2020
Corporate Profile

｜ Corporate Philosophy ｜Corporate Philosophy Framework
The Fundamental Principle, Corporate Precepts, and Corporate Commitments are the foundation and supporting pillars of
our corporate activities, and clearly express the founding spirit.
The Corporate Philosophy and Group Vision were established in 2018, based on these pillars. They convey the corporate
image and guidelines for conduct, and evolve with the times and social conditions.

Fundamental Principle

Dream with Conviction,
and Act on Information
Management Philosophy

Challenge the company to grow by becoming
helpful in the community
Group Vision

Funai creates products that are the choice of people
around the world“Around the world,” as a global company“The choice,” aiming for top share in the industry“Creates products,” that people will love
Contents

1

Corporate Philosophy

1

Topics

Message from the President & CEO

3

Core Competencies

At a Glance 

5

ESG

Financial Highlights

6

ESG Topics

Business Description

7

History

Our Initiatives for 2020

9

10
11
13
16
17

Corporate Commitments

To adopt continual product improvements
To continually promote ever deeper trust
To seek further harmony and mutual prosperity
Corporate Precepts

Perseverance overcomes all difficulties.
Innovation is achieved through effort.
Humanity must eventually find its expression.
Corporate Precepts

Expand the triangle of knowledge, empathy,
and intention
The larger the triangle created from knowledge, empathy,
and intention expands, the more we grow as human beings
who are vessels for these qualities.
If this triangle does not grow larger, that means that we, as human beings,
have not grown even though we have grown older. For example,
when we pass the age of 30 or 40, we must increase our skills toa level appropriate to our age and improve ourselves as human beings.
The larger this triangle grows, the more a person can contribute to society.
(Source: Becoming President of Five Companies at the Age of 40 by Tetsuo Funai)

Tetsuo Funai, Founder
Corporate Logo
Our Corporate Logo, which shows a stylized “F” breaking out of its circular boundaries, expresses our focus on
breaking away from stereotypes, while at the same time symbolizing our vigorous growth.
The shape of the “F” resembles a human hand, connoting production and manufacturing. This shape is meant toconvey our high productivity and outstanding quality, with sharp angles to express simplicity.

Corporate Profile 20202

｜ Message from the President & CEO ｜Our Goal is to Steadily Implement the Strategy
and Stable Business Management While Keeping
a Close Eye on the Business Environment andMarket Trends
Funai Electric provides high-quality digital consumer electronics products with superior
cost-performance, based on our fundamental principle of “Dream with Conviction, and Act on
Information” and the group vision of creating products that are the choice of customers aroundthe world.

Implementing a Strategy Aimed at an AV Changing
Business Environment

Reflecting on the Major Changes in the Business
Environment in Fiscal 2019
I would first like to extend my condolences for those whohave lost their lives and express my heartfelt sympathy tothose who have contracted COVID-19.
The Funai Group was also impacted by delays inprocuring parts, temporary suspension of operationsat production plants, and other challenges, but we are
discerning economic and market trends and moving forwardwith initiatives aimed at the business environment after
COVID-19 has been controlled.
3

During FY2019 (ended March 31, 2020), the Funai Grouplaunched a new product equipped with Android TV™ in
North America, our main market, and in Japan, launched
a new product line-up centered on OLED TVs, etc. thatenable recording based on the “record and watch” concept
in July 2019. We also launched the “CureNel” nail art printeras a new category in June 2019.
However, a large volume of LCD televisions made in
China were shipped to the U.S. market ahead of schedulefrom the first through the second quarter because they were
subject to the fourth round of tariff increases imposed by the
Trump administration in the U.S. The resulting oversupply of
LCD televisions caused a substantial drop in product prices,
and an operating loss for the first half of the fiscal year.
During the third quarter, exports of LCD televisions madein China decreased substantially and the balance of supply
and demand improved. Strong sales of the 65-inch LCD
televisions readied for the year-end sales campaign enabled
Funai to secure an operating profit.
During the fourth quarter, production at Funai’s LCD
television manufacturing plants in Thailand and Mexico
proceeded generally according to plan and exports to theNorth America continued, despite delays in the supply ofparts from suppliers in China caused due to COVID-19.
Meanwhile, exports of LCD televisions from China to
the North American market declined even further due to
COVID-19. This worked to Funai’s advantage and resulted
in operating income of around 100 million yen.

The above factors resulted in net sales for FY
2019 (ended March 31, 2020) of 88,425 million yen,
an increase of 3,425 million yen (-16.2% YoY) from theforecast disclosed. The operating loss was 1,732 million
yen (compared to operating income of 682 million yen in
FY2018), an improvement of 1,268 million yen from theforecast disclosed. The ordinary loss was 1,594 million
yen (compared to an ordinary profit of 1,392 million yen
in FY2018), an improvement of 1,506 million yen from theforecast disclosed. Net loss attributable to owners of theparent was 2,392 million yen (compared to net income
attributable to owners of the parent of 2,613 million yen
in FY2018), an improvement of 808 million yen from theforecast disclosed.

COVID-19 Impacts and Countermeasures
As I stated before, the spread of COVID-19 also impacted
Funai by causing delays in parts procurement andtemporary suspension of operations at production plantsfrom March 2020 onward. The Funai Group will implement
two countermeasures in response to these conditions.
The first is the procurement countermeasure. Delaysin the supply of parts from Chinese parts manufacturers
occurred because we are dependent on China for the
supply of parts. We are therefore considering diversificationof the producing countries to build an optimal supply chain.
The second is the production countermeasure. The
shutdown of operations at the Lima plant in the Philippines
and the Mexico plant caused delays in supply, so we willconsider a back-up plan for the future.

Along with steady pursuit of these measures, we willkeep a close eye on the business environment and market
trends as we pursue stable management, as stated in Our
Initiatives for 2020 on page 9.

