and equipment
Land
Amusement facilities and machines

0
250
465

—
—
—

—
—
—

Minato-ku, Tokyo (note 2)
Nishinomiya City, Hyogo andothers (note 3)

Business assets
Amusement facilities

Intangible assets
Other investments and assets
Other property, plant and equipment
Amusement facilities and machines

4
14
14
98

—
—
—
—

—
—
—
—

Koto-ku, Tokyo (note 4)

Assets scheduled for
disposalAssets scheduled for
disposal

Other investments and assets
Other property, plant and equipment

0
39

—
—

—
—

Other property, plant and equipment

8

—

—

Intangible assets
Other property, plant and equipment

0
—

—
133

—
1,205

Buildings and structures

—

89

805

Other property, plant and equipment
Land

—
—

0
48

4
438

Buildings and structures

—

4

44

Business assets

Land
Intangible assets

—
—

0
44

6
404

Amusement facilities

Amusement facilities and machines

—

241

2,177

Toshima-ku, Tokyo and others(note 3)

Amusement facilities

Intangible assets
Other investments and assets
Amusement facilities and machines

—
—
—

0
35
109

7
320
990

Minato-ku, Tokyo and others(note 4)

Amusement facilities

Intangible assets
Amusement facilities and machines

—
—

10
23

90
210

Suginami-ku, Tokyo (note 3)
Shinagawa-ku, Tokyo andothers (note 4)

Business assets
Assets scheduled for
disposal

Intangible assets
Other investments and assets
Other property, plant and equipment

—
—
—

206
0
0

1,864
2
7

—
¥1,4631¥954

14$8,596

Location

Items

Classification

Toys and Hobby

Zhongshan, China andothers (note 1)

Business assets

Buildings and structures

Taito-ku, Tokyo (note 3)

Assets scheduled for
disposalAssets scheduled for
disposal

Sumida-ku, Tokyo (note 4)

Shimotsuga-gun,Tochigi (note 5)
Real Entertainment Toshima-ku, Tokyo andothers (note 1)

Assets scheduled for
disposal

Corporate(Common)Yokohama City, Kanagawa(note 4)

Toys and Hobby

Zhongshan, China andothers (note 1)
Musashino City, Tokyo andothers (note 3)

Assets scheduled for
disposalShimotsuga-gun, Tochigi(note 6)
Minami Uonuma City, Niigata(note 7)

Assets scheduled for
disposalAssets scheduled for
disposal

Network
Chiyoda-ku, Tokyo (note 1)
Entertainment
Real Entertainment Chiyoda-ku, Tokyo and others(note 1)

Total

Business assets

Intangible assets

¥

2019

$

—

FINANCIAL SECTION

Strategic business unit

IP Creation
Corporate(Common)Thousands
ofU.S. dollars

Notes: 1. Impairment loss was recorded because it was forecast that the carrying amount of these fixed assets could not be recovered due to the decline in business profitability. In addition,these assets were determined that the value in use was considered to be zero.
2. Impairment loss was recorded because it was forecast that the carrying amount of these fixed assets could not be recovered due to the decline in business profitability. The recoverable
amount was measured as the estimated value in use based on forecasted future cash flows, but these cash flows were not discounted because the expected period of use was short.
3. Impairment loss was recorded because it was judged that the recoverable amount of these fixed assets had decreased substantially due to the decision to close the facility. In addition,these assets were determined that the value in use was considered to be zero.
4. Impairment loss was recorded on these fixed assets for which no future use was anticipated. In addition, these assets were determined that the value in use was considered to be zero.
5. Impairment loss was recorded on these fixed assets for which no future use was anticipated. The recoverable amount of land was calculated based on net selling price, and evaluation
was based on roadside land prices. Other assets were determined that the value in use was considered to be zero.
6. Impairment loss was recorded on these fixed assets for which no future use was anticipated. The recoverable amount was calculated based on the net selling price, which wasevaluated based on property tax value.
7. A decision was made to dispose of this real estate, and accordingly impairment loss was recorded. The recoverable amount was calculated based on the net selling price,which was evaluated based on a reasonable estimated sales price.

87

9 Loans Payable and Lease Obligations
Loans payable and lease obligations as of March 31, 2018 and 2019 are summarized as follows:
Millions of yen

2019

2019

Carrying
amountWeighted averageinterest rate (%)

Carrying
amountWeighted averageinterest rate (%)

Carrying
amount2018

Short-term loans payable

Thousands of
U.S. dollars

¥ 405

0.29

¥500

0.31

$4,504Current portion of long-term loans payable

232

0.34

180

0.28

1,626

Current portion of lease obligations

51

14.39

50

11.17

451

Long-term loans payable (Less current portion)

715

0.59

138

0.25

1,251

Lease obligations (Less current portion)

65

7.16

39

6.41

356

¥1,468—¥909—$8,191Total

The aggregate annual maturities of long-term loans payable and lease obligations outstanding as of March 31, 2019 are as follows:
Millions of yen

Thousands of
U.S. dollars

2020

¥230

$2,078

2021

139

1,260

2022

37

337

2023

1

10

¥409

$3,687

Millions of yen

Thousands of
U.S. dollars

Years ending March 31

Total

10 Trade Payables
Trade payables as of March 31, 2018 and 2019 are summarized as follows:

Notes payable
Accounts payable–trade
Total

88

2018

2019

2019

¥12,403¥13,969$125,862

57,151

60,835548,117¥69,555¥74,804$673,979

11 Retirement and Severance Benefits
1. Defined benefit plans(a) For the fiscal years ended March 31, 2018 and 2019, the reconciliation of the beginning and ending balances of retirement benefit obligations is
as follows (excluding plans for which the simplified method is applied):
Millions of yen

Beginning balance of retirement benefit obligations
Service costThousands of
U.S. dollars

2018

2019

2019

¥22,399¥26,212$236,165

1,438

1,746

15,734

96

116

1,050

Actuarial gains or losses incurred

3,091

1,918

17,286Retirement benefits paid
Increase resulting from changes from the simplified method to theprinciple method
Effect of business combinations

(554)

(896)

(8,077)
1,862Interest costEnding balance of retirement benefit obligations

—

206

(260)

—

—

¥26,212¥29,303$264,022(excluding plans for which the simplified method is applied):
Millions of yen

Beginning balance of plan assets

Thousands of
U.S. dollars

2018

2019

2019

¥17,897¥19,144$172,487

Expected rate of return on assets

364

352

3,177

Actuarial gains or losses incurred

159

(211)

(1,901)

Contributions to plan from employer

1,488

1,546

13,933Retirement benefits paid

(552)

(514)

(4,633)

Effect of business combinations

(212)

—

—

¥19,144¥20,318$183,063

Ending balance of plan assets

FINANCIAL SECTION(b) For the fiscal years ended March 31, 2018 and 2019, the reconciliation of the beginning and ending balances of plan assets is as follows(c) For the fiscal years ended March 31, 2018 and 2019, the reconciliation of the beginning and ending balances of net defined benefit liability andnet defined benefit asset for plans using the simplified method is as follows:
Millions of yen

Beginning balance of net defined benefit liability and net defined benefit asset, net

Thousands of
U.S. dollars

2018

2019

2019

¥1,192¥1,300$11,719

Retirement benefit expenses

249

392

3,534

Retirement benefits paid

(63)

(131)

(1,184)Contributions to plan from employer

(139)

(160)

(1,444)

Decrease resulting from changes from the simplified method to theprinciple method

—

(148)

(1,340)Effect of business combinations

48

—

—

Other

13

(2)

(18)

¥1,300¥1,250$11,266

Ending balance of net defined benefit liability and net defined benefit asset, net

89

(d) As of March 31, 2018 and 2019, the reconciliation of the ending balances of retirement benefit obligations and plan assets with the net defined
benefit liability and net defined benefit asset recorded in the consolidated balance sheets is as follows:
Millions of yen

Thousands of
U.S. dollars

2018

2019

2019

Retirement benefit obligations of funded plans¥ 24,404¥ 25,711$ 231,655

Plan assets(20,875)(22,159)(199,650)

3,529

3,552

32,005Retirement benefit obligations of non-funded plans

4,838

6,683

60,220Net amount of liabilities and assets recorded on consolidated balance sheet

8,368

10,236

92,225Net defined benefit liability

8,485

10,38393,551

Net defined benefit asset

(117)

(147)

(1,325)¥ 8,368¥ 10,236$ 92,225

Millions of yen

Thousands of
U.S. dollars

2018

2019

2019

Service cost

¥1,438¥1,746$15,734

Interest cost

96

116

1,050

Expected rate of return on assets

(364)

(352)

(3,177)

Amortization of actuarial gains or losses

687

780

7,032

Net amount of liabilities and assets recorded on consolidated balance sheet(e) For the fiscal years ended March 31, 2018 and 2019, the breakdown of retirement benefit expenses is as follows:

Amortization of prior service costs

20

19

175

Retirement benefit expenses calculated using the simplified method

249

392

3,534

—

58

522

2,128

2,760

24,871

616

142

1,285

¥2,744¥2,903$26,157

Amortization resulting from changes from the simplified method to the principle method
Retirement benefit expenses related to defined benefit plans
Other (note)
Total retirement benefit expenses

