Notice of AGM
Konami Corporation
07 June 2006
Notice of the 34th Ordinary General Meeting of Shareholders
Stock Code Number: 9766
June 7, 2006
Dear Shareholder,
You are cordially invited to attend the 34th Ordinary General Meeting of
Shareholders, which will be held as described hereunder.
If you are unable to attend the meeting, you may exercise your voting rights
either in writing or over the Internet (instructions overleaf). Please complete
the voting forms enclosed after reviewing the reference materials included. To
ensure your vote is counted, please complete all online procedures or return the
completed postal ballot by no later than Wednesday, June 28, 2006.
Sincerely yours,
Kagemasa Kozuki
Representative Director
KONAMI CORPORATION
4-1, Marunouchi 2-chome, Chiyoda-ku, Tokyo
MEETING AGENDA
1. Date and Time: 10:00 a.m., Thursday, June 29, 2006
2. Venue: 'Arena' of Konami Sports & Life Co., Ltd., 10-1,
Higashi Shinagawa 4-chome, Shinagawa-ku, Tokyo
3. Agenda:
Reports
1. Business Report, Consolidated Balance Sheet and Consolidated Statement of
Income for the 34th fiscal year (from April 1, 2005 to March 31, 2006); and on
the Reports of the Independent Auditor and of the Board of Statutory Auditors
regarding Consolidated Financial Statements for the 34th fiscal year.
2. Balance Sheet and Statement of Income for the 34th fiscal year.
Proposals
Proposal 1 Acceptance of Proposed Appropriation Plan of Earned Surplus for the
34th fiscal year
Proposal 2 Amendments to the Articles of Incorporation
Proposal 3 Election of eight members to the Board of Directors
4. Information on executing voting rights:
To vote using the Internet, please read carefully the procedures for voting by
electronic means on page 3 (overleaf) in exercising your voting right.
5. Method of notification to shareholders:
In case any amendments or changes are made to the reference materials for the
general meeting of shareholders prior to the date of the meeting, KONAMI
CORPORATION shall notify its shareholders by mail or via KONAMI CORPORATION's
web site (www.konami.net).
* If attending the meeting in person, please remember to bring the ballot
enclosed with these materials and hand it to the receptionist.
(This is an English translation of the Report for the 34th Fiscal Year (the
'Report') of Konami Corporation provided for your reference and convenience.
This translation includes a translation of the audit report of KPMG AZSA & Co.,
Konami's independent auditor, of the financial statements included in the
original Japanese language Report.)
Procedures for Voting
If you are unable to attend the meeting, you may exercise your voting right by
following one of the procedures described below. ADR holders cannot vote in this
manner. Please contact the ADR Depositary if you wish to vote.
Procedures for voting by electronic means
Shareholders are asked to follow the procedures detailed below if they wish to
exercise their voting rights using the Internet.
1. Shareholders may only exercise their voting rights online through the
dedicated voting website designated by KONAMI CORPORATION.
Voting website URL: http://www.webdk.net
2. Shareholders choosing to exercise their voting rights online need to use the
voting code and password specified on the enclosed voting form. Once you have
entered the site, please vote for or against the resolution by following the
instructions on screen.
3. Online votes may be accepted up to 18:00, Wednesday, June 28, 2006. However,
shareholders are kindly requested to register online votes as early as possible
to facilitate the counting of online votes.
4. If you duplicate your vote, i.e., if you exercise your voting rights both by
mail and via the Internet, we will consider only the Internet vote to be valid.
5. If you vote a number of times over the Internet, or if you duplicate your
vote using a PC and a mobile phone, we will consider the final vote to be the
valid one.
6. Any connection fees to the Internet providers or time charges (telephone
charges, etc.) incurred by shareholders in exercising votes online are to be
borne by such shareholders.
System requirements for voting by electronic means
The following are systems requirements for accessing voting website.
(1) Internet access.
(2) Shareholders choosing to exercise their voting rights using a PC should
note that the site only supports the following browser software: Microsoft(R)
Internet Explorer 5.5 or above, Netscape(R) 6.2 or above. The site supports any
hardware platform running the software specified above.
(3) Shareholders choosing to exercise their voting rights using a mobile phone
should note that a handset model that supports 128-bit SSL (encrypted)
communication is required (for security reasons, the site has been designed only
to be accessible by mobile phones with 128-bit SSL encryption technology).
(Microsoft(R) is a registered trademark in the United States and other
countries of Microsoft Corporation of the U.S. Netscape(R) is a registered
trademark in the United States and certain other countries of Netscape
Communications Corporation.)
1. Business Performance
(1) Konami Group Business Conditions and Results
Moderate economic recovery was the overall trend in the Japanese economy in the
consolidated fiscal year ended March 31, 2006. Corporate performance improved,
capital investments increased, and personal consumption rose moderately. There
was also healthy recovery in the global economy. Although the EU economy
remained stagnant, the U.S economy continued to grow steadily and the China
economy maintained solid growth.
With respect to the industries in which we operate, in the entertainment
industry, demand for videogame software has grown in step with the spreading
popularity of the new-style portable game consoles from Nintendo and Sony
Computer Entertainment, and the online application content business has
progressed with further advances in IT technology. In the health industry,
demand for fitness clubs among middle-aged and senior consumers, our main target
market, is rising as the Japanese population ages, and the market is expected to
expand into new service areas such as preventive nursing care and health
promotion. Demand in the gaming industry has expanded, as casinos are becoming
legalized in new localities.
Under these circumstances, the Digital Entertainment segment has maintained
solid sales. Sales of the WORLD SOCCER Winning Eleven series rose worldwide,
especially in Europe, reaching a record high in the number of titles sold. Sales
of trading card games also expanded globally, and 'e-AMUSEMSMENT' service
products for amusement arcades sold at steadily rising levels. KONAMI
CORPORATION (the 'Company') promoted business efficiency by restructuring the
group through a merger with a videogame software production company and other
realignments. Content was developed on multiple levels, and product lineups were
selected and streamlined in various genres.
In the Health & Fitness segment, we expanded our network of sports facilities
and endeavored to further boost the quality of our services by steadily
installing our original e-XAX IT health management system, chiefly in the new
Konami Sports Clubs. In March 2006 we exhibited fitness machines for
institutional use at the worldfs largest fitness trade show, Las Vegas, U.S.A.
(IHRSA International Health, Racquet & Sports Club Association 2006). These
machines attracted a high level of interest among visitors.
In the Gaming & System segment, Konami concluded a sales agreement in October
2005 with Casiloc, Inc., which is under the management of the Quebec provincial
government in Canada whereby we provided Casiloc with the Konami Casino
Management System. We will continue to promote sales of our system to build a
stable profit base. In March 2006, we received high reviews for our new platform
K2V and other products exhibited at the CMAA (The Club Managers'Association
Australia) 2006 game machine exhibits in Sydney, Australia - major
showcase for state-of-art gaming machines from around the world.
As a result, consolidated net revenues for the year ended March 31, 2006
amounted to Y 262,137million (100.6% of the figure for the year ended March 31,
2005), consolidated operating income was Y 2,481 million (8.8% of the figure for
the year ended March 31, 2005), consolidated income before tax was Y 8,438
million (30.8% of the figure for the year ended March 31, 2005), and
consolidated net income was Y 23,008 million (219.4% of the figure for the year
ended March 31, 2005).
Performance by business segment
Digital Entertainment
In our Computer & Video Games business, the WORLD SOCCER Winning Eleven series
recorded solid sales all over the world, with sales of more than 7 million units
including all the series released during the period. The high quality of the
games and the latest player data explain the strong support of our consumers.
Another factor behind the rising sales volumes for the units has been the
Companyfs decision to start developing products for PlayStation Portable. In
addition, music games have gained popularity, mainly in North America, and sales
of the PlayStation 2 version of Dance Dance Revolution EXTREME2 have exceeded
sales of its predecessor. Well-established series such as Yu-Gi-Oh!, METAL GEAR
SOLID, PAWAFURU PUROYAKYU, and GENSOSUIKODEN also achieved solid sales.
In our Toy & Hobby business, we continued to achieve strong sales of the
Yu-Gi-Oh! Trading Card Game series, a globally expanding series with a
particularly strong presence in the Japanese, U.S., and European markets. We
also released card games based on the popular animated TV series MALHEAVEN and
EYESHIELD21, as well as a new toy series called SAZER X. All of these titles are
selling well.
In the Amusement business, we continued to enjoy strong sales of MAH-JONG FIGHT
CLUB, a series of titles incorporating the 'e-AMUSEMENT' service which brings
together the Company and entertainment centers across Japan in a network. We
also launched Baseball Heroes, a videogame played with cards carrying images of
professional baseball players, and QUIZ MAGIC ACADEMY III, a quiz game that
gives players the chance to test their knowledge of trivia against each other.
Both received favorable reviews. The music game series continue to be popular
with growing sales. Our multiplayer token-operated horse racing games
GI-HORSEPARK and GI-TURFWILD3 have also received favorable reviews in the
market.
In the Online business, we developed an online match-up service for the WORLD
SOCCER Winning Eleven series in Japan, Europe, North America, and Asia. We also
launched services for Yu-Gi-Oh! ONLINE in Korea in December 2005. Our mobile
site in Japan, Konami Net DX, launched and distributed titles already popular in
the home and arcade arenas such as PAWAFURU PUROYAKYU and QUIZ MAGIC ACADEMY,
and Winning Eleven is now providing services via an independent mobile site.
In the Multimedia business we published several guides and released several
soundtracks on CD relating to popular videogames, all of which received
favorable reviews. We also released a CD album, a DVD album of live concerts
music of popular voice actors, and a series of products tied in with our
original animated TV program, GOKUJO SEITOKAI.
As a result, consolidated net revenues in the Digital Entertainment segment were
Y 165,276 million for the year ended March 31, 2006 (101.0% of the figure for
the year ended March 31, 2005).
Health & Fitness
In the fitness club management business, we further expanded our network of
Konami Sports Clubs through direct managing facilities. We opened nine new
facilities, including Honten Nishinomiya (Hyogo), Myoden (Chiba), Fukuoka-Kashii
(Fukuoka), Suzuka (Mie), and Asahikawa (Hokkaido), bringing the total number of
facilities up to 209 as of the end of March 2006. Konami Sports Club Honten
Nishinomiya (Hyogo), which opened in February 2006, is one of the largest sports
facilities in Japan with a fifty-meter regulation-size pool, a machine gym
equipped with some 100 training machines as e-XAX IT health management system,
and other advanced facilities incorporating the IT technology and know-how of
the Konami Group.
In the public sports center management business, we added facilities in public
sports centers, including those in Itabashi-ku (Tokyo) and Osaka-shi (Osaka),
increasing the number of facilities to 67 as of the end of March, 2006. With 34
more facilities added in April, we managed 101 facilities as of the end of May,
2006. As more and more people become health conscious in today's rapidly aging
society, we will make our utmost efforts to maximize the accumulated know-how
and experiences of the Konami Group in the management of public facilities.
