Member, Financial Accounting Standards Foundation

Consolidated Financial Results for the Fiscal Year Ended March 31, 2019
May 13, 2019
Listed company name
Funai Electric Co., Ltd.
Stock exchange listing
Tokyo first section
Securities code
6839
Representative
President and CEO
Inquiries
Officer General Manager
Annual general shareholders meeting
Filing of securities report
Commencement of annual dividend payments
Financial results supplementation
Financial results meeting

URL https://www2.funai.co.jp/en/
Hideaki Funakoshi
Makoto Ueshima
TEL: +81-72- 870-4395
June 26, 2019
June 26, 2019
Yes
Yes

1. Consolidated Financial Results for the Fiscal Year Ended March 31, 2019 (April 1, 2018 – March 31, 2019)(1) Consolidated Operating Results(% shows year on year rates)
Net Income(loss)
attributableto owners
Net Sales
Operating Income(loss) Ordinary Income(loss)of parent
Million yen%
Million yen%
Million yen%
Million yen%
105,549(18.9)
682
1,392
2,613
－
－
－
Fiscal Year 2018
130,130(2.8)(10,885)(11,909)(24,709)－－－
Fiscal Year 2017
(Note)

Comprehensive Income

3,490million yen (－%) for the FY2018, (25,467)million yen (－%) for the FY2017

Net Income
Net Income(loss)
Per Share
Per Shareon a Fully Diluted
Basis
Yen
Yen
76.59
－
(724.21)－

Fiscal Year 2018
Fiscal Year 2017
(Reference) Equity in earnings of affiliates

Return on
Shareholders’Equity5.0(38.9)- million yen for the FY2018

Ordinary
Income(loss) toTotal Assets

Operating
Income(loss) Ratio

%

%
1.7
(12.6)-million yen for the FY2017

%
0.6
(8.4)

(2) Consolidated Financial Position
Total Assets
Fiscal Year 2018
Fiscal Year 2017
(Reference)

Million yen
83,29380,265

Shareholders’ Equity

Net Assets
Million yen
54,05750,71754,025 million yen for the FY2018(3) Consolidated Cash FlowsNet Cash Provided by(Used in) Operating
Activities
Million yen
3,507
Fiscal Year 2018
(5,369)Fiscal Year 2017

Net Cash Provided by(Used in) Investing
Activities
Million yen(775)(2,174)

Shareholders’Equity Ratio

Net Assets
Per Share
%

64.9
63.2

Yen
1,583.46
1,485.96

50,699 million yen for the FY2017
Net Cash Provided by(Used in) Financing
Activities
Million yen
(239)
(584)

Cash and Cash
Equivalents at the End
of Period
Million yen
33,54430,6502. Dividends

1Q End2Q End3Q EndYear-End

Annual

Total
Dividend
Payment

yen

yen

yen

yen

yen

Million yen

0.00
0.00

0.00
0.00

－
－

Dividend per Share

Fiscal Year 2017
Fiscal Year 2018－－

Fiscal Year 2019
(Forecast)

－

0.00
0.00
－

－
－
－

－

－

Pay-out Ratio Dividend on
Equity Ratio
Consolidated Consolidated
%
－
－

%
－
－

－

(Note) The dividend forecast for FY 2019 is undetermined; because the high impact stemmed from the recent
fluctuations in exchange rates give to the consolidated net assets. The dividend forecast for FY 2019 will be announced
as soon as it is determined.
3 Consolidated Financial Forecast for the Fiscal Year Ended March 31, 2020 (April 1, 2019 - March 31, 2020)(% shows year on year rates)Net
Net Income(loss)
Operating
Ordinary
Income(loss)
Net Sales
attributable to
Income(loss)
Income(loss)
owners of parent
Per Share
Million yen%
Million yen% Million yen% Million yen%
Yen
52,00011.3(1,200)(1,200)(1,200)(35.17)－－－
The First Half
108,000
2.3
400(41.4)
200(85.6)
100(96.2)
2.93
Full Year*Note(1) Changes in Consolidated Subsidiaries (Changes in Scope of Consolidation): Yes
In (Company name: －)Out (Company name: FUNAI CORPORATION,INC.)(2) Changes in accounting policies and estimates
1. Changes in accounting policies from revision of accounting standards: Yes
2. Changes in accounting policies from other reason: No
3. Changes in accounting estimates: No
4. Restatement: No(4) Number of Shares Outstanding (Ordinary Shares)
1. Number of shares outstanding (including treasury stock)
2. Number of shares of treasury stock
3. The Average number of outstanding shares

As of March 31, 2018
As of March 31, 2019
As of March 31, 2018
As of March 31, 2019
On March 31, 2018
On March 31, 201936,130,796
36,130,796
2,011,829
2,011,830
34,119,024
34,118,966

(Reference)Non-consolidated Financial Results for the Fiscal Year ended March 31, 2019 (April 1, 2018– March 31, 2019)(1) Non-consolidated Operating Results

Fiscal Year 2018
Fiscal Year 2017

Net Sales
Operating Income(loss)
Million yen%
Million yen%
97,910(17.9)
452－
119,197
14.6(6,594)－Net Income(loss)
Per Share
Yen

