Securities Code: 6839
June 12, 2020

NOTICE OF THE 68TH ORDINARY GENERAL MEETING OF SHAREHOLDERS
Dear Shareholders
We would like to express our appreciation for your continued support.
You are hereby notified that the 68th Ordinary General Meeting of Shareholders of Funai Electric Co., Ltd.
(the “Company”) will be held as described below.
Amid the COVID-19 pandemic outbreak, the risk of cluster infections at meetings is concerned. Given thissituation, we carefully examined the holding of this ordinary general meeting of shareholders, and decided
to take appropriate infection prevention measures and limit the number of shareholders visiting to the venue
when possible.
We would like to ask you to exercise your voting rights by mail or online in advance in order to preventthe spread of the infection caused by the COVID-19. Furthermore, we would strongly urge you torefrain from visiting the venue for the meeting of the day regardless of your health condition.
Please review the attached Reference Document for the General Meeting of Shareholders set forth
below and exercise your voting rights as stipulated.
[Exercising voting rights in writing:]
Send the enclosed voting form indicating your approval or disapproval of the proposition to us by return mailno later than 5:00 p.m. (JST) on June 29, 2020 (Monday).
[Exercising voting rights online, including Internet:]
Access the designated website for exercising voting rights (https://evote.tr.mufg.jp/), use the code forexercising voting rights and the one-time password shown in the enclosed voting form, and follow the
instructions that appear on your screen. Submit your approval or disapproval of the proposition to us by nolater than 5:00 p.m. (JST) on June 29, 2020 (Monday).
For online voting, refer to “Instructions on exercising your voting rights online, including via Internet” onpage 5.
Yours very truly,
Hideaki Funakoshi
Representative Director, President andChief Executive Officer
Funai Electric Co., Ltd.
7-1 Nakagaito 7-chome, Daito City,
Osaka

Description
1.

Date and Hour:
June 30 (Tuesday), 2020, 10:00 a.m.

2.

Place:
Multipurpose Hall, 5th Floor, Technology Bldg. of the Company
7-1 Nakagaito 7-chome, Daito City, Osaka

3.

Matters Forming the Objects of the Meeting:
Matters to be reported:
1) The business report, the consolidated financial statements and the audit reports on the consolidated
financial statements by the accounting auditor and the Audit and Supervisory Committee for the68th fiscal year (from April 1, 2019 to March 31, 2020)
2) The non-consolidated financial statements for the 68th fiscal year (from April 1, 2019 to March 31,
2020)
Matter to be resolved:
Proposition: Election of six (6) Directors (excluding Directors who are Audit and Supervisory
Committee Members)

4.

Decisions for Convening the General Meeting of Shareholders○ In cases where a shareholder exercises their voting rights both in writing and electronically,
including via the Internet, the voting rights exercised electronically will be deemed as the valid vote.
○ In cases where a shareholder exercises their voting rights electronically, including via the Internet,
more than once, only the last vote will be deemed as valid.
- END -

 In attending the meeting, please submit the enclosed voting form to a receptionist at the place of the meeting.
 Of the documents to be provided upon giving notice of this Ordinary General Meeting of Shareholders,“Notes to the consolidated financial statements” and “Notes to the non-consolidated financial statements,”
which are posted on our website (http://www2.funai.co.jp/en/investors/) in accordance with and as provided
for in the applicable laws and ordinances and Article 14 of the Articles of Incorporation of the Company, are
not attached with this notice of the Ordinary General Meeting of Shareholders. Therefore, the attacheddocument to this notice of the Ordinary General Meeting of Shareholders is a part of the consolidated
financial statements and non-consolidated financial statements that have been audited when the Audit andSupervisory Committee prepared audit reports and the accounting auditor prepared accounting audit reports.
 In the event of the revision to any matters in the Reference Document for the General Meeting of
Shareholders, the business report, the consolidated financial statements, and the non-consolidated financial
statements, it will be posted on our website stated above.

[Requests and Information to Shareholders]・ Gifts are not handed out.
・ Please bring a mask to wear it at the venue.
・ Your temperature is taken around the entrance of the venue. If you are deemed to have a fever or be sick,you may be declined to participate in the meeting and urged to leave the venue.
・ Hand sanitizers are prepared around the entrance of the venue.
・ Please note that the staff for the meeting wear masks.
・ There are fewer seats than usual in order to leave sufficient space between seats in the venue. Thus, only alimited number of shareholders may enter the venue.
・ If the situation changes, the holding of the General Meeting of Shareholders may be affected. Any majorchanges will be informed on our website (https://www2.funai.co.jp/jp/investors/).

Reference Document
Proposition and Reference Information
Proposition: Election of six (6) Directors (excluding Directors serving as Audit and Supervisory
Committee Members)
The term of office of all six (6) directors (excluding directors who are Audit and Supervisory Committee
members; the same applies hereinafter in this proposition) currently in office will expire at the close of thisOrdinary General Meeting of Shareholders.
Hence, it is hereby proposed that six (6) Directors, increasing two (2) outside Director, be elected.
The candidates for Directors are as follows:
Candidate
No.
1

2

3

4

5

6
Note

Name

Position in the
Company

No. of Meetings
AttendedReelected

Hideaki
Funakoshi

Representative Director
President & CEO

8 out of 8
(100%)

Reelected

Takeshi Ito

Director
Officer

8 out of 8
(100%)

Reelected

Motoyoshi
Adachi

Director
Officer

8 out of 8
(100%)

Reelected

MakotoUeshimaDirector
Officer

8 out of 8
(100%)

Reelected

MitsuoYonemoto

Outside Director

7 out of 8
(87.5%)

Outside Director

7 out of 7
(100%)

Reelected

AtsushiShirakami

Outside Director
Independent Auditor
Outside Director
Independent Auditor

The number of meetings attended by Mr. Atsushi Shirakami was counted after he assumed his position
on June 26, 2019.

Candidate
No.

Name (date of birth)

Brief Personal History, Position in the Company &Responsibility (Important Concurrent Position)

April 1984
January 1993
April 2006
February 2008

June 20101
Reelected

Hideaki
Funakoshi(September 30,
1965)

July 2011

May 2012

April 2013

June 2016
May 2017

2
Reelected

Takeshi Ito(September 10,
1960)

Joined Mitsubishi ElectricEngineering Company, Limited
Joined the Company
General Manager of DVD Projectof the Company
Executive General Manager of
DVD Business Div. of theCompany
Officer and Director of theCompany
Deputy General Manager of AV
Business Headquarters of theCompany
Deputy General Manager of AV
System Business Headquarters andGeneral Manager of Digital MediaBusiness Div. of the Company
General Manager of AV System
Business Headquarters of theCompany
Director of the Company
Representative Director of theCompany (to date)President & CEO of the Company(to date)

April 1982

Joined the Company

April 2003

General Manager of the Company
President of Funai Corporation, Inc.

April 2005

Executive General Manager of theCompany

August 2008

President of P&F USA, Inc.

October 2009

Officer of the Company (to date)

Number of Sharesof the Company
Held by Candidate

800 shares

1,000 shares
April 2012

President of Funai India Private
Limited

October 2014

General Manager of Materials
Headquarters of the Company

June 2016

Director of the Company (to date)(Responsible)

General Manager of Sales
Headquarters

Candidate
No.

Name (date of birth)

Brief Personal History, Position in the Company &Responsibility (Important Concurrent Position)

April 1977

June 2018

Joined Victor Company of Japan,
Limited (currently JVC Kenwood
Corporation)
General Manager of Marketing
Promotion Dept., Overseas Sales
Div. of Victor Company of Japan,
Limited
Executive Vice President of JVC
Canada Inc.
Director of Victor Company ofJapan, Limited
Director, Executive Officer of JVC
Kenwood Holdings Inc. (currently,
JVC Kenwood Corporation)
Director, Managing Officer of JVC
Kenwood Holdings Inc.
Joined the Company as Associate
Director in charge of sales
management
General Manager of HV BusinessDiv., AV System Business
Headquarters of the Company
Officer of the Company (to date)
General Manager of Display
System Business Div. of theCompany
President of Funai Corporation, Inc.
President of P&F USA, Inc.
General Manager of Business
Headquarters of the Company
Director of the Company (to date)(Responsible)

General Manager of AV Division

September
1998

February 2003
June 2008
September
2008

3
Reelected

Motoyoshi
Adachi(January 26, 1955)

September2009
May 2013

April 2014

October 2014
January 2015

April 2016
April 2018

Number of Sharesof the Company
Held by Candidate– shareCandidate
No.

Name (date of birth)

Brief Personal History, Position in the Company &Responsibility (Important Concurrent Position)

April 1986

Joined Daiwa Bank, Limited(currently Resona Bank, Limited)

October 2003

General Manager of Senri Branchof Resona Bank

April 2006

Department Manager of theSeventh Osaka Sales Department,
Osaka Sales Office, Resona Bank
Department Manager of the Sixth
Tokyo Sales Department, Tokyo
Sales Office, Resona Bank
Department Manager of the Second
Sales Department, Toranomon
Branch, Resona Bank
General Manager of Amagasaki
Kita Branch and Amagasaki Area
Manager, Resona Bank
General Manager of Osaka Nishi
Branch, Resona Bank

June 2007

July 2009

July 2010

4
Reelected

MakotoUeshima(February 27, 1963)

April 2014
August 2015

General Manager of Pension Sales
Department, Resona Bank

April 2017

Loaned to the Company, Associate
Director

July 2017

General Manager of Administration
Headquarters of the Company (todate)
Joined the Company
Officer of the Company (to date)Director of the Company (to date)
General Manager of Administration
Headquarters

April 2018
May 2018
June 2018(Responsible)

5
Reelected
OutsideDirector

MitsuoYonemoto

July 1995

Vice President and Director of
T.P.S. Laboratory Co., Ltd. (to date)

September
1998

Outside Director of the Company(to date)

March 2009

Outside Director of The Sailor PenCo., Ltd.

June 2012

Outside Audit & Supervisory Board
Member of Oriental Chain Mfg.
Co., Ltd. (to date)Outside Director of the Company(to date)(March 18, 1939)
June 2018(Vice President and Director of T.P.S. LaboratoryCo., Ltd.)(Outside Audit & Supervisory Board Member ofOriental Chain Mfg. Co., Ltd.)

