Funai Soken Holdings

Integrated Report 2022
(Covering January ‒ December 2021)

FUNAI SOKEN Consulting Group
Funai Soken Holdings Inc.
Funai Consulting Inc.
Funai Soken Digital Inc.
Funai Consulting Shanghai Inc.
Funai Soken Logistics Inc.
Funai Soken IT Solutions Inc.
Proseed Corporation
HR Force Inc.

Funai Soken Consulting Group Mission and Vision

Our
MissionOur
Vision for
the Future

We help to build a better future for people,
businesses, and society.

Contents
Funai Soken Holdings: The Basics

ESG

1. Our Mission, Editorial Policy

35. Dedicated to ESG in Management

We at the Funai Soken Consulting Group will offer solutions for a better future

3. Our Journey So Far

37. Environment

to all the people and businesses we are involved with—and to society as a whole

5. Real Strengths Forged in Experience

39. Social—and will do our best to turn those ideas into reality.

7. Financial & Non-Financial Highlights

45. Information Security

Trusted and respected by society forbringing joy to people and businesses
through our work.

We are determined to work together as a corporate group to bring joy to thepeople and businesses we are involved with. By earning the trust and respect ofthe people and businesses we seek to please, we can also earn the trust andrespect of society as a whole.

9. The Value Creation Process

Governance
Growth Strategies

47. Corporate Governance

11. President's Message

49. Corporate Governance Structure

17. Mid-Range Business Plan

55. Director Dialogue
57. Business Risks

Value Creation Drivers
Corporate Data

19. Our Business Segments at a Glance

The Funai Way: Our Core Values

Adventureship

Empathy

Integrity

Converting change into
momentumA reliable partner
for business owners

A force for good

21. Consulting

59. Financial Review

33. Logistics

61. Consolidated Financial KPIs 2011–2021

34. Other Businesses

63. Consolidated Financial Statements
67. The Funai Soken Consulting Group Network
68. Corporate Overview & Stock Information

Link Buttons Used in This Report■ Our work is not work unlessit’s fun.

■ Our focus on outcomes isunwavering.

■ Our work is a vehicle for the
betterment of society.

■ We relish the challenges ofour ongoing quest for growth.

■ We share the mindset of theentrepreneurs we serve.

■ We design environments where
everyone can be themselves.

■ We are leaders of change.

■ We dream farther and act
quicker.

■ We are good corporate citizens,and we behave like it.

Editorial Policy

This report is edited and configured with reference torelevant Japanese and international guidelines.

Scope
This report pertains to FY2021 (January 1 throughDecember 31, 2021), with additional comment regarding
other adjacent times as necessary.
All data shown herein pertain to the group’s consolidated
accounts for the aforementioned period unless otherwise
stated.

Disclaimer
This report is published solely for the purpose ofproviding information relating to the Funai Soken
Consulting Group’s performance in FY2021 and its
strategies for the future. Its purpose is not to induce
investment in securities issued by Funai Soken Holdings,
and no contents hereof shall constitute a warranty or
promise.
Opinions and outlooks contained in this report
represent the views of Funai Soken Holdings and theFunai Soken Consulting Group at the time of writing, andwe make no guarantee or promise regarding theaccuracy or completeness of such contents, and thecontents of this report may be changed at any time
without notice.

A Comprehensive Communication Structure
Financial Information

Non-Financial Information

General information about our activities: corporate website
https://hd.funaisoken.co.jp/en/
IR information forshareholders and investors

https://hd.funaisoken.co.jp/en/ir/

ESG management andsustainability information

https://hd.funaisoken.co.jp/en/sustainability/index.html

Integrated Report 2022

(for shareholders, investors, client companies, employees,
students, families, business partners, local communities, etc.)
Documents

1

Reference to Guidelines

Link to relevant
section in thisreportOnlineThis report is designed to provide stakeholders acomprehensive understanding of the Funai Soken Consulting
Group’s efforts to achieve sustained growth and mid-to-longterm improvements in corporate value. Thus, in addition tofinancial data, the report contains non-financial information
about aspects such as the group’s strengths, and thephilosophy, business model, sustainability, growth potential,
growth strategies, and governance regime that contribute toits earning potential.
This year’s report includes information on ESG initiatives,
sustainability targets (particularly those relating to climaterelated financial disclosures), and outside directors’ views on
how to boost the effectiveness of the Board of Directors aspart of the group’s effort to generate sustained growth incorporate value. In this way, we seek to provide shareholders,investors, and other stakeholders a deeper understanding of
our commitment in these areas.