Aiming for Growth to the Next Stage
Continued instability of the global and domestic economies
is anticipated in the future. The Funai Group will respondflexibly to such changes while working to provide solutions
consisting of a combination of products, systems, andservices to address environmental problems, resource andenergy problems, and other social issues, based on ESG(environmental, social, governance) corporate management.
We will work to achieve both sustainability and safety,
security, and comfort, and create other types of value.
I think that it is precisely because conditions are severethat we will see increase opportunities to demonstrate
the potential of our proprietary technology, originality andingenuity, and other assets we have developed over theyears. Funai will continue to grow to the next stage in the
future by introducing excellent products that meet the needsof society.

Hideaki Funakoshi
Representative Director
President and CEO

Corporate Profile 20204

｜ At a Glance ｜At a GlanceFirst Section of the Tokyo Stock Exchange

Net sales

*1

88.4

bn yenAmericas % of total
consolidated sales*1

61

Shareholder distribution*2
Treasury Stock
2,011,000 (5.57%)
Other Corporationsin Japan
5,475,000 (15.15%)%

ForeignCompanies, etc.
8,087,000 (22.38%)

Securities Companies
in Japan
412,000 (1.14%)
No. of shares:

36,130,000

Individuals andOthers in Japan
17,386,000 (48.12%)

Financial Institutionsin Japan
2,756,000 (7.63%)*1 Consolidated results for fiscal year ended March 31, 2020
*2 As of March 31, 2020

Net Sales

4% 3.85% 4.6bn yenOffice Solutions Businessbn yenDevelopment and New Businesses

Backlight units for installation in vehicles
Nail art printer

Net Sales

88.4(¥ billion)

79% 69.5

bn yen

Display Business

12% 10.5

bn yenDigital Media Business

HD Blu-ray

5

65-inch Android TV™ for the U.S. market

｜ Financial Highlights ｜Financial Highlights
Net Sales(¥ million)
200,000
170,041
150,000

Sales by Region

Operating Income(¥ million)

(%)

4,000

100

2,000
133,838

EuropeAsia, et al.

Japan

80

682

-1,732

0

77

80

73
66

130,130-2,000105,549
100,000

88,42550,000-4,00040-6,775-8,000FY2018FY2019-10,539-12,000-10,885

FY2015 FY2016 FY2017

FY2018FY2019

0

32

26

22

18

20

-10,000
FY2015 FY2016 FY2017

61

60-6,0000Americas

36

1

1

1

2

3

1
FY20150
FY20160
FY20170
FY20180
FY2019The decline in the price of LCD
televisions in North America during thefirst half caused a slump in sales of
Funai’s new products. We were unable
to recover the ground lost due to thedecline in the first half and net sales
declined 16.2% YoY for the full year.

An operating loss of 1,732 million
yen was recorded. This resulted froma decline in profit accompanying thedecline in revenues, and a decline invalue added after the deduction of
COGS and selling expenses from net
sales.

The slump in sales of LCD televisions
caused a decline in revenues in
the Americas, while sales in Japanremained nearly flat. This resulted in
an increase in sales in Japan as apercentage of total sales.

Net Income (Loss) Attributableto Owners of Parent

Shareholders’ Equity/Equity Ratio

Capital Expenditures and Depreciation
Expenses

Shareholders’ equity

Capital expenditures
Depreciation expenses

Equity ratio(¥ million)
5,000

2,613

(¥ million)（%）(¥ million)

100,000

100

5,000
4,498

0

83,328-2,392-5,00050,699

80

4,000

60

3,000

54,025

51,14440,000-25,000

3,070
2,462

54.0

-20,000

4,098

64.9

70.4

60,000-15,00040

2,156 2,258

2,000
1,424

-24,709-30,000-35,000

72.4
63.2-6,745-10,000-40,000

76,50780,00020,000

20

1,000

0

0

1,447

974

1,212

-33,8390
FY2015 FY2016 FY2017

FY2018FY2019A loss on impairment of long-lived
assets accompanying the operating
loss and revision of deferred tax assets
due to shrinking demand in the North
American market resulted in a net loss
attributable to owners of the parentof 2,392 million yen.

FY2015 FY2016 FY2017 FY2018 FY2019

The equity ratio increased from last
fiscal year to 72.4%, owing to progress
on reducing inventories.

FY2015FY2016FY2017FY2018FY2019

Capital expenditures were 1.4 billion
yen, on par with last fiscal year.
Depreciation expenses increased by
230 million yen.

Corporate Profile 20206

｜ Business Description ｜Supplying Simple, High-quality Products to the World

7030 Series
OLED TV equipped with an internal hard disk drive

Since our company was established, Funai Electric has
demonstrated the ability to develop and supply productsof superior quality and cost-performance, and has built a
reputation of solid reliability in the global digital consumer
electronics market.
Today we are engaged in a broad range of businesses
in four business segments: The Display business, which
provides flat-screen televisions; the Digital Media business,
which provides BD (Blu-ray Disc) related products; the Office
Solutions business, which provides printer-related equipment;
and Development and New Businesses, which develops andmanufactures dental CT scanners, products for installation in
vehicles, and other high-quality products.
In our main Display business, we supply four brands offlat-panel televisions in a variety of sizes from small to large.
In our Digital Media business, we supply BD (Blu-ray Disc)related products. We supply these products to Japan andNorth America, respectively. We are recognized for our pricecompetitiveness and capacity to supply these audiovisual
products and are particularly proud of our top-ranked shareamong Japanese manufacturers in flat-panel televisions in the
North American market.
Funai utilizes the ink cartridges and printer products wedeveloped ourselves in our Office Solutions business and thestrong partnerships with our OEM (consignment manufacturing)customers in our Development and New Businesses segment
to develop, manufacture, and sell high value-added products.
We are entering a severe shakeout period in the global
digital consumer electronics industry as competition stiffens onfunction, design, and price with the rise of Chinese, Taiwanese,and Korean manufacturers.
However, it is precisely in this sort of severe environmentthat we are seizing the opportunity to manifest the true valueof Funai Electric, with our advanced in-house development
capacity and our formidable production system. We will work
to increase our brand value and expand our market share by
rapidly developing and manufacturing products that match theneeds of consumers and supplying products of superior quality
and cost-performance to the global market.