Note: In the fiscal year ended March 31, 2018, the following extra retirement payments were recorded: ¥554 million in “Selling, general and administrative expenses” and ¥62 million in “Other
income (loss).” In the fiscal year ended March 31, 2019, the following extra retirement payments were recorded: ¥135 million ($1,219 thousand) in “Selling, general and administrative
expenses” and ¥7 million ($66 thousand) in “Other income (loss).”(f) For the fiscal years ended March 31, 2018 and 2019, the breakdown of items recorded in remeasurements of defined benefit plans (before tax
effect) is as follows:
Millions of yen

2019

2018

Prior service costs¥

Actuarial gains or losses
Total

20

Thousands of
U.S. dollars

¥

19

2019

$

175

(2,245)(1,349)(12,156)¥(2,224)¥(1,329)$(11,980)(g) As of March 31, 2018 and 2019, the breakdown of items recorded in cumulative remeasurements of defined benefit plans (before tax effect)
is as follows:
Millions of yen

2019

2018

Unrecognized prior service costs
Unrecognized actuarial gains or losses
Total

90

¥

(90)

Thousands of
U.S. dollars

¥

(70)

2019

$

(636)

(6,694)(8,044)(72,475)¥(6,784)¥(8,114)$(73,111)

(h) As of March 31, 2018 and 2019, the major categories of plan assets as a percentage of total plan assets are as follows:
Bonds

2018

2019

36%

35%

Equities

15

10Life insurance general account21

20

Cash and cash equivalents

21

29

Other

7

6

100%

100%

Total

Note: The total of plan assets includes 28% and 27% representing assets contributed to a retirement benefit trust for the corporate pension plan as of March 31, 2018 and 2019, respectively.

(i) For the fiscal years ended March 31, 2018 and 2019, the principal actuarial assumptions are as follows:
2019

2018

Discount rateLong-term expected rate of return on assets
Method of determining long-term expected rate of return on assets

0.10%~0.80%

0.00%~0.60%

2.04%~2.50%

1.82%~2.50%

To determine the long-term expected rate of returnon plan assets, reference was made to the current andcurrent and expected future long-term rate of returns
on the various assets that make up plan assets.

Salary increase rate

1.65%~5.44%

1.86%~5.58%

2. Defined contribution plans

FINANCIAL SECTION

expected future allocations of plan assets and to the

For the fiscal years ended March 31, 2018 and 2019, the required contributions to defined contributions plans for the Company and its consolidated
subsidiaries was as follows:
Millions of yen

Required contributions to defined contribution plans

Thousands of
U.S. dollars

2018

2019

2019

¥617

¥652

$5,87491

12 Financial Instruments
1. Financial instruments

in addition the Company and its consolidated subsidiaries track(1) Policy for financial instruments

market trends and, as necessary, utilize forward foreign exchange

The Company and its consolidated subsidiaries manage funds by means

contracts and currency option contracts for hedging.

of highly secure financial instruments only and procures funds

Trade payables and Accrued income taxes are exposed to liquidity

through borrowing from banks and other methods, such as issuingrisk. The Company and its consolidated subsidiaries manage this risk

corporate bonds.

through the formulation and revision of monthly funding plans for the

The Company and its consolidated subsidiaries utilize derivatives
to hedge the risks noted below and do not engage in speculativetransactions.

Company and its consolidated subsidiaries.
Derivative transactions are used for hedging purposes. With regard
to hedging methods and hedged items, hedging policies, andmethods of assessing the effectiveness of hedging transactions, for(2) Types of financial instruments and related risks

which hedge accounting is applied, please refer to Note “2 Summary

With regard to credit risk posed by customers with respect to tradeof Significant Accounting Policies—(l) Derivatives and Hedging

receivables, the Company and its consolidated subsidiaries manage

Activities.”balance by counterparty and due date, and credit information on

Derivative transactions are executed and managed according tomajor customers is updated at least once a year to minimize suchinternal rules that determine trading authority and limits on amounts

credit risk. The Company and its consolidated subsidiaries have a

traded. Derivatives are used in ways that minimize credit risk,

system for immediately sharing within the Company and its consoli-

and thus transactions are carried out only with highly creditworthy

dated subsidiaries adverse credit and other information regarding

financial institutions.

counterparties in the event that such information is received.
As of March 31, 2018 and 2019, designated large customers werecounterparties for 23.5% and 23.7% of trade receivables, respectively.

financial instruments

Receivables denominated in foreign currencies arising as a result of

The fair value of financial instruments includes, in addition to

the fact that the Company and its consolidated subsidiaries conduct

the value determined based on market prices, valuations calculated

business on a global basis are subject to foreign exchange rate

on a reasonable basis if no market price is available. However, as

fluctuation risk. The Company and its consolidated subsidiaries

certain variables are used for these calculations, the result of suchmanage balances by counterparty and currency, and in addition thecalculations may vary if different assumptions are used.

Company and its consolidated subsidiaries track market trends and,as necessary, utilize forward foreign exchange contracts for hedging.
Marketable securities and investment securities are principally theshares of companies with which the Company has a business relationship. These investments are exposed to the risk of fluctuations inmarket prices. The market price is confirmed at least once perquarter, and the holdings are reevaluated once per year with consideration of market conditions and relationships with counterparties.
All trade payables substantially have due dates within one year.
Certain trade payables are denominated in foreign currencies and are
exposed to the risk of fluctuations in foreign exchange rates. In thesame manner as receivables, the Company and its consolidated
subsidiaries manage balances by counterparty and currency,

92(3) Supplementary explanation on the fair value of

The contract amounts of derivative transactions in Note “21Foreign Exchange Risk Management and Interest Rate Risk
Management” should not be considered indicative of the market
risk associated with the derivative financial instruments.

2. Fair value of financial instruments
The carrying amounts of financial instruments as stated in the consolidated balance sheets, their fair values as of March 31, 2018 and 2019,
and the differences between carrying amounts and fair values are as stated below. This table does not include assets for which it was judged
extremely difficult to assess the fair value (Note 2 below).
Millions of yen

Carrying
amount(1) Cash and time
deposits

Fair value

Thousands of U.S. dollars

2019

2018
Difference

Carrying
amountFair value

Difference

¥

¥

2019
Carrying
amountFair value

Difference¥185,517¥185,517—¥213,851¥213,851—$1,926,764$1,926,764(2) Trade receivables(3) Marketable securities
and investment
securities

88,061

88,061—

93,08393,083—

838,665

838,665—

51,77657,077

5,301

68,562

71,446

2,884

617,733

643,720

25,986

Total assets¥325,355¥330,656¥5,301¥375,497¥378,381¥2,884$3,383,163$3,409,150$25,986(1) Trade payables¥ 69,555¥ 69,555¥—¥ 74,804¥ 74,804¥—$ 673,979$ 673,979

$

8,597

8,597

—

17,495

17,495—

157,633

157,633¥ 78,152¥ 78,152¥—¥ 92,300¥ 92,300¥—$ 831,612$ 831,612$—¥ (1,264) ¥ (1,264)

¥

—

¥

¥

¥

—

$

$

$

—

(2) Accrued income taxes

12

12

116

—

—
—

116

* Assets and liabilities derived from derivative transactions are stated on a net basis. Items for which the total is a net liability are shown in parentheses.
Notes: 1. Method for calculating the fair value of financial instruments and matters related to securities and derivative transactions
Assets(1) Cash and time deposits
Since these are readily convertible into cash, their fair value is almost identical with the book value, and thus these are stated at the book value.
(2) Trade receivables
Since trade receivables that are settled in a short period of time are readily convertible into cash, their fair value is almost identical with the book value, and thus these are stated at
the book value. For trade receivables that are settled after a long period of time, the fair values are measured based on the present values calculated by discounting receivableamounts classified by certain periods of time at a rate for which time to maturity and credit risk has been taken into account.
(3) Marketable securities and investment securities
Since the Money Management Fund is readily convertible into cash, its fair value is almost identical with the book value, and thus is stated at the book value. Stocks and others arestated at the price on the stock exchange or the price as presented by counterparty financial institutions and others. With regard to marketable securities and investment securities
by holding purpose, please refer to Note “5 Marketable Securities and Investment Securities.”

FINANCIAL SECTION

Total liabilities
Derivative financial
instruments*$

Liabilities(1) Trade payables, (2) Accrued income taxes
Since these are readily convertible into cash, their fair value is almost identical with the book value, and thus these are stated at the book value.
Derivative financial instruments
Please refer to Note “21 Foreign Exchange Risk Management and Interest Rate Risk Management.”
2. Financial instruments for which fair value is extremely difficult to determine
Millions of yen

Thousands of U.S. dollars

2018

2019

2019

Carrying amount

Carrying amount

Carrying amountUnlisted stocks¥2,829¥2,815$25,370

Stocks of affiliated companies (unlisted stocks)

2,264

2,984

26,885

397

400

3,607

Contributions to investment partnerships

As these instruments do not have readily available fair values, and their fair values are extremely difficult to determine, they are not included in “(3) Marketable securities andinvestment securities” in the table above.
3. Maturity analysis of financial assets
Millions of yen

2018
Withinone year

Cash and time
deposits
Trade receivables
Total

More than
one year,withinfive years

More than
five years,
withinten years

More thanten years

Withinone yearMore than
one year,withinfive years

More thanten years

Withinone yearMore than
one year,withinfive years

More thanten years

$—

—

¥—

¥—

¥210,477

—

¥—

¥—

$1,896,363

—

$—

1,546

—

—

91,662

1,420

—

—

825,866

12,798——¥269,015¥1,546¥—¥—¥302,140¥1,420¥—¥—$2,722,229$12,798

$—

$—

¥

$

2019

More than
five years,
withinten years

86,515¥182,500¥

Thousands of U.S. dollars

2019

More than
five years,
withinten years93

13 Income Taxes
The Company and its domestic consolidated subsidiaries are subject to Japanese corporate, inhabitant, and enterprise taxes based on income which,in the aggregate, resulted in a normal tax rate of 30.9% and 30.6% for the years ended March 31, 2018 and 2019, respectively.
Income tax expenses reflected in the accompanying consolidated statements of income for the fiscal years ended March 31, 2018 and 2019consist of the following:
Millions of yen