External link

Shareholders meeting convocation notices (for shareholders, etc.)
Securities Report (for investors, etc.)
Summary of Financial Results (for investors, etc.)
Operation Reports (for shareholders, etc.)2

(Million yen)
30,00028,000Our Journey So Far

Company Timeline and Financial Performance

50th
anniversary

1,400

26,000

1,300
1,200

22,000

1,100

20,0001,000

18,000900
Move toholdingcompany
structure

16,000800

14,000700

12,000Global Financial Crisis

600

Mid-Range
Business Plan
（2014-2016）

10,0008,000

Mid-Range
Business Plan
（2017-2019）

Mid-Range 500
Business Plan
（2020-2022）
400
300

200

4,000

2,000

0

Founded

’70

100

’71

’72

’73

’74

’75

’76

’77

’78

’79

’80

’81

’82

’83

’84

’85

’86

’87

’88

’89

’90

’91

’92

’93

’94

’95

’96

’97

’98

’99

’00

’01

’02

’03

’04

’05

’06

’07

’08

’09

’10

’11

’12

’13

’14

’16

’17

’18

Operating income

’19

’20

’21

Employees at end of year

1980ｓ

1990ｓ

2000ｓ

2010ｓ

Inauguration

Listing

Focus on the service industry

Expanded operations

Move to a corporate group structure

March 6, 1970

1981

March 1990

February 2000

February 2010

February 2015

Yukio Funai starts the Japan Marketing
Center(now renamed Funai Soken Holdings).

Preparing for stock listing.

Funai Information Systems established(renamed Funai Soken IT Solutions inJuly 2014).

Inaugural annual Great Company Awards
held.

Proseed becomes a wholly owned
subsidiary.

Name changed to Funai Consulting.

Tadashi Moto'ori is appointed the 2nd
president, coinciding with a shift frompredominantly the distribution industry
to the service industry.

March 2010

February 2018

September 1988

June 1993

The 3rd President Masahiko Koyama
launches the “change of gears” toachieve ﬁnancial and workforce growth.

Sakae Takashima is named thecompany’s 4th president, implementing
group policy of self-control, autonomy,
and teamwork.

June 2018

December 2004

January 2012

Stock listed on the Tokyo Stock
Exchange 2nd section.

Funai Consulting Shanghai established.

December 2005

Funai Soken Logistics becomes a wholly
owned subsidiary.

Members-only Cosmo Club established.

1972
Yukio Funai’s Henshin Shoho(Commerce in Change) becomes a bestseller.

March 1985

Listed as a Specially Designated Stockon the 2nd Section of the Osaka Stock
Exchange.

Stock reclassiﬁed on OSE 2nd section.

March 2000

July 2014
Transition to holding company structure.
Funai Consulting renamed Funai Soken
Holdings; consulting arm spun off as the
new Funai Consulting; sales support arm
spun off as Funai Soken Corporate
Relations.

Shinwa Computer Service becomes awholly owned subsidiary.

March 6, 2020
50th anniversary of the group’s
founding.

March 2021
Takayuki Nakatani is appointed president,
and a new set of core values, the Funai
Way, is established for the group’s
management.

Corporate Data

Stock reclassiﬁed on the TSE andOSE 1st section.

January 2014

HR Force established.

Governance

1970ｓ

September 1970

0ESG

Net sales’15

Value Creation Drivers

Listed on
stockmarket6,000

Funai Soken Holdings: The Basics Growth Strategies

24,000April 2022
Tokyo Stock Exchange reorganizes
market segments; Funai Soken Holdings
shares now listed on the Prime market

July 2022
Funai Soken Corporate Relations andShinwa Computer Service merge to create
a new company: Funai Soken Digital Inc.
3

4

Real Strengths Forged in Experience
Throughout the Funai Soken Consulting Group’s steady growth over the past half century, we have amassed
a wealth of strengths, and these have enabled us to thrive in good times and bad through prudent applicationof sensible strategies. We will continue to add to those strengths as a vehicle for creating new group value.