Our Product Brands
Brand sold in Japan

7

Brands sold in North America

Display Business

Digital Media Business

79% oftotal sales

69.5

12% oftotal sales

10.5

bn yen(FY2019)bn yen(FY2019)

HD Blu-ray

65-inch Android TV™ for the U.S. market

Globally recognized high-definition imaging, a new
option in OLED TVs in Japan

Enticing AV users with a high-definition simultaneousrecording function

Funai Electric maintains top-ranked share among Japanesemanufacturers in the North American market where we sell
three brands (Philips, Magnavox, and SANYO). We also began
exclusive sales of FUNAI-brand products at Yamada Denki
stores in Japan from 2017 and are steadily expanding sales.

In the North American market, we have provided 4K Ultra HD
Blu-ray Disk players since 2016. We also launched exclusive
sales of a FUNAI-brand 4K Ultra-HD Blu-ray Disc recorderin Yamada Denki stores in July 2018, and are continuing to
expand overall sales with flat-panel televisions.

Office Solutions Business

Development and New Businesses

4% oftotal sales

3.8

5% of
total sales

4.6

bn yen(FY2019)

Nail art printerbn yen(FY2019)

Dental CT scanner

Capitalizing on the diverse range of business needs toachieve expansion of the printer businessMeeting a wide range of OEM needs with latest
technology and optimal manufacturing

Funai is utilizing the expertise it has cultivated in OEM for
inkjet printer products since 1997 to expand the businesssubstantially. We manufacture printer-related products forvarious purposes in the B2B and OEM segments, such as
proprietary ink cartridges for industrial use that employ thermal
inkjet technology and the Nail Art Printer. We have also enteredan alliance with The Procter & Gamble Company, the world’s
largest manufacturer of consumer daily necessities, and will
introduce products in the beauty segment.

Funai Electric is manufacturing dental CT scanning devices
for the U.S. market. We have also jointly developed a bed
for nursing care with the medical division of a university in anindustry-academic partnership and are working on a prototype.
Through this and other products, we are meeting a wide rangeof needs in the medical and healthcare segments with superior
technology. In addition to the above initiatives, we are working
on development of devices for installation in vehicles andwill provide components and modules that are based on our
optical technology, such as meter panels and power inverters.
Corporate Profile 20208

｜ Our Initiatives for 2020 ｜Our Initiatives for 2020
Display Business

Development and New Businesses

U.S. Market

Equipment for Installation in Vehicles

Funai has continued to position 32-inch, 65-inch, and 75-inchmodels as strategic models since last fiscal year. For 32-inchmodels, we are targeting growth in sales volume throughaggressive expansion. For 65 and 75-inch models, we aretargeting growth in the average unit price by expanding salesof large models. High value-added products to be launched
include the 2nd generation Android TV™ with the voicerecognition function installed in the body of the television toenhance convenience, and a new kitchen television with anenhanced voice recognition function.

Funai began mass production of direct backlight units, which
apply the imaging and optical technology we cultivated throughdevelopment of televisions, from June 2020.
We also began joint development of devices formotorcycles with ROKI Co., Ltd., an automotive filter
manufacturer that we partnered with in 2019.

Japanese Market
From June onward, we will launch a total of 10 new models,
beginning with the world’s first OLED Android TV™ equippedwith an internal hard disk drive.

Office Solutions Business
Enabling Printing on 3D Objects Other Than Paper
The focus is on commercializing products that make it possible
to print on 3D objects other than paper media, using edible ink
that can easily be printed on foods.

Cartridge Evaluation Kit
We have introduced a cartridge evaluation kit that enables
simple and quick evaluation of ink performance just by fillingthe cartridges with ink, to expand applications of Funai’s inkjet
technologies to alliance partners and accelerate support forcommercialization.

Food printer

Cartridge evaluation kit

9Café art printerBacklight unit for installation in vehicles

Medical Devices
PreXion Corporation, a company that develops and sells
dental CT scanners, became a wholly owned subsidiary of
Funai In May 2020, and its products have been well-received
by U.S. specialists and physicians. The company plans tolaunch a new product this fiscal year. We are also pursuinglife science technology applications of inkjet technology witha major player in the industry and are also working to develop
a body position-changing mat for use in long-term care via an
industry-academic partnership.

｜ Topics ｜TopicsTOPIC

Accelerating new business creation via an alliance: Sales of first product from the alliance withNTT Plala Inc. launched

Funai launched the HBD-WA10 Blu-ray Disc Recorder in July 2020, as the first product from our alliance with NTT Plala Inc. We
announced a business alliance with the company in June 2019 and are aiming to provide new products and services to serve as aplatform for home life by integrating NTT Plala’s expertise in network communications technology and video streaming services with
the imaging technology and global production platform cultivated by Funai over many years. The Blu-ray Disc Recorder launched isthe first product capable of dubbing programs that were recorded* on the Hikari TV service provided by NTT Plala and stored on a
USB hard disk drive to Blu-ray Discs/DVDs. It also can be purchased through the Hikari TV Shopping service run by the company.
We have positioned pursuit of an alliance strategy as a management strategy of combining our proprietary technology with thetechnology of other companies, creating new products and services, and developing and strengthening new businesses. We willcontinue to pursue collaboration with NTT Plala in the future, while also actively expanding business alliances that will contribute to
an increase in the corporate value of the Funai Group.
* Capable of recording programs streamed through Hikari TV (terrestrial and BS digital broadcasting, specialty channels, etc.).