Income taxes–current
Income taxes–deferred
Total

Thousands of
U.S. dollars

2018

2019

2019

¥19,867¥29,566$266,391(1,258)(5,361)(48,302)¥18,609¥24,205$218,089

Reconciliation of the normal tax rate and the effective tax rate as a percentage of profit before income taxes for the fiscal years ended March 31,2018 and 2019 is as follows:

94

2018

2019

Normal tax rate

30.9%

30.6%

Entertainment expenses not deductible for tax purposes

0.7

0.4

Corporate inhabitant tax on per capita basis

0.4

0.3

Directors’ bonuses

0.9

0.6

Change in valuation allowance for deferred tax assets

(2.4)

(2.1)

Differences of tax rates of foreign consolidated subsidiaries

(0.8)

(0.7)

Tax credits for research and development expenses

(4.2)

(2.0)

Tax credits for salary growth

(0.6)

—

Amortization of goodwill

0.1

0.0

Other

0.7

0.8

Effective tax rate

25.7%

27.9%

Significant components of deferred tax assets and liabilities as of March 31, 2018 and 2019 are as follows:
Millions of yen

Thousands of
U.S. dollars

2018

2019

2019

Deferred tax assets:¥ 10,695$ 96,364

10,854

13,930125,514

Accrued employee bonuses

3,446

4,685

42,219Inventory valuation losses

1,677

2,604

23,462

Net defined benefit liability

4,107

4,818

43,412

Loss on valuation of advance payments

1,324

1,366

12,311

Loss on impairment of fixed assets

661

376

3,392

Accrued enterprise taxes and others

869

1,606

14,472

Research and development expenses

596

531

4,785

Allowance for doubtful receivables

568

501

4,515

Revaluation reserve for land

2,043

2,043

18,409

Other

8,078

8,073

72,73946,313

51,232

461,599

Valuation allowance for tax loss carryforward (note 2)—(9,870)(88,931)

Valuation allowance for total deductible temporary differences—(8,910)(80,284)(19,844)(18,781)(169,216)

26,46932,451

292,382

Total gross deferred tax assets

Total valuation allowance (note 1)
Total deferred tax assets

FINANCIAL SECTION¥ 12,085

Excess depreciation of fixed assets

Tax loss carryforward (note 2)

Deferred tax liabilities:
Reserve for advanced depreciation of fixed assets

(63)

(60)

(543)

Retained earnings of foreign consolidated subsidiaries

(557)

(684)

(6,168)Valuation difference on available-for-sale securities(4,489)(8,367)(75,386)

(348)

(333)

(3,005)

Revaluation reserve for land
Other
Total deferred tax liabilities
Net deferred tax assets

(412)

(640)

(5,773)(5,871)(10,086)(90,876)¥ 20,598¥ 22,365$ 201,506

Notes: 1. The valuation allowance declined by ¥1,062 million ($9,575 thousand). The principal content of this loss was a decline in valuation allowance for tax loss carryforward at consolidated
subsidiaries.
2. Amounts of tax loss carryforward and related deferred tax assets by carryforward period
Millions of yen

2019Within one year

More thanMore thanMore thanMore than
one year, within two years, within three years, within four years, within
two years
three years
four years
five years

More than
five years

Total

¥62

¥ 275

¥ 60

¥ 75

¥ 411

¥ 9,810¥10,695

Valuation allowance

(2)

(237)

(60)

(70)

(411)

(9,088)(9,870)

Deferred tax assets

60

38

—

4

—

721

824

Tax loss carryforward** The tax loss carryforward were calculated using the normal tax rate.
Thousands of U.S. dollars

2019

Within one year

More thanMore thanMore thanMore than
one year, within two years, within three years, within four years, within
two years
three years
four years
five years

More than
five years

Total

$565

$ 2,483

$ 542

$ 678

$ 3,706$ 88,389$ 96,364

Valuation allowance(21)(2,139)

(542)

(636)

(3,706)(81,885)(88,931)

Deferred tax assets

543

343

—

42

—

6,503

7,432

Tax loss carryforward** The tax loss carryforward were calculated using the normal tax rate.

95

14 Selling, General and Administrative Expenses
Significant components of selling, general and administrative expenses for the fiscal years ended March 31, 2018 and 2019 are as follows:
Thousands of
U.S. dollars

Millions of yen

2018

2019

2019

¥ 39,720¥ 44,491$ 400,864

Directors’ remuneration and employees’ wages

43,99547,278425,975

Employees’ retirement and severance benefits

2,606

2,830

25,499Provision for directors’ bonuses

1,743

1,786

16,094

Research and development expenses

19,39819,811

178,500

110

14

129

Advertising expenses

Provision of allowance for doubtful accounts
Other
Total

58,98262,296561,279¥166,557¥178,510$1,608,343

15 Other Comprehensive Income
The components of “Other comprehensive income” for the fiscal years ended March 31, 2018 and 2019 are as follows:
Millions of yen

2018
Amounts Reclassification
arising
adjustments

Valuation difference on
available-for-salesecurities, net of tax
Deferred gains or losses onhedges, net of tax
Foreign currencytranslation adjustments
Remeasurements ofdefined benefit plans,
net of tax
Share of othercomprehensive incomeof associates accounted
for using equity method
Total

Beforetax effectTax effect

Net oftax effect1¥ 5,522¥(1,910)¥ 3,611

(115)

(508)

(623)

113

(509)

395

—

395

—

395

(2,932)707(2,224)664(1,560)¥ 5,521

¥

212

(13)

199

—

199

¥ 3,081¥ 187¥ 3,268¥(1,132)¥ 2,136
Millions of yen

Thousands of U.S. dollars

2019
Amounts Reclassification
arising
adjustments

Valuation difference on
available-for-salesecurities, net of tax

Tax effect

Net oftax effect2019
Amounts Reclassification
arising
adjustments

Beforetax effectTax effect

Net oftax effect$113,186 $(34,933)$78,252¥12,794¥(231)¥12,562¥(3,877)¥8,685$115,272$(2,085)

Deferred gains or losses onhedges, net of tax

935

(551)

383

(78)

305

8,425

(4,968)

3,457

(705)

2,751

Foreign currencytranslation adjustments

(531)

—

(531)

—

(531)

(4,786)—(4,786)—(4,786)(2,129)799(1,329)

380

(948)

(19,188)

7,207(11,980)

3,431(8,548)(1,718)—(1,718)$ 98,157 $(32,207)$65,950

Remeasurements ofdefined benefit plans,
net of tax
Share of othercomprehensive incomeof associates accounted
for using equity method
Total

96

Beforetax effect

(191)

0

(190)

—

(190)

(1,725)¥10,876¥ 17¥10,894¥(3,574)¥7,319$ 97,997

6

$

160

16 Reconciliation of Differences between Basic and Diluted Earnings per Share
The reconciliation of the differences between basic and diluted earnings per share for the fiscal years ended March 31, 2018 and 2019 is as follows:This is not included for this fiscal year because there are no dilutive shares.
Millions of yen

Thousands of
U.S. dollars

2018

2019

2019

Profit attributable to owners of parent¥54,109——

Profit attributable to owners of parent available to common stockholders

54,109——Profit attributable to owners of parent for diluted EPS calculation

54,109——Average number of common shares outstanding

219,698—53—

219,752—

Thousands of shares

Effect of dilutive securities:
Stock options
Average number of common shares for diluted EPS calculation

U.S. dollars

Basic¥246.29¥288.40$2.60

Diluted246.23——

FINANCIAL SECTION

Yen

Earnings per share:

17 Retained Earnings and Dividends
In Japan, in the event a dividend distribution of surplus is made,Dividend limitation

the lesser of an amount equal to 10% of the dividend or the excess,On March 23, 2016, the Company concluded global credit facility

if any, of 25% of common stock over the total of additional paid-inagreements with financial institutions. These agreements have thecapital and legal earnings reserve must be set aside as a legal

following restrictive financial covenants:

reserve until the aggregate amount of capital surplus and the(1) The Company shall maintain the amount of net assets in thelegal reserve equals 25% of stated capital.

consolidated balance sheet as of the closing dates of the second

Certain foreign consolidated subsidiaries are also required toquarter and the end of each fiscal year (the “Second Quarter orappropriate their earnings to legal reserves under the laws of the

End of Fiscal Year”) at 75% or above of whichever is greater:

respective countries.

(i) the amount of net assets in the consolidated balance sheet as

The Company’s retained earnings includes legal reserves of¥1,645 million and ¥1,645 million ($14,825 thousand) at March 31,2018 and 2019, respectively. Proposed appropriations of retained
earnings have not been reflected in the consolidated financialof the closing date of the immediately preceding Second Quarter
or End of Fiscal Year, or (ii) the amount of net assets in the
consolidated balance sheet as of March 31, 2015.
(2) With respect to the recurring profit and loss* in the consolidated

statements at the end of the fiscal year. The Company’s approved

statement of income for each fiscal year, the Company shall not

appropriations of retained earnings for the fiscal year ended

record recurring losses for two consecutive fiscal years.