1

As Japan’s foremost specialists in management solutions for mid-scale businesses and SMEs, wehave developed a unique capacity for offering proprietors across-the-board support from earlystrategy planning to final implementation and embedding.

mil. yenManagement
workshops

52

178

6,349

Business models
created for clientsby Funai Consulting

228

183

5.8

*Counted in accordancewith Funai Soken Holdings
definition of “digitaltransformation staff.”

Women in management(in person & online)(excl. seminar participants)

1,377

10,00075.2％

A Solid Financial Foundation

4

Our high ROE and equity ratio provide a solid financial foundation to underpin our ongoing quest forsustained improvements in corporate value through growth investments, as well as shareholder value
through steady shareholder returns.

Return-to-shareholders ratio

Dividends up
years in
a row

11

60.1

％

＋

Funai Consulting
contract renewal rate

％ of group management positions

RO E

18.2

％

Corporate Data

Client companies

23.5

GovernanceSeminars％ of group workforce

ESG

unlike those found anywhere else in the world.

Client companies of ourconsulting business

551(Men: 17.24%;
women: 100%;
overall: 51%)

% of group workforce

In recent years, we have begun holding workshops in Shanghai, where they are regarded as being(in Japan)

Non-Japaneseemployees

37.4

Our pool of management workshop clients is one of the largest among all consulting firms in Japan.

5,461

Digitaltransformation staff

Female employees

Wide-Ranging Client Base

7,018

873

Childcare leaveuptake％8(incl. those from 302 Funai Soken
Logistics, 166 Funai Consulting Shanghai)Group consultants

1,317

mil. yen（as of Jul. 1, 2022）

Management workshop
members

enables our people—the true drivers of our growth—to make the most of their strengths.

Group employees

Group companies

2

committed to enhancing our talent management capabilities and maintaining an environment that

Value Creation Drivers

A long-standing,trusted brandyears so far

3

A diverse workforce of talented people is vital for sustaining the group’s development. We are

Operating income

Net sales

28,813

A Diverse Workforce

Funai Soken Holdings: The Basics Growth Strategies

Japan’s Leading Consultant for Mid-scaleCompanies and SMEs

Operating margin

Equity ratio

22.0

80.7

％

％

6

Financial Highlights

Non-Financial Highlights

Net sales(Million yen)
30,000Operating income
25,75225,000Total Assets, Net Assets, Equity Ratio

Net income
28,81325,027

Equity ratio

83.3

82.4

82.2

18,685

80.7

79.4

40,00085
80
75

35,00030,88430,00025,00010,000

3,206
2017

3,868

3,549
2018

2019

4,982

15,00070

27,951

65

21,624

22,37023,16523,688

2017

2018

2019

2020

10,0002021

2020

28,41920,000

4,373

3,498

26,732

25,687

Operating Cash Flow

(Million yen)

(Million yen)

Total dividends

Shares bought back from market

2,771

2015

50

2,500

1,500

2,630
260

739

3,554

3,515

1,000
1,520

1,771

2,003

2017

2018

2019

2021

2020

（％）

34
2017

2018

90
80

2019

2020

InterimYear end

47.3

30

50.0

27.0

8.2
7.5

7.5
7.0

20.0

6.5

30
20

10

10
0

9.0

8.5
8.0

23.0
20.0

20

9.8

10.0

9.9

9.0
25.0

30.0

54.2

52.2

Dividend on Equity

9.5

40.0

40

64.0

47.3

48.0

45.0

60.1

50
40

50

10.0
2017

2018

2019

2020

2021

0

2017

15.0

2018

17.0

20.0

21.0

6.0
5.5

2019

2020

2021

5.0

2017 2018 2019 2020 2021

*Common shares in Funai Soken Holdings were split at a ratio of 1.5-for-1 on January 1, 2018. For the purposes hereof, annual dividend per share is calculated as if thestock split had been conducted at the beginning of FY2017.

7

Mid-career

Recent grad. %age of total consultant hires （%）
100
86
82
80

80

71

2015

114

91

21

29

2016

2017

123

152

168

144

51

38

27

30

2018

40
20

2019

0

2021

2020

Women inManagement Positions(Groupwide)

（%）

37.4
35.8
33.5

Non-Japanese
Employees

23.5

25

36.3

90
80
70
60
50
40
30
20
10
0

20.4

20

16.2

15

34.4

10
5

2021

（％）

(Yen)

35.0

70
60

Dividend Per Share*

2021

2020

2017

2018

2019

2020

0

2021

2019

2021

2020

83

(Groupwide)

77

51

2019

2020

2021

*The percentage of the Funai Soken Consulting Group workforce made up of women, and theAt Funai Consulting Shanghai andpercentage of group management positions held by women are increasing, but we need to do more.

throughout the whole group, our workforce

To that end, we provide management training for women and offer a broad range of working styles.

is becoming increasingly international.

