From April 1, 2015
To March 31, 2016

May 16, 2016
Funai Electric Co., Ltd.

Financial Summary for the Fiscal Year Ended March 31,2016
1. Summary of Operating Results (Consolidated)(Million yen)
Fiscal Year 2014

Fiscal Year 2015

From April 1, 2014
to March 31, 2015

From April 1, 2015
to March 31, 2016

AmountAmount%%%Net Sales

Rate ofincrease or
decrease%%

217,088100.0

168,116100.0(22.6)

Operating Income (Loss)

564

0.3

(13,061)(7.8)－

Ordinary Income (Loss)

1,924

0.9

(16,146)(9.6)－

Net Income (Loss) attributableto owners of parent

1,354

0.6

(36,221)(21.5)－Net Income (Loss) per Share

39.70(1061.62)

Notes: Includes 23consolidated subsidiaries, 1 equity method non‐consolidated subsidiary,

2. Summary of Operating Results (Non‐Consolidated)(Million yen)
Fiscal Year 2014

Fiscal Year 2015

From April 1, 2014
to March 31, 2015

From April 1, 2015
to March 31, 2016

Amount%Amount%%Net Sales

Rate ofincrease or
decrease%

154,549

100.0

133,632100.0(13.5)

Operating Income (Loss)(1,841)(1.2)(9,132)(6.8)－

Ordinary Income (Loss)

(343)

(0.2)

13,704

10.3－

Net Income (Loss) attributableto owners of parent

347

0.2

(5,866)(4.4)－

Net Income (Loss) per Share

10.19(172.52)

May 16, 2016
Funai Electric Co., Ltd.

Financial Summary for the Fiscal Year Ended March 31,2016
1. Summary of Operating Results (Consolidated)(Million yen)
Fiscal Year 2014

Fiscal Year 2015

From April 1, 2014
to March 31, 2015

From April 1, 2015
to March 31, 2016

AmountAmount%%%Net Sales

Rate ofincrease or
decrease%%

217,088100.0

168,116100.0(22.6)

Operating Income (Loss)

564

0.3

(13,061)(7.8)－

Ordinary Income (Loss)

1,924

0.9

(16,146)(9.6)－

Net Income (Loss) attributableto owners of parent

1,354

0.6

(36,221)(21.5)－Net Income (Loss) per Share

39.70(1061.62)

Notes: Includes 23consolidated subsidiaries, 1 equity method non‐consolidated subsidiary,

2. Summary of Operating Results (Non‐Consolidated)(Million yen)
Fiscal Year 2014

Fiscal Year 2015

From April 1, 2014
to March 31, 2015

From April 1, 2015
to March 31, 2016

Amount%Amount%%Net Sales

Rate ofincrease or
decrease%

154,549

100.0

133,632100.0(13.5)

Operating Income (Loss)(1,841)(1.2)(9,132)(6.8)－

Ordinary Income (Loss)

(343)

(0.2)

13,704

10.3－

Net Income (Loss) attributableto owners of parent

347

0.2

(5,866)(4.4)－

Net Income (Loss) per Share

10.19(172.52)

Member, Financial Accounting Standards Foundation

Consolidated Financial Results for the Fiscal Year Ended March 31, 2016
May 16, 2016
Listed company name
Funai Electric Co., Ltd.
Stock exchange listing
Tokyo first section
Securities code
6839
Representative
President and CEO
Inquiries
General Manager
Annual general shareholders meeting
Filing of securities report
Commencement of annual dividend payments
Financial results supplementation
Financial results meeting

URL http://www.funai.co.jp
Tomonori Hayashi
Keiichi Ikegami
TEL: (072) 870‐4395
June 28, 2016
June 28, 2016
June 29, 2016
Yes
Yes

1. Consolidated Financial Results for the Fiscal Year Ended March 31, 2016 (April 1, 2015 – March 31, 2016)(1) Consolidated Operating Results(% shows year on year rates)
Net Income(loss)
Net Sales
Operating Income(loss) Ordinary Income(loss) attributable to ownersof parent
Million yen%
Million yen%
Million yen%
Million yen%
168,116(22.6)(13,061)(16,146)(36,221)－－－
Fiscal Year 2015
217,088
(7.2)
564
1,924
1,354
－
－
－
Fiscal Year 2014
(Note) Comprehensive Income (40,012)million yen (－%) for the FY2015, 10,913million yen (－%) for the FY2014
Net Income
Net Income(loss)
Per Share
Per Shareon a Fully Diluted
Basis
Yen
Yen
(1,061.62)
－
39.70
－

Fiscal Year 2015
Fiscal Year 2014
(Reference) Equity in earnings of affiliates

Return on
Shareholders’EquityOrdinary
Income(loss) toTotal Assets%(34.1)
1.1(4) million yen for the FY2015

Operating
Income(loss) Ratio

%
(9.4)
(7.8)
1.0
0.3
(144) million yen for the FY2014%(2) Consolidated Financial Position
Total Assets
Fiscal Year 2015
Fiscal Year 2014

Million yen
154,295
189,695(Reference) Shareholders’ Equity

Net Assets
Million yen
86,569127,881

85,458 million yen for the FY2015(3) Consolidated Cash FlowsNet Cash Provided by(Used in) Operating
Activities
Million yen(7,549)Fiscal Year 2015
16,897
Fiscal Year 2014

Net Cash Provided by(Used in) Investing
Activities
Million yen
11,805(17,360)

Shareholders’Equity Ratio

Net Assets
Per Share
%

55.4
66.8

Yen
2,504.70
3,712.81

126,677 million yen for the FY2014
Net Cash Provided by(Used in) Financing
Activities
Million yen
69(2,725)

Cash and Cash
Equivalents at the End
of Period
Million yen
47,11642,991

2. Dividends

1Q End2Q End3Q EndYear‐End

Annual

Total
Dividend
Payment

yen

yen

yen

yen

yen

Million yen

－
－

30.00
35.00

30.00
35.00

1,023
1,194

－

－

－

Dividend per Share

Fiscal Year 2015
Fiscal Year 2014－－

Fiscal Year 2016
(Forecast)

－

0.00
0.00
－

Pay‐out Ratio Dividend on
Equity Ratio
Consolidated Consolidated
%
－
88.2

%
1.0
1.0

－

(Note) 1. The dividend for FY 2015 is 30.00 yen.
2. The dividend forecast for FY 2016 is undetermined; because the high impact stemmed from the recent
fluctuations in exchange rates give to the consolidated net assets. Additionally the company’s dividend policy
of DOE is unchanged. The dividend forecast for FY 2016 will be announced as soon as it is determined.
3 Consolidated Financial Forecast for the Fiscal Year Ended March 31, 2017 (April 1, 2016 ‐ March 31, 2017)(% 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
77,900(10.4)
1,100
400
200
5.86
－
－
－
The First Half
172,000
2.3
4,300
3,500
1,400
41.03
－
－
－
Full Year*Note(1) Changes in Consolidated Subsidiaries (Changes in Scope of Consolidation): Yes(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, 2016
As of March 31, 2015
As of March 31, 2016
As of March 31, 2015
On March 31, 2016
On March 31, 2015

36,130,796
36,130,796
2,011,687
2,011,665
34,119,119
34,119,178

(Reference)Non‐consolidated Financial Results for the Fiscal Year ended March 31, 2016 (April 1, 2015– March 31, 2016)(1) Non‐consolidated Operating Results

Fiscal Year 2015
Fiscal Year 2014

Net Sales
Operating Income(loss)
Million yen%
Million yen%
133,632(13.5)(9,132)－
154,549(13.1)(1,841)－Net Income(loss)
Per Share
Yen

Fiscal Year 2015
Fiscal Year 2014(172.52)
10.19(% shows year on year rates)
Net Income(loss)
Ordinary Income(loss)
Million yen%
Million yen%
13,704(5,886)
－
－
(343)
347
－
－

Net Income
Per Shareon a Fully Diluted BasisYen－－(2) Non‐consolidated Financial Position
Total Assets
Fiscal Year 2015
Fiscal Year 2014

Million yen
121,350
120,763

Net Assets
Million yen
75,32982,629(Reference) Shareholders’ Equity 75,184 million yen for the FY2015

Shareholders’ Equity
Ratio

Net Assets
Per Share
%

62.0
68.3

Yen
2,203.58
2,417.62

82,487 million yen for the FY2014

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. For theassumptions and other related matters concerning consolidated results forecast, please refer to “(1) Analysis ofBusiness Performance” “1 Business Performance for the Fiscal Year 2015.”