TOPIC

Market launch of world’s first OLED Android TV™ equipped with an internal hard disk drive

Sales of four series consisting of 10 models were launched in June 2020, including the7030 series using Android TV™ as the first OLED TV equipped with an internal hard disk
drive, and the FUNAI-brand television line-up sold exclusively through the Yamada DenkiGroup was updated. This line-up is based on the concept of “watch, record, and expand,”achieves even higher definition image quality and sound quality, and uses Android TV™,
which expands the new ways to have fun through a variety of recording functions and an
Internet connection. These products demonstrate the technical capabilities of FUNAI brand.
The top-of-the-line 7030 series is the world’s first* OLED Android TV™ equippedwith an internal hard disk drive. It is also compatible with the Dolby Atmos stereo soundtechnology used in feature films and theaters worldwide, and the use of height effects
7030 Series
speakers on the back provide a three-dimensional surround sound with just the television
OLED TV equipped withan internal hard disk drivealone. Installation of a 2 TB internal hard disk drive in addition to the multiple recording andreplay functions already available has also enabled high-capacity recording.
All series are equipped with 4K satellite broadcasting tuners that enable users to watch a 4K broadcast while recording a
different 4K broadcast in the background.
A TV commercial was launched nationwide along with the launch of the new series.
* As of March 31, 2020, research by Funai Electric

TOPIC

PreXion Corporation, a dental CT scanner development and sales company, acquired as a
subsidiary

On May 31, 2020, Funai acquired 100% of the shares in PreXion Corporation, a company whichdevelops and sells dental CT scanners, making it a wholly owned subsidiary. Funai has been
focusing on the highly profitable medical and healthcare fields as a new business pillar in addition
to the flat-screen television business to rebuild our business portfolio. PreXion Corporation has
been manufacturing dental CT scanners under contract for Funai, and we have acquired thecompany as a subsidiary to enter fully into integrated manufacturing and sales in this business withthe goal of enhancing corporate value.
PreXion Corporation
Headquarters: Chiyoda-ku, Tokyo
Business description: Development and sale of medical imaging and diagnostic equipment

Dental CT scannerCorporate Profile 202010

｜ Core Competence ｜DesignTargeting Even Stronger Competitiveness
Adding higher value, reducing the number of parts, local design, and production in the optimal location: Funai is working to achieveboth high value-added products and competitive cost performance to make Funai even more competitive and successful in global
competition.
The business environment surrounding Funai is becoming
increasingly severe due to the impact from trade friction and theemergence of global competitors.
To emerge the winner in such intense competition, Funai
must succeed in two ways: Maintaining the world-class pricecompetitiveness that is a strength of Funai, and developing
appealing products that customers will choose.
To maintain cost competitiveness, we are pushing aheadon reducing the number of parts, using common parts, finding
new local parts through overseas R&D, and reducing fixeddevelopment costs, among other efforts. We are performingsome design work at development sites in Malaysia, China,
and elsewhere, and are working to shorten development time,
reduce labor hours, and improve the efficiency of local partsprocurement.
To create high value-added products that customers will
choose, we are targeting medium and long-term development
themes and incorporating high value-added technology that willlead to building dominance, in addition to performing short-term
development.

Our Approach to Design

Highervalue-added

Achieving
both higher value-added
and cost-competitiveness

Reductionin the numberof parts

Local design
overseas

Production

Taking on the Challenge of Improvements in Productivity
Funai Electric continuously pursues improvements in productivity through its unique Funai Production System (FPS). FPS enables
Funai to provide high quality products with superior cost performance.
FPS, Funai’s unique production system, detects problems in
the production process through intentional stress testing of the
production line (reducing the number of line workers, speedingup the belt conveyor), and taking steps to improve productivity
that encourage voluntary efforts to improve.
Repeatedly working through this cycle detects problems
with the current production system and fosters a mindset
among team members to take the initiative on improvement.
This enables continual improvements in productivity. Funai
sees FPS as the driver for achieving sustainable growth and is
working to achieve even greater improvements in production.

Continual improvement in productivity through FPS

Perform
an intentionalline stress
test

Resolvethe problems

Detectproblems

Take steps
to improve

11

SalesCapturing the Needs of Markets around the World
Funai Electric deploys a sales strategy based on the unique characteristics of each market in many locations around the world. In
the North American market, which is the largest market in the world, Funai has strengthened its relationship with leading massretailers to develop an accurate assessment of market needs, and maintains top share in the market. We also began exclusive salesof the FUNAI brand through Yamada Denki, the largest mass retailer of consumer electronics in Japan, from 2017.
Funai’s sales strategy is to use our close relationships with sales
channels to accurately identify market needs and the latest
trends, and provide high-quality products with superior costperformance.
In LCD televisions, our core product, we hold top market*
share among Japanese manufacturers in the North American
market in terms of unit shipments. We also began exclusive
sales of FUNAI-brand products in Yamada Denki stores in theJapanese market from June 2017. In June 2020, we launchedsales of ten television models in four series, including the 7030
OLED Android TV™ series equipped with an internal hard disk
drive. This provides a new line-up of FUNAI-brand TVs soldexclusively through the Yamada Denki Group nationwide. Funai
is steadily increasing market presence by pursuing a productdevelopment and sales strategy matched to the needs of themarket.

In printer-related products, we launched the nail art printer,a product that applies Funai’s thermal inkjet technology, and it
has received good reviews. In new businesses, we are pursuingdevelopment and production of nursing care and medical
equipment, and are also engaging in product development
aimed at next-generation needs through our alliancestrategy, under which we have entered alliances with FOMM
Corporation, a venture firm that is developing compact electricvehicles; P&G, the world’s largest manufacturer of consumer
daily necessities; NTT Plala Inc., the provider of Hikari TV, thelargest video platform in Japan; ROKI Co., Ltd., and othercompanies.

* 2014–2019: Funai’s share of LCD television shipments in North America
compared to other Japanese manufacturers, IHS Markit research.