Fiscal Year 2018
Fiscal Year 201728.45
(569.64)(% shows year on year rates)
Net Income(loss)
Ordinary Income(loss)
Million yen%
Million yen
%
1,241
970
－
－
(8,414)(19,435)－－Net Income
Per Shareon a Fully Diluted BasisYen－－(2) Non-consolidated Financial Position
Total Assets
Fiscal Year 2018
Fiscal Year 2017
(Reference)

Million yen
70,691
73,612

Shareholders’ Equity

Net Assets
Million yen
52,33451,36252,302 million yen for the FY2018

Shareholders’ Equity
Ratio

Net Assets
Per Share
%

74.0
69.7

Yen
1,532.96
1,504.87

51,344 million yen for the FY2017

Note:
This document contains forward-looking statements and projections regarding business performance which are nothistorical facts. Please note that these statements are based on the current expectations, assumptions, estimates andprojections of the Funai Group in light of the information currently available to it. Actual performance may materiallydiffer from projections included in this document because of the impacts of uncertainty in various factors.

1. Business Performance and Financial Position(1) Overview of Business Performance
1. Business Performance for the Fiscal Year2018
During the fiscal year under review (April 1, 2018 to March 31, 2019), in the United States, the Group’s mainstay
market, the economy is trending firmly, reflecting an increase in private consumption and capital investment, andimprovement in the employment and income environment. Despite this overall tone, the pace of economic growthslowed at one point due to the government shutdown. Going forward, sufficient consideration should be given torisks stemming from uncertainties related to U.S. government policy, including trade issues, such as U.S.-China trade
friction, and a potential change in the Federal Reserve Board’s monetary tightening policy.
In Europe, there is a growing risk that rivalry with the EU will reignite, including turmoil triggered by Brexit
negotiations and the budget deficit in Italy which is set to breach EU rules. In light of this, the outlook for the EU
economy remains murky.
Meanwhile, in Japan, the economy is modestly recovering, owing to an improvement in employee and incomes, aswell as a rebound in private consumption. On top of this, special demand is anticipated owing to the Tokyo Olympic
and Paralympic Games, which will be held in July 2020. However, there is a concern that private consumption andinvestment are brittle due to growing risk of an economic downturn reflecting uncertainties related to overseas
economic trends and government policies, including trade issue trends and impact, and the economic outlook forcountries in Asia, including China.
Amid this backdrop, the Group worked steadily to achieve its vision—to become a company that creates productsthat are the choice of people around the world. The vision was promoted in the FY2018 management policy as ameasure to shed losses. As its basic strategy, the Group tackled (1) market share expansion in North America, (2)Funai brand penetration in Japan, and (3) new business development.
Consequently, the Group booked net sales of ¥105,549 million (a decrease of 18.9% year on year). The overall
decline reflects negative trends in North America, the Group’s mainstay sales market. Sales in North America faltered
due to ongoing inventory adjustments along distribution channels, especially in the first quarter of the period underreview, and sales of surplus inventory took precedence, mainly at large mass merchandisers. In addition, sales were
impacted in part by the withdrawal of an OEM partner from consumer electronics. However, sales did increase atlarge mass merchandisers in the United States and in Canada owing to the development of new business partners.
This paves the way for future expansion in market share. In Japan, sales to Yamada Denki Co., Ltd., with which theGroup has an exclusive distribution agreement, were in line with plans.
In the profit front, the Group posted operating income of ¥682 million (versus an operating loss of ¥10,885 million ayear earlier). Operating income improved sharply year on year reflecting a decline in component costs, including
those for LCD panels, the Group’s review of its business model and unprofitable product sales, and a certain scale ofbenefit from a reduction in manufacturing and selling, general and administrative expenses. Ordinary income totaled¥1,392 million (in contrast with a ¥11,909 million ordinary loss a year earlier). This is attributable to aforementioned
factors as well as an increase in foreign exchange translation gains and interest income. Meanwhile, profit
attributable to owners of the parent stood at ¥2,613 million (in comparison with a ¥24,709 million loss attributableto owners of the parent). This mainly reflects the posting of income taxes-deferred (profit) associated with themerger of sales companies in North America.
Results by regioni) Japan
Following suit from the previous fiscal year, sales trended mainly in line with plans owing primarily to the market
launch of new FUNAI brand products, including high-end organic electroluminescent display (OELD) TVs, throughYamada Denki from July 14, 2018. This absorbed the negative impact from the withdrawal by an OEM partnerfrom consumer electronics. Consequently, the Company posted net sales of ¥36,624 million, an increase of 1.2%
year on year, and segment income (operating income) of ¥637 million, versus a segment loss (operating loss) of¥5,634 million a year earlier.
ii) Americas
In the fiscal year under review, the Company started off the year hindered by surplus inventory issues whichinundated the entire market in North America, mirroring trends seen in the previous fiscal year. Sales of new LCD
TV sales faltered due to priority placed on the disposal of surplus inventories by large mass merchandisers. In
addition, sales also dropped due to a decrease in demand for DVD and BD related equipment reflecting impact of
online video distribution services. Consequently, net sales amounted to ¥68,083 million, a drop of 26.8% year on
year, and segment income (operating income) was ¥160 million (versus a segment loss (operating loss) of ¥965
million a year earlier).
iii) Asia
Net sales totaled ¥819 million, a decline of 4.0% year on year. This was primarily attributable to a termination of
LCD TV sales after a review of unprofitable products and an increase in component sales. Segment income