1. Business Performance and Financial Position(1) Analysis of Business Performance
1. Business Performance for the Fiscal Year2015
Although in Fiscal Year 2015 business conditions remained firm in the United States, the Funai Group’s (“the Group”)
main market, a few changes have appeared, such as a slight slowdown in consumer spending and weakness in
employment in some sectors amid continued improvement overall. Whereas the European economy is showing a
trend toward improvement in consumer spending, the slowdown in economic recovery in China that began in thesecond half of the fiscal year continues. The economic slowdown in emerging economies, centering on China, has
likely begun to affect the Japanese economy, particularly exports, as indicated by weakness in machinery orders anda decline in the Index of Industrial Production in some sectors since the start of the year.
As a result of the above factors, Net sales amounted to ¥168,116 million, down 22.6% compared to the samequarter of the last fiscal year (year on year). Because the orders of LCD‐TVs for the year‐end sales season decreasedin the U.S., Sales in regional mass merchandisers were slow, and Mexican market got more competitive and The
Group posted the expenses in preparation for termination of sales of Audio accessories business. As a result,operating loss amounted ¥13,061 million (Operating income was ¥564 million in the last fiscal year); Ordinary loss
amounted to ¥16,146 million as foreign exchange losses due to the depreciation of the Mexican Peso against yen inaccounts receivable and the appreciation of the yen against U.S. dollar.(Ordinary income was ¥1,924 million in thelast fiscal year)
The Group received an arbitral award from the ICC International Court of Arbitration on April 26, 2016 with respect
to arbitration in the dispute between Funai and Koninklijke Philips N.V. As a result of factors including the recordingof ¥18,502 million in compensatory damages and other amounts decided in the arbitral award under extraordinary
loss, net loss attributable to owners of the parent amounted to ¥36,221 million (net income attributable to ownersof the parent of ¥1,354 million in the last fiscal year).
The Group applied Accounting Standard for Business Combinations (ASBJ Statement No. 21, September 13, 2013) inthe first quarter of this fiscal year has changed “net income or net loss” to “net income attributable to owners of theparent or net loss attributable to owners of the parent.”
Results by regioni) Japan
LCD‐TVs increased year on year due to a strong sale in large size‐screen models for OEM business. But printers,
DVD/BD‐related products, and electronic reception devices declined.
As a result, net sales amounted to ¥34,139 million, down 19.7% year on year. Segment loss (operating loss)
amounted to ¥8,863 million (Segment loss was ¥938 million in the last fiscal year).
ii) Americas
DVD‐related products increased thanks to the good sales in DVD/VCR Combo models. Printers increased,because the Group lunched new in‐house development ink‐jet printers in May 2015. But LCD‐TVs decreased
due to the reduction of the orders on the year‐end sales season in the U.S. The Group tried to make up for thisdecline by getting the regular business transactions, but we could not. In additions to that, Sales in regional
mass merchandisers were slow, Mexican market got more competitive, and Audio accessories decreased.
As a result, net sales amounted to ¥130,291 million, down 21.5% year on year. Segment loss amounted to¥4,043 million (Segment income was ¥1,200 million in the last fiscal year).
iii) Asia
Net sales amounted to ¥2,426 million, down 50.4 % year on year due to decrease ink cartridges. Segment loss
amounted to ¥15 million (Segment loss was ¥202 million in the last fiscal year).
iv) Europe
Printers increased because the Group lunched new in‐house development ink‐jet printers in this fiscal year. In
the other hand LCD TVs were slow, so total sales decreased. As a result, net sales amounted to ¥1,259 million,
down 67.0% year on year, segment loss amounted to ¥300 million (Segment income was ¥57million in the last
fiscal year).

Results by product segmenti) Audiovisual Equipment
DVD‐related products increased because of the good sales in DVD/VCR Combo models. But LCD TV decreased
due to the reduction of the orders the year‐end sales season in the U.S. The Group tried to make up for thisdecline by getting the regular business transactions, but we could not. In additions to that, Sales in regionalmerchandisers were slow, Mexican market got more competitive. Total sales decreased year on year. As a result,net sales of this equipment amounted to ¥146,179 million, down 15.2 % year on year.
ii) Information Equipment
The Group lunched in‐house development ink‐jet printers, but we could not offset a shortage caused by theclosure of OEM business, then Printer and Ink cartridges decreased year on year.
As a result, net sales of this equipment amounted to ¥5,000 million, down 60.4 % year on year.
iii) Other Products
Net sales of other products amounted to ¥16,936 million, down 47.2% year on year, due to the decrease of
Audio accessories which sales contract is terminated in this fiscal year.
2. Consolidated Financial Forecast for the Fiscal Year 2016
For the fiscal year ended March 31, 2017, the Group expects the operating climate to remain problematic, but weare committed to these following strategies and improve sales and profit.
i) Sales expansion
Increase sales and obtain orders for LCD‐TVs for the year‐end sales season in the U.S. market by offering UHD
models and multiple models developed for individual customers. Begin selling a multi‐model line of inkjet
printers and open up new customers.
ii)Securing of profits from the LCD‐TVs business
Reduce inventory through rigorous control of purchasing, sales, and inventories (PSI) between production
subsidiaries, sales subsidiaries, and corporate divisions and reduce expenses through integration of the UnitedStates subsidiaries.
iii) Improvement of the rate of return from the Information Equipment Business
Improve the rate of return by reducing R&D expenses through selection and concentration in productdevelopment, improve plant utilization rates through sales expansion, and sell high‐value‐added products.
< Consolidated Operating Forecast >Net sales
Operating income
Ordinary income
Net income attributable to owners ofparent¥ 172,000 million
4,300 million
3,500 million
1,400 million( 2.3 % increase year‐on‐year)(Last fiscal year operating loss 13,061 million)(Last fiscal year ordinary loss 16,146 million)(Last fiscal year net income 36,221 million)

For its earnings estimates, the Group has assumed an exchange rate of JPY 112 = US$1.00.
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 main U.S. market,
and severe price fluctuations may cause actual results to differ from this forecast.
(2) Analysis of Financial Position
1. Balance Sheet
Total assets decreased by ¥35,400 million compared to the end of the last fiscal year. The primary components ofthe change were as follows: Decrease of ¥9,210 million in cash and deposits, ¥14,091 million in notes and accounts receivable – trade, and¥3,630 million in merchandise and finished goods.
Total liabilities increased by ¥5,911 million compared to the end of the last fiscal year. The primary components ofthe change were as follows: Decrease of ¥16,020 million in note and accounts payable‐trade Increase of ¥21,414 million in accounts payable‐other.
Net assets decreased by ¥41,312 million compared to the end of the last fiscal year. The primary components ofthe change were decrease of ¥37,495 million in retained earnings and ¥3,442 million in the foreign currencytranslation adjustment.