Global sales locations
Global production locations

Main markets

LCD televisions

OLED TVs, others

Production locations

Large LCD
televisions

BDs, printers
Ink cartridges

Corporate Profile 202012

｜ ESG ｜Realizing Sustainable Communities
We are also actively pursuing environmental initiatives as one of the cornerstones ofmanagement.
Since the company was founded,
Funai has built overwhelming trust in
the imaging device segment using its
superior supply capabilities and thecost performance of electronic products
focused on functionality as sales points.
The proprietary Funai Production
System (FPS), technical skills inmechatronics, and structure for producing

and selling in the optimal global locations,which we have developed in the courseof our history, are our most importantmanagement assets. We regard these as
our greatest weapons in surviving intense
industry competition.
We also aspire to improving quality,
delivery lead times, and costs even more,and delivering products that always meetthe needs of the times.
We are actively pursuingenvironmental initiatives as one of thecornerstones of management as wework to achieve these things.
We continually work to implement
environmental initiatives in activities atbusiness locations and in product-related
activities.

Product-related Activities and Results
Based on our Corporate Commitments to“adopt continual product improvements,
continually promote ever deeper trust,and seek further harmony and mutual
prosperity,” we design and manufacturehigh-quality products that are friendly
to the global environment and satisfy
customers.
Specifically, we endeavor to develop
products that are lightweight andsimple so they use fewer resources.
By decreasing the amount of electricity
products use, we contribute to
reductions in global warming when
our products are used by customers.
Making products slimmer means thatthey can be transported more efficiently,
and this reduces the environmental
impact of the shipping process. By
eliminating hazardous substances fromour products, we are working to halt
environmental pollution. To ensure thatthese goals are achieved on an ongoingbasis, we have established the ProductEnvironment Committee as a crosscompany organization for environmentallyconsiderate product design.

• Green Procurement Activities

Based on the principles contained in theGroup Code of Conduct, we endeavor
to protect the global environment andwork to mitigate the risk to human healthand the environment from the chemicals
contained in our products as one part of

13

those efforts. Funai has formulated Green
Procurement Standards. The purposeof these standards is to mitigate theserisks, and environmentally friendly partsand materials are procured throughout
the entire supply chain, by parts andmaterials manufacturers in addition to
Funai itself.
More specifically, we have built
and operate a system for managing
chemicals contained in products toensure that hazardous chemicals are
not used in our products. To achievethis, we work together with our partsand materials suppliers to prohibit orlimit hazardous chemicals regulated byindividual countries throughout the world.

• Initiatives to Prevent Global Warming
Funai is participating in the Japan
Business Federation’s Commitment
to a Low Carbon Society through the
Liaison Group of Japanese Electrical andElectronics Industries for Global Warming
Prevention and is pursuing measures
to combat global warming via thecompany’s business activities.
Reducing greenhouse gas emissions(CO2) is one indicator for productdevelopment, and we control new issues
such as reducing electricity consumption,
reducing product size, and improving
transport efficiency in all aspects ofproduct development while implementing
company-wide initiatives that cancontribute to preventing global warming
on an ongoing basis.

• Life Cycle Assessment (LCA)

To create products that reduce theburden on the environment, we perform
a product assessment every year toevaluate products from the aspectsof energy savings, reduction in use ofnatural resources, recycling, hazardous
substances contained, and other aspects
to assess the burden imposed on theenvironment, from production throughdisposal of a product. This is useful
in designing and developing productsthat impose a lower burden on theenvironment.

Environmentally-friendly Product Development

Based on the principles contained in
the Funai Group Code of Conduct,
we endeavor to protect the global
environment and work to reduce theburden imposed on the environment fromthe chemicals contained in our products

as one part of those efforts.
To reduce this environmental burden,
we have worked with our suppliers tobuild a system to manage chemical
substances contained in our products
and those of our suppliers, and havetaken steps to prohibit use of chemicals
in products that impose a large
environmental burden.
J-Moss is the abbreviation of the
JIS standard for labeling chemical
substances contained in electrical andelectronic devices in Japan.
Based on JIS C 0950: 2008, labelingof products that contain specified
chemical substances* is legally mandated

for specific product groups (televisions,personal computers, air conditioners,
refrigerators, washing machines,
microwaves, and clothes dryers). The
J-Moss Green Mark can be displayed on
products that contain a percentage ofsuch substances that is lower than thestandard value.
Funai televisions meet the criteria
for the J-Moss Green Mark because we
select environmentally friendly materials
and parts from the design stage.
* Covers six substances: Lead, mercury,cadmium, hexavalent chromium,polybrominated biphenyl, and polybrominateddiphenyl ether

Human Resource Education/Initiatives in Employee Health Management

In the Funai Group, we regard thedevelopment of globally active humanresources and professional resources as
one of the most important managementtasks embodying the founding spirit, andwe put effort into educating and training
people after they join the company.
New employee training is provided
in April every year to equip new

employees with basic knowledge as
full-fledged members of society andteach them how to perform their work.
Training in an overseas plant for threemonths is provided regardless of job
classification and employees learn
the thought process of the proprietary
Funai Production System (FPS).
Continuous skills improvement training
by an instructor is offered internallyto encourage ambitious employees
to pursue self-education to improvebusiness skills and technical skills.
Training by grade level is also provided
periodically to improve the management
skills of people in managerial andspecialist positions.
Various kinds of English courses
are provided to equip employees withthe language skills essential as global
human resources, and we are working tomaintain their motivation to improve theirEnglish skills by introducing the TOEIC
score as a requirement for advancement
and promotion.
We also actively engage in employee
health management to ensure that all
employees come to work in a healthy
condition and demonstrate their personalcapabilities. All employees participate incompany health drive efforts. We also
provide them with information on healthand nutrition, and have an industrial
physician conduct health management
courses.
Funai formulated a mental healthpromotion plan based on the Ministry of
Health, Labour and Welfare’s Guidelines
for Promoting the Mental Health ofWorkers. We have put in place an internal
structure and set up a consultation deskas part of our mental health promotion
measures.