(operating income) was ¥709 million (versus a segment loss (operating loss) of ¥3,948 million a year earlier.)iv) Europe
Sales of ink-cartridges for ink-jet printers declined owing to a review of hardware (ink-jet printer) sales.
Consequently, net sales were ¥22 million, a drop of 82.5% year on year and segment income (operating income)was ¥64 million (versus a segment loss (operating loss) of ¥83 million a year earlier).
Results by product segmenti) Audiovisual Equipment
In the audiovisual equipment segment, sales decreased in comparison with the previous year, due to a reductionin LCD-TV sales due to impact from inventory adjustments along distribution channels in North America, andparticularly due to a fall in sales of DVD and BD related products due to lower demand for DVD players and theemergence of low-priced products sold by Chinese manufacturers, and impact from a withdrawal from consumer
electronics by an OEM partner in Japan. As a result, net sales amounted to ¥97,059 million, down 20.8% year onyear.
ii) Information Equipment
In the information equipment segment, net sales amounted to ¥3,306 million, down 0.8% year on year. This
reflects a sales decrease of roughly ¥1.7 billion, due to the curtailment of unprofitable ink jet printers in North
America, and a shift to FY2019 of the launch of new product sales—CISS (large-capacity cartridge ink-jet printers)
to China and multi-functional printers. Meanwhile, sales rose for commercial-use ink cartridges owing tocontinued marketing of ink cartridges for ink jet printers and an expansion in sales of label and nail art printers.

iii) Other Products
In other equipment segment, automotive backlight unit sales expanded, LCD module sales grew, and sales
increased for medical and healthcare-related products, such as CT for dental clinics and bed modules for thenursing care field. As a result, net sales amounted to ¥5,183 million, a growth of 22.7% year on year.
2. Consolidated Financial Forecast for the Fiscal Year 2019
In the market environment in which Funai operates its Display business and Digital Media Business, competition is
expected to further intensify due to ongoing uncertainties in the North America market, in particular the accelerated
commoditization of large-size LCD TVs. In addition, the market for DVD and BD related products is shrinking fasterthan forecast due to the spread of online video streaming services. Meanwhile, the Company aims to further expand
its market share by increasing sales in Mexico, where it has completed a revision of its business model, and by
fortifying measures for the Christmas season in the market in North America. In Japan, sales of FUNAI brandproducts, which were launched in 2017, are trending steadily. Given anticipation for replacement demand foraudio-visual equipment, including televisions, mainly ahead of the 2020 Tokyo Olympic and Paralympic Games, theCompany aims to achieve further brand penetration, and focus management resources into the development of
products for the Japanese market.
In the Office Solutions business, the Company is planning to achieve sales and profit growth by expanding sales of
OEM and in-house brand CISS (large-capacity cartridge ink-jet printers), label printers, and nail art printers to China.
In new businesses, Funai plans to cultivate new fields and deploy new products, including automotive products andspecialty printers that apply technologies that were fostered over many years. In addition, the Company aims tosecure an earnings base in markets that it has full-filled market entry. Also, the Company aims to actively introduce
to market new products including automotive backlights, for which technological development was completed, andproducts in the commercial signage business, and the medical and healthcare-related fields. The Company also plans
to launch sales of jointly-developed derivative products that utilize microfluidics (micro fluid control technology), andexisting developed items for the world’s largest general consumer products manufacturer.
In the operating income front, Funai aims to pursue economies of scale on one hand while pouring energies into
sales promotions of high-margin products. On top of this, the Company aims to curb valuation losses on product,
component and raw material inventories by deploying a purchasing strategy that corresponds to actual sales atretailers to thoroughly implement PSI management. Funai aims to become a company that creates products that arechosen by people around the world. The Company plans to focus on reducing the product return rate as well as
minimize losses in tandem with the disposal of returned products. Through these measures, the Company aims tobuild a system that will consistently secure profits.
(a) Display Business (LDC-TV business): Sales forecast of ¥86,000 million (a rise of 2.4% year on year)
・Further expansion in market share of new large mass merchandisers and total fortification of competitive
strength, including quality and cost・Strengthen measures for the Christmas shopping season in North America and reduce returns and productdisposal by improving the service operation process in Japan and abroad
・Recoup share with high-spec BS-compatible TV sales in Japan and by rebuilding the business model for themarket in Mexico

(b) Digital Media Business (DVD, BD business): Sales forecast of ¥12,000 million (a drop of 8.7% year on year)
・In North America, capture market share by deploying a niche strategy for BD players, a market from which rivals
have exited
・In Japan, fortify ties with OEM partners and enhance lineup of FUNAI brand products(c) Office Solution Business (Information equipment-related business): Sales forecast of ¥6,000 million (a growthof 81.4% year on year)
・Improve profit margins with nail art printer OEM and expansion of in-house brand sales
・Expand sales of label printers and CISS (high capacity cartridge ink-jet printers)
・Expand sales by launching derivative products that utilize microfluidics (micro fluid control technology)(d) New businesses: Sales forecast of ¥4,000 million (a fall of 22.9% year on year)
・Expand sales channels for automotive backlights (existing edge types and new direct types)
・Secure earnings base and expand sales of medical and healthcare-related module products and also CT for dental
clinics
・Fortify alliance strategy through EV business and launch mass production and sales of commercial-use new
products related to audio-visual equipment
The forecast of business results for the year ending March 2020 is as follows:< Consolidated Operating Forecast >Net sales
Operating income
Ordinary loss
Net loss attributable to owners ofparent¥ 108,000 million
400 million
200 million( 2.3 % increase year-on-year)( 41.4 % decrease year-on-year)( 85.6 % decrease year-on-year)