2. Cash Flow
An analysis of consolidated cash flows shows that net cash used in operating activities amounted to ¥7,549 million.
Net cash provided by investing activities was ¥11,805 million, and net cash provided by financing activities was ¥69
million. The balance of cash and cash equivalent as of March 31, 2016 was ¥47,116 million.
Cash flow ratios
FY 2011

FY 2012FY 2013

FY 2014

FY 2015

Shareholders’ equity ratio (%)

69.5

61.7

64.2

66.8

55.4

Shareholders’ equity ratio at market value (%)

35.8

20.2

19.2

24.9

21.8

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

0.3

‐

‐

0.6

‐

130.5

‐

‐

89.6

‐

Interest coverage ratio (%)
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 theConsolidated Statements of Cash Flows.
* The ratio of cash flow to interest‐bearing debt and the interest coverage ratio for the fiscal year 2012, 2013 and2015 have been omitted because cash flow from operating activities was negative.
(3) Dividend Policy
Funai Electric Co., Ltd. (the “Company”) regards returning profits to shareholders as one of its most important key
issues, and basically provides stable dividends while strengthening its management base. The dividend policy isbased on dividend on equity ratio (DOE) of 1% under the consideration of business conditions. Basically theCompany plans to implement dividend payments once a year. When the Company pays an interim dividend, it
makes a public announcement in advance.
Based on above policy, the dividend plan for the fiscal year 2015 is expected to be JPY 30 per share. The dividend
plan for the fiscal year 2017 is currently undecided.
(4) Business Risks
The following risks may influence the Group’s financial condition and business results.
(The Group management policy)
The Group has adopted a policy of providing high‐quality, low‐cost products to consumers based upon optimized
production and sales systems on a global scale. We manufacture and sell our principal products, such as audiovisualequipment (LCD TVs, DVD‐related products, etc.) and information equipment (printers, etc.), in addition to otherproducts (antennas and related devices, audio accessory‐related products, etc.). Price competition in these productareas is intense. Additionally, the life cycle of digital products is short and the competition to develop newtechnologies and functions is also growing more severe. Accordingly, these factors may affect the Group’s financial
condition and business results.
i) Product cost and market prices
The Group’s primary target is the customers of mass merchandisers such as Walmart and therefore we mustdeliver low prices. Consequently, the Group is working to reduce costs through measures such as establishingproduction systems in optimal locations, pursuing further application of the Funai Production System (FPS), theunique productivity improvement system developed by the Company, and utilizing internal production of partsand centralized purchasing. However, the consumer electronics business is intensely competitive and when partsand raw materials prices rise, cost pressures may affect the Group’s financial condition and business results.

ii) New technologies
In the consumer electronics business, market needs is becoming more diverse; the Group needs to improve thequality, volume and speed of its new product development.
To address these issues, the Group will improve the technical capabilities mainly in the new business field bypartnership with other companies and universities, and personnel training. The Company also may consider
mergers and acquisitions depending on the situation. However, a diversification of market needs or technologicalinnovation beyond our expectations may affect the Group’s financial condition and business results.
iii) Defects relating to products and services
The Group strives to improve and keep quality by mainly the quality management and technology relevant
divisions. In addition, service companies in Japan and overseas have been established. However, if there are sometroubles with repair and replacement of our products, the impact of the warranty and/or the decrease of social
credibility may have negative impacts for the Group’s financial condition and business results.
iv) Intellectual property rights
The activities so‐called “patent trolls” have been very active these days. They have no products of their own, but
attempt to generate income from patent royalties by filing lawsuits using intellectual property rights acquired fromthird parties. This is a worrisome trend for all companies in manufacturing and sales industry. As a result of these
activities, we need to make high compensation payments that may affect the Group’s financial condition andbusiness results.
v) Corporate acquisition and Business alliances
The Group may pursue corporate acquisitions and business alliances to improve its profit and efficiently boost sales.
However for various reasons, in the event that the synergies fall short of initial expectations, we fail to reachagreement on an acquisition and affiliate relationships cannot be maintained, this may affect the Group’s financial
position, business results and growth forecasts.
(Impact of overseas market trends)i) Dependence on Americas (the United States, Mexico and other) market
The ratio of the Group’s net sales is high in overseas markets. In particular, Americas market accounted for 79.7%
of net sales in this fiscal year. Among them Walmart group accounted for 53.1% of net sales in this fiscal year.
If Americas’ economy rapidly enters a recession, this may affect the Group’s financial condition and businessresults.
ii) Dependence on Chinese production
The Group is working to improve the cost competitiveness of its products by concentrating production incost‐benefit regions and purchasing parts in bulk. In this fiscal year 98.9% of our products were produced overseas,with 55.0% were produced in China (consignment manufacturing and in‐house production). Although The Grouphas undertaken production site decentralization and the production ratio in China is declining. But we continue toengage in production in China, rising labor cost, changes in the government system, the outbreak of conflict,natural disasters and other unforeseen circumstances may affect the Group’s financial condition and businessresults.
iii) Foreign currency risk
The Group determines production sites for its principal products under consideration of optimal production sites
and sales systems. DVD‐related products, LCD TVs, and printers are produced in China, LCD TVs are produced in
Thailand, and Ink cartridges and Ink‐jet printers are produced in Philippines.
The Group purchases products from overseas production subsidiaries and sells them to overseas sales subsidiaries
or sells directly to OEM supply partners mainly in the North America. Domestic sales are also conducted throughdirect sales and sales subsidiaries.
Although the majority of the Group’s sales are conducted in U.S. dollars, some transactions are conducted in
Mexican pesos and yen. In addition, the majority of the Group’s purchasing transactions are conducted in U.S.
dollars. Although sales and purchase transactions conducted in U.S. dollars are not affected by currency
fluctuations, expenses denominated in U.S. dollars relating to sales transactions conducted in Mexican pesos or
yen are affected by currency fluctuations. Although the Group uses forward exchange contracts to hedgetransactions denominated in Mexican pesos against currency fluctuation risk, it is difficult to completely eliminate
the impact of significant currency fluctuations.
Since foreign currency‐denominated assets and liabilities are converted to yen using the exchange rates on thesettlement date, significant currency fluctuations may affect the Groups financial condition and business results.

(Other Risks)i) legal Regulations
In each country, the Group is subject to a variety of local legal regulations, concerning commercial transactions,
importing and exporting, intellectual property rights, product liability, environmental protection, consumer
protection, financial transactions, and corporate taxation. Changes to these legal regulations, or the ways in which
they are interpreted by the authorities, could affect the Group’s financial position and business performance.
ii) Litigation
There are litigation risks relating to the Group’s business. A major lawsuit or other legal action could affect theGroup’s financial position and business performance.
iii) Information control
The Group has internal systems to prevent information leaks and protect itself against viruses. However, factors
such as operational mistakes and the new viruses may preclude us avoiding information leaks and system
shutdowns completely. Such events could affect the Group’s financial position and business results.
iv) Retirement Benefit Obligations
The Group and its consolidated domestic subsidiaries have defined benefit corporate pension systems, andretirement benefit obligations are based on actuarial assumptions on the pension assets, such as rates of returnand discount rates. The Group’s financial position and business results could be affected if there are any changes
in these assumptions, if the pension assets decrease due to the deterioration in the investment environment, or ifchanges in the pension system cause future retirement benefit expenses to increase.
v) Financing
If the Group’s financing is limited due to deteriorating business performance, the cost of finance could increase.
This could affect the Group’s financial position and business performance.
Some of the Group’s debt is subject to financial covenants. The consequences of a covenant violation, such as ahigher loan interest rate or the loss of benefits of time, could affect the Group’s financial position and businessperformance.
(5) Important Information about Going Concern Assumption
Since the Group recorded a significant operating loss, ordinary loss, net loss attributable to owners of the parent,
and negative operating cash flow during the fiscal year 2016, events or circumstances that cast significant doubt on
the going concern assumption exist at the present time.
Since the Group’s balance of cash and deposits is sufficient to cover working capital, repayment of borrowings, andother requirements for some time, there is no significant concern about fundraising.
Since the Group is already implementing the following countermeasures in stages, the Group believes that a
resolution of the matter can be achieved.
i) Sales expansion
Increase sales and obtain orders for LCD‐TVs for the year‐end sales season mainly in U.S. market by offering UHD
models and multiple models developed for individual customers. Begin selling a multi‐model line of inkjet
printers and open up new customers.
ii) Securing of profits from the LCD TV business
Reduce inventory through rigorous control of purchasing, sales, and inventories (PSI) between production
subsidiaries, sales subsidiaries, and corporate divisions and reduce expenses through integration of U.S.
subsidiaries.
iii) Improvement of the rate of return from the Information Equipment Business
Improve the rate of return by reducing R&D expenses through selection and concentration in productdevelopment, improve plant utilization rates through sales expansion, and sell high‐value‐added products.
Accordingly, Funai judges that there is no significant uncertainty related to the going concern assumption as of theend of the fiscal year 2016 and has omitted the Notes on Going Concern Assumption from the consolidated financial
statements.

2. Current Conditions of the Company’s GroupThe Group has omitted disclosure of this item because there are no material changes from the information reported
in “Diagram of Operating Business Relationships (Business Contents)” and “Affiliated Companies” in the recent
financial statements (submitted on June 25, 2015).