Through these efforts, the Konami Group will be helping people in communities
everywhere become fitter.
As a new undertaking in the sports facilities business, in July 2005, our Konami
Sports Clubs became the first private sector facilities in Japan to be granted
the right to call themselves JOC Athlete Support Centers authorized by The
Japanese Olympic Committee. Konami Sports Clubs are committed to supporting
JOC-designated athletes in partnership with JOC. 'The First Konami Sports Club
Action Soccer Tournament,' acting as Japan's preliminary tournament leading up
to the Action Soccer World Cup (to be held in October 2006), was held in January
2006. This is one of our efforts to promote sports exchanges on a global scale.
As an output of our development activities, we exhibited a range of fitness
products for commercial use at the International Home Care & Rehabilitation
Exhibition 2005, and at an event held at Tokyo Big Sight in September 2005. Our
original machine program services developed for an aging society - a
program to promote a 'healthier, more enjoyable, and more attractive' life
- received especially favorable comments. We also exhibited 'GROOVE
MOTION DDR,' our new proposal for group exercise, and 'EZTWISTER,' an innovative
muscle and balance training machine, at IHRSA (International Health, Racquet &
Sportsclub Association) 2006, the world's largest fitness trade show (held in
Las Vegas, U.S. in March 2006). Both products attracted a great deal of interest
from visitors.
In the area of supplement products, we released EXERDIET and KONAMI SPORTS CLUB
BLACKCURRANT, two original Konami supplement, to further expand our product
line-up.
As a result, consolidated net revenues in the Health & Fitness segment totaled Y
81,209 million for the year ended March 31, 2006 (102.7% of the figure for the
year ended March 31, 2005).
Gaming & System
The construction of our new office building, which is to become the center of
our business activities in North America, was completed in June 2005. This is
part of our effort to strengthen our operating base. We have also begun
marketing our new K2V platform in the North American and Australian markets to
efficiently promote global development. As for the Konami Casino Management
System now being marketed full scale, in October 2005, we concluded a sales
agreement for the System with Casiloc, Inc., a casino operator under the
management of Quebec provincial government in Canada, for sales to three Quebec
casinos (approximate 6,300 slot machines in total) and also concluded a sales
agreement with a casino in Oklahoma, a new market for us. Furthermore, we have
installed slot machines in profit-sharing agreements in order to generate steady
revenues and ensure more stable management. In Australia we began selling a link
progressive jackpot system which won wide acclaim in August at the Australian
Gaming Expo 2005, one of the largest events of its kind in Oceania. We have also
begun providing knock-down components to Russia. Through these endeavors, we are
expanding our presence in both the domestic market and the overseas markets of
Europe, Asia, and South America.
As a result, consolidated net revenues in the Gaming & System segment was
Y10,623 million for the year ended March 31, 2006 (91.2% of the figure for the
year ended March 31, 2005).
(2) Konami Group Capital Expenditures and Financing Activities
Capital expenditures in the consolidated fiscal year ended March 31, 2006
totaled Y16,462 million. Principal capital investments were in new sports and
fitness club facilities and related renovations and in the construction of
internal backbone systems.
Capital spending was financed primarily from cash and deposits and operating
cash flow, with some additional financing from bank loans. The Company redeemed
its No. 3 straight corporate bond issue (Y15.0 billion, matured in September
2005) and plans to redeem its No.4 straight corporate bond issue (Y15.0 billion,
maturing in September 2006) using cash reserves. Going forward, the Company
plans to maintain current financing levels to fund dynamic business development
and to ensure adequate short-term liquidity.
(3) Operating Results and Assets
1) Consolidated operating results and assets (U.S. GAAP)
(Millions of Yen, except per share data)
Years ended March 31 2003 2004 2005 2006
Net revenues 253,657 273,412 260,691 262,137
Operating income (loss) (21,870) 40,713 28,136 2,481
Net income (loss) (28,519) 20,104 10,486 23,008
Basic net income (loss) per
share (yen) (234.58) 166.86 87.41 175.86
Total assets 278,250 294,497 304,321 302,637
Total shareholders' equity 90,406 102,129 105,857 163,815
Notes:
1. In line with the requirements of American Depositary Receipt issuance, the
figures for consolidated operating results and assets are presented in
conformity with U.S. GAAP, which comprises accounting standards and principles
generally accepted in the United States.
2. In the year ended March 31, 2003, we had our goodwill and other intangible
fixed assets of Health & Fitness Business, appraised by an independent appraisal
company in the U.S., and wrote off 47,599 million yen of impairment of assets
which the book value exceeded its fair value.
3. In the year ended March 31, 2006, we had our tangible fixed assets and other
intangible fixed assets of Health & Fitness Business, appraised by an
independent appraisal company in the U.S., and wrote off 19,713 million yen of
impairment of assets which the book value exceeded its fair value.
2) Non-consolidated operating results and assets (Japanese GAAP)
(Millions of Yen, except per share data)
Years ended March 31 2003 2004 2005 2006
Net revenues 130,186 146,654 134,117 122,591
Ordinary income 13,068 16,910 13,447 19,291
Net income (loss) (11,284) 10,381 12,794 16,572
Net income (loss) per
share (yen) (92.82) 83.71 105.33 124.75
Total assets 186,668 183,031 187,798 202,303
Total shareholders' equity 105,107 108,016 111,423 153,339
(4) Issues for Konami Group
Restructuring of business operations in order to respond to changing market
conditions
In the market in which the Konami group operates, regardless of geographic areas
or age, the needs of consumers are rapidly diversifying and growing. Also, as
the Internet environment has improved, online service has become widespread.
As Japan has become an aging society, people have become more focused on their
health and the retirement of people in the baby boom generation has created new
markets.
These changes in market conditions will make timely management decision making
and globalizing of the business more important that ever. The Konami group has
prepared a management base which we believe appropriately meets the needs of the
market, by strengthening the management system through group restructuring and
shifting to a holding company structure by company separation and by further
promoting the globalization of our business.
Group restructuring and shift to a holding company structure by company
separation
The merger between Konami Sports Life Corporation (hereafter, referred to as
'Konami Sports Life') and Konami Sports Corporation (hereafter, referred to as
'Konami Sports') took place on February 28, 2006, with Konami Sports remaining
as the surviving company, and on March 1, 2006, the Company became the sole
parent company through a share exchange with the merged Konami Sports. After
this share exchange, Konami Sports changed its registered name to Konami Sports
& Life Co., Ltd.
On March 31, 2006, Konami Digital Entertainment Co., Ltd. was newly established
through a company separation to succeed the Company's Digital Entertainment
business, and the Company shifted to a holding company structure.
The major objectives of shifting to a holding company structure were as follows:
(1) Further improvement of management transparency
The Konami Group has been actively working to improve corporate governance and
will endeavor to further strengthen group governance through its recent shift to
a holding company structure.
We will promote transparency of management by strengthening our group management
structure, separating and clarifying the decision-making and supervisory
functions of the entire group from the executive function of each business,
speeding up the management process, conducting business evaluations, and
allocating management resources from the viewpoint of the shareholders.
(2) Creating a speedy and flexible management structure
We will clarify the roles of our 'Digital Entertainment Business,' 'Health &
Fitness Business,' and 'Gaming & System Business.' Each group will cultivate
creativity and expertise in its fields and cope with the changes in today's
business environment with speed and flexibility. To respond more effectively to
rapidly changing market conditions, we will build a system to facilitate our
participation in new business collaborations and making capital investments in a
timely manner.
(3) Building a thorough structure of profit accountability
We will clarify our profit accountability structure by evaluating the
profitability of each of our businesses more carefully than before.
The holding company will be responsible for planning the corporate strategy of
the entire group, planning for investment projects, including the allocation of
management resources, and checking the status of the businesses executed in each
subsidiary. Business subsidiaries will make timely decisions in each business
area of the Company and accelerate the management process. The holding company
will thus aim to maximize corporate value at the Konami Group level.
1. Corporate Data
(As of March 31, 2006)
(1) Principal Business
Konami Group's principal business and principal products are listed below.
Digital Entertainment Business:
Computer & Video Games
Video game software for PlayStation 2
Video game software for PlayStation Portable
Video game software for Nintendo DS
Video game software for Game Boy Advance
Video game software for NINTENDO GAMECUBE
Video game software for Xbox
Video game software for Xbox360
Video game software for downloads by mobile phone
Procurement and distribution of consumer-use video game software produced by
other companies
Toy & Hobby
Card games
Toys for boys
Toys for babies
Educational toys
Electronic toys
Amusement
Video game machines for arcades
Music-simulation game machines
Token-operated game machines for arcades
Online
Building systems related to online games
Management and operation of online servers
Distribution of content for mobile phones
Multimedia
Music CDs, DVDs
Books, magazines
Health & Fitness Business:
Operation of sports and fitness clubs
Fitness equipment
Health-related products
Gaming & System Business:
Video slot machines and mechanical slot machines for casinos
Casino management systems
(2) Main Konami Group Offices
Holding company
KONAMI CORPORATION Chiyoda-ku, Tokyo
Operating companies in Japan
Konami Digital Entertainment Co., Ltd. Minato-ku, Tokyo
Konami Sports & Life Co., Ltd. Shinagawa-ku,Tokyo
Konami Logistics and Service, Inc. Zama-shi, Kanagawa
HUDOSN SOFT CO., LTD. Chuo-ku, Tokyo
Internet Revolution Inc. Minato-ku,Tokyo
Operating companies overseas
Konami Digital Entertainment, Inc. USA
Konami Gaming, Inc. USA
Konami Australia Pty Ltd. Australia
Konami Digital Entertainment B.V. Holland
Konami Digital Entertainment GmbH Germany
Konami Digital Entertainment Limited Hong Kong
Note: Locations are of each company's headquarters.
(3) Status of Shares
1. Number of shares authorized 450,000,000
2. Number of shares outstanding 143,555,786
Notes:
1. Outstanding shares increased by 10,794,142 shares as a result of the merger
on April 1, 2005 with Konami Computer Entertainment Studios, Inc., Konami
Computer Entertainment Tokyo, Inc., and Konami Computer Entertainment Japan,
Inc.
2. Outstanding shares increased by 4,024,078 shares as a result of a share
exchange on March 1, 2006 with Konami Sports Corporation (now Konami Sports &
Life Co., Ltd.)