Number of Sharesof the Company
Held by Candidate– share100 shares

Candidate
No.

Name (date of birth)

Brief Personal History, Position in the Company &Responsibility (Important Concurrent Position)

April 1983

June 1998
April 2002

June 2003

6
Reelected
OutsideDirector

AtsushiShirakami(December 19,
1960)

March 2005

August 2007

January 2010
January 2011
June 2019

Joined The Dai-Ichi Kangyo Bank,
Limited (currently Mizuho Bank,Ltd.)
Deputy Branch Manager, London
Office, Dai-Ichi Kangyo Bank
Assistant Sales Manager, JapaneseCorporate Sales, Europe Branch,
Mizuho Corporate Bank, Ltd.,(currently Mizuho Bank, Ltd.)
General Manager, Financial
Product Development, Mizuho
Securities Co., Ltd.
General Manager, Sales
Department, Medical Division,
Nikkiso Co., Ltd.
General Manager, Corporate
Planning, Executive Officer,
Katokichi Co., Ltd. (currently
TableMark Co., Ltd.)
Vice President, MT Lab
Strategic Dominance Co., Ltd.
President (to date)Outside Director of the Company(to date)

Number of Sharesof the Company
Held by Candidate– share(President, Strategic Dominance Co., Ltd.)(Director, Nippon Jigyo Senryaku Sogo Kenkyujo(Japan Business Strategy Research Institute))
Note 1 None of the candidates for Directors have any special interests with the Company.
Note 2 Candidates for Directors, Mitsuo Yonemoto and Atsushi Shirakami, are candidates for outside Directors.
Note 3 Reasons for the selection of the candidates for Directors or outside Directors:
・ The Management expects Mr. Hideaki Funakoshi to use the wide range of knowledge andcapabilities accumulated from his broad expertise and experience as a manager of the AV business,
one of the Company’s core businesses, for the management of the Company.
・ The Management expects Mr. Takeshi Ito to use the wide range of knowledge and capabilities
accumulated from his diverse business experience within the Company and extensive overseas
business experience, for the management of the Company.
・ The Management expects Mr. Motoyoshi Adachi to make full use of the abilities and insight that hehas developed from his abundant experience and achievements in the area of business management
for many years in his previous career and at this Company, for the management of the Company.
・ The Management expects Mr. Makoto Ueshima to make full use of his abilities and abundant insightin the area of banking and finance, for the management of the Company.
・ The Management expects Mr. Mitsuo Yonemoto to offer advice based on his broad experience as amanagement consultant and also enhance the transparency of management by participating in the
Board of Directors as an independent officer.
・ The Management expects Mr. Atsushi Shirakami to provide beneficial advice based on his wide
range of knowledge and capabilities accumulated as a management consultant and also use hisdiverse business experience and network, for the management of the Company.
Note 4 Years of service of outside Directors of the Company:
・ Mr. Mitsuo Yonemoto will have served as an outside director for 21 years and nine months at theclose of this Ordinary General Meeting of Shareholders.
・ Mr. Atsushi Shirakami will have served as an outside director for one year at the close of thisOrdinary General Meeting of Shareholders.
Note 5 Designation of independent officers:

The Company has designated Mr. Mitsuo Yonemoto as an independent officer in accordance with therules of Tokyo Stock Exchange, Inc. and registered him with such exchange. Mr. Atsushi Shirakami
has satisfied the requirements as an independent officer in accordance with the rules of Tokyo Stock
Exchange, Inc. and the Company will register him with such exchange.
Note 6 Conclusion of limited liability agreement:
The Company has entered into an agreement with Non-executive Directors (outside Directors) Mitsuo
Yonemoto and Mr. Atsushi Shirakami to limit their liability for any damage as provided for in Article
423, paragraph 1 of the Companies Act of Japan within the aggregate amount as provided for in theitems of Article 425, paragraph 1 of the said Act, pursuant to Article 427, paragraph 1 of the said Act.
If they are reelected, such agreement will be renewed.

(Attached Document) Business Report (April 1, 2019 to March 31, 2020)

1. Current State of the Funai Group (the “Group”)(1) Development and Results of Business Activities
In the United States, the Group’s main market, the economy as a whole was growing slowly from the firstquarter to the third quarter because household spending was robust thanks to sound labor markets, rising
wages, and stable consumer demand, although capital expenditures and exports were weak. Since the fourth
quarter, however, the coronavirus outbreak has begun in the country, forcing states to impose a lockdown toprevent further spread and practically bringing economic activities to a stop. Under these circumstances, theeconomic growth rate has significantly dropped year-on-year, increasing unemployment figures. Give this,the Federal Reserve held an emergency meeting in March 2020 and decided to cut interest rates to nearlyzero, and the U.S. Government signed an unprecedented $2 trillion relief bill to blunt the economic damage
from the coronavirus pandemic. The real GDP rate for the January to March quarter of 2020 was down by
4.8%, the second largest drop since the October to December quarter of 2008 when the rate decreased by
8.4%.
In China, the economy continued to be strong through 2019 with the support of government policies. In the
beginning of 2020, however, the coronavirus rapidly spread across the country, and therefore the Chinese
government locked down cities, including Wuhan, ground zero of the pandemic, around late January in 2020.
This action suspended economic activities in cities under lockdown, pushing down the real GDP rate forMarch in 2020 by 6% year-on-year.
In Japan, the consumption tax hike in October in 2019 and typhoons discouraged personal consumption andproduction outputs, exacerbating an economic slowdown. After February in 2020, the coronavirus pandemic
affected the country, forcing various activities, including outings and schooling, to be restricted to prevent
further spread. This move is seriously affecting economic activities. The government stated in its monthly
economic report for April 2020 that “the economy is rapidly deteriorating for the first time in 11 years since
May 2009 when the global economy suffered from a recession after the collapse of Lehman Brothers andthe country is facing an extremely difficult situation.”In this business environment, large amounts of LCD TVs made in China were exported and oversupplied to
the U.S. market, which pushed down retail prices between the first quarter and the second quarter. This movecame before the Trump administration’s fourth round of tariffs on imports from China. This led the Groupto sales of 42.109 billion yen (down by 9.9% year-on-year) and an operating loss of 1.905 billion yen(compared to an operating loss of 1.645 billion yen from the same period last year).
For the third quarter, after the aforementioned tariff measure became effective on September 15, 2019,
exports of China-made LCD TVs to North America declined significantly, which improved the demandand-supply balance of these products. In addition, retail prices of LCD TVs at large mass merchandisers
were not lowered than estimated while the Group was making cost reduction efforts. As a result, the Group
was able to make an operating profit.
For the fourth quarter, despite the coronavirus outbreak and delays in the delivery of parts from Chinese
suppliers, Funai (Thailand) Co., Ltd. (Thailand plant) and Funai Manufacturing, S.A.DE C.V. (Mexico
plant), which are the production sites of LCD TVs, produced products almost according to the initial plans
and could maintain exports to North America. The further decrease in exports of LCD TVs from China to
North America due to the coronavirus pandemic turned in favor of the Group. On the other hand, Funai
Electric Philippines Inc. (Lima plant in the Philippines), which is the production site of BD recorders,
printers, etc., suffered major setbacks, including the eruption of Taal Volcano in January 2020, delays in thedelivery of parts from Chinese suppliers due to the coronavirus pandemic in February, and the suspensionof the plant in mid-March due to a lockdown to prevent further spread of the virus in the country. Thesemoves disrupted its production plan, however, these negative impacts were offset by the overall sales of
LCD TVs and other products. As a result, the Group recorded operating income of about 100 million yen,achieving an operating surplus for two quarters in a row.
Consequently, the Group booked sales of 88.425 billion yen for the consolidated fiscal year under review(down by 16.2％ year-on-year) and an operating loss of 1.732 billion yen (versus operating income of 682
million yen year-on-year). Ordinary loss totaled 1.594 billion yen (in contrast with ordinary income of 1.392
billion yen year-on-year). Meanwhile, after booking an impairment loss of fixed assets and reviewing
deferred tax assets in response to the contraction of demand in the North American market, net income
attributable to owners of the parent stood at 2.392 billion yen (in comparison with a 2.613 billion yen net
income attributable to owners of the parent year-on-year).

Net sales by equipment segment were as follows:<Audiovisual Equipment>
In the audiovisual equipment segment, LCD TVs in large quantities were exported from China to the North
American market between the first quarter and the second quarter, which pushed down retail prices and sales.
The impact was not offset through the full year, and therefore the profit decreased. In addition, sales ofDVD- and BD-related products declined at large mass merchandisers because the market further shrank due
to the spread of online video streaming services, and thus the profit fell. As a result, net sales amounted to
80.027 billion yen, down 17.5% year-on-year.
<Information Equipment>
In the information equipment segment, sales and profits of new nail art printers and large-capacity inkjet
printers increased, which was able to offset a decline in sales and profits of inkjet printer cartridges and label
printers. Consequently, net sales amounted to 3.868 billion yen, up 17.0% year-on-year.
<Other>In other segment, sales of automotive backlights and medical and healthcare products, including dental CT
scanners and nursing bed modules, increased. However, sales of components dropped. Therefore, net sales
amounted to 4.53 billion yen, down 12.6% year-on-year.
(Consolidated Net Sales by Equipment Segment)
Segment

Net Sales (millions of yen)

Audiovisual Equipment

80,027

Information Equipment

3,868

Other

4,530
Total

Sales Composition (%)
90.5

88,425(2) Investment in Property, Plant and Equipment
Investment in property, plant and equipment during the fiscal year under review totaled 1.447 billion yen in
the Group, which were comprised of 989 million yen by its manufacturing companies and 458 million yen
by its sales companies. Such investments were mainly for the improvement of manufacturing facilities.

(3) Financing
Nothing to be reported.

(4) Major Organizational Restructuring, etc.
Nothing to be reported.