3. Management Policies(1) Management Policy
The Group will pursue its business based on its management policy that is to build strong trust and to seek themutual prosperity of all parties related to the company, by organizing the most efficient development,
manufacturing and sales system and stably supplying high quality and reasonable priced products to global markets.
(2) Management Indicators
As a management indicator, the Group places the greatest emphasis on operating income margin, and will seek toachieve over 5% of operating income margin in the medium term.
(3) Medium to Long‐term Management Strategy and Issues to be addressed
Demand for LCD TVs has been expanding because of the shift to UHD model and larger screens. However, theconsumer electronics industry continued to face challenging conditions because of an ongoing slump in the market
for DVD/BD‐related products and signs of a slowdown demand for products hitherto regarded as growth drivers,
such as smartphones and tablets.
The issues that the Group needs to address in this situation are as follows.
i) Increasing net sales and improving profitability
The Group has positioned the increase of net sales and improvement of earnings as its highest priority issue.
(Product strategy)
During the fiscal year 2016, sales and profits declined as a result of factors including a decrease in orders for theyear‐end sales season in U.S., sluggish sales at regional mass merchandisers, delays in inventory clearance, andintensification of competition in the Mexican market.
To increase net sales, the Group aims to increase sales of LCD‐TVs and secure orders for the year‐end sales season
by offering UHD models and multiple models developed for individual customers. The Group is endeavoring to sell
inkjet printers by offering a multi‐model line and opening up new customers.
(Market strategy)
As a short‐term market strategy, the Group is offering high‐value‐added models such as UHD TVs to secure thecompetitive advantage of the Group products in U.S. market. As a medium‐ to long‐term strategy, we are actively
engaging in sales channel expansion to eliminate in stages excessive concentration on U.S. market: for instance, in
Europe (the U.K. and other areas) in the Information Equipment Business and in Mexico and elsewhere in Central
and South America in the Audiovisual Equipment Business.
In order to implement the above strategies, the Group minimizes the time lags between product planning,development, material procurement, production and sales. Additionally the Group strives to meet market needs
precisely and on a timely basis.
ii) Reinforcing manufacturing and development systems
Excessive reliance on production in China is a risk factor. To avoid that risk, the Group has been working to
distribute our production sites to other locations. Consequently the production ratio in China has been in a
downward trend. The new factory in Philippines, Funai Electric Philippines Inc. started to work in this fiscal year.
The Group also continues to increase development efficiency among the entire The Group in China and Asia.
iii) Training and appointment of human resources
The Group recognizes that improving each employee’s capabilities and linking this to strengthening the group
power will be essential to win the global competition and implement the medium to long‐term business strategy.
Therefore we actively train and assign employees, without regard to whether they are younger or mid‐career staff,
by strengthening internal or external training systems.

4. 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.

4. Consolidated Financial Statements(1) Consolidated Balance Sheets(Million Yen)
Fiscal year 2014
(As of March 31, 2015)

Fiscal year 2015
(As of March 31, 2016)

ASSETS;
Current Assets
Cash and deposits

66,82057,609Notes and accounts receivable‐trade38,18324,092Merchandise and finished goods

26,39822,768Work in process

1,455

1,196

Raw materials and supplies

14,70813,212

Deferred tax assets

2,245

664

Other

5,352

4,071

Allowance for doubtful accounts

(389)

(400)

154,775

123,214

Buildings and structures

20,314

18,138

Accumulated depreciation(10,258)(9,794)

Buildings and structures, net

10,055

8,343

Machinery,equipment and vehicles

13,592

10,746

Accumulated depreciation(10,601)(8,964)

Machinery,equipment and vehicles, net

2,900

1,781

Tools, furniture and fixtures

26,15623,086

Accumulated depreciation(24,433)(21,919)

Tools, furniture and fixtures, net

1,722

1,166

Lands

6,343

6,331

Lease assets

513

697

Accumulated depreciation

(340)

(203)

Lease assets, net

173

493

Other

19

87

21,30618,203Patent right

4,020

3,297

Other

2,097

1,666

6,117

4,964

Investment securities

2,814

2,418

Deferred tax assets

339

206

Net defined benefit asset

1,716

1,555

Other

2,900

4,003

Allowance for doubtful accounts

(276)

(271)

Total investments and other assets

7,496

7,912

34,92031,080189,695

154,295

Total current assets
Noncurrent assets
Property, plant and equipment

Total property, plant and equipment
Intangible assets

Total intangible fixed assets
Investment and other assets

Total noncurrent assets
TOTAL ASSETS

(Million Yen)
Fiscal year 2014
(As of March 31, 2015)

Fiscal year 2015
(As of March 31, 2016)

LIABILITIES;Current Liabilities
Notes and accounts payable‐trade

31,625

15,604

Short‐term loans payable

4,012

5,118

Accounts payable‐other

11,94433,359lease obligations

126

251

Income taxes payable

485

783

Provision for bonuses

212

236

1,228

689

Provision for product warranties
Foward exchange contracts

‐

18

Other

1,743

1,735

Total current liabilities

51,37857,798

6,683

6,009

290

737

1,345

811

Deferred tax liabilities for land revaluation

226

205

Provision for directors' retirement benefits

1,093

1,106

Net defined benefit liability

548

395

Other

247

662

10,435

9,927

61,81367,725

Capital stock

31,30731,307

Capital surplus

33,27233,301Retained earnings

93,84056,345

Treasury stock(24,341)(24,341)

Total shareholders' equity

134,079

96,613421

160

Foreign currency translation adjustment(8,188)(11,630)

Remeasurements of defined benefit plans

365

314

(7,401)(11,155)

Subscription right to shares

142

145

Non‐controlling interests

1,061

965

127,881

86,569189,695

154,295

Noncurrent liabilities
Long‐term loans payable
lease obligations
Deferred tax liabilities

Total noncurrent liabilities
TOTAL LIABILITIESNET ASSETS;
Shareholders' equity

Accumulated other comprehensive income
Valuation difference on avaiable‐for‐sale securities

Total accumulated other comprehensive income

Total net assets
TOTAL LIABILITIES AND NET ASSETS

(2) Consolidated Statements of Income and Consolidated Statement of Comprehensive Income(Consolidated Statements of Income)(Million Yen)
Fiscal year 2014

Net sales

Fiscal year 2015

( from April 1, 2014
to March 31, 2015 )
217,088( from April 1, 2015
to March 31, 2016 )
168,116

Cost of sales

179,515

145,210Gross profit

37,57322,906

Selling, general and administrative expenses

37,00935,968564(13,061)Interest income

198

259

Dividends income

112

28

Operating income (loss)
Non‐operating income

1,570

－

Rent income on non‐current assets

208

208

Gain on investments in partnership
Other

106

218

160

79

2,356

793

Interest expenses

187

296

Equity in losses of affiliates

144

4

Foreign exchange losses
Loss on disposal of inventories

－

3,277

147

－

Other

517

299

Total non‐operating expenses

996

3,878

1,924

(16,146)

Foreign exchange gains

Total non‐operating income
Non‐operating expenses

Ordinary income (loss)
Extraordinary income
Gain on sales of noncurrent assets

150

18

Gain on sales of investment securities

824

68

Gain on sales of shares of subsidiaries
Settlement received

134

Refund of customs duty

41－

Notes1

902－

Notes2

485

－
1,110

Other
Total extraordinary income

46
1,562

Extraordinary loss
Loss on disposal of noncurrent assets
Impairment loss

25
Notes3618

475
Notes3557

Notes4－18,502

Loss on closing of sales office131

Compensation for damage
Other

－
14

Total extraordinary loss

789

19,838

Income (loss) before income taxes and minority interests

303

2,244

(34,422)

Income taxes

635

514

Income tax adjustments

238

1,322

Total income taxes

873

1,836

Net income (loss)

1,370(36,258)

16

(37)

1,354

(36,221)

Net income (loss) attributable to non‐controlling interests
Net income (loss) attributable to owners of parent

(Consolidated Statement of Comprehensive Income)(Million Yen)
Fiscal year 2014

Net income (Loss)

Fiscal year 2015

( from April 1, 2014
to March 31, 2015 )1,370( from April 1, 2015
to March 31, 2016 )(36,258)