Corporate Profile 202014

｜ ESG ｜Corporate Governance[Overview of Corporate Governance]
The Funai Electric Group has the following view of corporate governance. We aim to respond to changes in the management
environment and continually strive to enhance corporate value by increasing the transparency of management for shareholders,consumers, business partners, local communities, employees, and all other internal and external stakeholders, and ensuring soundand efficient management and swift decision-making.
We have established an executive officer system to facilitate agile decision-making and prompt execution of business based on
this philosophy.
Funai also established the Funai Group Code of Conduct and the Funai Group Procurement Policy, which is based on the Group
Code of Conduct. We established the CSR Committee as the organization in charge of promoting these, and this committee promotes
CSR activities.
[Overview of the Corporate Governance Structure and Reasons for Adopting this Structure]
We have adopted the structure of a company with an Audit
General Meeting of Shareholders
and Supervisory Committee, and have established a Boardof Directors, an Audit and Supervisory Committee, andAccounting Auditors
Accounting Auditors. Directors possessing voting rights on
the Board of Directors who are also Audit and Supervisory
Committee members perform audits to strengthen the(Discretionary committees)
oversight function of the Board of Directors and enhance
Nomination Committee
corporate governance.
Compensation Committee
Board of Directors
Audit and Supervisory Committee
We have established an executive officer system toInternal Investment and Loan Committee
facilitate prompt execution of business. In addition to the
Audit and Supervisory Committee, we have also establishedInternal Control Committee
President, Representative Director & CEO
the Nomination Committee, Compensation Committee,
Directors responsible for business/Officers
and Internal Investment and Loan Committee to serve as
discretionary advisory bodies to the Board of Directors.
Audit OfficeBusiness divisions & subsidiaries
These committees ensure objectivity and transparency in theprocess for making important decisions.
[Board of Directors]
The Board of Directors consists of nine directors: Six directors who are not Audit and Supervisory Committee members (two of whom
are outside directors), and three directors who are Audit and Supervisory Committee members (two of whom are outside directors).
The internal directors have extensive knowledge of Funai’s businesses and facilitate swift decision-making, while the outside directors,
who have no significant conflict of interests, ensure sound and transparent management by participating in decisions made by the
Board of Directors. More than one-third of the directors on the Company’s Board of Directors are outside directors and this structure
enables more objective, impartial, and fair decision-making.
[Advisory Bodies]• Nomination Committee
The Nomination Committee consists of directors who have been appointed as committee members by the Board of Directors. Asan advisory body to the Board of Directors, this committee recommends candidates for director positions to the Board of Directors,
thereby ensuring transparency and objectivity in the candidate selection process.
• Compensation Committee
The Compensation Committee consists of directors who have been appointed as committee members by the Board of Directors. This
committee has been delegated the authority to determine the compensation for executive officers and directors who are not Audit
and Supervisory Committee Members, thereby ensuring transparency and objectivity in the compensation determination process.
The compensation of Audit and Supervisory Committee members is determined through discussion by directors who are Audit andSupervisory Committee members.
• Internal Investment and Loan Committee
The Internal Investment and Loan Committee consists of directors and executive officers whom the president has appointed ascommittee members. This committee examines and discusses the contents of individual investment and lending projects of importanceto the Company, thereby ensuring transparency and objectivity in the process for deciding whether or not to proceed with individual
investment and lending projects.
15

｜ ESG Topics ｜A Broad Range of Local and Community Activities
Ongoing partnership with Los Angeles Angels to achieve penetration of the FUNAI brandFunai concluded a partnership agreement with the Los Angeles Angels, a major league baseball team in the U.S., in February 2018.
Shohei Ohtani, who is both a pitcher and designated hitter for the Los Angeles Angels, has attracted much interest in the U.S.,
as well as in Japan.
The main provisions of the partnership agreement include installing a board inscribed with both the FUNAI logo and the Angels
logo on the media banner in postgame “hero of the game” interviews in the press room after Angels home games, and conducting
postgame interviews for games that Ohtani has played in, in front of this media banner. A home plate advertisement will also be
displayed at 11 of the 21 home games that Ohtani will play in at the Angel Stadium of Anaheim, which is the home base of theAngels.
An advertisement was displayed over the pitcher’s mound as a new initiative for this season.

Sponsor agreement renewed with S.C. Sagamihara of the soccer J3 League
In June 2020, Funai renewed the sponsor agreement with the professional soccer J3 League club, S.C.
Sagamihara. The FUNAI logo is displayed on the pants of the official uniform for S.C. Sagamihara. The
FUNAI logo is also displayed on the interview board used for official S.C. Sagamihara home games
and events, the signboard installed behind the goal, on the official website, and on official publications,among other items.
S.C. Sagamihara, which calls Sagamihara City, Zama City, Ayase City, and Aikawa Town home, iscurrently part of the J3 League. The transfer of Junichi Inagaki, the former representative of Japan, fromthe 2019 season was a hot topic.
By supporting the activities of the team through this sponsorship agreement, we are contributing
to the promotion and energization of sports. It will create opportunities for even more people to take aninterest in the Funai Group, and our hope is that this will lead to penetration of the FUNAI brand.

(Photo provided by
S.C. Sagamihara)

Activities that contribute to and support communities
In the U.S., the Funai Group participates in the Children’s Miracle Network, which
supports hospitals that treat pediatric illnesses, and participates in charity projects.
We have also supported Walmart and Sam’s Club in participating in the Sharing &Caring support for children in need during the holiday season, and donated Funai TV
and DVD products.
We hope that these activities will make children’s dreams come true and give themthe strength and courage to fight their illnesses, and that they will contribute to thecommunity in general by supporting families, sponsors, and those who donate.