3. Number of shares constituting one unit 100
4. Number of shareholders 62,295
(4) The ten largest shareholders
Shareholders' Investment The Company's Investment
in the Company in Major Shareholders
Number of Percentage Number of Percentage
Shares of Total Shares of Total
(thousands) (%) (thousands) (%)
Kozuki Foundation for Sports and Education 14,330 10.52 - -
Kozuki Holding B.V. 13,530 9.93 - -
Japan Trustee Services Bank, Ltd. (Trust Account) 11,438 8.40 - -
The Master Trust Bank of Japan, Ltd. (Trust Account) 11,221 8.24 - -
Kozuki Capital Corporation 7,036 5.16 - -
Sumitomo Mitsui Banking Corporation 4,477 3.29 - -
Konami Sports & Life Co., Ltd. 3,048 - 28,290 100.00
BNP PARIBAS Securities (Japan) Ltd. 2,893 2.12 - -
Carillon DMA OTC 2,006 1.47 - -
Trust & Custody Services Bank, Ltd. 1,930 1.42 - -
(Securities investment trust account)
Notes:
1. The Company holds 3,354 thousands treasury stock.
2. Through its share exchange agreement with the Company, on March 1, 2006,
Konami Sports & Life Co., Ltd. acquired 3,048 thousands shares of the Company.
However, since they are mutually held shares, they have been excluded from the
number of voting rights.
(5) Acquisition, Disposition, and Holdings of Treasury Stock
1) Acquisition of shares Common stock 34,227 shares
Amount of shares acquired Y87 million
2) Disposition of shares Common stock 5,935,424 shares
Amount of shares disposed Y18,120 million
3) Holdings as of the end of
current fiscal year Common stock 3,354,958 shares
(6) Issuance of stock options
1) Outstanding stock acquisition rights are as follows:
No. 1 stock acquisition rights
Date of issuance resolution: June 20, 2002
Number of stock options: 15,578
Type of shares subject to stock options: Common stock
Number of shares subject to stock options: 1,557,800 shares
Value of stock options issued: Issued without consideration
Stock acquisition rights whose obligations were succeeded to through share
exchange agreement as of March 1, 2006
Date of issuance resolution: June 23, 2004
Number of stock options: 12,020
Type of shares subject to stock options: Common stock
Number of shares subject to stock options: 949,580 shares
Value of stock options issued: Issued without consideration
2) Stock acquisition rights issued under particularly advantageous
conditions during the fiscal year to persons other than shareholders
No. 2 to No. 9 stock acquisition rights
Date of issuance resolution: June 23, 2005
Number of stock options: 3,954
Type of shares subject to stock options: Common stock
Number of shares subject to stock options: 395,400 shares
Value of stock options issued: Issued without consideration
Period of exercise of rights From August 1, 2005
to June 30, 2008
Conditions for exercise of rights Those conditions stipulated in agreements to allot stock acquisition rights
that were entered into between the Company and recipients pursuant to resolutions of
the Ordinary General Meeting of Shareholders and meetings of the Board of Directors.
Reasons and conditions for
extinguishment of rights The Company may at any time and without consideration extinguish unexercised that it
has purchased and holds.
Item concerning the assignment of
rights All transfers of rights shall require the approval of the Board of Directors
Nature of advantageous conditions Issued without consideration
3) Names of persons receiving allotments of stock acquisition rights and
number received
Employees of the Company, directors of affiliated companies, statutory corporate
auditors of affiliated companies and employees of affiliated companies (top ten
recipients)
Number of Type and number of shares
Name stock options subject to stock options Remarks
Shingo Takatsuka 106 Common stock 10,600 shares Employee of the Company
Hideo Kojima 105 Common stock 10,500 shares Employee of the Company
(Corporate Officer)
Motoyuki Yoshioka 105 Common stock 10,500 shares Employee of the Company
(Corporate Officer)
Satoshi Shimomura 105 Common stock 10,500 shares Employee of the Company
Michihiro Ishizuka 100 Common stock 10,000 shares Employee of the Company
(Corporate Officer)
Shinji Enomoto 50 Common stock 5,000 shares Employee of the Company
Kuniaki Kinoshita 42 Common stock 4,200 shares Employee of the Company
(Corporate Officer)
Kenichiro Honda 36 Common stock 3,600 shares Employee of the Company
Koji Igarashi 36 Common stock 3,600 shares Employee of the Company
Junko Kawano 36 Common stock 3,600 shares Employee of the Company
Classification of stock acquisition rights issued to employees of the Company
and employees of affiliated companies
Number Type and number of shares subject Total number of
to stock options persons granted
of stock warrants
options
Remarks
Employees of the Company 3,911 Common stock 391,100 shares 524
Employees of affiliated
companies 43 Common stock 4,300 shares 7
(7) Employees
1. Konami Group
Number of Employees Change from End of Previous Term
Digital Entertainment Business 2,664 483
Health & Fitness Business 1,549 112
Gaming & System Business 320 (9)
Other Business 196 95
Entire Company (corporate staff) 398 (101)
Total 5,127 580
Notes:
1. Employees include all persons on the Konami Group payroll.
2. Employees classified as corporate staff for the entire Company are
administrative staff not assigned to any particular business segment.
2. KONAMI CORPORATION
Change from Average Length of Service
Number of Employees End of Previous Term Average Age (years) (years)
39 (837) 35.9 5.3
Notes:
1. Employees include all persons on the parent company payroll.
2. The year-on-year decline in number of employees was the result of a company
separation in which Konami Digital Entertainment Co., Ltd. succeeded to the
Company's digital entertainment business on March 31, 2006.
(8) Group Status
1. Major subsidiaries
Company Capital Voting Rights Major Businesses
Percentage
Konami Digital Entertainment Y26,000 million 100.0 Planning, production, manufacture and
Co., Ltd. sale of online games, consumer-use video
games, amusement machines, toys, card
games, content for mobile phones, music
CDs and DVDs, books, magazines, etc.
Konami Sports & Life Co., Ltd. Y5,040 million 100.0 Operation of sports clubs; planning,
production, and sales of health and
fitness-related products and services
Konami Logistics and Service,Inc. Y100 million 100.0 Repair services; general freight
transportation
Konami Real Estate, Inc. Y10,000 million 100.0 Real estate leasing and management
Konami School, Inc. Y80 million 100.0 Fostering and training of digital
creators
Konami Career Management, Inc. Y60 million 100.0 Recruiting agency
HUDSON SOFT CO., LTD. Y5,064 million 53.9 Planning, manufacture and sales of
content for mobile phones and online
games, and software for consumer-use
games
Internet Revolution Inc. Y1,250 million 70.0 Operation of portal sites
Konami Digital Entertainment, Inc. US$21,500 thousand (100.0) Production and sales of consumer-use
100.0 video game software in U.S.A.
Konami Gaming, Inc. US$25,000 thousand (100.0) Production, manufacture and sales of
100.0 gaming machines in U.S.A.
Konami Digital Entertainment B.V. Eur 9,019 thousand 100.0 Sales of toys, hobby products and
products for amusement facilities in
Europe
Konami Digital Entertainment Eur 5,113 thousand (100.0) Sales of consumer-use video game
GmbH 100.0 software in Europe
Konami Digital Entertainment HK$19,500 thousand 100.0 Sales in Asia
Limited
Konami Software Shanghai, Inc. US$2,000 thousand 100.0 Production of consumer-use video game
software in Asia
Konami Australia Pty Ltd. A$3,000 thousand 100.0 Production, manufacture and sales of
gaming machines in Australia
Notes:
1. Voting Rights shown in parentheses are indirect ownership percentages, and
are included in the percentage indicated in the second line.
2. In March 2006, a number of group companies changed their trade names: Konami
Corporation of Europe B.V. became Konami Digital Entertainment B.V.; Konami of
Europe GmbH became Konami Digital Entertainment GmbH; and Konami Marketing
(Asia) Limited became Konami Digital Entertainment Limited.
2. New developments in corporate consolidation
1) In April 2005, the Company merged with Konami Computer Entertainment
Studios, Inc., Konami Computer Entertainment Tokyo, Inc., Konami Computer
Entertainment Japan, Inc., Konami Online, Inc. and Konami Media Entertainment,
Inc.
2) In April 2005, as a result of the Company's acceptance of a third party
allotment of additional shares, HUDSON SOFT CO., LTD, previously an
equity-method affiliate, became a 53.99% owned consolidated subsidiary of the
Company. Hudson Entertainment, Inc., a subsidiary of HUDSON SOFT CO., LTD,
became a consolidated subsidiary of the Company.
3) In June 2005, the Company merged with Konami Traumer, Inc.
4) In October 2005, the Company merged with Konami Marketing, Inc. Before the
merger, Konami Marketing, Inc. divided its distribution and customer-service
departments and established Konami Logistics and Service, Inc.
5) In October 2005, Konami Digital Entertainment, Inc. merged with Konami
Marketing, Inc.
6) In February 2006, Konami Sports Corporation merged with Konami Sports Life
Corporation. In March, Konami Sports Corporation became a wholly owned
subsidiary of the Company through a share exchange. Konami Sports Corporation
then changed its registered name to Konami Sports & Life Co., Ltd.
7) In February 2006, the Company and Internet Initiative Japan Inc.
established a joint venture company called Internet Revolution Inc.
8) In March 2006, through a company separation, the Company established Konami
Digital Entertainment Co., Ltd., which succeeded to its digital entertainment
business.
3. Consolidated results (U.S. GAAP)
The Company consolidates 23 companies, including the 15 major subsidiaries
listed above, and applies the equity method to one affiliated company.
An overview of our consolidated performance is provided above under the heading
'1. Business Performance, (1) Konami Group Business Conditions and Results.'
4. Other developments in corporate consolidation
1) In April 2005, the Company sold its entire shares of and terminated its
equity relationship with TAKARA Co., LTD., previously an equity-method
affiliate.
2) In March 2006, the Company purchased 20 percent of the outstanding shares of
Resort Solution Co., Ltd., making it an equity-method affiliate.
(9) Lenders, Loans and Shares Held by Lenders
Number of shares of the Company owned by
the lender
Lender Amount of loan Number of Shares Percentage of Total
(millions) (thousands) (%)
Sumitomo Mitsui Banking Corporation 2,259 4,477 3.29
The Bank of Tokyo-Mitsubishi UFJ, Ltd. 1,400 - -
Mizuho Corporate Bank, Ltd. 313 - -
(10) Directors and Corporate Auditors
Position Name Areas of responsibility and primary duties
Representative Director Kagemasa Kozuki Chairman of the Board and CEO
Representative Director Kagehiko Kozuki Vice Chairman
Representative Director Noriaki Yamaguchi CFO
Director Kimihiko Higashio CHO
Director Tsutomu Takeda Chairman, Konami Sports & Life Co., Ltd.
(Former Representative Director and President,
Asatsu-DK Inc.)
Director Tomokazu Godai President, Maya Tec Co., Ltd.
Director Hiroyuki Mizuno Director, Research Institute of Kochi
University of Technology
(Former Vice President, Matsushita Electric
Industrial Co., Ltd.)
Director Akira Gemma Senior Corporate Adviser, SHISEIDO Co., Ltd.