100 million( 96.2 % decrease year-on-year)

For the forecast of business results, the Group’s assumed exchange rate (average during the period) is ¥109 per US$.
The operating forecast is a forward-looking statement about the future performance of the Company and is basedon management’s assumptions and beliefs in light of information currently available, and involves risks anduncertainties. Various factors such as changes in economic conditions overseas, especially in the U.S. market, andsevere price fluctuations may cause actual results to differ from this forecast.
(2) Overview of Financial Position
1. Balance Sheet
Total assets increased by ¥3,028 million compared to the end of the last fiscal year. The primary components of thechange were as follows: Increase of ¥3,026 million in cash and deposits, ¥1,217 million in Raw materials and supplies Decrease of ¥2,229 million in notes and accounts receivable - trade.
Total liabilities decreased by ¥311 million compared to the end of the last fiscal year. The primary components ofthe change were as follows: Increase of ¥3,810 million in notes and accounts payable-trade.
 Decrease of ¥2,084 million in accrued expenses, ¥537 million in income taxes payable and ¥997 provision for
director’s retirement benefits.
Net assets increased by ¥3,340 million compared to the end of the last fiscal year. The primary components of thechange were increase of ¥2,613 million in retained earnings and ¥696 million in the foreign currency translation
adjustment.
2. Cash Flow
An analysis of consolidated cash flows shows that net cash provided in operating activities amounted to ¥3,507
million. Net cash used by investing activities was ¥775 million, and net cash used by financing activities was ¥239
million. The balance of cash and cash equivalent as of March 31, 2019 was ¥33,544 million. The trends of the cash
flow indicators of the Group are as follows.
Cash flow ratios
FY 2014

FY 2015

FY 2016

FY 2017

FY 2018

Shareholders’ equity ratio (%)

64.6

54.0

70.4

63.2

64.9

Shareholders’ equity ratio at market value (%)

25.0

21.8

29.7

32.3

30.6

Ratio of cash flow to interest-bearing debt(year)

0.6

-

-

-

-

Interest coverage ratio (%)

89.6

-

-

-

261.2

Shareholders’ equity ratio
Shareholders’ equity ratio at market value
Ratio of cash flow to interest-bearing debt
Interest coverage ratio: Equity capital / Total assets: Market capitalization / Total assets: Interest-bearing debt / Operating cash flow
: Operating cash flows / Interest payments*All ratios are calculated based on consolidated financial statements.
*Market value is calculated by at price of shares at the end of the consolidated fiscal year×Number of shares
outstanding (after deducting treasury stock)*Operating cash flows represent the cash flows from net cash provided by (used in) operating activities on theConsolidated Statements of Cash Flows. Interest-bearing debt represents debt stated on the Consolidated Balance
Sheets for which interest is paid. Interest paid represents corresponding amount stated on the Consolidated
Statements of Cash Flows.
*The ratio of cash flow to interest-bearing debt and the interest coverage ratio for the fiscal year 2016 and 2017 havebeen omitted because cash flow from operating activities was negative.
(3) Dividend Policy
The Company regards returning profits to shareholders as one of its most important priorities. The basic policy is toprovide stable dividend payments while strengthening its management base. As a specific standard, the dividend
policy is based on a dividend on equity ratio (DOE) of 1% taking into account the business environment and otherfactors. As its basic policy, the Company aims to implement dividend payments once a year. The Company shall makean announcement in advance of plans to pay out an interim dividend.
However, the Company recognizes that it is currently in the process of transitioning from the rebuilding its business
operations to sustainable growth. Going forward, the Company acknowledges that sufficient internal reserves are
essential to further improve corporate value. In light of this, while it is regrettable, the Company has decided it will
not pay a dividend in the fiscal year under review.
A decision on the dividend payout for the next fiscal year is pending.

(4) Important Information about Going Concern Assumption
Given the Group recorded a significant operating loss, ordinary loss, loss attributable to owners of the parent andnegative operating cash flow in the previous consolidated fiscal year, at this stage there are events andcircumstances that cast significant doubt on the Company’s viability as a going concern.
There are no significant concerns about fundraising as the current balance of cash and deposits will sufficiently
satisfy working capital needs for the time being.
In addition, the Group formulated a medium-term management policy, for which FY2018 is the first year of
implementation. In line with the basic policy, the Group posted operating cash flow of ¥3,507 million. Moreover, theCompany aims to gradually implement measures in line with the aforementioned policies for each of its businesses
going forward. In light of this, the Group believes that a resolution of the matter can be achieved.
Consequently, as of the final business day of the fiscal year under review, Funai assessed there is no significant
uncertainty related to the going concern assumption and has omitted the Notes on Going Concern Assumptions
from the consolidated financial statements.