Locally-rooted contribution activities
Funai products are used as thank you gifts when taxpayers contribute a portion of their taxes to the hometown revitalization fund forthe city of Daito in Osaka, where our headquarters is located. We provided approx. 4,000 units in FY2019. We will continue to makesubstantial contributions to the Daito City hometown revival tax contribution fund and strive to improve Funai’s name recognition.
Corporate Profile 202016

｜ History ｜A Parallel Chronology of Product Development andthe History of Funai Electric
1960s
August 1961

1980s
● FUNAI ELECTRIC CO., LTD. established in
Ikuno Ward, Osaka City, capitalized at 20 million
yen. (Transistor radio business of FUNAI LIGHT
MACHINERY MFG. CO., LTD. spun off as anindependent company)

March 1964

● CHUGOKU FUNAI ELECTRIC CO., LTD. (now aconsolidated subsidiary) established as a production
company in Fukayasu-gun (now Fukuyama City),
Hiroshima Prefecture

May 1968● FUNAI ELECTRIC COMPANY OF TAIWAN
established in Kaohsiung, Taiwan as the first large
production plant overseas

April 1969

● Construction of new headquarters building
completed in Daito City, Osaka Prefecture (current
location of headquarters)

1970s

September 1970 ● FUNAI AMERICA ELECTRIC SERVICE CORP. (later,
FUNAI USA CORPORATION) established in the U.S.
as a sales subsidiary
September 1976 ● Headquarters relocated to Daito City, Osaka
Prefecture

June 1980● FUNAI ELECTRIC TRADING (EUROPE) GmbHestablished in Hamburg, Germany as a sales
subsidiary

July 1983● Tokyo Branch Office established in Chiyoda-ku, Tokyo

March 1987

● Full-scale entry into the domestic market

1990s
March 1992

● HIGHSONIC INDUSTRIAL LTD. (now FUNAIELECTRIC (H.K.), LTD., a consolidated subsidiary)established in Hong Kong to oversee contract
manufacturing in Guangdong, China

January 1996

● FUNAI SERVICE CO., LTD. (now a consolidated
subsidiary) established as a domestic service
subsidiary

February 1999

● Listed on the Second Section of the Osaka Securities
Exchange

2000s
March 2000

● Listed on the First Sections of the Tokyo Stock
Exchange and the Osaka Securities Exchange

November 2000 ● FUNAI LIGHT MACHINERY MFG. CO., LTD. acquired
through an absorption-type merger
March 2001

● Fiscal year-end changed from June 15 to March 31

Product History
1971
1959

1963

The start of productionof the transistor radio led
to the establishment ofour predecessor, FUNAILIGHT MACHINERY
MFG. CO., LTD. Explosive
growth followed, as thecompany concentrated
on OEM sales to leading
U.S. and European
manufacturers.

The application of
mechatronics technology,
centering on control
technology for the rotating
mechanism, led to thedevelopment of a host of
product manufacturing
technologies.

Transistor Radios

1994

Air Conditioners

1968

8-Track Car Stereos

1969Radio Cassette Players

Home Stereos

Cassette Car Stereos

1977

Stereo Cassette Tape Decks

1997

In these years, set world
record for unit productionof 8-track car stereos.

1999

Proprietary compact
video cassetterecorder developed.
The advanced
technical capabilities
drew interest for the
success in recording
a video on the peakof Mt. Everest for
the first time in theworld.

2000

Laser Beam Printers

Supplied OEM products
to leading U.S. printermanufacturer. Succeededin mass production.

2002

Projectors

2002
LCD TVs

2004

DVD Recorders

DVD Players

In the 2000s, acquired aleading share of the North
American market.

1980

CVC VCRs

Open Reel-to-reel Tape
Recorders

Inkjet Printers

17

1971

Commenced productionof monochrome laser
beam printers following
the launch of inkjet printersin 2000.

Provision of OEM
products to specialized
projector manufacturer inUnited States.

With a few years
after commencing
production, acquired
top share of the North
American market.

In addition to
our own brand,
received orders for
OEM production
from other major
manufacturers,
leading to a top
share of the global
market.

July 2003

● FUNAI (THAILAND) CO., LTD. (now a consolidated
subsidiary) established in Nakhon Ratchasima,
Thailand as a production subsidiary

October 2006

● FUNAI ELECTRIC (POLSKA) Sp. z o.o. established in
Lubusz, Poland as a production subsidiary

April 2013

● Acquired 100% of the shares in a manufacturingsubsidiary of Lexmark International (Philippines), Inc.
that produces printer-related products (now FUNAIELECTRIC CEBU, INC., a consolidated subsidiary)

June 2015

September 2007 ● BROADTEC TV R&D CENTER SDN. BHD. (nowFUNAI MALAYSIA R&D SDN. BHD.) established in
Malaysia as a research and development center● Switched to the format of a company with an Audit &Supervisory Committee

April 2016

● FUNAI SERVICE CORPORATION (now aconsolidated subsidiary) established in Ohio, U.S.A.
as a service subsidiary● FUNAI MANUFACTURING, S.A. DE C.V. (now aconsolidated subsidiary) established in Tijuana,
Mexico as a production subsidiary

May 2017● Hideaki Funakoshi became President & CEO

June 2017● Exclusive sale of FUNAI-brand televisions and Blu-ray
Disc recorders at Yamada Denki began

July 2017● Tetsuro Funai, the company founder passed away

April 2018

● Absorption-type merger of FUNAI CORPORATION,
INC. and P&F USA INC., with P&F USA INC. (now aconsolidated subsidiary) as the surviving company

June 2019● Entered business alliance with NTT Plala, Inc.

October 2019

● Entered business alliance with ROKI Co., Ltd.