(Former Representative Director and President,
SHISEIDO Co., Ltd.)
Standing Corporate Auditor Noboru Onuma (Former Director, Sumitomo Mitsui Banking
Corporation)
Standing Corporate Auditor Tetsuro Yamamoto (Former Director, The Bank of Tokyo-Mitsubishi
UFJ, Ltd.)
Corporate Auditor Minoru Nagaoka President, Capital Markets Research Institute
(Former Chairman, Tokyo Stock Exchange)
Corporate Auditor Masataka Imaizumi Chairman, Police Association
(Former Superintendent-General of the
Metropolitan Police Department)
Note 1: Board members Tomokazu Godai, Hiroyuki Mizuno and Akira Gemma are
external directors as defined under Article 188, Section 2-7-2 of the Commercial
Code.
Note 2: Corporate auditors Noboru Onuma, Tetsuro Yamamoto, Minoru Nagaoka and
Masataka Imaizumi are external corporate auditors as defined under Article 18,
Section 1 of the 'Law for Special Exceptions to the Commercial Code concerning
Audits, etc. of Corporations.'
Note 3: Changes in the status of directors during the year ended March 31, 2006 were as follows.
Retired June 23, 2005 Director Toshiro Tateno
Appointed June 23, 2005 Director Kimihiko Higashio
(11) Payments to independent auditors
1) Total payments to independent auditors by the Company and its subsidiaries: Y194 million
2) Of total in 1) above, total payments by the Company and its subsidiaries for certified
auditing services: Y175 million
3) Of total in 2) above, total payments by the Company for services rendered as independent auditors: Y121 million
Note: The auditing contract between the Company and the independent auditors
makes no distinction between auditing services based on the Law Concerning the
Commercial Code and Special Treatment Under the Code for the Audit, etc. of
Kabushiki Kaisha and auditing services based on the Securities & Exchange Law.
Since no effective distinction can be made in practice, only the total amounts
are listed.
3. Important Events Following the End of the Fiscal Year
Not applicable.
Consolidated Balance Sheet
(As of March 31, 2006)
(Millions of yen)
ASSETS: LIABILITIES:
Current assets Y144,327 Current liabilities Y81,224
Cash and cash equivalents 68,694 Short-term borrowings 958
Trade notes and accounts receivable, Current portion of long-term debt
net of allowance for doubtful and capital lease obligations 24,492
accounts of Y541 millions
at March 31, 2006 32,294
Inventories 20,109 Trade notes and accounts payable 19,357
Deferred income taxes, net 16,510 Accrued income taxes 7,487
Prepaid expenses and other
current assets 6,720 Accrued expenses 16,323
Deferred revenue 5,353
Other current liabilities 7,254
Property and equipment, net Y42,452 Long-term liabilities Y55,477
Long-term debt and capital lease
Investments and other assets Y115,858 obligations, less current portion 35,631
Investments in marketable 572 Accrued pension and severance costs 2,658
securities
Investments in affiliates 6,050 Deferred income taxes, net 11,924
Identifiable intangible 38,575 Other long-term liabilities 5,264
assets
Goodwill 22,102
Lease deposits 25,277 Minority interest in consolidated
subsidiaries Y2,121
Other assets 20,103
Deferred income taxes, net 3,179 Commitments and contingencies -
SHAREHOLDERS' EQUITY:
Common stock 47,399
Additional paid-in capital 77,110
Legal reserve 284
Retained earnings 53,756
Accumulated other comprehensive
income 3,957
182,506
Treasury stock (18,691)
Total shareholders' equity 163,815
Total liabilities, minority interests
Total assets Y302,637 and shareholders' equity Y 302,637
Consolidated Statement of Income
(Year ended March 31, 2006)
(Millions of yen)
Net revenues Y262,137
Costs and expenses 259,656
Costs of products sold 184,744
Impairment charge for long-lived assets 10,533
Impairment charge for identifiable intangible assets 9,180
Selling, general and administrative expenses 55,199
Operating income 2,481
Other income (expenses) 5,957
Interest income 716
Interest expense (1,137)
Gain on sale of shares of an affiliated company 6,917
Other, net (539)
Income before income taxes, minority interest and equity
in net income of affiliated companies 8,438
Income taxes (10,270)
Income before minority interest and equity in net
income of affiliated companies 18,708
Minority interest in income of consolidated subsidiaries (4,267)
Equity in net income of affiliated companies 33
Net income Y23,008
Assumptions underlying preparation of consolidated financial statements
Summary of Significant Accounting Policies
1. Basis of presentation for consolidated financial statements
The consolidated statutory report including consolidated balance sheets and
consolidated statements of income has been prepared on the basis of accounting
principles generally accepted in the United States of America ('U.S. GAAP'), in
compliance with Article 179, Section 1 of the Commercial Code Enforcement
Regulations. However, in compliance with such article, certain disclosure that
is required on the basis of U.S. GAAP is omitted.
2. Methods and standards for the valuation of assets
(1) Marketable and Investment Securities
Marketable securities and securities held for trading purposes are stated at
fair value when readily determinable. Held-to-maturity debt securities are
stated at amortized cost after adjustment for any premium or discount. Realized
gains and losses from the sale of available-for-sale securities are determined
based on the average cost method.
(2) Inventories
Resalable products, finished products, work-in-process, raw materials and
supplies are stated at the lower of cost or market. Cost is determined by the
first-in first-out method for merchandise, by the identified-cost method for
software, and by averaging for all other items.
3. Depreciation methods
Tangible fixed assets are depreciated mainly using the declining balance method
while intangible fixed assets are amortized mainly using the straight-line
method.
4. Accounting standards for material reserves
(1) Allowance for doubtful accounts
Generally, allowance for doubtful accounts is calculated based on the actual
ratio of bad debt losses incurred. For specific accounts with higher possibility
of bad debt loss, the allowance is determined by respective judgment.
(2) Accrued pension and severance costs
The Company's financial statements have been prepared in conformity with
Statement of Financial Accounting Standards ('SFAS') No.87, 'Employers'
Accounting for Pensions.' With defined-benefit pension schemes operated by
multiple business owners, SFAS No.87 requires the recognition of net pension
expense based on the value of obligatory contributions for each fiscal period.
5. Consumption Tax
Consumption tax is excluded from the stated amount of revenue and expenses.
6. Goodwill and identifiable intangible assets
Goodwill represents the difference between the cost of acquired companies and
amounts allocated to the estimated fair value of their net assets. Identifiable
intangible assets represent intangible assets related to trademarks, membership
lists, gaming licenses, existing technologies, customer relationships and
franchise contracts, etc. acquired in connection with acquisitions of
subsidiaries. In accordance with SFAS No. 142, reviews are conducted at least
once annually to identify any impairment against fair value for goodwill and
intangible assets subject to amortization with indefinite useful lives, and a
test for any impairment loss is conducted at the end of each consolidated fiscal
period. Intangible assets subject to amortization with definite useful lives are
amortized over a period of 2-15 years corresponding to the estimated
useful life.
7. Impairment of long-lived assets
In accordance with SFAS No.144 'Accounting for the Impairment or Disposal of
Long-Lived Assets', the Company's long-lived assets are reviewed for impairment
whenever events or changes in circumstances indicate that the carrying amount of
an asset may not be recoverable. When the carrying amount of assets exceeds the
estimated future cash flows (undiscounted) for the assets, the impairment to be
recognized is measured by the amount by which the carrying amount of the assets
exceeds the estimated fair value of the assets. Assets to be disposed of are
reported at the lower of the carrying amount or fair value less costs to sell.
8. Scope of consolidation
Major consolidated subsidiaries are listed in '2.Corporate Data (8) Group
Status.'
9. Rounding policy
Amounts of less than one million yen are rounded to the nearest unit.
Notes to Consolidated Balance Sheet
1. Accumulated depreciation of tangible fixed assets Y63,026 million
2. Accumulated other comprehensive income
A breakdown of accumulated other comprehensive income at the consolidated level
in the year ended March 31, 2006 is as follows.
Foreign currency translation adjustments Y3,906 million
Unrealized gains on available-for-sale securities - net Y66 million
Adjustments of minimum pension liabilities Y (15) million
Accumulated other comprehensive income Y3,957 million
Notes to Consolidated Statement of Income
Basic net income per share Y175.86
Diluted net income per share Y175.80
(English Translation of the Auditors' Report Originally Issued in the Japanese
Language)
Independent Auditors' Report
May 26, 2006
The Board of Directors
KONAMI CORPORATION:
KPMG AZSA & Co.
Hideki Amano (Seal)
Designated and Engagement
Partner
Certified Public Accountant
Hidetoshi Fukuda (Seal)
Designated and Engagement
Partner
Certified Public Accountant
We have audited the consolidated statutory report, that is the consolidated
balance sheet and the consolidated statement of income of KONAMI CORPORATION
('the Company') for the 34th business year from April 1, 2005 to March 31, 2006
in accordance with Article 19-2(3) of the 'Law for Special Exceptions to the
Commercial Code Concerning Audit, etc. of Kabushiki Kaisha.' The consolidated
statutory report is the responsibility of the Company's management. Our
responsibility is to express an opinion on the consolidated statutory report
based on our audit as independent auditors.
We conducted our audit in accordance with generally accepted auditing standards
in Japan.
Those auditing standards require us to obtain reasonable assurance about whether
the
consolidated statutory report is free of material misstatement. An audit is
performed on a test basis, and includes assessing the accounting principles
used, the method of their application and estimates made by management, as well
as evaluating the overall presentation of the statutory report and supporting
schedules. We believe that our audit provides a reasonable basis for our
opinion. Our audit procedures also include those considered necessary for the
Company's majority-owned subsidiaries.
As a result of the audit, in our opinion, the consolidated statutory report
referred to above presents fairy the consolidated financial position of the
Company and consolidated subsidiaries, and the consolidated results of their
operations in conformity with related laws and regulations and the Articles of
Incorporation of the Company.
Our firm and engagement partners have no interest in the Company which should be
disclosed pursuant to the provisions of the Certified Public Accountants Law of
Japan.
Report of the Board of Corporate Auditors on the Consolidated Financial Statements
Having received reports from each corporate auditor regarding the methods and
results of the audit for the 34th term of business that extended from April 1,
2005 to March 31, 2006, and based on discussion of relevant matters, we, the
Board of Corporate Auditors, present our report on the Company's consolidated
financial statements (the consolidated balance sheet and statement of income).
1. Outline of Auditing Procedures by the Corporate Auditors
Based on the auditing standards established by the Board of Corporate Auditors
and in accordance with the allocation of responsibilities, each of the auditors
received reports and explanations from the directors of the Company and the
independent auditors regarding the consolidated financial statements and, where
deemed necessary, audited the operations and financial condition of subsidiaries
and consolidated subsidiaries, based on documents requested from these firms.