2. Basic Rationale on Selection of Accounting Standards
The Group applies Japanese accounting standards. We have not set a definite timetable for the adoption ofinternational financial reporting standards (IFRS), but we will consider taking this step based on the situation ofanother companies in the same business.

2. Consolidated Financial Statements and Notes(1) Consolidated Statement of Financial Position(Units : Million Yen)
Fiscal year 2017
(As of March 31, 2018)

Fiscal Year 2018
(As of March 31, 2019)ASSETS;
Current Assets
Cash and deposits

32,39035,417

Notes and accounts receivable - trade

9,953

7,724

Merchandise and finished goods

13,251

13,517

516

681

9,841

11,059

Other

2,379

2,276

Allowance for doubtful accounts(1,021)(718)

Total current assets

67,31069,958

8,193

8,159

93

68

Investment securities

1,285

1,273

Deferred tax assets

689

1,201

Net defined benefit asset

1,840

1,881

Other

1,090

819

Allowance for doubtful accounts

(239)

(68)

Total investments and other assets

4,667

5,107

12,954

13,33580,26583,293

Notes and accounts payable - trade

11,80815,618

Accounts payable included in other

10,3728,287

Lease obligations

236

217

Income taxes payable

664

126

Provision for product warranties

981

1,056

Other

2,780

2,815

Total current liabilities

26,842

28,121

Lease obligations

282

102

Deferred tax liabilities

650

617

1,025

27

3

33

744

333

Work in process
Raw materials and supplies

Noncurrent Assets
Property, plant and equipment
Intangible assets
Investments and other assets

Total noncurrent assets
TOTAL ASSETSLIABILITIES;Current Liabilities

Noncurrent Liabilities

Provision for directors' retirement benefits
Net defined benefit liability
Other
Total noncurrent liabilities
TOTAL LIABILITIES

2,705

1,114

29,54829,236

Fiscal year 2017
(As of March 31, 2018)

Fiscal Year 2018
(As of March 31, 2019)

NET ASSETS;
Shareholders' equity
Capital stock

31,30731,307

Capital surplus

33,60333,603Retained earnings

21,97024,583

Treasury shares(24,341)(24,341)

Total shareholders' equity

62,53965,15313

1Foreign currency translation adjustment(12,305)(11,609)

Remeasurements of defined benefit plans

451

480

(11,840)(11,127)

Accumulated other comprehensive income
Valuation difference on available-for-sale securities

Total accumulated other comprehensive income
Subscription rights to shares
Total net asset
TOTAL LIABILITIES AND NET ASSETS

17

31

50,71754,05780,26583,293

(2) Consolidated Quarterly Statements of Income and Comprehensive Income(Consolidated Quarterly Statements of Income)(Units : Million Yen)
Fiscal Year 2017

Fiscal Year 2018

( from April 1, 2017
to March 31, 2018)
130,130( from April 1, 2018
to March 31, 2019)
105,549

Cost of sales

121,529

91,849Gross profit

8,600

13,700

Selling, general and administrative expenses

19,48513,018Operating income (loss)(10,885)682Interest income

245

394

Dividends income27Foreign exchange gains

-

539

Other

258

201

Total non-operating income

506

1,142

67

10

Foreign exchange losses

1,107

-

Compensation expenses

225

320

-

51

130

51

1,530

433

(11,909)

1,392

Gain on sales of non-current assets

2

48

Gain on sales of subsidiaries and affiliates' stocks

29-

Gain on liquidation of subsidiaries and affiliates

-

163

Other

146

4

Total extraordinary income

178

215

17

48

12,586

177

12,604

226(24,335)

1,381

373

(1,231)

Income (loss) before minority interests(24,709)

2,613

Net income (loss) attributable to owners of parent(24,709)

2,613

Net sales

Non-operating income

Non-operating expenses
Interest expenses

Compensation for damage
Other
Total non-operating expenses
Ordinary income (loss)
Extraordinary income

Extraordinary loss
Loss on disposal of noncurrent assets
Impairment loss
Total extraordinary loss
Income (loss) before income taxes
Income taxes

Notes.1

(Consolidated Quarterly Statement of Comprehensive Income)

Income (loss) before minority interest adjustment(Units : Million Yen)

Fiscal Year 2017

Fiscal Year 2018

( from April 1, 2017
to March 31, 2018)( from April 1, 2018
to March 31, 2019)(24,709)

2,613

1

(12)

(1,099)859

Remeasurements of defined benefit plans, net of tax

340

29

Total other comprehensive Income

(757)

876

(25,467)

3,490(25,467)

3,490

Other comprehensive Income
Valuation difference on avaiable-for-sale securities
Foreign currency translation adjustment

Comprehensive income(Comprehensive income attributable to)Comprehensive income attributable to owners of parent

(3) Consolidated Statements of Changes in Shareholders' Equity
Fiscal year 2017 (April 1, 2017 - March 31, 2018)(Million Yen)
Shareholders' equity
Capital stock

31,307

Beginning balance

Capitalsurplus33,603Retainedearnings

Treasury
stock

Total
shareholders'equity47,020(24,341)

87,590Changes of items during the period
Dividends from surplus
Income (loss) attributable to owners of parent