Other comprehensive income
Valuation difference on avaiable‐for‐sale securities

(246)

(264)

Foreign currency translation adjestment

9,294(3,422)

481

(48)

12

(19)

Remeasurements of defined benefit plans, net of tax
Share of other comprehensive income of associates
accounted for using equity method
Total other comprehensive income
Comprehensive income

9,542

Notes

(3,754)

10,913(40,012)Comprehensive income attributable to owners of the parent

10,879(39,975)

Comprehensive income attributable to non‐controlling inter

34

(37)

(Comprehensive income attributable to)(3) Consolidated Statements of Changes in Shareholders' Equity
Fiscal year 2014 (April 1, 2014 ‐ March 31, 2015)(Million Yen)
Shareholders' equity
Capital stock

Capitalsurplus31,307

Beginning balance
Cumulative effect of changes in accounting
policies
Restated balance
Changes of items during the period

Retainedearnings

33,272

93,196

Treasury
stock

Total
shareholders'equity(24,341)

133,435483
31,30733,272

93,679483(24,341)

133,918

Dividends from surplus(1,194)(1,194)

Income (loss) attributable to owners of parent

1,354

1,354
(0)

(0)

(0)
(24,341)160
134,079

Purchase of treasury stock
Net changes of items other than shareholders'equity－31,307

Total changes of items during the periodEnding balance－
33,272160
93,840

Accumulated other comprehensive income

Beginning balance
Cumulative effect of changes
in accounting policies
Restated balance
Changes of items during theperiodUnrealized
holding
gains/losses
on securities

Foreigncurrencytranslation
adjustment

Remeasurements ofdefinedbenefit
plans

Total
accumulated othercomprehensive income

Subscription
rights toshares672(17,495)(103)(16,925)

132

Non‐controlling
interests

1,042 117,684
(11)

672

(17,495)(103)(16,925)

132

Total net
assets472

1,031 118,156

Dividends from surplus(1,194)

Income (loss) attributableto owners of parent

1,354

Purchase of treasury stock(0)

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

(251)

9,307

468

9,524

10

29

9,564

(251)

9,307

468

9,524

10

29

9,724

421

(8,188)365(7,401)142

1,061 127,881

Fiscal year 2015 (April 1, 2015 ‐ March 31, 2016)(Million Yen)
Shareholders' equity
Capital stock

Capitalsurplus31,307

Beginning balance
Changes of items during the period

Retainedearnings

33,272

93,840Total
shareholders'equityTreasurystock(24,341)

134,079

Dividends from surplus(1,194)(1,194)

Income (loss) attributable to owners of parent(36,221)(36,221)(0)

Purchase of treasury stock(79)

Change of scope of consolidation
Change in treasury shares of parent arising fromtransactions with non‐controlling shareholders
Net changes of items other than shareholders'equityTotal changes of items during the periodEnding balance29－
31,30729
33,301

(0)
(79)
29

(37,495)
56,345(0)(24,341)(37,465)
96,613

Accumulated other comprehensive income

Beginning balance
Changes of items during theperiodUnrealized
holding
gains/losses
on securities

Foreigncurrencytranslation
adjustment

Remeasurements ofdefinedbenefit
plans

Total
accumulated othercomprehensive income

Subscriptio
n rights tosharesNon‐controlling
interests

Total net
assets421(8,188)365(7,401)

142

1,061

127,881

Dividends from surplus(1,194)

Income (loss) attributableto owners of parent(36,221)

Purchase of treasury stock(0)

Change of scope of
consolidation
Change in treasury sharesof parent arising fromtransactions
with
non‐controllingshare
holders
Net changes of items otherthan shareholders' equity
Total changes of items during
the periodEnding balance

(79)

29

(260)

(3,442)(51)(3,753)2(95)(3,846)(260)(3,442)(51)(3,753)

2(95)(41,312)160(11,630)

314(11,155)

145

965

86,569(4) Consolidated quartely statements of cash flows(Million Yen)
Fiscal year 2014

Fiscal year 2015

( from April 1, 2014
to March 31, 2015)( from April 1, 2014
to March 31, 2015)

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

2,244(34,422)

Depreciation

5,855

4,498

Impairment loss

618

557

Increase (decrease) in allowance for doubtful accounts

123

41

Increase (decrease) in net defined benefit liability

(163)

(125)

Interest and dividend income

(311)

(287)

Interest expenses

187

296

Share of (profit) loss of entities accounted for using equity method

144

4

Loss on retirement of property, plant and equipment

19

357

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

(146)

9

Loss (gain) on sales of investment securities

(824)

(68)

Loss (gain) on sales of shares of subsidiaries and associates

(134)

(41)

Loss (gain) on valuation of investment securities－

2

Loss on valuation of shares of subsidiaries and associates

136

Decrease (increase) in notes and accounts receivable ‐ trade

2,289

12,199Decrease (increase) in inventories

12,597

2,716

Increase (decrease) in notes and accounts payable ‐ trade(5,435)(15,381)

Increase (decrease) in notes and accounts payable ‐ other(21)

22,400

Other, net

904

111

Subtotal

17,961(7,141)

Interest and dividend income received

298

295

Interest expenses paid

(188)

(294)

Income taxes paid

(1,205)(454)

Income taxes refund

31

28

16,897(7,549)Payments into time deposits(39,069)(21,227)

Proceeds from withdrawal of time deposits

22,25634,215Purchase of property, plant and equipment(3,164)(2,113)

Proceeds from sales of property, plant and equipment

218

886

Purchase of intangible assets

(343)

(270)

Purchase of investment securities

(154)

(62)

Proceeds from sales of investment securities

2,093

242

Payments of loans receivable

(68)

(2)

Collection of loans receivable

684

40

Net cash provided by (used in) operating activities
Cash flows from investing activities

Other, net
Net cash provided by (used in) investment activities

186

98

(17,360)

11,805

(Million Yen)
Fiscal year 2014

Fiscal year 2015

( from April 1, 2014
to March 31, 2015)( from April 1, 2015
to March 31, 2016)

Cash flows from financing activities
Net increase (decrease) in short‐term loans payable(1,404)

1,124

(0)

(0)

(1,194)(1,194)

(126)

139

Net cash provided by (used in) financing activities(2,725)69

Effect of exchange rate change on cash and cash equivalents

2,567

(251)

Net increase (decrease) in cash and cash equivalents

(621)

4,074

43,612

42,991－

51

42,991

47,116

Purchase of treasury shares
Cash dividends paid
Other, net

Cash and cash equivalents at beginning of period
Increase in cash and cash equivalents from newly consolidated subsidiary

Cash and cash equivalents at end of period

(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: 23
The major consolidated subsidiaries are FUNAI CORPORATION, INC., FUNAI ELECTRIC (H.K.), LTD. and
DX ANTENNA CO., LTD.
In this fiscal year, the Group has included DX ANTENNA PHILIPPINES, INC. in the scope of consolidation, because
its importance has increased. And the Group has included Funai North America, Inc. established in this fiscal year.
In addition, the Group has excluded FUNAI CMET Optical Electronics Co., Ltd from the scope of consolidation inthis fiscal year, as the result of its liquidation.
(Change in Accounting Policy)(Application of “Accounting Standard for Business Combinations”)
The Group has applied the accounting standard for business combination in this fiscal year. The details are as
follows.
1. “Accounting Standard for Business Combinations” (ASBJ Statement No. 21, September 13, 2013),
2. “Accounting Standard for Consolidated Financial Statements” (ASBJ Statement No. 22, September 13,2013),and
3. “Accounting Standard for Business Divestitures” (ASBJ Statement No. 7, September 13, 2013).
This change had no effect on the consolidated statements of income.
(Additional Information)
About Anti‐Tax Haven Law
The Group received a reassessment notice from the Osaka Regional Taxation Bureau on June 29, 2011. The
Bureau determined that our Hong Kong subsidiary does not meet the requirements for exemption under theanti‐tax haven rules. In addition, they imposed a tax on us adding up with the Hong Kong subsidiary’s income forthe three fiscal years ended March 31, 2008 through 2010, which deems as our income.
We objected to this reassessment of income taxes, and filed a request for examination to the Osaka National Tax
Tribunal on August 25, 2011. However, we received written verdicts that reject our petition on July18, 2012. The
Group filed a suit for cancellation of reassessment to the Tokyo District Court on January 17, 2013.
The additional tax amount is totally ¥825 million including corporate, enterprise and residence taxes (¥935 million
including incidental taxes). We recorded this additional tax as “prior year’s taxes” in the fiscal year ended March
31, 2012. Also, the financial impact, when applying this tax rules has been recorded in the fiscal year ended
March 31, 2011 when tax investigation was completed.
(Consolidated statement of income)*1. Settlement received
Fiscal year 2015 (April 1, 2015 ‐ March 31, 2016)
The Group filed a lawsuit for a compensatory damage against Olympus Corporation due to Olympus’s
misstatements in its securities registration statement, etc. The Group recorded 902 million as settlement received
after deducting necessary expenses from the settlement money in connection with this settlement.
*2. Refund of customs duty
Fiscal year 2015 (April 1, 2015 ‐ March 31, 2016)
This amount consists of refunded customs duties, legal costs, and associated interest received after consolidated
subsidiary FUNAI EUROPE GmbH won a lawsuit claiming a refund of assessed additional customs duties brought
against the German tax authorities in the District Court of Hamburg.