2. Conclusions of the Audit
(1) We affirm that the methods and the conclusions of the audit by KPMG AZSA &
Co., the independent auditors are proper.
(2) Based on the results of subsidiaries and consolidated subsidiaries audits,
we note no material findings with respect to the consolidated financial
statements.
May 29, 2006
Board of Corporate Auditors
KONAMI CORPORATION
Noboru Onuma (Seal)
Standing Statutory Corporate Auditor
Tetsuro Yamamoto (Seal)
Standing Statutory Corporate Auditor
Minoru Nagaoka (Seal)
Statutory Corporate Auditor
Masataka Imaizumi (Seal)
Statutory Corporate Auditor
Note: Statutory Corporate Auditors Messrs. Noboru Onuma, Tetsuro Yamamoto, Minoru Nagaoka and
Masataka Imaizumi are external statutory corporate auditors as provided for in
Article18.1 of the former 'Law for Special Exceptions to the Commercial Code
concerning Audits, etc. of Corporations' of Japan.
Balance Sheet
(As of March 31, 2006)
(Millions of yen)
ASSETS: LIABILITIES:
Current assets Y59,170 Current liabilities Y30,651
Cash and cash equivalents 43,980 Bonds redeemable within 1 year 15,000
Prepaid expenses 45 Current portion of long-term debt 1,992
Deferred income taxes, net 891 Other accounts payable 6,356
Short-term loans to 12,890 Accrued expenses 128
subsidiaries
Other accounts receivable 1,192 Income taxes payable 6,791
Other 188 Short-term deposits received 138
Allowance for doubtful accounts (18) Other 243
Fixed assets Y143,132 Long-term liabilities Y18,312
Tangible fixed assets 81 Straight Bonds 15,000
Buildings improvement 37 Long-term debt 1,980
Transportation equipment 4 Liabilities for directors' retirement
benefits 1,332
Tools and fixtures 39
Intangible fixed assets 3
In-house software 3 Total liabilities Y48,963
Other 0
Investments and other assets 143,048 SHAREHOLDERS' EQUITY:
Investment securities 952 Common stock 47,398
Investments in subsidiaries Capital reserves 43,568
and affiliates 139,628
Additional paid-in capital 36,893
Deferred income taxes, net 544 Other capital reserves 6,674
Lease deposits 1,264 Gain on reduction of capital or capital
reserves 6,674
Other 658 Retained earnings 72,546
Legal reserved 283
Appropriated earned surplus 34,094
General reserve 34,094
Unappropriated earned surplus 38,168
Net unrealized gains 64
on available-for-sale securities
Treasury stock (10,238)
Total shareholders' equity Y153,339
Total assets Y202,303 Total liabilities and shareholders'
equity Y202,303
Statement of Income
(Year ended March 31, 2006)
(Millions of yen)
I Net revenues Y122,591
II Costs and expenses 108,286
Costs of products sold 75,499
Selling, general and administrative expenses 32,786
Operating income 14,305
III Non-operating income 5,679
Interest and dividend income 5,417
Foreign exchange gains 139
Other 122
IV Non-operating expenses 693
Interest expenses 64
Bond interest expense 346
Other 282
Ordinary income 19,291
V Extraordinary income 5,707
Gain on sale of shares of an affiliated company 5,555
Gain on reversal of allowance for doubtful accounts 151
VI Extraordinary losses 247
Loss on disposal and sale of fixed assets 247
Income before income taxes 24,751
Current 8,803
Deferred (625)
Net income 16,572
Unappropriated earned surplus carried fowared 7,710
Transfer from legal reserve 17,402
Interim cash dividends 3,518
Unappropriated earned surplus Y 38,168
Summary of Significant Accounting Policies
1. Methods and standards for the valuation of assets
(1) Marketable and Investment Securities
Securities in affiliated companies are stated at cost based on the moving
average method.
Other investment securities
- Quoted securities: the market value method is applied, based on
the market value as of the fiscal year-end. The entire
positive or negative valuation difference with the
purchase price is booked directly as shareholders'
equity, and the cost of securities sold is calculated
using the moving average method
Unquoted securities: valued at cost using the moving average method
(2) Derivatives
Stated at fair value.
(3) Inventories
Finished products and raw materials and supplies are stated at cost determined
by the moving average method.
Work in process consisting of hardware products is stated at cost determined by
the moving average method while work in process consisting of software products
is stated at cost determined by the specific identification method.
2. Depreciation methods
Tangible fixed assets are depreciated mainly using the declining balance method
while intangible fixed assets are amortized mainly using the straight-line
method. For in-house software, amortization is computed using the straight-line
method based on the estimated useful life of 5 years. Long-term prepaid expenses
are amortized mainly using the straight-line method.
3. Accounting standards for material reserves
(1) Allowance for doubtful accounts
Generally, allowance for doubtful accounts is calculated based on the actual
ratio of bad debt losses incurred. For specific accounts with higher possibility
of bad debt loss, the allowance is determined by respective judgment.
(2) Accrued pension and severance costs (Prepaid pension expense)
Provided based on the estimated amount of the projected benefit obligation and
the plan assets at the year-end. Unrecognized net transition asset is credited
to expense over 13 years on a straight-line basis. Unrecognized actuarial net
gain or loss will be amortized from the following fiscal year within the average
remaining service period of 8 years on a straight-line basis.
(3) Liabilities for directors' retirement benefits
Reserved as per Article 43, of the Commercial Code to provide for the payment of
special retirement allowances to directors and corporate auditors. The amount is
calculated based on the amount to be paid at the end of the term as per internal
regulations.
4. Leases
Finance leases other than those that are deemed to transfer ownership of the
leased property to the lessee are accounted for as operating lease transactions.
5. Consumption Tax
Consumption tax is excluded from the stated amount of revenue and expenses.
6. Rounding policy
Amounts of less than one million yen are rounded to the nearest unit.
7. Others
The rules governing exemptions for affiliates under Article 48, Section 1 of the
Commercial Code are applied to the presentation of certain parts of the
financial statements.
Changes in Accounting Policy
1. Accounting standards for loss on impairment of fixed assets
Beginning with the reporting term, the Company has adopted the new accounting
standards for recognition of loss on impairment of fixed assets(Opinion
concerning establishment of accounting standard for impairment of fixed assets,
issued by the Business Accounting Council dated August 9, 2002, and its related
guideline issued on October 31, 2003). There is little impact to the income
statement.
2. Accounting standards for retirement benefits
Beginning with the reporting term, the Company has adopted the new accounting
standards for retirement benefits based on Accounting Standard No. 3, 'Partial
Revision of Accounting Standard for Retirement Benefits' and Financial Standards
implementation Guidance No. 7, 'Implementation Guidance for Partial Revision of
Accounting Standard for Retirement Benefits' issued on March 16, 2005. As a
result of this change, the impact is minimal.
Notes to Balance Sheet
1. Monetary assets and liabilities in relation to subsidiaries and affiliated
companies
(Millions of yen)
Short-term assets 13,822
Short-term liabilities 5,961
Long-term assets 106
Long-term liabilities -
2. Accumulated depreciation of tangible fixed assets Y204 million
3. Major leased assets
In addition to tangible fixed assets shown on the balance sheet, computers used
for research, development, and production and some office equipment are leased.
4. Number of outstanding shares and treasury stock
Total shares outstanding at end of term: 143,555,786 shares
Number of own shares held at end of term: 3,354,958 shares
5. Limitation on dividend
Net asset value as stipulated in Article 124 Section 3 of the Commercial Code:
Y64 million
Notes to Statement of Income
1. Transactions with subsidiaries and affiliated companies
(Millions of yen)
Revenues 68,562
Purchases 3,406
Selling, general and administrative expenses 8,630
Non-operating transactions 5,408
2. Net income per share Y124.75
Proposed Appropriation Plan of Earned Surplus
(Year ended March 31, 2006)
(Yen)
Unappropriated earned surplus at year-end Y 38,168,302,792
To be appropriated as follows.
Cash dividends 3,785,422,356
(Y27.0 per share)
Directors' bonuses 220,000,000
General reserve 18,000,000,000
Unappropriated earned surplus carried forward to next year Y16,162,880,436
Notes:
1. On November 30, 2005, interim cash dividends amounting to Y3,518,264,025
(Y27.0 per share) were paid.
2. Cash dividends exclude dividends on 3,354,958 shares of treasury stock.
(English Translation of the Auditors' Report Originally Issued in the Japanese
language)
Independent Auditors' Report
May 8, 2006
The Board of Directors
KONAMI CORPORATION:
KPMG AZSA & Co.
Hideki Amano (Seal)
Designated and
Engagement Partner
Certified Public Accountant
Hidetoshi Fukuda (Seal)
Designated and
Engagement Partner
Certified Public Accountant
We have audited the statutory report, that is the balance sheet, the statement
of income, the business report (limited to accounting matters) and the proposal
for appropriation of unappropriated retained earnings, and its supporting
schedules (limited to accounting matters) of KONAMI CORPORATION ('the Company')
for the 34th business year from April 1, 2005 to March 31, 2006 in accordance
with Article 2(1) of the 'Law for Special Exceptions to the Commercial Code
Concerning Audit, etc. of Kabushiki Kaisha'. With respect to the aforementioned
business report and the supporting schedules, our audit was limited to those
matters derived from the accounting books and records of the Company. The
statutory report and supporting schedules are the responsibility of the
Company's management. Our responsibility is to express an opinion on the
statutory report and supporting schedules based on our audit as independent
auditors.
We conducted our audit in accordance with generally accepted auditing standards
in Japan. Those auditing standards require us to obtain reasonable assurance
about whether the statutory report and supporting schedules are free of material
misstatement. An audit is performed on a test basis, and includes assessing the
accounting principles used, the method of their application and estimates made
by management, as well as evaluating the overall presentation of the statutory
report and supporting schedules. We believe that our audit provides a reasonable
basis for our opinion. Our audit procedures also include those considered
necessary for the Company's subsidiaries.
As a result of the audit, our opinion is as follows:
(1) The balance sheet and the statement of income present fairly the financial
position and the results of
operations of the Company in conformity with related laws and regulations and
the Articles of Incorporation of the Company.
(2) As mentioned in 'Changes in accounting policy', effective April 1, 2005 the
Company has been applying the Accounting Standard for the Impairment of Fixed
Assets (Opinion Concerning Establishment of Accounting Standard for the
Impairment of Fixed Assets; Business Accounting Council, August 9, 2002) and the
Implementation Guidance for the Accounting Standard for Impairment of Fixed
Assets (Financial Accounting Standard Implementation Guidance No. 6; Accounting
Standards Board of Japan; October 31, 2003). We consider the nature of these
changes and the reasons therefore to be appropriate. This change results from a
decision to apply the Accounting Standard and the Implementation Guidance
effective April 1, 2005.
(3) The business report (limited to accounting matters) presents fairly the
status of the Company in conformity with related laws and regulations and the
Articles of Incorporation of the Company.