March 31, 2019 were cash dividends of ¥27,929 million ($251,641* Recurring profit and loss is a Japanese accounting term denoting income before
extraordinary items.

thousand). In addition, a mid-year dividend may be paid based on
approval by the Board of Directors, which is subject to limitations.
The mid-year dividend for the fiscal year ended March 31, 2019was ¥3,958 million ($35,665 thousand).

97

18 Revaluation Reserve for Land
In accordance with the Law Concerning Land Revaluation (Lawthe foundation for calculating taxable value for land value tax

No. 34, promulgated on March 31, 1998), the land used for businessprescribed in Article 16 of the Land Value Tax Law (Law No. 69,

purposes was revalued and “Revaluation reserve for land, net of tax”

promulgated on May 2, 1991), as stipulated in Article 2-4 of thewas reported in “Net assets” in the consolidated balance sheets.

Ordinance Implementing the Law Concerning Land Revaluation(Cabinet Order No. 119, promulgated on March 31, 1998). Reasonable

Revaluation method

adjustments are made to the official notice prices.

The fair value of land is determined based on official notice prices

Unrealized losses for land of ¥374 million ($3,377 thousand)that are calculated by the method assessed and published by thewere recognized based on the difference between the land carrying

Commissioner of the National Tax Agency. The Commissioner

amount, which was revalued as of March 31, 2002, and the fair value

assesses and publishes the method to calculate land value that formsof the land as of March 31, 2019.

19 Common Stock and Treasury Stock
The changes in the number of common stock and treasury stock for the fiscal years ended March 31, 2018 and 2019 are as follows:
SharesCommon stock (number of shares)
Number of shares at beginning of year
Number of shares at end of year

2018

2019

222,000,000
222,000,000

222,000,000
222,000,000
SharesTreasury stock (number of shares)
Number of shares at beginning of year
Purchases and other
Number of shares at end of year

2018

2019

2,334,579(94,678)
2,239,901

2,239,901(30,499)
2,209,402

20 Leases
As lessee
The Company and its consolidated subsidiaries occupy offices and other facilities and use various assets under operating lease arrangements.
Operating leases
Future minimum payments required under operating leases as of March 31, 2018 and 2019 are as follows:
Millions of yen

Within one year

98

Thousands of
U.S. dollars

2018

2019

2019

¥1,823¥2,305$20,769Over one year

5,534

5,634

50,763

Total¥7,358¥7,939$71,532

21 Foreign Exchange Risk Management and Interest Rate Risk Management
Derivative financial instruments are comprised principally of forward foreign exchange contracts and currency option contracts. These instruments
are used to reduce the risk of changes in foreign exchange rates, but are not used for speculation.
The Company is exposed to credit risk related to nonperformance by the counterparties to forward foreign exchange contracts and currency
option contracts, but the Company does not expect any instances of nonperformance due to the high credit ratings of the counterparties.
Contract amounts, fair values, and gains or losses from valuation of forward foreign exchange contracts outstanding as of March 31, 2018 and2019 are as follows. The contract amounts in themselves should not be considered indicative of the market risk associated with the derivative
financial instruments.
(1) Derivative transactions not qualifying for hedge accounting
Millions of yen

Thousands of U.S. dollars

2019

2018
Estimated Unrealized
fair value gain (loss)

Contract
amount¥ 2,656¥(141)¥(141)¥1,997

¥(21)

¥(21)

$18,000$(193)$(193)

1,237

29

29

1,553

(25)

(25)

13,998

(226)

(226)

726

6

6

503

6

6

4,539

57

57

U.S. dollars

876

(47)

(47)

1,336

25

25

12,039228

228

H.K. dollars

51

(1)

(1)

46

0

0

422

1

1

U.S. dollars

5,444

(718)

(718)

747

0

0

6,733

8

8

H.K. dollars

329

(23)

(23)

—

—

—

—

—

—

¥11,321¥(896)¥(896)¥6,185

¥(13)

¥(13)

$55,733$(123)$(123)

Hedging method

Estimated Unrealized
fair value gain (loss)

2019

Contract
amountContract
amountEstimated Unrealized
fair value gain (loss)

Forward foreign exchange contracts
Sold:

Euro
Purchased:

FINANCIAL SECTION

Yen
U.S. dollars

Currency option contracts
Sold/Purchased:

Total

Notes: 1. Method of calculating fair value
Calculated based on prices provided by counterparty financial institutions.
2. For certain of the above forward foreign exchange contracts, hedge accounting is applied mainly for the transactions between consolidated subsidiaries in non-consolidated financial
statements, but these transactions have been eliminated in the consolidated financial statements. As a result, these transactions are not treated as effective hedges of the hedged
assets and/or liabilities in the consolidated financial statements.
3. Currency option contracts are zero cost options, and option premiums are not paid or received. In addition, call options and put options are contained within a single integrated contract
and are therefore listed as a single amount.

(2) Derivative transactions qualifying for hedge accounting
Millions of yen

Hedge accounting
methodHedging method

Hedged items

Thousands of U.S. dollars

2019

2018

2019

Contract
amountEstimated
fair value

Contract
amountEstimated
fair value

Contract
amountEstimated
fair value$(357)

Forward foreign exchange contracts
Sold:

DeferredYen

Accounts receivable–trade¥ 3,187¥(158)¥ 4,661¥(39)$ 42,000

U.S. dollars

Accounts receivable–trade

468

1

934

(0)

8,418

(8)

Euro

Accounts receivable–trade

—

—

114

2

1,028

19
829

Purchased:
U.S. dollars

Accounts payable –trade

7,844

(216)

10,83992

97,661

Yen

Accounts payable –trade

69

(3)

—

—

—

—

H.K. dollars

Accounts payable –trade

188

(6)

263

1

2,371

14

Chinese yuan

Other current liabilities

605

13

932

(28)

8,400

(258)

403

(note 2)301

(note 2)

2,720

(note 2)

¥12,766¥(368)¥18,046¥ 26$162,600$ 239

Forward foreign exchange contracts

Foreign exchange
Purchased:
allocation method
U.S. dollars
Total

Accounts payable –trade

Notes: 1. Method of calculating fair value
Calculated based on prices provided by counterparty financial institutions.
2. Forward foreign exchange contracts and other contracts for which the allocation method is applied are accounted for together with the accounts payable–trade that are the hedged
items, and as a result the fair values of those contracts are included in the fair values of the accounts payable–trade.

99

22 Commitments and Contingent Liabilities
1. Pledged assets
As of March 31, 2018 and 2019, the detail of pledged assets is as follows:
Millions of yen

Cash and time deposits

Thousands of
U.S. dollars

2018

2019

2019

¥74

¥44

$400

As of March 31, 2019, there were no claims relating to pledged assets.
In addition to the above, there were assets deposited as a security deposit for issuance under the Payment Services Act of ¥1,175 million and¥1,553 million ($13,992 thousand) in “Other investments and assets” at March 31, 2018 and 2019, respectively.

2. Commitments
Commitments as of March 31, 2018 and 2019 are summarized as follows:

Guarantees for loans payable from financial institutions to companies other thanconsolidated subsidiaries

Guarantee of obligation resulting from rental contracts of unconsolidated subsidiary

Millions of yen

Thousands of
U.S. dollars

2018

2019

2019

¥67

¥—

$—

Millions of yen

Thousands of
U.S. dollars

2018

2019

2019

¥24

¥6

$54

23 Real Estate for Lease
The Company and certain consolidated subsidiaries own real estate for lease (including land) in Tokyo and other regions. Lease income or loss
associated with this real estate for lease in the previous fiscal year was ¥226 million (lease revenues recorded in other income (loss); major lease
expenses recorded in SG&A expenses);impairment loss was ¥250 million (recorded in other income (loss)); and gain on sale was ¥13 million(recorded in other income (loss)). In this fiscal year, lease income or loss associated with this real estate for lease was ¥220 million ($1,988
thousand) (lease revenues recorded in other income (loss); major lease expenses recorded in SG&A expenses); impairment loss was ¥48 million($438 thousand) (recorded in other income (loss)); and gain on sale was ¥2,065 million ($18,611 thousand) (recorded in other income (loss)).
Also, the book value stated in the consolidated balance sheet, amount of increase during the fiscal period, and the amount of decrease during
the fiscal period are as follows.
Millions of yen

Thousands of
U.S. dollars

2018

2019

2019

Balance at beginning of year

¥ 2,141¥35,347$318,472

Changes during the year

33,206(840)(7,574)

Balance at end of year

35,34734,506

310,897

Fair value at end of year

¥39,713¥39,033$351,687

Consolidated balance sheet

Notes: 1. The book value stated in the consolidated balance sheet is calculated by deducting accumulated depreciation and accumulated impairment loss from acquisition cost.
2. Among the changes during the year, the principal increase in the previous fiscal year was acquisition of real estate—¥34,018 million. The principal decrease in this fiscal year was saleof real estate—¥774 million ($6,981 thousand) due to sale of real estate.
3. The fair value at the end of this fiscal year is the amount calculated by the Company primarily based on the Real Estate Appraisal Standards (including that adjusted using relevant indices, etc.).