(5) Issues to be Addressed:(i) Issues related to the management environment
In North America, the Group’s main market, competition from China-made LCD TVs is intensifying, which
may affect retail prices and profits. In addition to this downside risk, the spread of online video streaming
services is increasing the risk of shrinking the market for DVD- and BD-related products. Amid this businessenvironment, the Group aims to tackle the following issues:(A) Sales expansion and recovery of earnings strength
Sales expansion and the recovery of earnings strength are positioned as two key priorities for the Group.
For audiovisual equipment, the Group aims to expand sales to customers at large mass merchandisers in
the North American market as mentioned later. In the Japanese market, the Group aims to achieve further
brand penetration by launching a new line-up of TVs with highly added value under the concept of“Record, Watch and Expand” in June.
Regarding information equipment, the Group is planning to grow sales and profits by expanding salesof OEM and in-house brand large-capacity inkjet printers, label printers, and nail art printers in the
Chinese market. The Group also promotes sales of jointly-developed derivative products, which utilize
microfluidics (micro fluid control technology), and existing developed items, to the world’s largest
general consumer products manufacturer.

In new businesses, the Group applies technologies that have been fostered over many years to actively
introduce new products, including direct automotive backlights, commercial signage products, andmedical and healthcare products.
In the operating income front, the most important challenge is strategically procuring liquid crystal
panels and other main components and materials. The Group procures liquid crystal panels with different
sizes in anticipation of future demand and supply trends, thereby aiming to increase profit margins. The
Group deploys a purchasing strategy that corresponds to actual sales at retailers through thoroughproduction and inventory management, thereby aiming to curb valuation losses on product, component
and raw material inventories. Furthermore, the Group focuses on reducing the product return rate andminimizing losses in tandem with the disposal of returned products, thereby aiming to become acompany that creates products that are chosen by people around the world. Through these measures, theGroup builds a system that can consistently secure profits.
(B) Training and appointment of human resources
The Group recognizes that it is important to bolster its capabilities by improving employee’s capabilities
in order to win out against the global competition in the new era and implement the Group’s medium- tolong-term business strategy. Therefore, the Group is actively training and assigning employees,
regardless of their age and career, by enhancing and expanding internal and external training programs,
such as language training.
(ii) Issues related to the coronavirus outbreak
The coronavirus pandemic has affected the Group’s production sites, business operations and sales branches,
the U.S. market or the Group’s main market, and the Japanese market, which is posing a range of issues.
Under these circumstances, the Group aims to tackle the following issues:(A) Impact on production sites
The spread of the coronavirus is affecting the Group’s production sites, but the main plant for LCD TVs
in Thailand hasn’t suspended its operation to date. The plant has been forced to reduce some production
volume due to delays in procuring parts from Chinese parts makers. The coronavirus is now under control
in Thailand. Parts procurement is on a recovery track as the operating rate of Chinese parts makers has
returned to about 80%. The Group aims to regain lost ground to increase production.
The plant in Mexico, where 65-inch or larger LCD TVs are manufactured for the U.S. market, hasreduced its operating rate because the coronavirus is spreading. Thus, some of this production is carriedout by the Thailand plant from June this year. The Mexico plant is located in Tijuana, Baja California,
where a state of emergency was declared to prevent the spread of the coronavirus. This forced the Mexico
plant to suspend its operation from April 13 to 27. The plant began preparation to resume production inlate April and returned some production to normal operation in early May. It started preparation forfurther production increase in the middle of May. From now on, the Group aims to increase productionin the Mexico plant while paying close attention to the virus situation in Mexico, and continues to use
the Thailand plant to recover the decreased production as a way of dispersing risk.
The Lima plant in the Philippines, which manufactures BD recorders and printers, was shut down fromMarch 17 to April 12 after a state of emergency was declared in Luzon, where the plant is located, on
March 16. Some production resumed on April 15, and the operation rate has returned to 20 to 30%. Local
suppliers in the Philippines haven’t resumed their operations as of the middle of May, and overseas airand sea shipping services have been reduced, which is causing logistics problems. The Lima plant is
steadily preparing to return to normal operation while paying close attention to the virus situation.
(B) Impact on business operations and sales branches
In response to the government’s state of emergency and request to refrain from non-essential outings,
the business operations and sales branches located in Japan encouraged as many employees in the Groupas possible to work from home, stagger office hours, or use commute options other than public
transportation. Funai Corporation, Inc., a sales company in the U.S., ordered employees to work fromhome due to a national state of emergency.
(C) Impact on markets
In the U.S., the Group’s main market, a national state of emergency was declared on March 13. Against
this backdrop, Walmart, which is one of the Group’s main retailers and sells medical supplies andgroceries, remained open with almost no closures while cutting operating hours. On the other hand, manyof household electrical appliance retailers, including Best Buy, had to close their stores. As a result, salesof TVs at Walmart has increased and remains strong since the fourth quarter. Sales of LCD TVs is
expected to maintain momentum until the first half of 2020. However, there are many factors to watch
and address: When the coronavirus is contained, when economic activities are resumed, a second waveof the coronavirus spread, unemployment rates, share price trends, the development of the U.S.

presidential election, and the recurrence of U.S.-China trade frictions.
As for the Japanese market, the launch of new TV models was postponed from April to June after the
Tokyo Olympics and Paralympics were rescheduled to 2021. Originally the Group planned the launch
in April to respond to special demand created by the Games. Yamada Denki, one of the Group’s main
retailers, was keeping most of its stores open while cutting operating hours even under the state of
emergency. Therefore, Yamada Denki achieved better TV sales than its competitors, and thus Funai’s
TV sales was relatively strong. From now on, the Group needs to take appropriate action while paying
close attention to the impact of suspended economic activities due to the state of emergency,
unemployment rates, bonus payment trends, personal consumption trends, and a second wave of thecoronavirus spread.
(D) Strategies after the coronavirus outbreak is contained
In this situation, the Group aims to take the following strategies after the coronavirus outbreak is
contained:
The first strategy is about procurement. The delivery of parts was delayed owing to the Group’ heavy
dependence on Chinese makers. The Group examines how to diversify countries of origin, therebybuilding an optimal supply chain.
The second strategy is about production. The coronavirus spread forced the Lima plant in the Philippines
and the Mexico plant to suspend their operations. Given this, the Group studies a backup plan to utilize
its global production sites.
(iii) Significant events concerning the assumptions of the going concern
Given the Group posted an operating income, ordinary income, income attributable to owners of the parent,
and positive operating cash flow in the previous consolidated fiscal year. However, the Group recorded an
operating loss, ordinary loss and loss attributable to owners of the parent despite a positive operating cash
flow in the consolidated fiscal year under review. Therefore, there are events and circumstances that castsignificant doubt on the Company’s ability to continue as a going concern at this stage.
There are no significant concerns about financing because the current balance of cash and deposits cansufficiently satisfy working capital needs for the time being.
Furthermore, the Group is implementing step-by-step measures in line with the following policies for eachbusiness segment based on the medium-term management policy formulated in the previous consolidated
fiscal year. In light of this, the Group believes that resolution of any identified going concern issues can beachieved.
(A) Display business (flat-panel TVs, etc.)
・ Further increasing market share at new mass retailers in North America with the support of the largestever economic stimulus package
・ Further reducing costs and enhancing competitiveness by launching the next-generation Android TVs
and other products・ Consistently securing profits by selling highly added-value flat-panel TVs in the Japanese market
・ Making a full-scale entry into the Mexican market by restructuring business models(B) Digital media business (DVD- and BD-related products)
・ Regaining market share of BD players and the like from which other companies have withdrawn inNorth America
・ Expanding a line-up of FUNAI brand products and strengthening cooperation with OEMs in theJapanese Market(C) Office solution business (printers and related products)
・ Expanding sales of own-brand nail art printers and improving profitability through OEM supply
・ Expanding sales of special-purpose printers, including high-capacity inkjet printers and label printers
・ Marketing derivative products using microfluidics (microflow control technology) to expand sales(D) New businesses
・ Expanding sales of automotive backlights and other products and forging ahead with alliance strategies
for automotive business・ Expanding sales of medical and healthcare module products, including dental CT scanners, andsecuring the revenue base・ Launching mass production and sales of new products, including new commercial displays
As a result of the foregoing, it has been determined that significant uncertainty concerning the assumptionsof the going concern is not deemed to exist as of the end of the fiscal year under review.

(6) Property and Income/Loss
Fiscal Term
Item

65th
(April 1, 2016 to
March 31, 2017)

66th(April 1, 2017 toMarch 31, 2018)

67th(April 1, 2018 toMarch 31, 2019)

68th(April 1, 2019 toMarch 31, 2020)(197.70)(724.21)76.59(70.13)2,242.38

1,485.96

1,583.46

1,498.99

Net sales (millions of yen)

133,83

Ordinary
income(millions of yen)

(7,726)(loss)Net income (loss) attributableto owners of the parent(millions of yen)
Net income (loss) per share(yen)
Total assets (millions of yen)

Equity (millions of yen)

Equity per share (yen)Note 1

Note 2

Net income (loss) per share is calculated based on the average of the total number of shares issued andoutstanding during the fiscal year. Equity per share is calculated based on the total number of sharesissued and outstanding as of the end of the fiscal year. These numbers do not include the shares oftreasury stock.
The Company began implementing the Partial Amendments to Accounting Standard for Tax EffectAccounting (ASBJ No. 28, February 16, 2018) at the beginning of the 67th fiscal term. The above
revised standards have been retroactively applied to main financial indicators and other data for the65th and 66th fiscal terms.

(7) Major Subsidiaries
Capital Stock

Percentage of
Equity Participationby the Company

FUNAI CORPORATION,INC.

US$123.5 million

100.00%FUNAI （THAILAND） CO.,LTD.

THB 1,568 million

100.00%Funai Electric Philippines Inc.

PHP 1,176 million

100.00%Trade Name

Main Business
Sale of theCompany’s products
Sale of theCompany’s products
Sale of theCompany’s products(8) Major Businesses of the Group
Segment

Principal Products
LCD TVs, organic EL TVs, DVD players, DVD recorders, BD players, andBD recorders
Large capacity ink jet printers, label printers, nail art printers, and ink
cartridges
Automotive backlight units, dental CT scanners, bed modules for nursing
care, and other equipment

Audiovisual equipment
Information equipment
Other(9) Major Business Sites of the Group
Category

Name

Location

Head Office
Tokyo Branch
FUNAI CORPORATION, INC.
P & F MEXICANA, S.A. DE C. V .
Funai Electric (HK) Ltd.
FUNAI (THAILAND) CO., LTD.
Funai Electric Cebu, Inc.
Funai Electric Philippines Inc.
Funai Manufacturing, S.A. DE C.V.
Chugoku Funai Electric Co., Ltd.