October 2007

June 2008

April 20092010s

● P&F USA, Inc. (now FUNAI CORPORATION, INC.,
a consolidated subsidiary) established in Georgia,
U.S.A. as a sales subsidiary● P&F MEXICANA, S.A. DE C.V. (now a consolidated
subsidiary) established in the State of Mexico, Mexico
as a sales subsidiary

June 2011● FUNAI ELECTRIC R&D (SHENZHEN) CO., LTD.
established in China as a research and development
centerApril 2013

● FUNAI ELECTRIC PHILIPPINES INC. (currently aconsolidated subsidiary) established in Batangas
Province, Philippines as a production subsidiary2020s
May 2020● Acquired PreXion Corporation as a subsidiary

1985

TV/VCR Combos

1983

VHS Videos

CVC technology
applied todevelopment of the
VHS video format.
The video deckmechanisms andkey parts (motor,
cylinders) werethen produced inhouse and productcompetitiveness
improved dramatically.

2004

1983

1985

Microwave Ovens

1986
CRT TVs

1987

Auto Bakeries

Developed cordless home
telephones, entering
the telecommunications
equipment business.
Developed the world’s
first antenna-less cordlesstelephone.

2008

2009

Blu-ray Disc Recorders

One example of a CRT
TV/video combination:
the TV with internal
video. Major sales
growth in the late
1990s to early 2000s,
acquiring a share ofmore than 60% in North
America.

The world’s first
automatic bread-making
machine, sold as the
Raku Raku Pan Da.
The first such productto make a full-fledged
entry into the Japanesemarket. Earned topselling product award as
the Nikkei Inc. “bestselling product of theyear awards.”

2012

2013

LED Lighting

Stick-Type Smart TV Devices

Blu-ray Disc Players

1989

Laser Disk Players

Noteworthy as the first
products marketed by
all stores of Japaneseleading mass retailers
under the FUNAI brand.
Commercial versions
sold later.

2018

2019

OLED

Digital Still Cameras

OEM supply toleading U.S. camera
manufacturer.

1988
Faxes

Cordless Telephones

Commenced
production of players
meeting the nextgeneration optical discstandard, with higher
quality than DVDs.

Became a recordbreaking hit in Japan
ahead of the 2011transition to digitalterrestrial broadcasting.

Commenced
development and sales
to telecommunications
carriers of this stick-typecompact set-top-box,
which converts astandard television to an
Android™ 4.0-equipped
smart TV.

Nail Art Printer “CureNel”

Launched OLED withbuilt-in hard disk for the
first time in history at
Yamada Denki.

We started sellingcompletely new productsthat anyone can easily
print on their nails in ashort time.

Corporate Profile 2020

18

FUNAI ELECTRIC (H.K.), LTD.

FUNAI SERVICE CORPORATIONFUNAI ELECTRIC R&D(SHENZHEN) CO., LTD.

FUNAI LEXINGTONTECHNOLOGY CORPORATIONFUNAI ELECTRIC CO., LTD.
Head office

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

FUNAI SERVICE CO., LTD.

FUNAI (THAILAND) CO., LTD.

FUNAI GENERAL SERVICE CO., LTD.

FUNAI MANUFACTURING,
S.A. DE C.V.

FUNAI MALAYSIA R and D SDN. BHD.
Graphic Corporation

FUNAI ELECTRIC PHILIPPINES INC.

FUNAI TRADING CORP.
FUNAI CORPORATION, INC.

TOKYO BRANCH OFFICE
PreXion Corporation

FUNAI ELECTRIC CEBU, INC.

CHUGOKU FUNAI ELECTRIC CO., LTD.

Offices and subsidiaries

Name

FUNAI ELECTRIC CO., LTD.

Established

August 1961

OfficesHead office

7-7-1 Nakagaito, Daito, Osaka 574-0013
TEL +81-72-870-4303 FAX +81-72-871-1112
URL https://www2.funai.co.jp/en/index.html

Salessubsidiaries

Capital31.307 bn yen (as of Mar. 31, 2020)

Net sales

88.425 bn yen(fiscal year ended Mar. 31, 2020)

Employees

2,166 (as of Mar. 31, 2020)

TOKYO BRANCH OFFICE

Production
subsidiaries

FUNAI TRADING CORP.
CHUGOKU FUNAI ELECTRIC CO., LTD.
FUNAI MANUFACTURING, S.A. DE C.V.
FUNAI ELECTRIC (H.K.), LTD.
FUNAI (THAILAND) CO., LTD.

Display Business

LCD TVs/OLED TVs

Digital MediaBusiness

Blu-ray Disc players/
recorders

Office Solutions
Business

Printers
Ink cartridges

Development andNew Businesses

FUNAI CORPORATION, INC.
P&F MEXICANA, S.A. DE C.V.

Business category Electrical equipment
Principal
businesses

HEAD OFFICEFUNAI ELECTRIC CEBU, INC.
FUNAI ELECTRIC PHILIPPINES INC.
Development FUNAI ELECTRIC R&D (SHENZHEN) CO., LTD.
subsidiaries
FUNAI MALAYSIA R and D SDN. BHD.
FUNAI LEXINGTON TECHNOLOGY CORPORATION
Affiliatedsubsidiaries

Other devices

FUNAI SERVICE CO., LTD.
FUNAI GENERAL SERVICE CO., LTD.
Graphic Corporation
PreXion Corporation
FUNAI SERVICE CORPORATION

Executives (as of Jun. 30, 2020)
Members of the Board
Representative Director and President and CEO		
Hideaki Funakoshi
Director and Executive Officer
Makoto Ueshima
Director and Officer
Takeshi Ito
Director and Officer
Motoyoshi Adachi
Outside Director
Mitsuo Yonemoto
Outside Director
Atsushi Shirakami

Directors (Audit and Supervisory
Committee Members)
Director
Fumiaki Kidera
Outside Director
Hiroyuki Yamada
Outside Director
Takahiro Tanaka

7-7-1 Nakagaito, Daito, Osaka 574-0013, Japan
Phone +81-72-870-4303 Fax +81-72-871-1112

URL https://www2.funai.co.jp/en/index.html

Officers
Officer
OfficerHisaharu Oura
Masanori Sakakibara