(341)

(341)

(24,709)(24,709)
(0)

(0)

(0)
(24,341)(25,050)
62,539Purchase of treasury stock
Net changes of items other than shareholders'equityTotal changes of items during the periodEnding balance－
31,307－33,603(25,050)
21,970

Accumulated other comprehensive income

Beginning balance

Unrealized
holding
gains/losses
on securities

Foreigncurrencytranslation
adjustment

Remeasurements ofdefinedbenefit
plans

Total
accumulated othercomprehensive income

Subscriptio
n rights tosharesTotal net
assets11(11,206)

111(11,082)

149

76,656

Changes of items during theperiod(341)

Dividends from surplus
Income (loss) attributableto owners of parent(24,709)

Purchase of treasury stock(0)

Net changes of items otherthan shareholders' equity
Total changes of items during
the periodEnding balance

1(1,099)

340

(757)

(131)

(889)

1

(1,099)

340

(757)

(131)

(25,939)

13(12,305)451(11,840)17

50,717

Fiscal year 2018 (April 1, 2018 - March 31, 2019)(Million Yen)
Shareholders' equity
Capital stock

31,307

Beginning balance
Changes of items during the period

CapitalsurplusRetainedearnings

Treasury
stock

Total
shareholders'equity21,970(24,341)

62,53933,603

2,613

Income (loss) attributable to owners of parent

(0)

(0)

2,613
24,583(0)(24,341)

2,613
65,153

Total net
assetsPurchase of treasury stock
Net changes of items other than shareholders'equityTotal changes of items during the periodEnding balance－
31,307－33,603

2,613

Accumulated other comprehensive income

Beginning balance
Changes of items during theperiodIncome (loss) attributableto owners of parent

Unrealized
holding
gains/losses
on securities

Foreigncurrencytranslation
adjustment

Remeasurements ofdefinedbenefit plans

Total
accumulated
othercomprehensi
ve income

Subscription
rights toshares13(12,305)451(11,840)17

50,7172,613(0)Purchase of treasury stock
Net changes of items otherthan shareholders' equity

(12)

696

29

713

13

726

Total changes of items during
the period

(12)

696

29

713

13

3,340

1

(11,609)480(11,127)31

54,057

Ending balance(3) Consolidated quartely statements of cash flows(Million Yen)
Fiscal Year 2017

Fiscal Year 2018

( from April 1, 2017
to March 31, 2018)( from April 1, 2018
to March 31, 2019)

Cash flows from operating activities
Income (Loss) before income taxes and minority interests(24,335)

1,381

Depreciation

2,258

974

Impairment loss

12,586

177

212

(641)

-

(997)

18

0

(248)

(402)

Interest expenses

67

10

Loss on retirement of property, plant and equipment

5-

Loss (gain) on sales of property, plant and equipment

3

0

(29)

-

Decrease (increase) in notes and accounts receivable - trade

5,386

2,419

Decrease (increase) in inventories

1,421

(685)

Increase (decrease) in notes and accounts payable - trade(6,214)

3,589

Increase (decrease) in notes and accounts payable - other

3,368(2,291)Other, net

(143)

(275)

Subtotal(5,640)

3,259

245

407

Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for directors' retirement benefits
Increase (decrease) in net defined benefit liability
Interest and dividend income

Gain on sales of subsidiaries and affiliates' stocks

Interest and dividend income received
Interest expenses paid

(65)

(13)

Income taxes paid

(320)

(381)

Income taxes refund

411

235

(5,369)3,507(1,364)(1,025)

Net cash provided by (used in) operating activities
Cash flows from investing activities
Payments into time deposits
Proceeds from withdrawal of time deposits

737

942

Purchase of property, plant and equipment(2,100)(1,360)

Proceeds from sales of property, plant and equipment

167

606

Purchase of intangible assets

(299)

(13)

Purchase of investment securities

(157)

-

Proceeds from sales of investment securities

336-

Payments of loans receivable

0(2)Collection of loans receivable

568

19

Other, net

(61)

59

(2,174)

(775)

(243)

(239)

0

0

(341)

-

Net cash provided by (used in) financing activities

(584)

(239)

Effect of exchange rate change on cash and cash equivalents

(192)

400

Net cash provided by (used in) investment activities
Cash flows from financing activities
Repayments of lease obligations
Purchase of treasury shares
Cash dividends paid

Net increase (decrease) in cash and cash equivalents(8,320)2,893

Cash and cash equivalents at beginning of period

38,97130,650Cash and cash equivalents at end of period

30,65033,544

(5) Notes on Consolidated Financial Statements(Notes on Going Concern Assumption)
Not Applicable(Basis of presenting consolidated financial statements)
The matter regarding consolidation scope
The number of consolidated subsidiaries: 18
Principal consolidated subsidiaries are FUNAI CORPORATION, INC., FUNAI (THAILAND) CO., LTD and Funai Electric
Philippines Inc.
From the current consolidated fiscal year, FUNAI CORPORATION, INC. which was a consolidated subsidiary,
disappeared due to an absorption-type merger with P & F USA, Inc. a consolidated subsidiary, as the surviving
company, and is excluded from the scope of consolidation. The verification of P & F USA, Inc. has been changed to
FUNAI Corporation.
Zhong Shan Funai Electron Co. has been excluded from the scope of consolidation from the current consolidated
fiscal year as production has been completed.