(4) The proposal for appropriation of unappropriated retained earnings has been
prepared in conformity with related laws and regulations and the Articles of
Incorporation of the Company.
(5) With respect to the supporting schedules (limited to accounting matters)
there are no items to be noted that are not in conformity with the provisions of
the Commercial Code.
Our firm and engagement partners have no interest in the Company which should be
disclosed pursuant to the provisions of the Certified Public Accountants Law of
Japan.
COPY OF THE BOARD OF STATUTORY CORPORATE AUDITORS' REPORT
We, the Board of Corporate Auditors, have received reports from each of the
Corporate auditors on the Conduct of business activities by the directors of the
Company during the 34th termCWhich extended from April 1, 2005 to March 31, 2006
and on the methods and results of the audit covering such term. After meeting
and discussing these matters, we report as follows:
1. Outline of Auditing Procedures by the Corporate Auditors
Based on the auditing standards established by the Board of Corporate Auditors
and in accordance with audit policies and plans, each of the auditors attended
meetings of the Board of Directors and other important meetings; interviewed
directors regarding the execution of their duties (including matters such as
oversight of internal control systems for legal compliance and risk management);
inspected important accounting documents; carried out investigations of the
Company's business operations and financial condition at the Head Office and all
major sites; and audited the operations and financial condition of major
subsidiaries as necessary, based on documents requested from these firms.
In addition to the above-mentioned auditing procedures, with respect to such
matters as the engagement of a director in a competing business, the conduct of
transactions causing a conflict of interest between a director and the Company,
the provision of benefits by the Company without consideration, the conduct of
irregular transactions with subsidiaries or shareholders of the Company, and
acquisitions and disposal of own shares by the Company, we employed such methods
as requiring reports from directors and others and made detailed inspections or
such matters.
2. Conclusions of the Audit
(1) We affirm that the methods and the conclusions of the audit by KPMG AZSA &
Co., the independent auditors are proper.
(2) We affirm that the business report fairly presents the situation of the
Company in compliance with the provisions of applicable laws, regulations and
the Articles of Incorporation.
(3) That the proposition relating to the appropriation of retained earnings has
nothing to be pointed out considering the state of property of the Company and
other circumstances;
(4) That the accompanying detailed statements fairly present the matters to be
stated therein and contain nothing to be pointed out; and
(5) We affirm that there have been no illegal acts committed or any serious
violations of laws and regulations or the Company's Articles of Incorporation
with regard to the directors' execution of corporate duties.
We also affirm that there have been no violations by directors with regard to
matters such as engaging in a competing business or other operational conflicts
of interest, receipt of remuneration other than that for execution of corporate
duties, conduct of irregular transactions with subsidiaries or shareholders of
the Company, or the acquisition or disposal of shares in the Company.
(6) We note no material findings with respect to the directors' execution of
duties in regard to internal control systems.
(7) Based on the results of subsidiary audits, we note no material findings
with respect to the directors' execution of duties.
May 9, 2006
Board of Corporate Auditors
KONAMI CORPORATION
Noboru Onuma (Seal)
Standing Statutory Corporate Auditor
Tetsuro Yamamoto (Seal)
Standing Statutory Corporate Auditor
Minoru Nagaoka (Seal)
Statutory Corporate Auditor
Masataka Imaizumi (Seal)
Statutory Corporate Auditor
Note: Statutory Corporate Auditors Messrs. Noboru Onuma, Tetsuro Yamamoto,
Minoru Nagaoka and Masataka Imaizumi are external statutory corporate auditors
as provided for in Article18.1 of the former 'Law for Special Exceptions to the
Commercial Code concerning Audits, etc. of Corporations' of Japan.
Reference Materials for the General Meeting of Shareholders
1. Proposals and related items
Proposal 1: Acceptance of Proposed Appropriation Plan of Earned Surplus for the
34th fiscal year.
Details of this proposal appear on page 33 of the appended materials.
The Company believes that the maintenance of a high dividend and the enhancement
of enterprise value are important means of providing value to shareholders.
Based on the policy concerning dividends described above, the dividend for the
current term is proposed to be Y27 per share.
When this dividend is added to the interim dividend (Y27 per share), the total
dividend for the year will be Y54 per share, the same amount as the 33rd fiscal
year.
Considering our financial results for the year ended March 31, 2006, the Company
proposed to pay Y220 million of directors' bonus to our four directors.
Proposal 2: Amendments to the Articles of Incorporation
The Company proposes to make partial amendments to the Articles of Incorporation
for the reasons outlined below.
1. Reasons for amendments
(1) As a holding company and to correspond to the business development of the
Konami group, we plan to make a partial amendment to the Article 2 (Purpose).
(2) With the enactment of the 'Corporate Law' (Law No. 86, 2005) and the 'Law
to Accommodate Relevant Laws in line with the Enforcement of the Corporate Law'
(Law No. 87, 2005) effective on May 1, 2006, it is proposed that:
(a) Article 4 (Governing Bodies) be newly established in order to
create governing bodies of the Company;
(b) Article 7 (Issuance of Share Certificates) be newly
established to enable the Company to make such issuance;
(c) Article 10 (Rights concerning Shares Constituting Less Than
One Unit) be newly established to define rights of shareholders holding shares
less than one minimum share-trading unit;
(d) Article 17 (Internet Disclosure of Reference Documents, etc.
and Deemed Provision) be newly established to adopt the system to disclose via
internet reference documents, etc. for a general shareholders meeting;
(e) Current Article 15 (Exercise of Voting Rights by Proxy) be
amended to Article 19 (Exercise of Voting Rights by Proxy), which defines the
method to prove the proxy's authority and number of the proxy when voting rights
are exercised by proxy at a General Meeting of Shareholders;
(f) Article 25 (Omission of Resolution of the Board of
Directors) be newly established in order to allow the Board of Directors to make
a resolution flexibly in writing or in an electronic method where necessary;
(g) Article 28 (Limited Liability Contracts with External
Directors) be newly established to enable the Company to enter into contracts
with External Directors under which their liabilities shall be restricted.
(h) Article 36 (Limited Liability Contracts with External
Corporate Auditors) be newly established to enable the Company to enter into
contracts with External Corporate Auditors under which their liabilities shall
be restricted.
(i) Article 38 (Governing Bodies to Determine Distribution of
Surplus, etc.) be newly established to enable the Company to take flexible
dividend policy as it was approved to determine distribution of surplus, etc. by
resolution of the Board of Directors rather than General Meeting of
Shareholders; and
(j) In addition to the above, amendments be made or added to
terms or expressions used or provisions of relevant laws quoted in these
Articles of Incorporation to make such terms or expressions or quotations
consistent with the Corporate Law.
(3) It is necessary for the Company to revise overall provisions of and make
any necessary amendment to words or phrases contained in these Articles of
Incorporation by making a full review thereof.
2. Particulars of the amendments
The Company proposes that the current Articles of Incorporation be amended as
follows:
(Amendments are underlined)
Current Articles of Incorporation Amended Proposed Amendments
Chapter I: GENERAL PROVISIONS Chapter I: GENERAL PROVISIONS
Article 1 (Trade Name) Article 1 (Trade Name)
The name of the Company is Konami Kabushiki (Unchanged)
Kaisha, being expressed as 'KONAMI CORPORATION' in
English.
Article 2 (Purposes) Article 2 (Purposes)
The purpose of the Company shall be to own shares (Unchanged)
of companies which run the following businesses or
a foreign company which runs equivalent
businesses, and be engaged in the control and
administration of the subject companies' business
activities as well as implementation of operations
incidental to such activities.
1. Research, development, manufacture and 1. (Unchanged)
distribution of software and hardware
relating to electric appliances and
electronic components;
2. Planning, production, manufacture, rental 2. (Unchanged)
and distribution of music, audio and visual
software (including disks, tape and film,
etc.); production and acquisition of master
copies, and transferal or usage permission
thereof;
3. Acquisition, management, promotion of usage 3. (Unchanged)
and development of music copyright and
related performance rights, and transferal
or usage permission thereof;
4. Planning, production and distribution of 4. (Unchanged)
books, magazines, sheet music and other
publications;
5. Development, manufacture and distribution of 5. (Unchanged)
toys;
6. Design of character products (with images of 6. (Unchanged)
people, animals, etc. which have unique
names or characters);
7. Planning, production and distribution on the 7. Planning, production, distribution on the Internet
Internet; and Internet related services;
8. Planning, establishment and operation of (Deleted)
shopping complex on the Internet, provision
of know-how thereof and correspondence
sales;
9. Provision and distribution of software using (Deleted)
communication circuits;
(Newly added) 8. Gathering online distribution, processing and online
sales of information, pictures and music using
electrical communication and electrical communication
related services;
(Newly added) 9. Information processing services and information
reporting services;
10. Management of sports facilities and 10. Management and control of sports facilities,
amusement arcades; amusement arcades, restaurants, accommodations, hot
spring bathing facilities, saunas and parking lots;
(Newly added) 11. Management of schools for training and educating
sport instructors, producers of digital content
(application software for digital technology) and
producers of computer software;
(Newly added) 12. Medical treatment services and beauty services;
11. Distribution of soft drinks, foods, 13. (Unchanged)
alcoholic beverages, sports gear, clothing
and computer game machines;
12. Advertising agency, insurance agency, 14. Advertising agency, insurance agency, broadcasting
broadcasting business and leisure business business, travel agency and leisure business
including tour, sports, etc.; including tour, sports, etc.;
13. Purchase and sale of antiques; 15. (Unchanged)
14. Sale, purchase, lease, blockage and 16. (Unchanged)
management of real estate;
15. Job placement; 17. (Unchanged)
(Newly added) 18. General lease business and finance business;
16. Holding of and investment in securities; 19. (Unchanged)
17. Acquisition and management of copyrights, 20. (Unchanged)
trademark rights, design rights, performance
rights and rights to produce records and
videos related to the preceding items;
18. Import, export and agency business related 21. (Unchanged)
to each of the preceding items;
19. Investment in the party in charge of the 22. (Unchanged)
business specified in the preceding items;
and
20. Any and all businesses incidental to any of 23. (Unchanged)
the preceding items.
Article 3 (Location of Head Office) Article 3 (Location of Head Office)
The Company shall have its head office in (Unchanged)
Chiyoda-ku, Tokyo.
(Newly added) Article 4 (Governing Bodies)
The Company shall have a Board of Directors, Corporate
Auditors, a Board of Corporate Auditors and Accounting
Auditors.
Article 4 (Method of Public Notice) Article 5 (Method of Public Notice)
Public notices of the Company shall be published (Unchanged)
electronically. In cases where accident or other
unavoidable circumstances preclude online
publication, notices shall be carried in the Nihon
Keizai Shimbun.