Funai Electric Co., Ltd.
Sales subsidiaries

Production subsidiaries

Daito City, Osaka
Chiyoda-ku, Tokyo
U.S.A.
MexicoHong Kong
ThailandPhilippines
Philippines
MexicoFukuyama City, Hiroshima(10) Employees of the Group

Note 1
Note 2

No. of Employees (persons)

Change from the End of the Previous Fiscal Year(+/-) (persons)

2,166

−217

The above number of employees represents those actively at work.
The number of employees decreased from the previous fiscal year mainly due to personnel reduction
at Funai Manufacturing, S.A.DE C.V. and other manufacturing subsidiaries.

(11) Major Lenders
Nothing to be reported.

(12) Other Important Matters Concerning the Current State of the Group
Nothing to be reported.

2. Matters Concerning the Shares of the Company(1) Total number of shares authorized:(2) Total number of shares issued:(3) Number of shareholders(4) Principal Shareholders (top 11):

80,000,000 shares
36,130,796 shares(Including 2,011,830 shares of treasury stock)7,653 persons
Number of Shares Held(thousands of share)

Shareholding Ratio (%)

Tetsuo Funai

11,73834.41％

Funai Information Science Promotion Foundation

1,740

5.10

Roki Group Co., Ltd.

1,700

4.98

1,299

3.81

1,101

3.23

SSBTC CLIENT OMNIBUS ACCOUNT

1,028

3.02

The Master Trust Bank of Japan, Ltd. (trust account)

929

2.72

NORTHERN TRUST CO. (AVFC) RE U.S. TAXEXEMPTED PENSION FUNDS SEC LENDING

710

2.08

EFUTSU Co., Ltd.

470

1.38

T&N Co., Ltd.

470

1.38

Funai Kosan Co., Ltd.

470

1.38

Name

BNY GCM CLIENT ACCOUNT JPRD AC ISG (FEAC)NORTHERN TRUST CO. (AVFC) SUB A/C USLNON-TREATY

Note 1
Note 2The Company, which holds 2,011,000 shares of treasury stock, is not included in the above-listed
principal shareholders.
Each shareholding ratio is obtained by deducting shares of treasury stock of the Company andcalculating down to the third decimal place and thereafter rounding upward or downward to the nearest
second decimal place, as the case may be.

(5) Other Important Matters Concerning Shares
Nothing to be reported.

3. Matters Concerning Stock Acquisition Rights(1) Stock Acquisition Rights at the End of the Fiscal Year under Review:(i) Number of stock acquisition rights:
4,273 rights
Note The number of stock acquisition rights is determined by deducting the number of stock acquisitionrights exercised and the number of stock acquisition rights that the persons entitled thereto have lost
based on retirement or other conditions for exercising the rights, from the number of stock acquisitionrights granted.
(ii) Class and number of shares underlying stock acquisition rights:

427,300 shares of common stock(100 shares per stock acquisition right)(iii) Stock acquisition rights held by Directors of the Company
Issue
1st stock acquisition forthe year ended March 31,
2015
1st stock acquisition forthe year ended March 31,
2017
1st stock acquisition forthe year ended March 31,
2018
Stock acquisition for theyear ended March 31,
2020

Category

No. ofRightsNo. of
Holders(persons)

Exercise
Price Per
Share

Exercise
Period40

1¥1,296

Sep. 1, 2016 toAug. 31, 2023

144

3

¥1,019Sep. 1, 2018 toAug. 31, 2023

Director(other than Audit and Supervisory
Committee Member)(other than outside Director)
Director(other than Audit and Supervisory
Committee Member)(other than outside Director)
Director(other than Audit and Supervisory
Committee Member)(other than outside Director)
Director(other than Audit and Supervisory
Committee Member)(other than outside Director)

180

3

¥947

250

3

¥841

Sep. 1, 2019 toAug. 31, 2024

Sep. 1, 2021 toAug. 31, 2026

(2) Stock Acquisition Rights Allotted during the Fiscal Year under Review:
Stock acquisition rights issued on August 26, 2019(i) Number of stock acquisition rights:(ii) Class and number of shares underlying stock acquisition rights:

1,765 rights
176,500 shares of common stock(100 shares per stock acquisition right)(iii) Value of the property to be contributed
when such stock acquisition rights are exercised: ¥84,100 per stock acquisition right (¥841 per share)(iv) Period during which when such stock acquisition rights
can be exercised: From September 1, 2021 to August 31, 2026(v) Stock acquisition rights allotted
Category
Directors of the Company

No. of Rights

No. of Shares

No. of Holders(persons)

250

25,0003

Employees of the Company(3) Other Important Matters Concerning Stock Acquisition Rights, etc.
Nothing to be reported.

4. Matters Concerning Officers of the Company(1) Directors (as of March 31, 2020)
Position in the Company

Name

Representative Director,
President and CEO

Hideaki Funakoshi

Director and Officer

Takeshi Ito

Director and Officer

Motoyoshi Adachi

Director and Officer

Makoto Ueshima

Outside Director

Mitsuo Yonemoto

Outside Director

Atsushi Shirakami

Director (full-timemember of Audit andSupervisory Committee)

Fumiaki Kidera

Responsibility and Important Concurrent
Position

General Manager of Sales Headquarters
General Manager of AV Division
General Manager of Administration
Headquarters
Executive Vice President and Director, TPS
Co., Ltd.
Outside Corporate Auditor, Oriental Chain
Mfg. Co., Ltd.
President, Strategic Dominance Co., Ltd.
Director, Nippon Jigyo Senryaku Sogo
Kenkyujo (Japan Business Strategy ResearchInstitute)
Chairman of the Audit and Supervisory
Committee

Representative, Yamada & Partners Accounting
Co., Ltd.
Representative, Yamada & Partners Tax
Hiroyuki Yamada
Accounting Co., Ltd.
Outside Director, Takasho Co., Ltd.
Outside Auditor, Imura Envelope Corporation
Partner, Nakanoshima Chuo Law OfficeOutside Director
Outside Director, Shinko Wire Company, Ltd.
(member of Audit andVisiting Professor, Graduate School of
Takahiro Tanaka
Supervisory CommitteeIntellectual Property, Osaka Institute ofMember)Technology
Note 1 The Company has appointed Fumiaki Kidera as a full-time member of the Audit and Supervisory
Committee with the aim of enhancing the effectiveness of audits by reinforcing the Committee’s
information gathering capability and collaborating with internal audit units, etc., and further
strengthening its audit and supervisory functions.
Note 2 Outside Director (Audit and Supervisory Committee Member) Hiroyuki Yamada is qualified CPA andtax accountant and has considerable knowledge related to finance and accounting.
Note 3 The Company has designated outside Directors Mitsuo Yonemoto, Hiroyuki Yamada, and Takahiro
Tanaka as Independent Officers in accordance with the rules of the Tokyo Stock Exchange, Inc. andregistered them with the exchange.
Note 4 The Company has established a Nomination Committee and a Compensation Committee (both ofwhich are voluntary committees). The members of each of the committees are as follows:・ Nomination Committee: Hideaki Funakoshi (Chairman), Takeshi Ito, Motoyoshi Adachi, Makoto
Ueshima, and Mitsuo Yonemoto
・ Compensation Committee: Hideaki Funakoshi (Chairman), Takeshi Ito, Makoto Ueshima, Mitsuo
Yonemoto, Hiroyuki Yamada, and Takahiro Tanaka
・ The members of the Nomination Committee were changed, effective April 21, 2020 as follows:・ Nomination Committee: Hideaki Funakoshi (Chairman), Motoyoshi Adachi, Makoto Ueshima,
Mitsuo Yonemoto, Hiroyuki Yamada, and Takahiro Tanaka
Outside Director(member of Audit andSupervisory Committee
Member)(2) Directors who Retired during the Fiscal Year under Review
Name

Retirement Date

Masahide Morimoto

June 26, 2019

Masakazu Funaishi

June 26, 2019

ReasonExpiration ofterm of office
Expiration ofterm of office

Position, Responsibility and Important
Concurrent Position upon Retirement
Outside Director (Audit and Supervisory
Committee Member)
Outside Director (Audit and Supervisory
Committee Member)(3) Outline of Liability Limitation Agreements
In accordance with Article 427, paragraph 1 of the Companies Act of Japan, the Company has entered into
an agreement with Non-executive Directors Mitsuo Yonemoto, Atsushi Shirakami, Fumiaki Kidera,
Hiroyuki Yamada, and Takahiro Tanaka to limit their liability for any damage as provided for in Article 423,
paragraph 1 of said act within the aggregate of the amounts listed in the items of Article 425, paragraph 1 ofsaid act.

(4) Total Amounts of Remuneration, etc. for Directors
Total amounts of remuneration, etc. for the fiscal year under review:No. of Recipients
Category(persons)
Director (other than Director serving as Audit and6
Supervisory Committee Member)(2)(outside Director)

Amount of Payment(millions of yen)
91
(7)

Director (Audit and Supervisory Committee Member)(outside Director)

5
(4)

18
(9)

Total
(outside Director)

11
(6)

109
(17)

Note 1

The above list includes two outside Directors (Audit and Supervisory Committee Members) who
retired during the fiscal year under review.
Note 2 The above-listed amounts of payments include the following amounts of allowance for Officers’
retirement benefits recorded as expenses for the fiscal year under review:・ ¥6,837,000 for six Directors (other than Directors serving as Audit and Supervisory Committee
Members) (including ¥612,000 for two outside Directors)
・ ¥1,400,000 for five Directors (Audit and Supervisory Committee Members) (including ¥700,000
for four outside Directors)
Note 3 The above-listed amounts of payments include the following amount of remuneration in stock options
recorded as expenses for the fiscal year under review:・ ¥2,318,000 for four Directors (other than Audit and Supervisory Committee Members)(5) Other Important Matters Concerning Officers
Nothing to be reported.