*3. Impairment loss
Fiscal Year 2014 (April 1, 2014 ‐ March 31, 2015)
The Group recorded losses on impairment in the following asset groups for fiscal year 2014.
Use

Location

Type

Business Assets

FUNAI ELECTRIC EUROPE Sp.z o.o.
(Poland)

Buildings, Constructions and Land.

In principle, the Group groups business assets on the basis of legal units that strive to maintain an ongoingunderstanding of income and expenses. The idle assets are grouped by individual asset.
The book values of assets used for business activities affected by significant declines in profitability for this fiscal
year have been reduced to the recoverable amounts. This reduction (¥618 million) is recorded in extraordinary
loss. The total consists of ¥596 million for buildings and ¥22 million for land.
Recoverable amounts are based on the net amounts that can be realized through sales, which are calculated on
the basis of real estate valuations.
Fiscal Year 2015 (April 1, 2015 ‐ March 31, 2016)
The Group recorded losses on impairment in the following asset groups for fiscal year 2015.
Use

Location

Type

Business Assets

Funai Electric Co., Ltd.
(Osaka Daito city)

Long‐term prepaid expenses

Business Assets

Funai Electric (H.K.)LTD(Hong Kong)

Machinery, equipment and vehicles
Tools, furniture and fixtures

Business Assets

Zhongshan Funai Electron Co.
(China Guangdong)Tools, furniture and fixtures

In principle, the Group groups business assets on the basis of legal units that strive to maintain an ongoingunderstanding of income and expenses. The idle assets are grouped by individual asset.
In the fiscal year 2015, as a result of the decision to withdraw from the laser printer business to concentrate
information equipment enterprise resources on the inkjet printer business, Funai wrote down the book value of
manufacturing facilities, development assets, and other assets not expected to be used in the future to therecoverable amount and recorded the reduction (¥431 million) in extraordinary loss. The total consists of ¥87
million for Funai Electric Co.,Ltd.(Long‐term prepaid expenses), ¥10 million for Funai Electric(H.K.)LTD (¥6 millionof Machinery, equipment and vehicles and ¥4 million of Tools, furniture and fixtures) and ¥333 million forZhongshan Funai Electron Co.(Tools, furniture and fixtures).
The recoverable amount of the assets has been determined based on net selling price and calculated with the net
selling price as zero.
Use

Location

Type

Retirement Assets

Funai Electric Cebu, Inc.
(Philippine Cebu)

Machinery, equipment and vehicles

In principle, the Group groups business assets on the basis of legal units that strive to maintain an ongoingunderstanding of income and expenses. The idle assets are grouped by individual asset.
Since acquiring the shares of a manufacturing subsidiary of Lexmark International, Inc. (now Funai Electric Cebu,Inc.), the Group has engaged in contract production of inkjet cartridges through the acquired company. Although
we previously grouped assets scheduled for retirement in connection with the end of production of some models
as business assets, since the assets are now scheduled for retirement, we wrote down the book value to therecoverable amount and recorded the reduction (¥125 million) in extraordinary loss.
The recoverable amount of the assets has been calculated using net selling price based on disposal value.

*4. Compensation for damage
Funai resolved to acquire all shares in a company taking over PHILIPS’ Lifestyle Entertainment Business from
Koninklijke PHILIPS N.V. (“PHILIPS”). However, PHILIPS filed against Funai a petition for arbitration to recoverdamages caused by breach of agreement of Funai as of October 25, 2013.
With regard to this matter, Funai recognizes there has been no breach of agreement on its behalf. Therefore,
Funai filed a counterclaim for damages caused by breach of the agreement and unlawful actions by PHILIPS to theInternational Chamber of Commerce on December 6, 2013.
On April 26, 2016 the arbitral tribunal has ordered Funai to pay compensatory damages to Philips in the sum of
EUR 134.8M, arbitration costs in the sum of USD 1.35M,and Philips’s legal fees in the sum of EUR 2.5M plus
interest (2%) for them and the arbitral tribunal has dismissed the counterclaim by Funai. Funai posted ¥18,502
million as compensatory damages etc. in extraordinary loss in this fiscal year.
(Consolidated statement of comprehensive income)* 1. Reclassification adjustment and tax effect amount involved in other comprehensive income(Million Yen)

Fiscal year 2015
( from April 1, 2015
to March 31, 2016 )Fiscal year 2014
( from April 1, 2014
to March 31, 2015 )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 amount

Valuation difference on available‐for‐sale securities
Remeasurements of defined benefit plans:
Accrued amount on the current term
Reclassification adjustment amountPre‐adjustment of tax effectTax effect amountForeign currency translation adjustment
Share of other comprehensive income of entities
accounted for using equity method:
Accrued amount on the current term
Reclassification adjustment amountPre‐adjustment of tax effectTax effect amount

Share of other comprehensive income of entities
accounted for using equity method:
Total other comprehensive income

409
(824)
(415)
169
(246)

323
(66)
(389)
125
(264)

9,324
－
9,324
(30)
9,294

(3,353)(92)(3,446)24(3,422)

657
88
746
(264)
481

(153)
69
(83)
35
(48)

12
－
12
－

0
(19)
(19)
－

12

(19)

9,542

(3,754)

(Business combination)
Fiscal Year 2015 (April 1, 2015 ‐ March 31, 2016)
The Group established a regional head subsidiary “Funai North America, Inc.” on October 1, 2015 in accordance withthe resolution of the board of directors held on May 11, 2015. After that the Group executed contribution in kind of
all shares of 2 consolidated subsidiaries held by the Group and acquired its shares.
1. Outline of business combination(1) Name and business of combine company
Combine company
Name:
Funai North America, Inc.
Business: Management of subsidiaries in the North America
Combined company
Name:
FUNAI CORPORATION, INC.
Business: Sales of electrical equipment
Name:
P&F USA, Inc.
Business: Sales of electrical equipment(2) Date of business combination
November 5, 2015(3) Legal form of business combination
The Group executed contribution in kind of all shares of its subsidiaries to Funai North America, Inc.
(4) Other information
The Group aimed the strengthening of sales system and the improvement of efficiency in the North America.
The Group executed contribution in kind of all shares of FUNAI CORPORATION, INC. and P&F USA, Inc. held by
the Group to Funai North America, Inc.
2.

Outline of accounting policy
The Group treated this transaction as “a transaction under common control” in accordance with the“Accounting Standard for Business Combinations” (ASBJ Statement No. 21, September 13, 2013) and the“Revised Guidance on Accounting Standard for Business Combinations and Accounting Standard for Business
Divestitures” (ASBJ Guidance No.10, December 26, 2008).