(Changes in accounting policies)
Overseas consolidated subsidiaries except Americas apply IFRS No. 15 (Revenue from Contracts with Customers)
since the first quarter consolidated accounting period.
The impact of application of the accounting standards on consolidated financial statements is slight.
(Additional Information)[Application of Partial Amendments etc. to "Accounting standard for tax effect accounting"]
The company apply to Partial Amendments etc. to "Accounting standard for tax effect accounting" (Corporate
Accounting Standards No. 28, 16 February 2018) since beginning of the year of the first quarter consolidated
accounting period. Therefore, Deferred Tax Assets is presented division of Investments and other assets andDeferred Tax Liabilities is presented division of Noncurrent liabilities.

(Consolidated statements of income)*Notes.1 Impairment loss
The Group recorded losses on impairment in the following asset groups.
Fiscal year 2017 (April 1, 2017 to March 31, 2018)
Use
Location

Business Assets

Business Assets

Business Assets

Business Assets

Business Assets

Business Assets

Business Assets

Business Assets

Business Assets

Funai Electric Co., Ltd.

FUNAI ELECTRIC (H.K.), LTD.

FUNAI (THAILAND) CO., LTD.

Funai Electric Philippines Inc.

Funai Electric Cebu, Inc.

FEP REAL ESTATE, INC.

FUNAI CORPORATION, INC.

Funai Trading Corp.

Funai Lexington Technology
Corporation

Type

Impairment loss
(million yen)Tools, furniture andfixtures

148

Lease assets (fixed)

4

Patent right
Software
Long-term prepaid
expenses
Buildings and structures
Machinery, equipment
and vehicles
Tools, furniture andfixtures
Buildings and structures
Machinery, equipment
and vehicles
Tools, furniture andfixtures
Land

2,451
75

Software
Buildings and structures
Machinery, equipment
and vehicles
Tools, furniture andfixtures
Software1
474

Buildings and structures
Machinery, equipment
and vehicles
Tools, furniture andfixtures
Software

539

Land

42

Buildings and structures
Machinery, equipment
and vehicles
Tools, furniture andfixtures
Lease assets (tangible)
Buildings and structures
Machinery, equipment
and vehicles
Tools, furniture andfixtures
Software8

Buildings and structures
Machinery, equipment
and vehicles
Tools, furniture andfixtures
Software

4,883
42
37
613
596
181
413
56

331
218
34
594
67
33

2
3
293
5
27
33
55
59
136
66
3

Use

Business Assets

Business Assets

Location

Funai Manufacturing, S.A. DE C.V.

P&F MEXICANA, S.A. DE C.V.

Type
Buildings and structures
Machinery, equipment
and vehicles
Tools, furniture andfixtures
SoftwareMachinery, equipment
and vehicles
Tools, furniture andfixtures
Software

Total

Impairment loss
(million yen)
13
5
4
8
3
1
13
12,586

The Group group’s business assets on the basis in management accounting, the idle assets are grouped byindividual asset. The Group reduced the carrying amount to the recoverable value of business assets whose
profitability has markedly decreased, and recorded such reduction (12,586 million yen) as impairment loss forfiscal year 2017.
The recoverable value of the asset is measured based on the net selling price for buildings and structures andland, and the net selling price based on the valuation calculated rationally by a real estate appraiser etc. is used,
assets other than those mentioned above are measured based on the net selling price and the net selling priceis calculated as zero.
Fiscal year 2018 (April 1, 2018 to March 31, 2019)
Use
Location
Business Assets

Funai Electric Co., Ltd.

Business Assets

Funai Electric Philippines Inc.

Business Assets

Business Assets

Funai Electric Cebu, Inc.

Funai Lexington Technology
Corporation
Total

Type
Long-term prepaid
expenses
Tools, furniture andfixtures
Buildings and structures
Machinery, equipment
and vehicles
Tools, furniture andfixtures
SoftwareMachinery, equipment
and vehicles

Impairment loss
(million yen)
37
88
3
5
27
3
10
177

The Group group’s business assets on the basis in management accounting, the idle assets are grouped byindividual asset. The Group reduced the carrying amount to the recoverable value of business assets whose
profitability has markedly decreased, and recorded such reduction (177 million yen) as impairment loss for fiscal
year 2018.
The recoverable value of the asset is measured based on the net selling price for buildings and structures andland, and the net selling price based on the valuation calculated rationally by a real estate appraiser etc. is used,
assets other than those mentioned above are measured based on the net selling price and the net selling priceis calculated as zero.