(6) Matters Concerning Outside Officers:(i) Important concurrent positions as executive officers at other companies, and the relationships that theCompany has with those companies:• Director Mitsuo Yonemoto is the Vice President and Director of T.P.S. Laboratory Co., Ltd. The Company
has no special relationship with T.P.S. Laboratory Co., Ltd.
• Director Atsushi Shirakami is the President of Strategic Dominance Co., Ltd. and Director of Nippon
Jigyo Senryaku Sogo Kenkyujo (Japan Business Strategy Research Institute). The Company has no
special relationship with Strategic Dominance Co., Ltd. or Nippon Jigyo Senryaku Sogo Kenkyujo (Japan
Business Strategy Research Institute).
• Director (Audit and Supervisory Committee Member) Hiroyuki Yamada is the Representative of Yamada& Partners Accounting Co., Ltd. and the Representative of Yamada & Partners Tax Accounting Co., Ltd.
The Company has no special relationship with Yamada & Partners Accounting Co., Ltd. or Yamada &Partners Tax Accounting Co., Ltd.
• Director (Audit and Supervisory Committee Member) Takahiro Tanaka is a partner at Nakanoshima Chuo
Law Office. The Company has a consulting contract with this law firm.
(ii) Important concurrent positions as outside officers at other companies, and the relationships that the Company
has with those companies:• Director Mitsuo Yonemoto is an outside director of Oriental Chain Mfg. Co., Ltd. The Company has no
special relationship with Oriental Chain Mfg. Co., Ltd.
• Director (Audit and Supervisory Committee Member) Hiroyuki Yamada is an outside director of Takasho
Co., Ltd. and an outside auditor of Imura Envelope Corporation. The Company has no special relationshipwith Takasho Co., Ltd. or Oriental Chain Mfg. Co., Ltd.
• Director (Audit and Supervisory Committee Member) Takahiro Tanaka is an outside director of Shinko
Wire Company, Ltd. and a visiting professor of Graduate School of Intellectual Property, Osaka Instituteof Technology. The Company has no special relationship with Shinko Wire Company, Ltd. or the Graduate
School of Intellectual Property, Osaka Institute of Technology.
(iii) Family relationship with an executive or officer of the company or a specified associated company of thecompany
Nothing to be reported.

(iv) Major activities during the fiscal year under review
Attendance and comments at the meetings of the Board of Directors and the Audit and Supervisory
Committee
Attendance and Speeches

Director
Mitsuo Yonemoto

He attended 7 of the 8 meetings (attendance rate: 87.5%) of the Board of
Directors held during the fiscal year under review, and expressed opinions
principally from the standpoint of a management consultant, and from an
objective standpoint as an Independent Officer.

Director
Atsushi Shirakami

After he assumed the position on June 26, 2019, he attended 7 of the 7
meetings (attendance rate: 100%) of the Board of Directors held during
the fiscal year under review, and expressed opinions principally from thestandpoint of a management consultant.

Director (Audit and Supervisory
Committee Member)
Hiroyuki Yamada

After he assumed the position on June 26, 2019, he attended 7 of the 7
meetings (attendance rate: 100%) of the Board of Directors and 13 of 13
meetings (attendance rate: 100%) of the Audit and Supervisory
Committee held during the fiscal year under review. He expressed
opinions at the meetings of the Board of Directors and the Audit andSupervisory Committee principally from the standpoint of a CPA and tax
accountant, and from an objective standpoint as an Independent Officer.

Director (Audit and Supervisory
Committee Member)
Takahiro Tanaka

After he assumed the position on June 26, 2019, he attended 7 of the 7
meetings (attendance rate: 100%) of the Board of Directors and 12 of 13
meetings (attendance rate: 92.3%) of the Audit and Supervisory
Committee held during the fiscal year under review. He expressed
opinions at the meetings of the Board of Directors and the Audit andSupervisory Committee principally from the standpoint of a lawyer, andfrom an objective standpoint as an Independent Officer.

Note

In addition to the number of meetings of the Board of Directors above, written resolutions, which shallbe deemed to have been adopted pursuant to the provisions of Article 370 of the Companies Act andArticle 23 of the Articles of Incorporation of the Company, were adopted on three occasions (including
two occasions after June 26, 2019).

5. Matters Concerning Accounting Auditor(1) Name of Accounting Auditor
Deloitte Touche Tohmatsu LLC(2) Amount of Remuneration, etc., of Accounting Auditor for the Fiscal Year under Review:(i) Remuneration, etc., of the accounting auditor for the fiscal year under review:(ii) Total amount of cash and other proprietary benefits payable to the accounting auditor:¥76 million¥76 million

Note The amount of remuneration, etc., for audits under the Companies Act of Japan and the amount of remuneration, etc.,
for audits under the Financial Instruments and Exchange Act of Japan are not separated in the audit agreement between
the Company and the accounting auditor and cannot actually be separated. Hence, the amount in item (i) above includes
both amounts.

(3) Content of Non-auditing Services
Nothing to be reported.

(4) Reasons for Audit and Supervisory Committee to Consent to Remuneration, etc., of
Accounting Auditor
The Audit and Supervisory Committee, based on the “Practical Guidance on Cooperation with Accounting
Auditor” issued by the Japan Audit & Supervisory Board Members Association, verified the changes in audit
hours and audit remuneration by audit item as well as the status of audit plans and results for the previous
fiscal year, and investigated whether the estimates of audit hours and remuneration for the fiscal year underreview were appropriate. As a result, the Audit and Supervisory Committee consented to the remuneration,etc. of the accounting auditor pursuant to Article 399, paragraph 1 of the Companies Act.

(5) Policy on Determination of Dismissal or Non-reappointment of Accounting Auditor
In the event that the accounting auditor is found to fall under any event of dismissal under the items of Article
340, paragraph 1 of the Companies Act and is considered appropriate to be dismissed, the Audit andSupervisory Committee shall, upon unanimous consent of the Audit and Supervisory Committee Members,
dismiss the accounting auditor. In addition, in the event that the accounting auditor is found to interfere withproper audits, the Audit and Supervisory Committee shall determine the content of a proposition for thedismissal or non-reappointment of the accounting auditor to be submitted to a General Meeting of
Shareholders.

(6) Outline of Liability Limitation Agreements
Nothing to be reported.

6. Systems and Policies of the Company(1) Systems to Secure Propriety of Business Activities:(i) System to ensure that the Directors and employees perform their duties in compliance with laws, ordinances
and the Articles of Incorporation
Under the “Funai Group Charter of Conduct,” the “Regulations of Officers’ Compliance,” and the“Regulations of Compliance,” the Company shall clarify acts to be taken by Directors, Officers andemployees to ensure their performance of duties in compliance with laws, ordinances and the Articles ofIncorporation. The Company also prohibits unfavorable treatment of whistleblowers under the“Whistleblower Protection Regulations.”(ii) System for the storage and management of information concerning Directors’ performance of duties
With regard to the storage and management of information concerning the Directors’ performance of duties,
the minutes of meetings of the Board of Directors and other important meetings that Directors attend, circulardecision documents, and other documents and information necessary for Directors to perform their duties
appropriately shall be stored and managed in compliance with laws, ordinances and the “Document
Management Regulations.”(iii) Regulations and other system for managing the risk of loss
The Company shall appoint Officers responsible for risk management, and they shall properly grasp andevaluate risks to the Company and manage risks related to their respective operations in charge under the“Risk Management Regulations” specified for managing the risk of loss.
(iv) System to ensure that Directors perform their duties effectively
Under the “Officer System” introduced to ensure quick and effective decision-making by the management,
the Company shall assign Officers under the control of the Executive Director to ensure that the operations
determined by the Executive Director are performed swiftly. In addition, to enhance the transparency of theBoard of Directors and strengthen its supervisory functions, the Company shall appoint outside Directors
and institute an Audit and Supervisory Committee.
(v) Systems to secure the propriety of business activities of the corporate group composed of the Company andits subsidiaries(a) System of reporting to the Company the matters concerning duties performed by Directors, etc. of its
subsidiaries
To grasp the managing status of the subsidiaries appropriately, the Company shall set materiality
standards and reporting items for the subsidiaries under the “Affiliated Companies Management
Regulations.” Accordingly, the Company shall require the subsidiaries to submit operating results andfinancial reports on a monthly basis.
(b) Regulations and other system for managing the risk of loss for the subsidiaries
To manage the operation and administration of the subsidiaries, the Company shall set agenda anddiscuss with them the matters that may affect their financial condition and administration in terms offinancing, technology, personnel, transactions, etc. under the “Affiliated Companies Management
Regulations.”(c) System to ensure that Directors, etc. of the subsidiaries perform their duties effectively
To ensure that the subsidiaries manage business effectively, the Company shall allow them to manage
business in respect of their managerial autonomy and independence under corporate regulations basedon the “Affiliated Companies Management Regulations.”(d) System to ensure that Directors, employees, etc. perform their duties in compliance with laws, ordinances
and the Articles of Incorporation
Under the “Funai Group Charter of Conduct” as a code of conduct for all Officers and employees of theFunai Group, and the “Funai Group Procurement Policies” and “Regulations of Compliance” based on
the Charter of Conduct, the Company shall clarify acts to be taken by Directors, employees, etc. of thesubsidiaries to ensure their performance of duties in compliance with laws, ordinances and the Articles
of Incorporation.
(vi) Matters concerning employees who assist the Audit and Supervisory Committee to perform its duties
To allow the Audit and Supervisory Committee to properly perform its duties, the Company shall institute a
Secretariat to the Audit and Supervisory Committee and assign employees to assist the Audit and Supervisory
Committee.
(vii) Matters concerning the independence of employees, who assist at the duties of the Audit and Supervisory
Committee, from Directors (other than Directors serving as Audit and Supervisory Committee Members)
For employees who are transferred to the Secretariat to the Audit and Supervisory Committee in order toassist at the duties of the Audit and Supervisory Committee, the Company shall assign employees who are
not subjected to direct instructions and orders from Directors (other than Directors serving as Audit andSupervisory Committee Members) in order to secure their independence. The Company shall respect
opinions of the Audit and Supervisory Committee with regard to transfer and assessment of these employees.
(viii) Matters concerning ensuring the effectiveness of instructions and orders given by the Audit andSupervisory Committee to employees who assist at the duties of the Audit and Supervisory Committee
To ensure the effectiveness of instructions and orders, the Audit and Supervisory Committee shall directly
give instructions and orders to and receive reports from employees who assist the Audit and Supervisory
Committee.
(ix) Matters concerning reporting to the Audit and Supervisory Committee(a) System of reporting by Directors (other than Directors serving as Audit and Supervisory Committee
Members), Officers and employees of the Company to the Audit and Supervisory Committee
If Directors (other than Directors serving as Audit and Supervisory Committee Members), Officers andemployees of the Company find any fact that has inflicted or may inflict significant damage on the
Company, they shall immediately report the fact to the Audit and Supervisory Committee.
(b) System of reporting by Directors, auditors, Officers and employees of the subsidiaries to the Audit andSupervisory Committee of the Company
In the event that Directors, Officers and employees of the subsidiaries are requested to give reports on
business by Directors serving as Audit and Supervisory Committee Members appointed by the Audit andSupervisory Committee of the Company, they shall immediately do so unless there is any justifiablereason to the contrary. If Directors, auditors, Officers and employees of the subsidiaries find any violationof law or any fact that has inflicted or may inflict significant damage on the Company or its subsidiaries,
they shall report the fact to the Audit and Supervisory Committee of the Company.
(x) System to ensure that any party who has given a report to the Audit and Supervisory Committee does not
suffer unfavorable treatment because of giving such report
The Company prohibits unfavorable treatment of whistleblowers under the “Regulations of Compliance” andthe “Whistleblower Protection Regulations.” The Company shall also ensure that any party who has given areport to the Audit and Supervisory Committee does not suffer unfavorable treatment because of giving suchreport.
(xi) Matters concerning policies on the treatment of expenses to be incurred in duties performed by Audit andSupervisory Committee Members
In the event that Audit and Supervisory Committee Members request payments for expenses in performing
their duties, the Company shall make such payments unless such expenses are not necessary for theirperformance of duties.
(xii) Other system to ensure that the Audit and Supervisory Committee performs audits effectively
To ensure that the Audit and Supervisory Committee performs audits effectively, the Audit and Supervisory
Committee shall closely cooperate with the accounting auditor, and regularly meet the Representative
Director, Directors of the subsidiaries, etc. to confirm management policies and exchange opinions on risks
and issues surrounding the Company.
(xiii) System to ensure the reliability of financial reporting
The Company shall establish a “Basic Policy for Internal Control over Financial Reporting” to ensure thereliability of financial reporting and the effective and appropriate disclosure of “Internal Control Reports.”
In accordance with the Basic Policy, the Company shall establish an Internal Control Committee, which ischaired by the Representative Director, President and CEO, continuously maintain, manage and evaluate
internal control over financial reporting, and promptly correct any defect if it is found.
(xiv) System for the exclusion of antisocial forces
The Company shall have a fundamental policy of having no relation with any antisocial force and refusing
any unjust claim.
In the event that a client is found to be an entity, enterprise, individual, etc. having any relation with such
antisocial force, the Company shall promptly terminate a business relationship with it.
The Company shall designate its Personnel and General Affairs Department as a principal division in chargeof dealing with antisocial forces and control the information centrally. To ensure compliance by Officers andemployees, the Company shall also define this fundamental policy clearly in related rules and regulations
and establish an education system therefor. In addition, the Company shall prepare countermeasures toprevent damages from antisocial forces, if necessary.
In the event that any unjust claim is requested by an antisocial force, the Company shall work closely withexternal specialized agencies, including the police and legal counsels, to develop cooperation for emergency
situations.