Chapter II: SHARES Chapter II: SHARES
Article 5 (Total Number of Shares to be Issued) Article 6 (Total Number of Shares Authorized to be Issued)
The total number of shares authorized to be issued The total number of shares authorized to be issued by the
by the Company shall be four hundred fifty million Company shall be four hundred fifty million (450,000,000).
(450,000,000); provided, however, that the number
shall be, in case of cancellation, reduced by the
number of shares so cancelled.
(Newly added) Article 7 (Issuance of Share Certificates)
The Company shall issue share certificates for its shares.
Article 6 (Acquisition of the Company's Own Article 8 (Acquisition of the Company's Own Shares)
Shares)
In accordance with the provisions of Article 165, paragraph
In accordance with the provisions of item 2, 2 of the Corporate Law, the Company may acquire its own
paragraph 1 of Article 211-3 of the Commercial shares through market transactions by resolution of the
Code, the Company may purchase and hold its own Board of Directors.
shares through a resolution adopted by its Board
of Directors.
Article 7 (Number of Shares Constituting One Unit Article 9 (Number of Shares Constituting One Unit and
and Non-Issuance of Share Certificates Non-Issuance of Share Certificates Constituting Less than
Constituting Less than One Unit) One Unit)
1. The number of shares of the Company which (Unchanged)
constitute one (1) unit shall be one hundred
(100).
2. The Company shall not issue any share
certificates for shares constituting less than one
(1) unit ('Shares Constituting Less than One
Unit'); unless otherwise provided for in the Share
Handling Regulations.
(Newly added) Article 10 (Rights concerning Shares Constituting Less
than One Unit)
Shareholders of the Company holding Shares Constituting
Less than One Unit (including beneficial shareholders,
hereinafter the same) cannot exercise their rights as
shareholders other than as enumerated below:
(1) rights provided for in each item of Article 189,
Paragraph 2 of the Corporate Law;
(2) rights provided for in Article 166, Paragraph 1 of the
Corporate Law;
(3) rights of shareholders to subscribe for shares or stock
acquisition rights in accordance with the number of shares
they hold; and
(4) rights to make a request provided for in Article 11
hereof.
Article 8 (Requests for purchase of fractional Article 11 (Requests for purchase of fractional unit
unit shares) shares)
1. Shareholders (including, hereinafter, 1. Shareholders shall have the right to request that
beneficial shareholders) who hold shares numbering the Company sell to them that number of shares which
less than one unit shall have the right to request will bring their current holdings numbering less than one
(hereinafter, 'request for additional shares') unit up to one unit.
that the Company sell to them that number of
shares which will bring their current holdings up
to one unit.
2. The periods for such requests of
additional shares, the methods required to be
used, etc., shall be governed by rules established
by the Board of Directors. 2. (Unchanged)
Article 9 (Transfer Agent) Article 12 (Administrator of Shareholders' Register)
1. The Company shall have a transfer agent 1. The Company shall appoint an administrator of the
with respect to its shares. shareholders' register.
2. The transfer agent and its handling 2. The administrator of the shareholders' register
office shall be selected by a resolution of the and its handling office shall be designated by resolution
Board of Directors and public notice thereof shall of the Board of Directors, and public notice thereof shall
be given. be given.
3. The shareholders' register (including 3. The preparation and retention of the register of
beneficial shareholders' register, hereinafter, shareholders (including register of beneficial
the same) of the Company and its lost stock shareholders, hereinafter the same), ledger of stock
certificates register shall be kept at the acquisition rights and register of lost share certificates
transfer agent's handling office and the of the Company or any other business related thereto shall
registration of transfer of shares, registration be entrusted to the administrator of shareholders' register
of pledge, record of trust assets, delivery of and shall not be handled by the Company.
share certificates, the recording of lost stock
certificates, purchase and sale of Shares
Constituting Less than One Unit, acceptance of
notifications and other matters relating to shares
shall be handled by the transfer agent and not by
the Company.
Article 10 (Share Handling Rules) Article 13 (Share Handling Rules)
The class of share certificates, the registration The handling business relating to shares of the Company
of transfer of shares, registration of pledge, and fees thereof shall be subject to the provisions of the
record of trust assets, delivery of share Share Handling Regulations determined by the Board of
certificates, the recording of lost stock Directors as well as laws and regulations and these
certificates, purchase and sale of Shares Articles of Incorporation.
Constituting Less than One Unit and other matters
relating to shares shall be subject to the
provisions of the Share Handling Regulations
determined by the Board of Directors as well as
these Articles of Incorporation.
Article 11 (Record Date) (Deleted)
1. The Company shall deem that the
shareholders, who are listed or recorded on the
Shareholders' Registers as of March 31 of every
year are entitled to exercise their voting rights
at the ordinary general meeting of shareholders
for the relevant fiscal year.
2. In addition to the preceding paragraph,
the Company may, giving prior public notice, fix a
record date for the occasion whenever necessary by
a resolution of the Board of Directors.
Chapter III: GENERAL MEETING OF SHAREHOLDERS Chapter III: GENERAL MEETING OF SHAREHOLDERS
Article 12 (Convocation) Article 14 (Convocation)
An ordinary general meeting of shareholders of the An ordinary general meeting of shareholders of the
Company shall be convened within three (3) months Company shall be convened in June of each year and an
after the day following each account settlement extraordinary general meeting of shareholders shall be
date of every fiscal year and an extraordinary convened from time to time whenever necessary. Such general
general meeting of shareholders shall be convened meetings of shareholders shall be held within the wards in
from time to time whenever necessary. Such general Tokyo.
meetings of shareholders shall be held within the
wards in Tokyo.
(Newly added) Article 15 (Record Date for Ordinary General Meeting of
Shareholders)
The record date for the determination of voting rights at
the Company's ordinary general meeting of shareholders
shall be March 31st of each year.
Article 13 (Convener and Chairperson) Article 16 (Convener and Chairperson)
Chairman or President shall convene the general Chairman or President shall convene the general meetings
meetings of shareholders of the Company and act as of shareholders of the Company and act as a chairperson. If
a chairperson, unless otherwise provided for by both Chairman and President are unable to act in this
laws or regulations. If both Chairman and capacity, one of the other Directors shall take his/her
President are unable to act in this capacity, one place in the order previously determined by a resolution of
of the other Directors shall take his/her place in the Board of Directors.
the order previously determined by a resolution of
the Board of Directors.
(Newly added) Article 17 (Internet Disclosure of Reference Documents,
etc. and Deemed Provision Thereof)
In convening a general meeting of shareholders, the Company
may, pursuant to the relevant regulation issued by the
Ministry of Justice, deem that it has duly provided its
shareholders with the information which must be mentioned
or displayed in the reference document of a general meeting
of shareholders, business report, financial statements and
consolidated financial statements by disclosing such
information using the Internet.
Article 14 (Method of Resolution) Article 18 (Method of Resolution)
1. Unless otherwise provided for by laws, 1. Unless otherwise provided for by laws and
regulations or these Articles of Incorporation, regulations or these Articles of Incorporation, resolutions
any resolution at a general meeting of at a general meeting of shareholders shall be approved by
shareholders shall be approved by the majority of the majority of the voting rights of the shareholders
the voting rights of shareholders present. present who are entitled to exercise their voting rights at
said meeting.
2. Extraordinary resolutions, subject to
Article 343 of the Commercial Code, can be made by 2. Extraordinary resolutions, subject to Article 309,
a two-thirds vote of the shareholders present, who Paragraph 2 of the Corporate Law, can be made by a
possess one-third or more of the total voting two-thirds vote of the shareholders present, who possess
rights. one-third or more of the voting rights of the shareholders
who are entitled to exercise their voting rights at said
meeting.
Article 15 (Exercise of Voting Rights by Proxy) Article 19 (Exercise of Voting Rights by Proxy)
A shareholder may exercise his/her voting right
by a proxy who is also a shareholder having voting
right of the Company; provided, however, that only A shareholder may exercise his/her voting right by one (1)
one (1) proxy shall be admitted and such proxy proxy who is also a shareholder having voting right of the
shall be required to submit documents evidencing Company; provided, however, that such shareholder or proxy
his/her authority. submits to the Company documents evidencing his/her
authority at the general meeting of shareholders at which
the proxy is voting on behalf of the shareholder.
Chapter IV: DIRECTORS AND THE BOARD OF DIRECTORS Chapter IV: DIRECTORS AND THE BOARD OF DIRECTORS
Article 16 (Number of Directors) Article 20 (Number of Directors)
The number of Directors of the Company shall not (Unchanged)
be more than twelve (12).
Article 17 (Election of Directors) Article 21 (Election of Directors)
1. Directors of the Company shall be elected 1. (Unchanged)
at a general meeting of shareholders.
2. Directors of the Company shall be elected
by the majority of the voting rights of 2. Directors of the Company shall be elected by the
shareholders present at a general meeting of majority of the voting rights of shareholders present at a
shareholders where shareholders having one third general meeting of shareholders who have one third (1/3) or
(1/3) or more of voting rights of all the more of the voting rights of the shareholders entitled to
shareholders shall be present. exercise their voting rights thereat.
3. The election of Directors of the Company 3. (Unchanged)
shall not be made by a cumulative voting.
Article 18 (Term of Office of Directors) Article 22 (Term of Office of Directors)
1. The term of office of Directors of the 1. The term of office of Directors of the Company shall
Company shall expire upon the conclusion of the expire upon the conclusion of the ordinary general meeting
ordinary general meeting of shareholders with of shareholders with respect to the last business year
respect to the last fiscal year ending within one ending within one (1) year after their election.
(1) year after their assumption of office.
2. The term of office of Directors elected
to increase the number of Directors shall expire
at the time of expiration of the term of office of
the other incumbent Directors. (Deleted)
3. The term of office of the Director
elected to fill a vacancy of a retired Director
shall be the remaining period of the term of
office of such retired Director. (Deleted)
Article 19 (Representative Directors and Article 23 (Representative Directors and Directors with
Directors with Title) Title)
Directors who represent the Company, President and 1. Director(s) who represent the Company shall be
any other Directors with specific titles shall be appointed at a meeting of the Board of Directors.
appointed at a meeting of the Board of Directors.
(Newly added) 2. The President and Director and any other Directors with
specific titles shall be appointed at a meeting of the
Board of Directors.
Article 20 (Convocation of the Meeting of the Article 24 (Convocation of the Meeting of the Board of
Board of Directors and Chairperson) Directors and Chairperson)
1. Chairman or President shall convene a 1. (Unchanged)
meeting of the Board of Directors and act as a
chairperson unless otherwise provided for by laws
or regulations. If both Chairman and President are
unable to act in this capacity, one of the other
Directors shall take his/her place in the order
previously determined by a resolution of the Board
of Directors.
2. Notice of convocation of a meeting of the 2. (Unchanged)
Board of Directors shall be dispatched to each
Director and Corporate Auditor three (3) days
prior to the date of such meeting; provided,
however, that such period may be shortened in case
of emergency.