(Segment Information)[Segment Information]
1. Summary of Reporting Segments
The reporting segments of the Group are components for which discrete financial information is available andwhose operating results are regularly reviewed by the board of directors to make decision about resource allocationand to assess their performance.
Businesses of the Group are to manufacture and sell electrical equipment and devices. In Japan, such functions are
the responsibility of DX Antenna Co., Ltd. In the areas of the United States, Asia and Europe such functions aremanaged by Funai Corporation, Inc. (Americas), P&F USA, Inc. (Americas), Funai Electric (H.K.) Ltd. (Asia), FUNAIELECTRIC EUROPE Sp.z o.o (Europe), and other local corporations. They are independent each other and plancomprehensive 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 2014 (April 1, 2014 ‐ March 31, 2015)
Japan

AmericasAsia

42,489124,248

165,887969

4,894
130,2733,817
0

217,088
255,491－(255,491)

217,088－

166,738(938)
121,725

166,856
1,200
62,605

135,167(202)
69,025

3,817
57
3,057

472,579
117
256,413(255,491)
446(66,717)217,088564
189,695

1,606
0

44
－

4,152
－

52
－

5,855
0

－
－

5,855
0

Investment amount to equity
method affiliate

4

－

175

－

180

－

180

Increase in tangible fixed
assets and intangible assets

332

562

2,939

6

3,840

(0)

3,840

Net Sales(1) Sales to outside customers(2) Inter‐segment sales
Total
Segment Income (Loss)
Segment Assets
Other
Depreciation and amortization
Amortization of goodwill

Europe

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

Fiscal year 2015 (April 1, 2015 ‐ March 31, 2016)
Japan

AmericasAsia

34,139110,558

130,291
1,159

2,426
96,794

1,259－

168,116
208,512－(208,512)

168,116－

Total
Segment Income (Loss)
Segment Assets
Other
Depreciation and amortization

144,697(8,863)
119,694

131,451(4,043)45,162

99,220(15)
52,612

1,259
(300)
2,119

376,629(13,223)
219,588(208,512)161(65,293)

168,116(13,061)
154,295

1,633

180

2,660

23

4,498

－

4,498

Investment amount to equity
method affiliate

－

－

166

－

166

－

166

Increase in tangible fixed
assets and intangible assets

752

510

1,863

－

3,127

(0)

3,127

Net Sales(1) Sales to outside customers(2) Inter‐segment sales

Europe

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

(Note) 1. Adjustments were as follows.
Segment Income(loss)
Eliminations
Corporate expenses *Inventories

899
(726)
274

(Million Yen)
Fiscal year 2015
453
(761)
469

Total

446

161

Fiscal year 2014

* Corporate expenses are general & administration expenses that do not correspond to the reporting
Segments
Segment Assets
Total assets *Adjustments of inventories
Eliminations

26,306(1,990)(91,032)(Million Yen)
Fiscal year 2015
27,677(1,520)(91,450)

Total(66,717)(65,293)

Fiscal year 2014

*Total assets are mainly excess cash/deposits and long term securities for investment that do not correspondto the reporting segments.
2. Segment income and loss are adjusted with the operating income reported in the consolidated statements
of income and loss.
[Related Information]
Fiscal year 2014 (April 1, 2014‐ March 31, 2015)
1. Information every product and service
Audiovisual
Equipment
Sales to outside customers
172,367(Million Yen)
Information
Equipment
12,634

Other Equipment

Total

32,087217,088

2. Information every area
(1) Sales(Million Yen)
Americas

Japan

U.S.

32,211

Mexico147,332

Other

22,460

6,851

Asia

Europe

Other

1,870

6,122

239

Total
217,088(Note) Geographical sales are groupings of nations and regions based on geographical location of customers.
(2) Property, plant and equipment(Million Yen)
Asia

Japan
9,469
3.

Americas
135

China
7,448

Thailand
2,409

Other
1,007

Information every main customer
Name of the customer
WAL‐MART STORES, INC.

EuropeTotal
836

21,306(Million Yen)

Sales
113,349

Associated segment
Americas

Fiscal year 2015 (April 1, 2015‐ March 31, 2016)
1. Information every product and service
Audiovisual
Equipment
Sales to outside customers
146,179(Million Yen)
Information
Equipment
5,000

Other Equipment

Total

16,936

168,116

2. Information every area
(1) Sales(Million Yen)
Americas

Japan

U.S.

31,477

Mexico117,266

Other

14,467

2,223

Asia

Europe

Other

1,022

1,659

－

Total
168,116(Note) Geographical sales are groupings of nations and regions based on geographical location of customers.
(2) Property, plant and equipment(Million Yen)
Asia

Japan
9,521
3.

AmericasPhilippines
77

Thailand

6,405

Europe

Other

1,784

411

Total
2

Information every main customer(Million Yen)

Name of the customer

Sales

Associated segment

WAL‐MART STORES, INC.

89,251

Americas[Information of impairment loss in each reporting segments]
Fiscal year 2014 (April 1, 2014 ‐ March 31, 2015)
Japan

Americas－

Impairment loss

(Million Yen)

Asia

－

Europe－618

All of thecompanies
Elimination－

Fiscal year 2015 (April 1, 2015 ‐ March 31, 2016)
Japan
Impairment loss

18,203618(Million Yen)

Americas
87

Total

－

Asia

Europe469－

All of thecompanies
Elimination－[Information of amortization of goodwill and unamortized balance in each reporting segments]
Fiscal year 2014 (April 1, 2014 ‐ March 31, 2015)
All of theJapan
Americas
Asia
Europecompanies
Elimination
Amortization of
0
－
－
－
－
current year
Balance at the end
－
－
－
－
－
of current year
Fiscal year 2015 (April 1, 2015 ‐ March 31, 2016)
No Applicable[Information of amortization of negative goodwill in each reporting segments]
Fiscal year 2014(April 1, 2014‐March 31, 2015) No Applicable
Fiscal year 2015(April 1, 2015‐March 31, 2016) No Applicable

Total
557

(Million Yen)
Total
0
－

(Information per share)
Fiscal year 2014
（April l,2014 – March 31,2015）
Book Value per share
3,712.81
Net income per share
39.70

Fiscal year 2015
（April l,2015 – March 31,2016）
Book Value per share
2,504.70
Net loss per share
1,061.62(Note)
1. In the fiscal year 2015, net income per share after dilution is not shown because there are no issuable shares with adilutive effect. In the fiscal year 2014, the net loss per share after adjustment for dilution was not shown, since there
were 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 2014
（April 1, 2014 – March 31,2015）

Fiscal year 2015
（April 1, 2015 – March 31,2016）

Net income (loss) per share
Net income (loss) attributable to owners ofparent1,354(36,221)

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

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

1,354

(36,221)

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

34,11934,119Overview of potentially dilutive common shares not Two types of stock acquisition Two types of stock acquisition rights
included in computation of net income per share rights (number of stock acquisition (number of stock acquisition rights:
after dilution because of their anti‐dilutive effectrights: 3,835) have been excluded. 2,837) have been excluded.

(Events after the reporting period)
Not applicablefrom 2015.4.1
to 2016.3.31
Page
1. Summary of Full Year Financial Statements（Consolidated）(1) Operating Results, Financial Conditions ･････････････････････････････

１(2) Profitability and Per Share Data etc. ････････････････････････････････

１(3) Capital Expenditures, Depreciation, R&D Expenses ･････････････････

１(4) Cash Flow ･･･････････････････････････････････････････････････････

２

2. Operating Activities (Consolidated)(1) Slaes by Equipment ･･･････････････････････････････････････････････

２(2) Sales by Area in Equipment ･･･････････････････････････････････････

３(3) Sales by Equipment in Areas ･･････････････････････････････････････

３

3. Summary of 4Q (January‐March) Financial Statements(Consolidated)(1) Operating Results ･･････････････････････････････････････････････････

4(2) Sales by Equipment ････････････････････････････････････････････････

4

１．Summary of Full Year Financial Statements (Consolidated)(1) Operating Results, Financial Conditions
FY2014%

Amount（Units : 100 million yen, %）FY2016 (Projection)

FY2015
ChangeAmount%ChangeAmount%ChangeNet Sales

2,340

100.0

21.9

1,681

100.0

(22.6)

1,720

100.0

2.4

Operating Income (Loss)

(54)

(2.3)

－

(130)

(7.8)

－

43

2.5

－

Ordinary Income (Loss)

(22)

(1.0)

－

(161)

(9.6)

－

35

2.0

－

Net Income (Loss) after Tax

(67)

(2.9)

－

(362)

(21.5)