(2) Summary of Operation Status of Systems to Secure Propriety of Business Activities:(i) Compliance
The Company has kept all Officers and employees informed about the “Funai Group Charter of Conduct” asa code of conduct, the “Regulations of Officers’ Compliance,” and the “Regulations of Compliance,” andclarified the fundamental policy on compliance, thereby ensuring that they perform their duties in compliancewith laws, ordinances and the Articles of Incorporation. The Company also has a whistleblower system toprevent violations of law and swiftly detect problems.
The Company provided Officers and employees with an e-learning session each for the first and second halfof the fiscal year under review as part of educational activities to raise the awareness of compliance.
(ii) Risk management
To minimize losses and disadvantages in business activities, the Company shall make continuous risk
management through regular monitoring by a risk management division under the “Risk Management
Regulations.”(iii) Directors’ performance of duties
The Board of Directors, which consists of nine Directors (three of whom are serving as Audit and Supervisory
Committee Members) including four outside Directors, makes decisions on the matters required by laws orordinances and important matters concerning management, and supervises the execution of business. During
the fiscal year under review, the Board of Directors held eight meetings. In addition, the Investment and Loan
Committee held two sessions, the Nomination Committee held one session, and the Compensation
Committee held two sessions.
(iv) Audit and Supervisory Committee Members’ performance of duties
The Audit and Supervisory Committee Members attend meetings of the Board of Directors, as well asmonthly financial reporting meetings. During the fiscal year under review, 16 meetings of the Audit andSupervisory Committee were held.

(3) Policies for Determination of Directors’ Remuneration, etc.
Remuneration for Directors (other than Directors serving as Audit and Supervisory Committee Members)
shall be determined based on working conditions (full time or part time), supervisory functions in duties,
performance of duties, the business environment surrounding the Company, business performance, andindustry standards, etc.
Remuneration for Directors serving as Audit and Supervisory Committee Members shall be determinedbased on working conditions (full time or part time), the business environment surrounding the Company,
business performance, and industry standards, etc.
The determination method is as follows:
Remuneration for Directors shall be determined within the range of the total amount of remuneration for
Directors (other than Directors serving as Audit and Supervisory Committee Members) and the total amountof remuneration for Directors serving as Audit and Supervisory Committee Members, which are approved
at a shareholders’ meeting.
The amount of remuneration for Directors (other than Directors serving as Audit and Supervisory Committee
Members) shall be determined separately for inside Directors and outside Directors. The amounts ofremuneration shall be determined by the Board of Directors or the Compensation Committee upon
authorization by the Board of Directors.
The amount of remuneration for Directors serving as Audit and Supervisory Committee Members shall be
determined upon consultation among Directors serving as Audit and Supervisory Committee Members.
The resolution on remuneration for Officers of the Company was made on June 25, 2015. It stipulates thatthe annual amount of remuneration for Directors (other than Directors serving as Audit and Supervisory
Committee Members) be within 550 million yen (within 30 million yen for outside Directors) and the annual
amount of remuneration for Directors serving as Audit and Supervisory Committee Members be within 40
million yen.
The Compensation Committee shall have the right to determine a policy for the amount of remuneration for
Officers of the Company and the determination method.
The Compensation Committee shall determine the following items upon authorization by the Board of
Directors:
・ Monthly amount of remuneration
・ Bonus・ Retirement benefit
・ Condolence money

・ Other matters concerning remuneration for Directors
The Compensation Committee shall be comprised of three or more inside Directors and outside Directors(including outside Directors serving as Audit and Supervisory Committee Members) by a resolution of theBoard of Directors. The chairperson selected by the Compensation Committee shall convene one or moreregular meetings every year. A majority of members of the Compensation Committee shall attend a meeting
to vote the resolution.
Remuneration for Directors of the Company shall be comprised of the fixed remuneration (the amountobtained by adding or subtracting based on the business environment surrounding the Company, businessperformance, and industry standards) and the performance-based bonus (bonus). The fixed remunerationand the performance-based bonus shall account for about 80% and 20%, respectively.
For the performance-based bonus, the consolidated operating income margin shall be used as a performanceindicator. The consolidated operating income margin is chosen because it is a leading performance indicator
to represent a profit made by activities of the main business and is found most reasonable indicator tomeasure results from the execution of operation.
The amount of performance-based bonus shall be determined through discussion at the Compensation
Committee in consideration of the consolidated operating income margin as the major performance indicatorand by comprehensively assessing changes in business performance by sector from the previous period,
individual contributions, etc.

(4) Policy for Distribution of Retained Earnings, etc., Determined by the Board of Directors
The Company recognizes the return of earnings to its shareholders as one of the most important missions ofmanagement and strives to maintain a stable dividend policy while reinforcing the management base.
Specifically, the Company implements an active dividend policy with a 1.0% DOE (dividend on equity) in
consideration of the business environment and other factors.
For the fiscal year under review, we regret to announce that the Company decided not to pay year-end
dividends. The Company strives to improve its business performance and financial position, aiming toresume dividend payments at an early point.

Note: In this business report, all figures and the numbers of shares are shown by rounding down fractions lessthan the indicated units, and ratios are shown by rounding upward or downward to the nearest fist decimal
place unless otherwise indicated. Net income per share, net loss per share and equity per share are shownby rounding off to the nearest integer.