100

24 Segment Information
The reportable segments of the Company are components of the Group whose separate financial information is available and which are periodicallyevaluated by the Board of Directors in deciding how to allocate management resources and in assessing performance.
The Group is made up of (1) five Units, one for each business domain, namely the Toys and Hobby Unit, the Network Entertainment Unit, theReal Entertainment Unit, the Visual and Music Production Unit, and the IP Creation Unit, and (2) the affiliated business companies that mainly
serve a supporting role for these Units. The core company of each Unit leads the planning and promotion of the business strategies of the unit forJapan and overseas.
Accordingly, the Group has the following five reportable segments: Toys and Hobby Business, Network Entertainment Business, Real Entertainment
Business, Visual and Music Production Business, and IP Creation Business.
The Toys and Hobby Business conducts production and sales of toys, candy toys, and products for vending machines. The Network
Entertainment Business conducts planning, development, and distribution of network content, and planning, development, and distribution ofhome video games, etc. The Real Entertainment Business conducts planning, production, and sales of arcade games, etc., and planning andoperation of amusement facilities. The Visual and Music Production Business conducts planning, production, and sales of visual and music content
and packaged software, and live entertainment operations. The IP Creation Business conducts planning and development of animations, etc., andmanagement and administration of copyrights and other rights, etc.
Effective from this fiscal year, the Group has changed its organizational structure to promote the advancement of each of the strategies of thefrom “SBUs” to “Units.” In addition, to enable swifter advancement of the main strategies for each mission stated in the Mid-term Plan, the Group
has shifted from its previous three-SBU structure to a five-Unit structure.
In conjunction with this organizational restructure, effective from this fiscal year, the reportable segments have been changed from the Toysand Hobby Business, Network Entertainment Business, and the Visual and Music Production Business to the Toys and Hobby Business, Network
Entertainment Business, Real Entertainment Business, Visual and Music Production Business, and IP Creation Business.
Segment information of the prior fiscal year is prepared and disclosed based on the reportable segment classifications after the change.

FINANCIAL SECTION

Mid-term Plan. The name of the units of aggregated business companies that are to execute the respective business strategies has been changed

The accounting method used for the business segments reported is the same as the accounting method stated in Note “2 Summary of
Significant Accounting Policies.” Segment profit in the segment information below is measured by operating profit, and segment assets aremeasured by total assets. Amounts of inter-segment transactions are based on the prevailing market prices.
Millions of yen

2018
Reportable Segment
Toys and
Hobby

Network
Entertainment

Real Entertainment

Visual andMusic
Production

IP Creation

Subtotal

Other(note 1)

Total

¥213,296¥319,567¥89,877¥35,831¥10,345¥668,917¥ 9,394¥678,312

Adjustments Consolidated(note 2) total (note 3)

Net sales:
To external customers
Inter-segment sales
and transfers
Total

¥

—

¥678,312

9,121

6,969

672

4,860

6,624

28,247

18,24546,493(46,493)—¥222,417¥326,537¥90,549¥40,691¥16,970¥697,165¥27,640¥724,805¥(46,493)¥678,312

Segment profit

14,47650,150

3,168

6,618

5,264

79,678767

80,445(5,421)75,024

Segment assets

127,923

145,101

58,20328,391

18,190377,809

29,203407,013

133,477

540,490

2,829¥ 6,43148¥ 22,590

411¥ 23,002¥

542¥ 23,545

Other items:
Depreciation andamortization¥ 12,716

¥

¥

563

¥

¥

Amortization of goodwill

82

0

28

79

—

190

—

190

—

190

Loss on impairment of
fixed assets

816

—

638

—

—

1,454

—

1,454

8

1,463

Investments in associates
accounted for using
equity method

844

—

—

—

—

844

13,254

14,099—14,099

Increase in property,
plant and equipment
and intangible assets

11,1152,805

11,611597

61

26,192506

26,69833,80260,501

101

Millions of yen

2019
Reportable Segment
Toys and
Hobby

Network
Entertainment

Real Entertainment

Visual andMusic
Production

IP Creation

Subtotal

Other(note 1)

Total

¥234,924¥333,805¥100,699¥37,425¥16,186¥723,041¥ 9,305¥732,347

7,941

7,121

793

8,093

6,278

30,22820,459Adjustments Consolidated(note 2) total (note 3)

Net sales:
To external customers
Inter-segment sales
and transfers
Total

¥

—

¥732,347

50,687(50,687)—¥242,865¥340,927¥101,493¥45,518¥22,464¥753,269¥29,764¥783,034¥(50,687)¥732,347

Segment profit

21,71047,534

4,264

8,797

5,020

87,328

1,197

88,526(4,480)84,045

Segment assets

127,726

158,563

65,87634,215

21,764

408,145

33,708441,853

171,101

612,955¥

Other items:
Depreciation andamortization47¥ 20,544

455¥ 21,000370¥ 21,370

Amortization of goodwill

126

0

28

21

—

177

—

177

—

177

Loss on impairment of
fixed assets

278

44

628

—

0

951

—

951

2

954

Investments in associates
accounted for using
equity method

969

—

—

—

—

969

15,87916,849—16,849

Increase in property,
plant and equipment
and intangible assets

12,002

2,587

12,342633

29

27,595430

28,025991

29,016¥ 10,877

¥

1,522

¥

7,461

¥

635

¥

¥

Thousands of U.S. dollars

2019
Reportable Segment
Toys and
Hobby

Network
Entertainment

Real Entertainment

Visual andMusic
Production

IP Creation

Subtotal

Other(note 1)

$2,116,627$3,007,526$907,288$337,195$145,836$6,514,474$ 83,843$6,598,317 $

71,55064,165

7,148

72,91856,566272,349

184,332

456,681

Total

Adjustments Consolidated(note 2) total (note 3)

Net sales:
To external customers
Inter-segment sales
and transfers
Total

—

$6,598,317(456,681)—$2,188,178$3,071,691$914,437$410,114$202,402$6,786,823$268,175

Segment profit

195,611428,279

38,41879,26745,234

786,812

10,792$7,054,999 $ (456,681) $6,598,317
797,604(40,370)

757,233

Segment assets

1,150,790

1,428,624

593,532

308,277

196,094

3,677,318

303,704

3,981,023

1,541,596

5,522,620

Other items:
Depreciation andamortization$

98,005 $$429 $ 185,106$

4,106 $ 189,212$

3,334 $ 192,546

13,713$ 67,229$ 5,728

Amortization of goodwill

1,142

1

259

197

—

1,600

—

1,600

—

1,600

Loss on impairment of
fixed assets

2,505

404

5,661

—

2

8,574

—

8,574

22

8,596

Investments in associates
accounted for using
equity method

8,734

—

—

—

—

8,734

143,074

151,809—

151,809

Increase in property,
plant and equipment
and intangible assets

108,136

23,313111,203

5,708

265

248,626

3,876

252,503

8,932

261,435

Notes: 1. The “Other” category is a business segment not included in reportable segments under which operations such as logistics services and printing for each of the Group companies areclassified.
2. The details of adjustment amounts are as follows:(1) The adjustment to segment profit of -¥5,421 million for the fiscal year ended March 31, 2018 includes elimination of inter-segment transactions of ¥662 million and corporate
expenses not allocated to reportable segments of -¥6,083 million. The adjustment to segment income of -¥4,480 million (-$40,370 thousand) for the fiscal year ended March 31,
2019 includes elimination of inter-segment transactions of ¥1,381 million ($12,443 thousand) and corporate expenses not allocated to reportable segments of -¥5,861 million(-$52,814 thousand). Principal corporate expenses are expenses related to administrative divisions not belonging to reportable segments.
(2) The adjustment to segment assets of ¥133,477 million as of March 31, 2018 includes elimination of inter-segment transactions of -¥27,450 million and corporate assets notallocated to reportable segments of ¥160,927 million. The adjustment to segment assets of ¥171,101 million ($1,541,596 thousand) as of March 31, 2019 includes elimination ofinter-segment transactions of -¥36,069 million (-$324,980 thousand) and corporate assets not allocated to reportable segments of ¥207,171 million ($1,866,577 thousand).
Principal corporate assets are cash and deposits, investment securities, and assets related to administrative divisions not belonging to reportable segments.
(3) The adjustment to depreciation and amortization expense of ¥542 million for the fiscal year ended March 31, 2018 includes elimination of inter-segment transactions of -¥616
million and depreciation and amortization expense not allocated to reportable segments of ¥1,159 million. The adjustment to depreciation and amortization expense of ¥370
million ($3,334 thousand) for the fiscal year ended March 31, 2019 includes elimination of inter-segment transactions of -¥745 million (-$6,716 thousand) and depreciation andamortization expense not allocated to reportable segments of ¥1,115 million ($10,050 thousand).
(4) The adjustment to loss on impairment of fixed assets of ¥8 million and ¥2 million ($22 thousand) for the fiscal year’s ended March 31, 2018 and 2019, respectively, are related tocorporate assets not allocated to reportable segments.
(5) The adjustment to increase in property, plant and equipment and intangible assets of ¥33,802 million and ¥991 million ($8,932 thousand) as of March 31, 2018 and 2019,respectively, are related to corporate assets not allocated to reportable segments.
3. Segment profit is adjusted with operating profit in the consolidated statements of income.