－

14

0.8

－

Total Assets

1,813

－

－

1,542

－

－

－

－

－

Net Assets

1,176

－

－

865

－

－

－

－

－

（※） Yen‐Dollars / Exchange rate
FY2014FY2015

Average Rate in each Period

119.98100.49（Units : Yen / Dollars）
FY2016 (Projection)
112.00(2) Profitability and Per Share Data etc.
FY2014FY2016 (Projection)

FY2015

（％）

13.9

13.7

19.3

Operating Income Ratio （％）

(2.3)

(7.8)

2.5

Ordinary Income Ratio （％）

(1.0)

(9.6)

2.0

Shareholders' Equity Ratio （％）

64.2

55.4

－

Gross Profit Ratio

Net Assets Per Share（yen）

3,414.77

2,504.70－

Net Income Per Share（yen）(197.70)(1061.62)

41.03

Return on Assets

（％）

(3.6)

(21.1)－

Return on Shareholders' Equity （％）(5.7)(34.1)－

Number of Total Employees

5,112

3,318

－

(3) Capital Expenditures, Depreciation, R&D Expenses
FY2014
AmountChange109

Capital Expenditures

Amount105.7

Depreciation Expenses
R&D

%

52

2.2

84

3.6

Change24

FY2013
Amount（Units : 100 million yen, %）FY2016 (Projection)

FY2015%

ChangeAmount

30.0

35

2.1

77

4.6

(9.7)

－1－

(4.2)

23

(25.0)FY2014

ChangeAmount

FY2015 (Projection)%

ChangeAmount(24.7)

27

1.6(22.2)

72

4.5

(6.5)

4.1

Change(4) CashFlow

Cash flows from operating activities

(12)

(75)

（Units : 100 million yen）
FY2016 (Projection)－

Income Before Income Taxes

(56)

(344)

－

Depreciation Expenses

64

44

－

Others

(20)

225

－

Cash flows from investing activities

(27)

118

－

Free cash flows

(39)

43

－

Cash flows from financing activities

(46)

1

－

20

(2)

－

(66)

40

－

FY2015FY2014

Effect of exchange rate changes oncash and cash equivalents
Net increase (decrease) in cash andcash equivalents

2．Operating Activities (Consolidated)(1) Sales by Equipment
FY2015FY2014
AmountAudio Visual Equipment%（Units : 100 million yen, %）FY2016 (Projection)

ChangeAmount%ChangeAmount%Change

1,831

78.2

17.6

1,462

86.9

(15.2)

1,518

88.2

3.8

DVD

174

7.4

(5.4)

131

7.8

5.0

67

3.9

(48.9)

BD

168

7.2

19.1

103

6.1

(23.9)

131

7.6

27.2

LCD TV

1,436

61.4

19.8

1,203

71.5

(15.3)

1,289

74.9

7.1

Others

53

2.2

60.6

25

1.5

(43.2)

31

1.8

24.0

Information Equipment

189

8.1

57.8

50

3.0

(60.4)

65

3.8

30.0

Others

320

13.7

31.6

169

10.1

(47.2)

137

8.0(18.9)

Total

2,340

100.0

21.9

1,681

100.0

(22.6)

1,720

100.0

2.3

－2－

(2) Sales by Areas in Equipment
FY2014
AmountAudio Visual Equipment%（Units : 100 million yen, %）FY2016 (Projection)

FY2015
ChangeAmount%ChangeAmount%Change

1,831

78.2

17.6

1,462

86.9

(15.3)

1,518

88.2

3.8

Americas

1,570

67.1

18.5

1,269

75.5

(15.9)

1,335

77.6

5.4

Europe32

1.3(25.6)

6

0.4(82.9)

00.0(100.0)Asia and Others

12

0.5

140.0

2

0.1

(60.0)

6

0.3

200.0

Japan

217

9.3

17.9

185

10.9

3.9

177

10.3

(4.3)

189

8.1

57.8

50

3.0

(60.4)

65

3.8

30.0

Americas

126

5.3

96.9

38

2.2

(58.7)

46

2.7

21.1

Europe

45

2.0

136.8

10

0.6

(61.5)

17

1.0

70.0

Asia and Others

16

0.7

(48.4)

20.2(75.0)

2

0.1

‐

Japan

2

0.1

(60.0)

0‐‐

0‐

Others

320

13.7

31.6

169

10.1

(47.2)

137

8.0(18.9)

Total

2,340

100.0

21.9

1,681

100.0

(22.6)

1,720

100.0

2.3

Information Equipment‐(Note)
Effective from FY 2014, sales to Central and South America, which were previously included in the Asia and others , have been included in
Americas. The segment name North America has been changed to Americas.
Figures for FY 2013 have been restated accordingly.

(3) Sales by Equipment in Areas
FY2014
AmountAmericas%（Units : 100 million yen, %）FY2016 (Projection)

FY2015
ChangeAmount%ChangeAmount%Change

1,850

79.0

26.7

1,340

79.7

(24.2)

1,384

80.5

3.4

Audio Visual Equipment

1,570

67.1

18.5

1,269

75.5

(15.9)

1,335

77.6

5.2

Information Equipment

126

5.3

96.9

38

2.2

(58.7)

46

2.7

21.1

Others

154

6.6

116.9

33

2.0

(80.4)

3

0.2(90.9)

77

3.3

24.2

16

1.0

(72.9)

17

1.0

6.3

Audio Visual Equipment

32

1.3

(25.6)

6

0.4(82.9)

0

0.0‐

Information Equipment

45

2.0

136.8

10

0.6

(61.5)

17

1.0

70.0

Others

0

0.0

－

0

0.0

‐

‐

‐

‐

32

1.4

(17.9)

10

0.6(51.6)

8

0.4(20.0)

Audio Visual Equipment

12

0.5

140.0

2

0.1

(60.0)

6

0.3

200.0

Information Equipment

16

0.7

(48.4)

20.2(75.0)

2

0.1

0.0

Others

4

0.2

33.3

6

0.3

(25.0)

‐

‐

‐

381

16.3

6.1

315

18.7

(2.3)

311

18.1

(1.2)

Audio Visual Equipment

217

9.3

17.9

185

10.9

3.9

177

10.3

(4.3)

Information Equipment2

0.1(60.0)

0

‐

‐

0

0.0

‐

162

6.9

(4.7)

130

7.8

(9.7)

134

7.8

3.1

2,340

100.0

21.9

1,681

100.0

(22.6)

1,720

100.0

2.3

EuropeAsia and Others

Japan

OthersTotal－3－

3．Summary of 4Q (January to March) Financial Statements (Consolidated)(1) Operating Results（Units : 100 million yen, %）FY2014FY20154Q (Jan.‐Mar.)

4Q (Jan.‐Mar.)%

Amount%AmountChangeChangeNet Sales

485

100.0

7.9

351

100.0

(19.5)

Operating Loss

(59)

(12.2)－(51)(14.6)－

Ordinary Loss(70)

(14.5)－(69)(19.7)－Net Loss after Tax(84)(17.5)－(264)(75.4)－（※） Yen‐Dollars / Exchange rate
（Units : Yen / Dollars）

Average Rate in each Period

FY2014FY20154Q (Jan.‐Mar.)

4Q (Jan.‐Mar.)102.57115.05(2) Sales by Equipment（Units : 100 million yen, %）FY2015FY20144Q (Jan.‐Mar.)%

Amount4Q (Jan.‐Mar.)%

AmountChangeChange

374

77.1

8.1

310

88.3

(8.5)

DVD

37

7.6

(9.8)

25

7.1

(13.8)

BD

49

10.1

44.1

26

7.4

0.0

LCD TV

272

56.1

2.6

259

73.8

(7.2)

Others

16

3.3

166.7

0

0.0

‐

Information Equipment

41

8.5

(6.8)

8

2.3

(38.5)

Others

70

14.4

16.7

33

9.4

(60.2)

Total

485

100.0

7.9

351

100.0

(19.3)

Audio Visual Equipment－4－

（Company）

FUNAI ELECTRIC CO., LTD.
INVESTOR RELATIONS OFFICE
7‐7‐1 Nakagaito Daito‐city, Osaka 574‐0013, JapanTEL 81‐72‐870‐4395 ･ FAX 81‐72‐870‐4613