Consolidated Financial Statements
CONSOLIDATED BALANCE SHEET(As of March 31, 2020)
AssetsCurrent assets(millions of yen)
57,985

Cash and deposits .......................................................................................................................... 35,787
Notes and accounts receivable-trade................................................................................................. 6,472
Merchandise and finished goods ...................................................................................................... 4,693
Work in process .................................................................................................................................. 445
Raw materials and supplies .............................................................................................................. 9,293
Other ............................................................................................................................................... 1,854
Allowance for doubtful accounts ...................................................................................................... (560)
Fixed assets
Property, plant and equipment

12,698
8,210

Buildings and structures................................................................................................................... 4,157
Machinery, equipment, and motor vehicles.......................................................................................... 433
Tools, furniture, and fixtures ............................................................................................................... 396
Land ................................................................................................................................................ 2,932
Lease assets ........................................................................................................................................ 222
Other .................................................................................................................................................... 68
Intangible assets

470

Other .................................................................................................................................................. 470
Investments and other assets

4,017

Investment securities ....................................................................................................................... 1,067
Deferred tax assets .............................................................................................................................. 848
Assets for retirement benefits ........................................................................................................... 1,820
Other .................................................................................................................................................. 347
Allowance for doubtful accounts ........................................................................................................ (66)
TOTAL ASSETS

70,683

Liabilities
Current liabilities(millions of yen)
18,589Notes and accounts payable-trade .................................................................................................... 8,763
Accounts payable-other ................................................................................................................... 5,472
Lease liabilities ................................................................................................................................... 131
Income taxes payable .......................................................................................................................... 364
Reserve for product warranty ........................................................................................................... 1,742
Other ............................................................................................................................................... 2,113
Fixed liabilities

905

Lease liabilities ................................................................................................................................... 142
Deferred tax liabilities ........................................................................................................................ 599
Liabilities for Directors’ and Audit & Supervisory Board Members’ retirement benefits ........................ 32
Liabilities for retirement benefits .......................................................................................................... 18
Other .................................................................................................................................................. 111
TOTAL LIABILITIES

19,494EquityShareholders’ equity

62,759Common stock .............................................................................................................................. 31,307
Capital surplus ............................................................................................................................... 33,603
Retained earnings .......................................................................................................................... 22,190
Treasury stock ............................................................................................................................ (24,341)
Accumulated other comprehensive income (loss)(11,615)

Unrealized gain (loss) on available-for-sale securities..................................................................... (16)Foreign currency translation adjustments ................................................................................ (11,974)
Defined retirement benefit plans ......................................................................................................... 375
Stock acquisition rights

44

TOTAL EQUITY

51,189TOTAL LIABILITIES AND EQUITY

70,683

CONSOLIDATED STATEMENT OF INCOME(April 1, 2019 - March 31, 2020)(millions of yen)
Description

AmountNet sales

88,425

Cost of sales

78,207Gross profit

10,217

Selling, general, and administrative expenses

11,950Operating loss

1,732

Non-operating income
Interest and dividend income

243

Dividends income

187

Reversal of compensation expenses

110

Other

105

646

Non-operating expenses
Interest expense

11

Foreign exchange income

236

Compensation expenses

234

Other

26

Ordinary loss

508
1,594

Extraordinary income
Gain on sales of noncurrent assets
Other

107
3

110

Extraordinary loss
Loss on disposal of fixed assets

64

Loss on valuation of investment securities

157

Impairment loss

132

Loss before income taxes

354
1,837

Income taxes – current(85)

Income taxes for prior periods

285

Income taxes – deferred

354

554

Net loss

2,392

Net loss attributable to owners of theparent2,392

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY(April 1, 2019 - March 31, 2020)(millions of yen)
Shareholders’ equity
Commonstock
Balance as of April 1, 2019

Capitalsurplus31,307Retainedearnings

33,603

24,583Cumulative effects of changes
in accounting policies
Restated balance(24,341)

65,153(0)31,307

Changes of items during theperiodNet loss attributable to ownersof the parent
Net changes of items otherthan shareholders' equity
Total changes of items during
the fiscal year
Balance as of March 31, 2020

Total
shareholders’equityTreasurystock

33,603(0)24,582(24,341)

65,152(2,392)(2,392)––(2,392)–(2,392)31,30733,60322,190(24,341)

62,759(11,609)480

Total accumulated
other comprehensive
income (loss)

1

Defined retirement
benefit plans

Foreign currencytranslation
adjustments

Balance as of April 1, 2019

Unrealized gain (loss)
on available-for-salesecurities

Accumulated other comprehensive income (loss)(11,127)

StockacquisitionrightsTotalequity31

54,057

Cumulative effects of changes
in accounting policies
Restated balance
Changes of items during theperiodNet loss attributable to ownersof the parent
Net changes of items other thanshareholders' equity
Total changes of items during
the fiscal year
Balance as of March 31, 2020

(0)1

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

54,056(2,392)
(17)

(364)

(105)

(487)

13

(474)

(17)

(364)

(105)

(487)

13

(2,867)(16)(11,974)

11,974(11,615)44

51,189Note: In the consolidated balance sheet, the consolidated statement of income, and the consolidated statementof changes in equity, all figures are shown by rounding down fractions less than the indicated units.

Non-consolidated Financial Statements
NON-CONSOLIDATED BALANCE SHEET(As of March 31, 2020)
AssetsCurrent assets(millions of yen)
33,010Cash and deposits .......................................................................................................................... 22,529
Accounts receivable-trade ................................................................................................................ 6,641
Merchandise and finished goods ......................................................................................................... 254
Raw materials and supplies .............................................................................................................. 2,677
Prepaid expenses ................................................................................................................................ 204
Other .................................................................................................................................................. 706
Allowance for doubtful accounts .......................................................................................................... (3)Fixed assets
Property, plant and equipment

31,6584,519

Buildings ......................................................................................................................................... 1,783
Structures ............................................................................................................................................. 20
Machinery and equipment ................................................................................................................... 232
Tools, furniture, and fixtures ................................................................................................................. 26
Land ................................................................................................................................................ 2,292
Lease assets ........................................................................................................................................ 163
Intangible assets

42

Software ............................................................................................................................................... 22
Lease assets ............................................................................................................................................7
Other .................................................................................................................................................... 12
Investments and other assets

27,096

Investment securities ............................................................................................................................ 72
Investment in subsidiaries and associated companies ...................................................................... 22,374
Long-term loans receivable ............................................................................................................ 15,138
Long-term prepaid expenses ................................................................................................................. 26
Prepaid pension cost ........................................................................................................................ 1,328
Other .................................................................................................................................................. 158
Allowance for doubtful accounts ................................................................................................. (12,003)
TOTAL ASSETS

64,669

Liabilities
Current liabilities(millions of yen)
14,400Accounts payable-trade.................................................................................................................... 4,861
Lease liabilities ..................................................................................................................................... 87
Accounts payable-other ................................................................................................................... 4,230
Accrued expenses ............................................................................................................................ 3,121
Income taxes payable ............................................................................................................................ 62
Deposits received ............................................................................................................................... 191
Reserve for product warranty ........................................................................................................... 1,633
Other .................................................................................................................................................. 213
Fixed liabilities

1,475Long-term loans payable..................................................................................................................... 870
Lease liabilities ................................................................................................................................... 109
Deferred tax liabilities ........................................................................................................................ 453
Liabilities for Directors’ retirement benefits .......................................................................................... 32
Other ......................................................................................................................................................8
TOTAL LIABILITIES

15,875EquityShareholders’ equity

48,765

Common stock

31,307

Capital surplus

33,272

Capital reserve ............................................................................................................................... 17,023
Other capital surplus ...................................................................................................................... 16,248
Retained earnings

8,527

Other retained earnings .................................................................................................................... 8,527
Reserve for advanced depreciation of fixed assets ............................................................................... 106
General reserve .............................................................................................................................. 10,971
Retained earnings brought forward ............................................................................................... (2,550)
Treasury stock
Valuation and translation adjustments
Unrealized gain (loss) on available-for-sale securities(24,341)(16)(16)

Stock acquisition rights

44

TOTAL EQUITY

48,794TOTAL LIABILITIES AND EQUITY

64,669NON-CONSOLIDATED STATEMENT OF INCOME(April 1, 2019 - March 31, 2020)(millions of yen)
Description

AmountNet sales

73,087

Cost of sales

67,523Gross profit

5,563

Selling, general, and administrative expenses

8,827

Operating loss

3,264

Non-operating income
Interest and dividend income

366

Dividends income

187

Reversal of compensation expenses

110

Commission fee

129

Other

129

923

Non-operating expenses
Interest expense

26

Foreign exchange income

217

Provision to the allowance for doubtful
accounts for affiliates

555

Other

17

Ordinary loss

817
3,158

Extraordinary income
Gain on sales of noncurrent assets

9Gain on reversal of subscription rights toshares

2

Other

1

13

Extraordinary loss
Loss on disposal of fixed assets

5

Loss on valuation of investment securities

157

Loss on valuation of shares of subsidiaries
and associates

94

Impairment loss

99

Loss before income taxes

3,502

Income taxes – current

12

Income taxes – deferred21

Net loss

357

33
3,536

NON-CONSOLIDATED STATEMENT OF CHANGES IN EQUITY(April 1, 2019 - March 31, 2020)(millions of yen)
Shareholders’ equity
Capital surplus
Commonstock

Balance as of April 1, 2019

31,307

Changes of items during the fiscal
year
Transfer to other capital surplus
from legal capital surplus
Reversal of reserve for advanced
depreciation of fixed assets

Retained earnings
Other retained earnings

Capitalreserve

Other
capitalsurplusTotal
capitalsurplusReserve foradvanceddepreciation of
fixed assets

Generalreserve

20,023

13,24833,272

113

10,971(3,000)3,000–

Balance as of March 31, 2020

Treasury
stock

Total
shareholders’equity97812,063(24,341)

52,301–(7)

Net loss
Net changes of items other thanshareholders’ equity
Total changes of items during the
fiscal year

Retainedearnings
brought
forwardTotal
retainedearnings

7––(3,536)(3,536)(3,536)–(3,000)

3,000

–

(7)

–

(3,528)(3,536)–(3,536)31,307

17,023

16,24833,272

106

10,971(2,550)8,527(24,341)

48,765

Valuation and translation adjustments

Balance as of April 1, 2019

Unrealized gain
(loss) on
available-for-salesecurities

Total valuationand translation
adjustments

1

1

Stock
acquisitionrightsTotal equity

31

52,334

Changes of items during the fiscal
year
Transfer to other capital surplus
from legal capital surplus
Reversal of reserve for advanced
depreciation of fixed assets––

Net loss
Net changes of items other thanshareholders’ equity
Total changes of items during the
fiscal year
Balance as of March 31, 2020

(3,536)
(17)

(17)

13

(4)

(17)

(17)

13

(3,540)

(16)

(16)

44

48,794

Note: In the non-consolidated balance sheet, the non-consolidated statement of income, and the non-consolidated
statement of changes in equity, all figures are shown by rounding down fractions less than the indicatedunits.