102

Additional segment information as of and for the fiscal years ended March 31, 2018 and 2019 is as follows:
1. Information by product and service
This information is included in the segment information above.
2. Information by geographic region
Net sales and property, plant and equipment
Millions of yen

2018

Net salesJapan

Americas

EuropeAsia, excluding Japan

Total¥478,281¥79,277¥60,054¥60,699¥678,312

74,612

2,155

4,428

4,907

86,104

Property, plant and equipment

Millions of yen

2019

Net salesJapan

Americas

EuropeAsia, excluding Japan

Total¥519,068¥84,274¥63,384¥65,619¥732,347

76,196

2,135

4,461

4,799

87,593

Property, plant and equipment

2019

Net salesJapan

Americas

EuropeAsia, excluding Japan

Total$4,676,710$759,300$571,083$591,224$6,598,317

686,518

19,24240,19643,246789,204

Property, plant and equipment

FINANCIAL SECTION

Thousands of U.S. dollars

3. Information by major customer
Fiscal year ended March 31, 2018

Net sales(Millions of yen)

Name

Apple Inc.

¥95,259

Google Inc.

¥82,370

Name of related segment

Network Entertainment Business,
Visual and Music Production Business
Toys and Hobby Business,
Network Entertainment Business,
Visual and Music Production BusinessNote: Apple Inc. and Google Inc. are both platform-provision companies. The actual results of sales to these companies are usage fees, etc., for users (ordinary users) of game services provided
by the Group.

Fiscal year ended March 31, 2019

Name

Net sales(Millions of yen)

Net sales(Thousands of U.S.
dollars)

Name of related segment

Toys and Hobby Business,
Apple Inc.

¥103,883$935,975

Network Entertainment Business,
Visual and Music Production Business
Toys and Hobby Business,

Google Inc.

¥84,677$762,933

Network Entertainment Business,
Visual and Music Production BusinessNote: Apple Inc. and Google Inc. are both platform-provision companies. The actual results of sales to these companies are usage fees, etc., for users (ordinary users) of game services provided
by the Group.

103

4. By reportable segment, information regarding the amount of amortization of goodwill for the fiscal years ended March 31, 2018 and 2019,
and the unamortized balance of goodwill as of March 31, 2018 and 2019, is as follows:
Millions of yen

2018

Toys and Hobby

Network
Entertainment

RealEntertainment

Visual andMusic
Production

Amortization of
goodwill

¥82

¥0

¥28

¥79

¥—

¥—

¥—

¥190

Unamortizedbalance of goodwill

82

0

57

82

—

—

—

222

IP Creation

Other

Corporate andeliminations

Total

Millions of yen

2019

Toys and Hobby

Network
Entertainment

RealEntertainment

Visual andMusic
Production

Amortization of
goodwill

¥126

¥0

¥28

¥21

¥—

¥—

¥—

¥177

Unamortizedbalance of goodwill

843

—

29

60

—

—

—

933

IP Creation

Other

Corporate andeliminations

Total

Thousands of U.S. dollars

2019

104

Toys and Hobby

Network
Entertainment

RealEntertainment

Visual andMusic
Production

Amortization of
goodwill$1,142

$1

$259

$197

$—

$—

$—

$1,600

Unamortizedbalance of goodwill

7,600

—

262

544

—

—

—

8,407

IP Creation

Other

Corporate andeliminations

Total

25 Related-Party Disclosures
Fiscal year ended March 31, 2018
(1) Transactions by consolidated subsidiaries of the Company with non-consolidated subsidiaries and affiliated companies of the Company

Type
Affiliatedcompany

Company
Happinet
Corporation

Address
Taito-ku,
Tokyo

Capital orcontribution
to capital¥2,751 million

Content of business
Wholesaler of toys,
video games, andamusement products

Ratio of voting rights
ownership
Holding
directly 27.1%
indirectly 0.3%

Relationshipwith related
party
Sales agency

Content

Transaction
amountSales of products,¥54,592 million
and others

Account items
Accounts
receivable–
trade

Balance asof March 31,
2018¥11,112 million

Notes: 1. The above “Transaction amount” does not include consumption tax; the balance includes consumption tax.
2. Transaction terms and policy for determining transaction terms
For the transaction stated above, the products were sold on the same terms as general transactions with third parties in the ordinary course of business.

(2) Transactions between the Company and related parties
Directors, Audit & Supervisory Board Members, major shareholders (limited to individuals), etc.

Type

Officer

Officer

Officer

Officer

Officer

ShukuoIshikawa

Mitsuaki
TaguchiShuji Ohtsu

Yuji Asako

MasaruKawaguchi

Satoshi
OshitaAddress

—

—

—

—

—

—

—

—

—

—

—

—

Content of business

Chairman and
Representative Directorof the Company

President andRepresentative Directorof the Company

Director of theCompany

Director of theCompany

Director of theCompany

Director of theCompany

Ratio of voting
rights ownership

Ownership
directly 0.0%

Ownership
directly 0.0%

Ownership
directly 0.0%

Ownership
directly 0.0%

Ownership
directly 0.0%

Ownership
directly 0.0%

Relationshipwith related
party

—

—

—

—

—

—

Transaction
amountAccount items

Balance asof March 31,
2018

Disposal of treasury
stock accompanying
exercise of stock
options (note 1)¥17 million——

Disposal of treasury
stock accompanying
contribution in kindof the monetarycompensation
claims (note 2)¥12 million——

Disposal of treasury
stock accompanying
contribution in kindof the monetarycompensation
claims (note 2)¥12 million——

Disposal of treasury
stock accompanying
exercise of stock
options (note 1)¥8 million——

Disposal of treasury
stock accompanying
contribution in kindof the monetarycompensation
claims (note 2)¥6 million——

Disposal of treasury
stock accompanying
exercise of stock
options (note 1)¥6 million——

Disposal of treasury
stock accompanying
contribution in kindof the monetarycompensation
claims (note 2)¥6 million——

Disposal of treasury
stock accompanying
contribution in kindof the monetarycompensation
claims (note 2)¥11 million——

Disposal of treasury
stock accompanying
exercise of stock
options (note 1)¥15 million——

Disposal of treasury
stock accompanying
contribution in kindof the monetarycompensation
claims (note 2)¥11 million——

Content

FINANCIAL SECTION

Officer

Name

Capital orcontribution
to capital

Notes: 1. The disposal price of treasury stock is determined based on the stock options (share acquisition rights) exercise price set by the resolution at the seventh and eighth Ordinary General
Meetings of Shareholders of the Company.
2. These items are due to contribution in kind of monetary compensation claims accompanying the performance-based stock compensation plan. The disposal price of treasury stock is
determined based on the closing price of common stock of the Company on the First Section of the Tokyo Stock Exchange on June 16, 2017 (the business day immediately preceding
the date of the resolution at the Board of Directors’ meeting).

105

Fiscal year ended March 31, 2019(1) Transactions by consolidated subsidiaries of the Company with non-consolidated subsidiaries and affiliated companies of the Company

Type

Company

Address

Affiliatedcompany

Happinet
Corporation

Taito-ku,
Tokyo

Capital orcontribution
to capitalContent of business¥2,751 million($24,788
thousand)

Wholesaler of toys,
video games, andamusement products

Ratio of voting rights
ownership
Holding
directly 26.9%
indirectly 0.3%

Relationshipwith related
party
Sales agency

Content

Transaction
amount¥56,259 million
Sales of products,($506,891
and others
thousand)Account items

Balance asof March 31,
2019

Accounts
receivable–
trade¥10,963 million($98,783
thousand)

Notes: 1. The above “Transaction amount” does not include consumption tax; the balance includes consumption tax.
2. Transaction terms and policy for determining transaction terms
For the transaction stated above, the products were sold on the same terms as general transactions with third parties in the ordinary course of business.

(2) Transactions between the Company and related parties
Directors, Audit & Supervisory Board Members, major shareholders (limited to individuals), etc.

Type

Personequivalent to
Officer

Officer

Officer

Name

ShukuoIshikawa

Mitsuaki
Taguchi

MasaruKawaguchi

Officer

YusukeFukudaOfficer

Satoshi
OshitaAddress

Capital orcontribution
to capital

—

—

—

—

—

—

—

Content of business

Ratio of voting
rights ownership

Adviser of theCompany

President andRepresentative Directorof the Company

Ownership
directly 0.0%

Ownership
directly 0.0%—

Director of theCompany

Ownership
directly 0.0%—

Director of a
subsidiary of theCompany

Ownership
directly 0.0%—

Director of theCompany

Ownership
directly 0.0%

Relationshipwith related
party

Account items

Balance asof March 31,
2019

Disposal of treasury
stock accompanying
contribution in kind
¥13 millionof the monetary ($124 thousand)compensation
claims (note 1)——

Payment of advisory¥12 million
fees (note 2)($113 thousand)

—

—

—

Disposal of treasury
stock accompanying
contribution in kind
¥13 millionof the monetary ($124 thousand)compensation
claims (note 1)

—

—

—

Disposal of treasury
stock accompanying
contribution in kind
¥12 millionof the monetary ($112 thousand)compensation
claims (note 1)

—

—

—

Disposal of treasury
stock accompanying
contribution in kind
¥10 millionof the monetary($91 thousand)compensation
claims (note 1)

—

—

—

Disposal of treasury
stock accompanying
contribution in kind
¥12 millionof the monetary ($112 thousand)compensation
claims (note 1)

—

—

—

Content

Transaction
amountNotes: 1. These items are due to contribution in kind of monetary compensation claims accompanying the performance-based stock compensation plan. The disposal price of treasury stock is
determined based on the closing price of common stock of the Company on the First Section of the Tokyo Stock Exchange on June 15, 2018 (the business day immediately preceding
the date of the resolution at the Board of Directors’ meeting).
2. Advisory fees are determined through negotiations between both parties.