(Newly added) 3. With the consent of all the Directors and Corporate
Auditors, a meeting of the Board of Directors may be held
without complying with the convocation procedures.
(Newly added) Article 25 (Omission of Resolution of the Board of
Directors)
In case where requirements as provided for in Article 370
of the Corporate Law are satisfied, the Company deems that
relevant resolutions of the Board of Directors shall have
been duly made.
Article 21 (Regulations of the Board of Article 26 (Regulations of the Board of Directors)
Directors) (Unchanged)
Matters regarding the Board of Directors of the
Company shall be determined pursuant to the
Regulations of the Board of Directors unless
otherwise provided for by laws, regulations or
these Articles of Incorporation.
Article 22 (Remuneration) Article 27 (Remuneration, etc.)
The remuneration of Directors shall be determined The remuneration for Directors, annual bonus and other
at a general meeting of shareholders. proprietary benefits received from the Company as
consideration for execution of their duties (hereinafter
referred to as 'Remuneration, etc.') shall be determined by
resolution of a general meeting of shareholders.
(Newly added) Article 28 (Limited Liability Contracts with External
Directors)
In accordance with the provisions of Article 427, Paragraph
1 of the Corporate Law, the Company may enter into
contracts with External Directors under which their
liabilities provided for in Article 423, Paragraph 1 of the
said law shall be restricted.
Chapter V: CORPORATE AUDITORS AND THE BOARD OF Chapter V: CORPORATE AUDITORS AND
CORPORATE AUDITORS THE BOARD OF CORPORATE
AUDITORS
Article 23 (Number of Corporate Auditors) Article 29 (Number of Corporate Auditors)
The number of Corporate Auditors of the Company (Unchanged)
shall not be more than five (5).
Article 24 (Election of Corporate Auditors) Article 30 (Election of Corporate Auditors)
1. Corporate Auditors of the Company shall 1. (Unchanged)
be elected at a general meeting of shareholders.
2. Corporate Auditors of the Company shall
be elected by the majority of the voting rights of
shareholders present at a general meeting of
shareholders where shareholders having one third 2. Corporate Auditors of the Company shall be elected
(1/3) or more of voting rights of all the by the majority of the voting rights of shareholders
shareholders shall be present. present at a general meeting of shareholders who have one
third (1/3) or more of the voting rights of the
shareholders entitled to exercise their voting rights
thereat.
Article 25 (Term of Office of Corporate Auditors) Article 31 (Term of Office of Corporate Auditors)
1. The term of office of Corporate Auditors
of the Company shall expire upon the conclusion of
the ordinary general meeting of shareholders with 1. The term of office of Corporate Auditors of the
respect to the last fiscal year ending within four Company shall expire upon the conclusion of the ordinary
(4) years after their assumption of office. general meeting of shareholders with respect to the last
business year ending within four (4) year after their
election.
2. The term of office of the Corporate
Auditor elected to fill a vacancy of a retired 2. The term of office of the Corporate Auditor
Corporate Auditor shall be the remaining period of elected to fill a vacancy of a retired Corporate Auditor
the term of office of such retired Corporate shall expire when such predecessor's full term of office
Auditor. would have expired.
Article 26 (Standing Corporate Auditors) Article 32 (Standing Corporate Auditors)
Corporate Auditors shall elect Standing Corporate The Board of Corporate Auditors shall, by resolution
Auditors from and among themselves. thereof, elect Standing Corporate Auditors from among the
Corporate Auditors.
Article 27 (Notice of Convocation of the Meeting Article 33 (Notice of Convocation of the Meeting of the
of the Board of Corporate Auditors) Board of Corporate Auditors)
Notice of convocation of a meeting of the Board of 1. (Unchanged)
Corporate Auditors shall be dispatched to each
Corporate Auditor three (3) days prior to the date
of such meeting; provided, however, that such
period may be shortened in case of emergency.
(Newly added) 2. If the consent of all Corporate Auditors is obtained, a
meeting of the Board of Corporate Auditors may be held
without following the procedures for convening the meeting.
1.
Article 28 (Regulations of the Board of Corporate Article 34 (Regulations of the Board of Corporate
Auditors) Auditors)
Matters regarding the Board of Corporate Auditors (Unchanged)
shall be determined pursuant to the Regulations of
the Board of Corporate Auditors unless otherwise
provided for by laws, regulations or these
Articles of Incorporation.
Article 29 (Remuneration) Article 35 (Remuneration, etc.)
The remuneration of Corporate Auditors shall be The remuneration, etc. for Corporate Auditors, shall be
determined at a general meeting of shareholders. determined by resolution of a general meeting of
shareholders.
(Newly added) Article 36 (Limited Liability Contracts with External
Corporate Auditors)
In accordance with the provisions of Article 427, Paragraph
1 of the Corporate Law, the Company may enter into
contracts with External Corporate Auditors under which
their liabilities provided for in Article 423, Paragraph 1
of the said law shall be restricted.
Chapter VI: ACCOUNTS Chapter VI: ACCOUNTS
Article 30 (Business Year) Article 37 (Business Year)
The business year of the Company shall commence The business year of the Company shall commence on April 1
on April 1 of every year and end on March 31 of of every year and end on March 31 of the following year.
the following year and the account settlement date
shall be the last day of each business year.
(Newly added) Article 38 (Governing Bodies to Determine Distribution of
Surplus, etc.)
The Company shall determine the matters listed in each Item
of Article 459, Paragraph 1 of the Corporate Law, including
distribution of surplus, by resolution of the Board of
Directors, and not by resolution at a general meeting of
shareholders, unless otherwise provided for by laws or
regulations.
Article 31 (Dividend and Interim Dividend) Article 39 (Base Date for Distribution of Surplus)
1. Dividends shall be paid to the 1. The base date for dividends of the Company shall
shareholders or the registered pledgees who are be March 31st of each year.
listed or recorded on the Shareholders' registers
as of the account settlement date.
2. The Company may, by a resolution of the 2. The base date for interim dividends of the Company
Board of Directors, distribute interim dividends shall be September 30th of each year.
to the shareholders or the registered pledgees who
are listed or recorded on the Shareholders'
registers as of September 30 every year.
(Newly added) 3. In addition to the dates referred to in the preceding
two paragraphs, the Company may set a base date and
distribute surplus on such date.
Article 32 (Prescription) Article 40 (Prescription of Dividends)
If any dividend or any interim dividend remains In the case of cash dividends, the Company shall be
unreceived after expiration of full three (3) exempted from the obligation of paying them if they remain
years from the day on which such dividends become unreceived for three (3) years after the date of the
due and payable, the Company shall be relieved of commencement of payment thereof.
the obligation to pay such dividends.
Proposal 3: Election of eight members to the Board of Directors
Because the terms of office for all eight directors expire as of the end of this
General Meeting of Shareholders, this proposal requests the election of eight
directors.
Candidates for the new board are as follows:
Name Resume, representation of other companies, etc. and position and Shares of the
responsibility while assuming directorship Company's stock
(Date of Birth) owned
1 Kagemasa Kozuki Mar. 1969 Founded Konami Industries (private enterprise)
(Nov. 12, 1940) Mar. 1973 Established Konami Industries Co., Ltd. (now KONAMI
CORPORATION) with the paid-in capital of Y1 million
98,353
Mar. 1974 Assumed the office of Representative Director and
President
Jun. 1987 Representative Director and Chairman of the Board
Jun. 1994 Representative Director and Chairman of the Board
and CEO (to present)
2 Kagehiko Kozuki Dec. 1983 Joined the Company as Manager of Production division
(Mar. 7, 1944) May 1984 Director
Aug. 1990 Managing Director 117,148
May 1991 Senior Managing Director
Jun. 1997 Director and Vice Chairman
Mar. 1998 Representative Director and Vice Chairman (to present)
3 Noriaki Yamaguchi Jun. 1994 Joined the Company as Advisor
(Jan. 26, 1944) Jun. 1994 Managing Director in charge of International
Business Division
51,127
Jul. 1995 Managing Director in charge of Administration
Division
Feb. 1996 Managing Director in charge of Finance and
Accounting Division
Jun. 2000 Director and Executive Corporate Officer Finance
and Accounting Division
Jun. 2001 Representative Director and Executive Corporate
Officer Finance and Accounting Division
Jan. 2003 Representative Director and Executive Corporate
Officer, Vice President & CFO
Mar. 2006 Representative Director and CFO (to present)
Name Resume, representation of other companies, etc. and position and Shares of the
responsibility while assuming directorship Company's stock
(Date of Birth) owned
4 Kimihiko Higashio Dec. 1997 Joined the Company
(Sep. 24, 1959) Jan. 2000 Executive Corporate Officer (Kansai Region
Representative)
22,041
May 2003 Executive Corporate Officer (Division
President, Human Resources)
Jun. 2005 Director and Division President, Human Resources
Mar. 2006 Director and CHO (to present)
Representation of other companies, etc.
• Representative Director and President, Konami Career
Management, Inc.
5 Tsutomu Takeda Mar. 1996 Representative Director and President, Asatsu Inc.
(the present-day Asatsu-DK Inc.)
(May 13, 1937)
Sep. 2001 Director and Senior Corporate Adviser
23,665
Jun. 2003 Director of the Company (to present)
Representation of other companies, etc.
• Representative Director and Chairman of the Board, Konami
Sports & Life Co., Ltd.
6 External Director May 1992 Director (to present)
Tomokazu Godai 7,923
(Oct. 6, 1939) Representation of other companies, etc.
• Representative Director and Chairman of the Board, Maya Tec Co., Ltd.
• Representative Director and President, Santetsu Giken Co., Ltd.
• Representative Director and Chairman of the Board,
Hiroshima River Industry Co., Ltd.
7 External Director Jun. 1990 Vice President, Matsushita Electrical Industrial
Hiroyuki Mizuno Co., Ltd.
Aug. 1994 Adjunct Professor, Stanford University
(Apr. 20, 1929) 8,800
Jun. 2001 Director of the Company (to present)
Mar. 2003 Director, Research Institute of Kochi
University of Technology (to present)
8 External Director Jun. 1997 Representative Director and President, SHISEDO Co.,Ltd.
Akira Gemma
Jun. 2001 Representative Director and Corporate Officer,
(Aug. 1, 1934) Chairman of the Board 7,300
Jun. 2003 Senior Corporate Adviser (to present)
Jun. 2004 Director of the Company (to present)
Note: No special conflicts of interest exist between the Company and the
proposed candidates for director.
This information is provided by RNS
The company news service from the London Stock Exchange
Friday, 2nd August 2024
COMPANIES COVERED:
Latest directors dealings
- 1 day ago Legal & General Group
- 1 day ago BlackRock Sustainable American Income Trust
- 1 day ago Sage Group
- 1 day ago Barclays
- 1 day ago Shell