Audit Report
Accounting Auditor’s Report on Consolidated Financial Statements
INDEPENDENT AUDITOR'S REPORT (Translation)
May 28, 2020
To the Board of Directors of Funai Electric Co., Ltd.
Osaka Office, Deloitte Touche Tohmatsu LLC

Designated Unlimited Liability Partner,
Engagement Partner,
Certified Public Accountant:

Akihiro Okada
Designated Unlimited Liability Partner,
Engagement Partner,
Certified Public Accountant:Yuichiro Katsura
OpinionPursuant to the fourth paragraph of Article 444 of the Companies Act, we have audited the consolidated
financial statements of Funai Electric Co., Ltd. (the “Company”), which comprise the consolidated balance
sheet for the fiscal year from April 1, 2019 to March 31, 2020, and the consolidated statement of income, theconsolidated statement of changes in equity, and notes to the consolidated financial statements.
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, theproperties and profit and loss of the corporate group composed of the Company and its subsidiaries (the“Group”) as at March 31, 2020 in accordance with business accounting standards generally accepted in Japan.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our responsibilities
under those standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated
Financial Statements section of our report. We are independent of the Group in accordance with the code of
ethics in Japan, and we have fulfilled our other ethical responsibilities in accordance with the code. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Responsibilities of Management and the Audit and Supervisory Committee for the Consolidated Financial
Statements
Management is responsible for the preparation and fair presentation of the consolidated financial statementsin accordance with business accounting standards generally accepted in Japan and for such internal control as
management determines is necessary to enable the preparation of consolidated financial statements that are
free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the Group’s ability
to continue as a going concern, including whether the use of the disclosing, as applicable, matters related togoing concern and using the going concern basis of accounting unless management either intends to liquidate
the Group or to cease operations, or has no realistic alternative but to do so.
The Audit and Supervisory Committee is responsible for overseeing the Group’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as awhole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit

conducted in accordance with auditing standards generally accepted in Japan will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if,
individually or in aggregate, they could reasonably be expected to influence the economic decisions of users
taken on the basis of these consolidated financial statements.
As part of an audit in accordance with auditing standards generally accepted in Japan, we exercise professional
judgment and maintain professional skepticism throughout the audit. We also:• Identify and assess the risks of material misstatement of the consolidated financial statements, whether
due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures thatare appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectivenessof the Group’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimatesand related disclosures made by management.
• Conclude on the appropriateness of management’s use of the going concern basis of accounting and basedon the audit evidence obtained, whether a material uncertainty exists related to events or conditions that
may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that amaterial uncertainty exists, we are required to draw attention in our auditor’s report to the related
disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our
opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report.
However, future events or conditions may cause the Group to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the consolidated financial statements, including
the disclosures, and whether the consolidated financial statements represent the underlying transactions
and events in a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or businessactivities within the Group to express an opinion on the consolidated financial statements. We areresponsible for the direction, supervision and performance of the group audit. We remain solely
responsible for our audit opinion.
We communicate with the Audit and Supervisory Committee regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any significant deficiencies in internal
control that we identify during our audit.
We also provide the Audit and Supervisory Committee with a statement that we have complied with relevant
ethical requirements regarding independence, and to communicate with them all relationships and othermatters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
Interest
Our firm and the engagement partners do not have any interest in the Group for which disclosure is required
under the provisions of the Certified Public Accountants Act.
-END-

Accounting Auditor’s Report on Non-consolidated Financial Statements
INDEPENDENT AUDITOR'S REPORT (Translation)

May 28, 2020
To the Board of Directors of Funai Electric Co., Ltd.
Osaka Office, Deloitte Touche Tohmatsu LLC
Designated Unlimited Liability Partner,
Engagement Partner,
Certified Public Accountant:

Akihiro Okada
Designated Unlimited Liability Partner,
Engagement Partner,
Certified Public Accountant:Yuichiro Katsura
OpinionPursuant to the first item, second paragraph of Article 436 of the Companies Act, we have audited the financial
statements of Funai Electric Co., Ltd. (the “Company”), which comprise the balance sheet for the 68th fiscal
year from April 1, 2019 to March 31, 2020, and the statement of income, the statement of changes in equity,
notes to the financial statements, and the accompanying supplemental schedules (the “Financial Statements,etc.”).
In our opinion, the accompanying Financial Statements, etc. present fairly, in all material respects, theproperties and profit and loss of the Company as at March 31, 2020 in accordance with business accounting
standards generally accepted in Japan.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our responsibilities
under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial
Statements, etc. section of our report. We are independent of the Company in accordance with the code of
ethics in Japan, and we have fulfilled our other ethical responsibilities in accordance with the code. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Responsibilities of Management and the Audit and Supervisory Committee for the Financial Statements, etc.
Management is responsible for the preparation and fair presentation of the Financial Statements, etc. inaccordance with business accounting standards generally accepted in Japan and for such internal control as
management determines is necessary to enable the preparation of the Financial Statements, etc. that are freefrom material misstatement, whether due to fraud or error.
In preparing the Financial Statements, etc., management is responsible for assessing the Company’s ability tocontinue as a going concern, including whether the use of the disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless management either intends to liquidate theCompany or to cease operations, or has no realistic alternative but to do so.
The Audit and Supervisory Committee is responsible for overseeing the Company’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Financial Statements, etc.
Our objectives are to obtain reasonable assurance about whether the Financial Statements, etc. as a whole arefree from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes
our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conductedin accordance with auditing standards generally accepted in Japan will always detect a material misstatement
when it exists. Misstatements can arise from fraud or error and are considered material if, individually or inaggregate, they could reasonably be expected to influence the economic decisions of users taken on the basisof these Financial Statements, etc.

As part of an audit in accordance with auditing standards generally accepted in Japan, we exercise professional
judgment and maintain professional skepticism throughout the audit. We also:• Identify and assess the risks of material misstatement of the Financial Statements, etc., whether due tofraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence
that is sufficient and appropriate to provide a basis for our opinion.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures thatare appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectivenessof the Company’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimatesand related disclosures made by management.
• Conclude on the appropriateness of management’s use of the going concern basis of accounting and basedon the audit evidence obtained, whether a material uncertainty exists related to events or conditions that
may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that amaterial uncertainty exists, we are required to draw attention in our auditor’s report to the related
disclosures in the Financial Statements, etc. or, if such disclosures are inadequate, to modify our opinion.
Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However,
future events or conditions may cause the Company to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the Financial Statements, etc., including thedisclosures, and whether the Financial Statements, etc. represent the underlying transactions and events ina manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of each component
included in the Financial Statements, etc. to express an opinion on the Financial Statements, etc. We areresponsible for the direction, supervision and performance of the company audit. We remain solely
responsible for our audit opinion.
We communicate with the Audit and Supervisory Committee regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any significant deficiencies in internal
control that we identify during our audit.
We also provide the Audit and Supervisory Committee with a statement that we have complied with relevant
ethical requirements regarding independence, and to communicate with them all relationships and othermatters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
Interest
Our firm and the engagement partners do not have any interest in the Company for which disclosure is required
under the provisions of the Certified Public Accountants Act.
-END-

Audit Report of the Audit and Supervisory Committee
AUDIT REPORT
We, the Audit and Supervisory Committee of Funai Electric Co., Ltd. (the “Company”), have performed our
audits on the execution by Directors of their duties during the 68th fiscal year from April 1, 2019, through March
31, 2020. We hereby report the audit method and results as follows.

1. Methods of Audits and the Particulars ThereofWith regard to the details of the resolutions of the Board of Directors on the matters provided in Article 39913, paragraph 1, item 1 (b) and (c) of the Companies Act of Japan and the systems established pursuant tosuch resolutions (internal control systems), we periodically received reports from the Directors and employees,
etc., demanded their explanations as necessary, and expressed our opinions, on the state of formulation andoperation thereof and conducted our audits in the following methods.
(i)

Working in collaboration with the internal audit division, we attended important meetings, received theexecution of duties from the Directors and employees, etc., demanded their explanations as necessary,
inspected important decision-making documents, etc., and investigated the state of business operations
and property at the head office and principal business offices of the Company, pursuant to the audit
policy, task allocation, etc. determined by us. With regard to its subsidiaries, we maintained constantcommunication and exchanged information with the directors, Audit & Supervisory Board Members,
etc. and required the subsidiaries to report on their business operations as necessary.

(ii) In addition to monitoring and verifying whether the accounting auditor had maintained an independent
position and conducted adequate audits, we received reports on the state of execution of duties fromthe accounting auditor and demanded their explanations, as necessary. Moreover, we received from theaccounting auditor a notice that a “system to secure adequate execution of duties” (as listed in the itemsof Article 131 of the Ordinance on Accounting of Companies) has been established in accordance withthe “Quality Control Standards Concerning Audits” (the Accounting Standards Board of Japan, October28, 2005) and demanded their explanations, as necessary.

In accordance with such methods, we investigated the business report and its accompanying supplemental
schedules, the non-consolidated financial statements (the non-consolidated balance sheet, the nonconsolidated statements of operations and changes in equity, and the related notes) and their accompanying
supplemental schedules, as well as the consolidated financial statements (the consolidated balance sheet, theconsolidated statements of operations and changes in equity, and the related notes), for the fiscal year underreview.

2. Results of Audit(1) Results of audit of the business report, etc.
(i)

We confirm that the business report and its accompanying supplemental schedules present fairly thestate of the Company in accordance with laws and ordinances and the Articles of Incorporation.

(ii) We confirm that in connection with the execution of duties of the Directors, no misconduct or material
fact of violation of laws or ordinances or the Articles of Incorporation was found.
(iii) We confirm that the details of the resolutions of the Board of Directors on internal control systems areproper. We did not find anything that should be mentioned with respect to the information in thebusiness report and the execution of duties of the Directors concerning such internal control systems.
(2) Results of audit of the non-consolidated financial statements and their accompanying supplemental
schedules
We confirm that the audit method and results performed by the accounting auditor, Deloitte Touche
Tohmatsu LLC, are proper.

(3) Results of audit of the consolidated financial statements
We confirm that the audit method and results performed by the accounting auditor, Deloitte Touche
Tohmatsu LLC, are proper.

May 29, 2020

The Audit and Supervisory Committee,
Funai Electric Co., Ltd.
Fumiaki Kidera
Full-time Audit and Supervisory Committee
MemberHiroyuki Yamada
Audit and Supervisory Committee Member

Takahiro Tanaka
Audit and Supervisory Committee Member

Note

Audit and Supervisory Committee Members Hiroyuki Yamada and Takahiro Tanaka are outside Directors asprescribed in Article 2, item (xv) and Article 331, paragraph 6 of the Companies Act of Japan.

- END –