26 Business Combinations
Common Control Transactions, etc.

The BANDAI CO., LTD. business handling figures, plastic

1. Overview of business combination

models, and other products for the mature fan base and the(1) Name and description of combined business

BANPRESTO CO., LTD. business handling prizes for conve-

BANDAI CO., LTD.’s planning, development, manufacture, andnience stores, etc., were transferred to BANDAI SPIRITS CO.,sales of figures and plastic models for the mature fan baseLTD. The objective of this transfer was to strengthen the ToysBANPRESTO CO., LTD.’s planning, development, and sales ofand Hobby Unit business handling products for the mature fan

prizes for convenience stores, etc.
(2) Date of business combination
April 1, 2018(3) Legal form of business combinationbase in Japan and overseas.
2. Overview of accounting process
In accordance with the Accounting Standard for Business
Combinations and Guidance on the Accounting Standard for

Absorption-type company split with BANDAI CO., LTD. andBusiness Combinations and the Accounting Standard for Business

BANPRESTO CO., LTD. as the splitting companies and BANDAI

Divestitures, the transaction was carried out as a transaction

SPIRITS CO., LTD. as the successor company

conducted by commonly controlled entities.

(4) Company name after combination
No change.

106(5) Other matters related to overview of transaction

Absorption-type company split between subsidiaries

Absorption-type company split between subsidiaries and change in

Absorption-type merger between subsidiaries and change in trade

trade name of subsidiaryname of subsidiary

1. Overview of business combination

1. Overview of business combination(1) Name and description of combined business(1) Name and description of business of the company involved in

BANDAI NAMCO Entertainment Inc.’s planning, production, andcombination

sales of amusement machines

Merging company (surviving company)(2) Date of business combination
April 1, 2018

Name: BANDAI VISUAL CO., LTD.
Description of business: Planning, production, and sales of(3) Legal form of business combination

visual software

Absorption-type company split with BANDAI NAMCO

Merged company (disappearing company)

Entertainment Inc. as the splitting company and NAMCO

Name: Lantis Co., Ltd.

LIMITED as the successor company

Description of business: Planning, production, and sales of(4) Company name after combination
BANDAI NAMCO Amusement Inc. (the name changed from
NAMCO LIMITED on April 1, 2018)(5) Other matters related to overview of transaction

music software(2) Date of business combination
April 1, 2018(3) Legal form of business combination
Absorption-type merger with BANDAI VISUAL CO., LTD. as theEntertainment Inc. was transferred to NAMCO LIMITED, whichsurviving company and Lantis Co., Ltd. as the disappearing

plans and operates amusement facilities. The objective of thistransfer was to strengthen the Real Entertainment business,
which utilizes bricks-and-mortar venues to provide services,
machines, and other content that draw on BANDAI NAMCO’s
distinct strengths.

company(4) Company name after combination
BANDAI NAMCO Arts Inc. (the name changed from BANDAIVISUAL CO., LTD. on April 1, 2018)(5) Other matters related to overview of transaction
BANDAI VISUAL CO., LTD., which handles the visual product2. Overview of accounting process

FINANCIAL SECTION

The amusement machines business of BANDAI NAMCO

business, was merged with Lantis Co., Ltd., which handles the

In accordance with the Accounting Standard for Businessmusic business. The objective of this merger was to foster

Combinations and Guidance on the Accounting Standard for

more-integrated development of visual products, music, andBusiness Combinations and the Accounting Standard for Businesslive events.

Divestitures, the transaction was carried out as a transaction
conducted by commonly controlled entities.

2. Overview of accounting process
In accordance with the Accounting Standard for Business
Combinations and Guidance on the Accounting Standard forBusiness Combinations and the Accounting Standard for Business
Divestitures, the transaction was carried out as a transaction
conducted by commonly controlled entities.

27 Significant Subsequent Events
Disposal of Treasury Stock as Stock Compensation(7) Other

Based on a resolution at a Board of Directors’ meeting held on June

The taking effect of the securities registration statement filed in

24, 2019, a disposal of treasury stock as stock compensation has

accordance with the Financial Instruments and Exchange Act isbeen implemented, as follows:
1. Overview of disposal(1) Date of disposal July 12, 2019(2) Class and number of shares to be disposed
40,300 shares of the Company’s common stock(3) Disposal value ¥5,220 per share(4) Total disposal value ¥210 million(5) Method of offering or disposal
Stock compensation allotment method(6) People eligible for allotment, number of eligible people,
number of shares to be allotted
Directors of the Company (note 1)
3 people 6,700 sharesa condition for this disposal of treasury stock.

Notes:
1. Company Directors (excluding those serving concurrently as President and Representative
Director of BANDAI CO., LTD., BANDAI NAMCO Entertainment Inc., BANDAI NAMCO
Amusement Inc., BANDAI NAMCO Arts Inc., SUNRISE INC., and BANDAI SPIRITS CO.,LTD., and Outside Directors)
2. Directors of BANDAI CO., LTD., BANDAI NAMCO Entertainment Inc., BANDAI NAMCO
Amusement Inc., BANDAI NAMCO Arts Inc., SUNRISE INC., and BANDAI SPIRITS CO., LTD.

2. Objective of and reasons for the disposal
As performance-based remuneration related to this consolidated
fiscal year, monetary compensation claims from the Company andsubsidiaries are granted to the directors of the Company andsubsidiaries (hereinafter “eligible directors”). Eligible directors
pay in the monetary compensation claims as property contributedin kind to receive delivery of the Company’s common stock.

Directors of subsidiaries of the Company (note 2)
28 people 33,600 shares

107

INDEPENDENT AUDITOR’S REPORTTo the Board of Directors of BANDAI NAMCO Holdings Inc.:
We have audited the accompanying consolidated financial statements of BANDAI NAMCO Holdings Inc. and its consolidated subsidiaries,
which comprise the consolidated balance sheets as at March 31, 2019 and 2018, and the consolidated statements of income, statements ofcomprehensive income, statements of changes in net assets and statements of cash flows for the years then ended, and the notes toconsolidated financial statements.
Management’s Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance withaccounting principles generally accepted in Japan, and for such internal control as management determines is necessary to enable thepreparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits inaccordance with auditing standards generally accepted in Japan. Those standards require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements.
The procedures selected depend on our judgement, including the assessment of the risks of material misstatement of the consolidated
financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity’s
preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in thecircumstances, while the objective of the financial statement audit is not for the purpose of expressing an opinion on the effectiveness of theentity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness ofaccounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
OpinionIn our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of BANDAI NAMCO
Holdings Inc. and its consolidated subsidiaries as at March 31, 2019 and 2018, and their financial performance and cash flows for the years
then ended in accordance with accounting principles generally accepted in Japan.
Convenience Translation
The U.S. dollar amounts in the accompanying consolidated financial statements with respect to the year ended March 31, 2019 arepresented solely for convenience. Our audit also included the translation of yen amounts into U.S. dollar amounts and, in our opinion, suchtranslation has been made on the basis described in Note 3 to the consolidated financial statements.

August 9, 2019
Tokyo, Japan108

CORPORATE DATA
As of March 31, 2019

Corporate Name:BANDAI NAMCO Holdings Inc.

Head Office:

BANDAI NAMCO Mirai Kenkyusho
5-37-8, Shiba, Minato-ku, Tokyo 108-0014, Japan
URL: www.bandainamco.co.jp/

Capital:¥10 billion

Stock Exchange Listing:Tokyo Stock Exchange, First Section (Code number: 7832)

Main Business:

Planning and execution of medium- and long-term management strategies for the
BANDAI NAMCO Group;
provision of support for business strategy implementation by Group companies andmanagement of business activities

Stock Information:

Number of shares authorized:

1,000,000,000 shares

Number of shares issued:

222,000,000 shares

Number of shareholders:

32,903

Number of shares per trading unit:

Shareholders:

100 shares

Number of shares(Thousands)% of total

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

14,752

6.71

Japan Trustee Services Bank, Ltd. (Trust account)

14,658

6.67

Kyoko Nakamura

6,203

2.82

XIL, LTD.

6,000

2.73

The Nomura Trust and Banking Co., Ltd. (Retirement and severance
benefits trust. MUFG Bank, Ltd. account)

4,586

2.09

MAL Ltd.

4,400

2.00

Japan Trustee Services Bank, Ltd. (Trust account 5)

4,057

1.84

Nintendo Co., Ltd.

3,845

1.75

STATE STREET BANK AND TRUST COMPANY 505001

3,160

1.44

STATE STREET BANK WEST CLIENT-TREATY 505234

3,151

1.43

Number of shares(Trading units)% of total——

Financial institutions

692,078

31.20

Brokerage

51,748

2.33

Other corporate entities

263,534

11.88

Foreign corporate entities and others

938,365

42.31

Individuals, etc.

272,192

12.27

Name

Note: The shareholding ratio is calculated after reduction of the number of treasury stocks.

Ownership Breakdown:

Public entities© 窪岡俊之 ©BANDAI NAMCO Entertainment Inc. ©BNOI/ アイナナ製作委員会 © 円谷プロ © ウルトラマンタイガ製作委員会・テレビ東京 © 創通・サンライズ ©SOTSU・SUNRISE ©2019 石森プロ・テレビ朝日・ADK EM・東映 ©2019 テレビ朝日・東映 AG・東映 © やなせたかし／フレーベル館・TMS・NTV
PAC-MAN™＆©BANDAI NAMCO Entertainment Inc. ©BANDAI,WiZ ©ABC-A・東映アニメーション © バードスタジオ／集英社・フジテレビ・東映アニメーション © バードスタジオ／集英社 ･東映アニメーション © バードスタジオ／集英社 ©「2018ドラゴンボール超」製作委員会 ©BIRD STUDIO/SHUEISHA,TOEI ANIMATION©2019 プロジェクトラブライブ！サンシャイン !! ムービー ©2017 プロジェクトラブライブ！サンシャイン !! © 岸本斉史 スコット／集英社・テレビ東京・ぴえろ © 尾田栄一郎／集英社・フジテレビ・東映アニメーション ©BANDAI © カラー ©BANDAI NAMCO Amusement Inc.