(Consolidated statement of comprehensive income)* 1. Reclassification adjustment and tax effect amount involved in other comprehensive income
Fiscal year 2017
( from April 1, 2017
to March 31, 2018 )(Million Yen)
Fiscal year 2018
( from April 1, 2018
to March 31, 2019 )Valuation difference on available-for-sale securities:
Accrued amount on the current term
Reclassification adjustment amountPre-adjustment of tax effectTax effect amount

Valuation difference on available-for-sale securities
Foreign currency translation adjustment:
Accrued amount on the current term
Reclassification adjustment amountPre-adjustment of tax effectTax effect amountForeign currency translation adjustment
Adjustment for Retirement Benefits
Accrued amount on the current term
Reclassification adjustment amountPre-adjustment of tax effectTax effect amount

Adjustment for Retirement Benefits
Total other comprehensive income

1
1
1

(12)
(12)
(12)

(1,099)(1,099)(1,099)

1,023
(163)
859
859

334
162
496
(156)
340
(757)

43
14
58
(29)
29
876

(Segment Information)
1. Summary of Reporting Segments
The reporting segments of the Group are components for which discrete financial information is available and whose
operating results are regularly reviewed by the board of directors to make decision about resource allocation and toassess their performance.
Businesses of the Group are to manufacture and sell electrical equipment and devices. In Japan, such functions are
the responsibility of the Company. In the areas of the United States, Asia and Europe such functions are managed by
Funai Corporation, Inc. (Americas), P&F USA, Inc. (Americas), Funai Electric (H.K.) Ltd. (Asia), FUNAI (THAILAND)
CO.,LTD. (Asia), FUNAI ELECTRIC EUROPE Sp.z o.o (Europe), and other local corporations. They are independent eachother and plan comprehensive strategies on the products to carry in the region on their own.
Consequently, the Group is comprised of location-specific segments that are based on its manufacturing and sales
structure and has “Japan”, “Americas”, “Asia” and “Europe” as its four reporting segments.
2. Measurement of the amount of net sales, income/loss, assets and liabilities and other in each reporting segment
The accounting policies of the reporting segment are the same as “Basis of presenting consolidated financial
statements”. Net sales of intersegment are based on sales price to outside customers.
3. Net sales, income/loss, assets, liabilities and other by reporting segments
Fiscal year 2017 (April 1, 2017 - March 31, 2018)
Japan
Net Sales(1) Sales to outside customers(2) Inter-segment sales
Total
Segment Income (Loss)
Segment Assets
Other
Depreciation and amortization
Increase in tangible fixed
assets and intangible assets

Americas

Asia

EuropeTotal

36,19983,38992,9492,293

853
98,355

127－

130,130
184,038－(184,038)

130,130－

119,589(5,634)76,25895,243(965)
24,892

99,209(3,948)28,038

127
(83)
1,407

314,169(10,631)130,595(184,038)(253)(50,330)130,130(10,885)
80,265

706

110

1,442

－

2,258

－

2,258

815

164

1,445

－

2,425

(16)

2,408

Fiscal year 2018 (April 1, 2018 - March 31, 2019)Japan
Net Sales(1) Sales to outside customers(2) Inter-segment sales
Total
Segment Income (Loss)
Segment Assets
Other
Depreciation and amortization
Increase in tangible fixed
assets and intangible assets(Note)(Million Yen)
Adjustments Consolidated(Note 1)
(Note 2)

Americas

Asia

Europe

Total(Million Yen)
Adjustments Consolidated(Note 1)
(Note 2)

36,624
61,58068,0836,424

819
62,85022－

105,549
130,856－(130,856)

105,549－

98,205637
69,61374,508160
25,64063,670709
28,395

22
64
1,414

236,406
1,571
125,064(130,856)(889)(41,770)

105,549
682
83,293

340

26

615

－

982

(8)

974

170

173

1,152

－

1,495

(46)

1,449

1. Adjustments were as follows.
Segment Income(loss)(Million Yen)
Fiscal year 2018
Eliminations
(735)
(34)
Corporate expenses *
(772)
(128)
Inventories
1,254
(726)
Total
(253)
(889)
* Corporate expenses are general & administration expenses that do not correspond to the reporting
Segments
Fiscal year 2017

Segment Assets(Million Yen)
Fiscal year 2018
Total assets *20,635
24,771
Adjustments of inventories
(44)
(770)
Eliminations(70,921)(65,771)
Total(50,330)(41,770)*Total assets are mainly excess cash/deposits and long term securities for investment that do not correspondto the reporting segments.
Fiscal year 2017

2. Segment income and loss are adjusted with the operating income reported in the consolidated statements
of income and loss.

(Information per share)
Fiscal year 2017
(April l,2017 – March 31,2018)
Book Value per share
1,485.96
Net loss per share724.21

Fiscal year 2018
(April l,2018 – March 31,2019)
Book Value per share
1,583.46
Net income per share
76.59(Note)
1. Net loss per share after dilution is not shown because there are no issuable shares with a dilutive effect.
2. The basis for the calculation of net income or net loss per share is as follows.
Fiscal year 2017
(April 1, 2017 – March 31,2018)

Fiscal year 2018
(April 1, 2018 – March 31,2019)

Net income (loss) per share
Net income (loss) attributable to owners of(24,709)

2,613

Amount not attributable to owners of the parent(million yen)－－

Net income (loss) attributable to owners ofparent available to common shares (million yen)

(24,709)

2,613

The average number of outstanding shares for theperiod（Thousands of shares）

34,11934,118parentOverview of potentially dilutive common shares not Three types of stock acquisition Three types of stock acquisition
included in computation of net income per share rights (number of stock acquisition rights (number of stock acquisition
after dilution because of their anti-dilutive effectrights: 3,091) have been excluded.
rights: 2,721) have been excluded.

(Events after the reporting period)
Not applicable