109

OVERVIEW OF MAIN GROUP COMPANIESAs of August 1, 2019

BANDAI NAMCO Holdings Inc.
BANDAI NAMCO Holdings USA Inc.
BANDAI NAMCO Holdings UK LTD.
BANDAI NAMCO Holdings ASIA CO., LTD.
BANDAI NAMCO Holdings CHINA CO., LTD.
BANDAI NAMCO Holdings France S.A.S.

Planning and execution of the BANDAI NAMCO Group’s medium- and long-term management strategies; provision of support for business strategy implementation by Group
companies; management of business activities (Tokyo Stock Exchange, First Section)
Regional headquarters in the Americas, providing support for the implementation of strategies by operating companies, etc.
Regional headquarters in Europe, providing support for the implementation of strategies by
operating companies in Europe
Regional headquarters in Asia, providing support for the implementation of strategies by
operating companies in Asia
Regional headquarters in China, providing support for the implementation of strategies by
operating companies, etc.
Regional holding company in Europe, providing support for the implementation of strategies
by operating companies in Europe

Toys and Hobby Unit
BANDAI CO., LTD.

Planning, development, manufacturing, and marketing of toys, capsule toys, cards, confectionery and foods, apparel, sundries, and other products
BANDAI SPIRITS CO., LTD.
Planning, development, manufacturing, and sales of toys and plastic models for the mature
fan base as well as prizes, sundries, etc.
MegaHouse Corporation
Planning, development, production, and sales of toys, candy toys, figures, communications
equipment, peripheral equipment, etc.
CCP Co., Ltd.
Planning, development, production, and sales of RC toys, toys, consumer electronics, andsundries
Sun-Star Stationery Co., Ltd.
Planning, development, production, and sales of character stationery, fancy stationery,schoolchildren’s stationery, creative stationery, premium stationery, and other sundries
Plex Co., Ltd.
Planning, design, development, production, and sales of character-based products
Seeds Co., Ltd.
Planning, development, and manufacturing of toys, plastic models, pachinko and pachislot
machines, medical equipment (ISO 13485 certified), electronic-related equipment, etc.; contract
operations for various types of inspecting and testing (ISO 17025-accredited testing organization)BANPRESTO SALES CO., LTD.
Sales of prizes, etc., for amusement facilities
People Co., Ltd.*
Planning, development, and sales through outsourced contract production for toys,
playground equipment, bicycles, and furniture
Planning, production, and distribution of visual products, etc.
TSUBURAYA PRODUCTION CO., LTD.*BANDAI AMERICA INC.
Sales of toy-related products in the U.S.
BANDAI NAMCO Collectibles LLC
Sales, promotions, event sales, e-commerce, etc., for collectible figures and other products
for the mature fan base
BANDAI S.A.S.
Sales of toy-related products in France
BANDAI UK LTD.
Sales of toy-related products in the U.K.
BANDAI ESPAÑA S.A.
Sales of toy-related products in Spain
BANDAI NAMCO ASIA CO., LTD.
Procurement, sales, importing, and exporting of toys, etc., in Asia (excluding Japan)
BANDAI NAMCO Toys & Hobby (SHANGHAI) CO., LTD. Manufacturing and sales of toys, etc., for China
BANDAI (SHENZHEN) CO., LTD.
Quality assurance and quality control operations; contracting for production management,
plant audits, etc., for cooperating manufacturers; planning and sales of toy-related products
in China
BANDAI NAMCO KOREA CO., LTD.
Planning and sales of toy-related products
BANDAI NAMCO (THAILAND) CO., LTD.
Production of Super Sentai series robot toys as well as molds
BANDAI NAMCO PHILIPPINES INC.
Manufacturing of toys (principally capsule toys, figures, and lower-priced toys)BANPRESTO (H.K.) LTD.
Manufacturing and production management of prizes for amusement facilities,
convenience stores

Network Entertainment Unit
BANDAI NAMCO Entertainment Inc.
BANDAI NAMCO Studios Inc.
BANDAI NAMCO Online Inc.
D3PUBLISHER INC.
B.B.STUDIO Co., Ltd.
VIBE Inc.
BANDAI NAMCO Rights Marketing Inc.
BANDAI NAMCO Network Services Inc.
BANDAI NAMCO Sevens Inc.
BANDAI NAMCO Research Inc.

110

Planning, development, and distribution of network content; planning, development, andsales of home video games; planning of live events; sales of goods, etc.
Planning and development of network content and home video games, etc.
Planning, development, and operation of Internet-based online games, other software,and services
Planning, development, and sales of home video games; planning, development, anddistribution of network content
Planning and development of home video games, network content, and amusement
machines
Provision of content and products using various interactive media options, advertising, andpromotion
Development, operation, and sales of online video distribution platform services;development, operation, and sales of various communications services and related tools
Content operation, distribution, localization, and technical support for network services
Development and sales of pachinko and pachislot machines; development, manufacturing,and sales of visual substrates; planning and operation of other new businesses
Research, development, investigation, verification, and consulting related to technologies
targeting the creation of new businesses, etc.

BXD Inc.

Development and operation of online games and distribution platforms utilizing technologies
centered on HTML5BANDAI NAMCO Entertainment America Inc.
Planning, development, and sales of home video games; planning, development, and distribution of network content
BANDAI NAMCO Entertainment Europe S.A.S.
Planning, development, and sales of home video games; planning, development, and distribution of network content; holding company; shared services company
BANDAI NAMCO Entertainment (SHANGHAI) CO., LTD. Planning, operation, and production of network content in China
BANDAI NAMCO Studios Singapore Pte. Ltd.
Planning and development of home video games, amusement machines, etc.
D3Publisher of America, Inc.
Planning, development, and distribution of network content

Real Entertainment Unit
BANDAI NAMCO Amusement Inc.
Pleasure Cast Co., Ltd.
Hanayashiki Co., Ltd.
BANDAI NAMCO Technica Inc.
BANDAI NAMCO Amusement Lab Inc.
BANDAI NAMCO Amusement America Inc.
BANDAI NAMCO Amusement Europe Ltd.
NAMCO USA INC.
NAMCO UK LTD.
NAMCO ENTERPRISES ASIA LTD.
BANDAI NAMCO Amusement (SHANGHAI) CO., LTD.

Planning, development, operation, and sales of facilities, machines, and services related toreal entertainment
Planning and operation of amusement facilities
Planning and operation of Asakusa Hanayashiki amusement park
After-sales service operations related to amusement machines; stocking and sales of
pre-owned amusement machines and products from other companies
Operations related to the research, planning, and development of content for real entertainment facilities and areas related to amusement machines
Sales of amusement machines
Sales of amusement machines
Planning and operation of amusement facilities
Planning and operation of amusement facilities
Planning and operation of amusement facilities
Operation of real entertainment business in China

Visual and Music Production Unit
BANDAI NAMCO Arts Inc.
Actas Inc.
Highway Star Inc.
BANDAI NAMCO Live Creative Inc.

Planning, production, and sales of visual and music content and package software; planning,production, sales, and management, etc., of music masters and musical works
Planning and production of animation
Management of affiliated artists, production of music, and operation of fan clubs; audio
engineering operations
Planning and production of live performances and events; production of visual products
related to live performances and events; planning, production, and sales of goods, ticket
sales, etc.

IP Creation Unit
SUNRISE INC.
BANDAI NAMCO Pictures INC.
SUNRISE BEYOND INC.
SUNRISE Music INC.
Evolving GUNDAM Inc.
SUNRISE SHANGHAI CO., LTD.

Planning and production of animation; management and administration of copyrights
Planning and production of animation; management and administration of copyrights
Animation planning and production
Management and administration of music copyrights and masters; production of music foranimations; planning and production of labels; planning and production of events; etc.
Operation of GUNDAM FACTORY YOKOHAMAManagement and administration of copyrights and other rights, etc.

Affiliated Business Companies
BANDAI LOGIPAL INC.
LOGIPAL EXPRESS INC.
BANDAI NAMCO Business Arc Inc.
ARTPRESTO CO., LTD.
HAPPINET CORPORATION*
SOTSU CO., LTD.*
Italian Tomato Ltd.*International distribution, customs brokerage, amusement-related business, productinspection, product manufacturing support, etc.
Truck freight, industrial waste collection and transportation, logistics management,
warehouse operations, vehicle maintenance, etc.
Work related to the BANDAI NAMCO Group’s general affairs, personnel, finance andaccounting, information systems, operational support, and visual product production
Planning, design, and printing (packages, catalogs, posters, cards); website production,
event planning, and administration
Distribution of toys, visual and music products, video games, and amusement products(Tokyo Stock Exchange, First Section)
Planning, production, and copyright business for TV animation programs; production andagency operations in the sports entertainment area (JASDAQ)Management of restaurants; franchise operations; production, sales, and provision of
production guidance for pastries* Companies accounted for by the equity method111

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