*The base date for calculating women in management positions has been changed fromJanuary 1 to December 31. Figures published last year (which showed 16% for 2019 and 22%
for 2020) have been revised to reﬂect the change.

Management Workshop Members
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0

5,181

6,115

6,682

7,459

7,379

7,177

Seminars & Participants (incl. in-person, online (free and paid) seminars)

7,018

Seminars held
Participants(Participants)(Seminars)
29,28026,197 30,000
1,500
25,931
22,86821,747 22,817 21,526
1,200
24,000
900
600
300

2015

2016

2017

2018

2019

2020

2021

0

Corporate Data

100

Return-to-shareholders ratio
Dividend payout ratio
90.6
85.0
78.1

29

0

32

Return-to-Shareholders Ratio& Dividend Payout Ratio

68

36

1,000
0

2019

Governance

0

444

60

（%）
38

2,000

500

444

2018

76

70

Women in Our Workforce(Groupwide)

3,000

2,370

396

Recent graduates

3,950

1,520
2,233

366

We are recruiting aggressively, and are known for hiring large numbers of recent graduates.

999

1,500

2017

84

100

4,522

4,000

2,000

2016

250

50

5,000

295

873

Consultant Hiring: Recent Graduates & Mid-Career Hires

5,214
2,972

308

859

ESG

3,000

283

813

150

3,503

3,500

565

739

Consulting Group in 2022.

6,000

4,000

500

646

1,317

Our people are our most valuable asset and our biggest investment. Our goal is to reach a workforce of 1,500 people across the Funai Soken

200

Total Dividends & Share Buy-back

941

873

783

1,209

1,105

Non-consultant employees

1,303

60
55

2021

1,400
1,200
1,000
800
600
400
200
0

Value Creation Drivers

0

5,705

4,946

4,631

6,349

25,650Consultants（％）
90

45,00015,0005,000

Net assets

50,00021,69720,000Total assets(Million yen)

Employee & Consultant Numbers for the Entire Funai Soken Consulting Group

Funai Soken Holdings: The Basics Growth Strategies

Net Sales, Operating Income, Net Income

18,000
1,398
866

775

2015

2016

593
2017

804

900

2018

2019

1,377

12,000
6,000

2020

2021

0

Management workshops are one of our group’ s foremost platforms,

Seminars help proprietors and executives ﬁnd solutions to businessbringing together business proprietors to study challenges facing

management problems. They are the ideal point of ﬁrst contact where

speciﬁc industries, business types, and solution categories.

we can meet prospective clients.

8

The Value Creation Process

Business Risks

Management Capital

P57

P35

High-materiality issues

Our Strengths

Financial Capital

Value Creation Drivers

Clients’ needs

Creating Value Groupwide

Consolidated operating income

6,349

mil. yen

Total assets

mil. yenThree Business Segments

We offer services
optimized to meetclients’ needs basedon state-of-the-art
business models

Intellectual Capital
A long, proven track record

years so far

Strengths lie in marketing (growth support) solutions
offered by teams of consultants specializingin specific industries and solution categories

Social Capital

Employees: 1,317 (groupwide)
Consultants: 873 (groupwide)
Digital transformation staff: 183 (groupwide)
Non-Japanese employees: 5.8% of group workforce
Female employees: 37.4% of group workforce
Women in management: 23.5% of management
positions groupwide

9

P33

Other Businesses
P05

Housing, real estate

Manufacturing

Healthcare, nursing care, welfare

Education, childcare, schools■ Wide-ranging client base

Certified professional services

Dining, foodSpecialist services

HR business

Mobility

Amusement

Environment, energy

Finance■ Diverse workforce■ Solid financial foundation

Public, gov’t services

P01

Our Vision for the Future
The Funai Way

ESG and proactive information
disclosure are at the core of
our group company management

Industries Served■ Japan’s leading consultant for
mid-scale companies and SMEs

Our Mission

We offer support and solutions
to help clients implement
ESG management

P34

Solution Categories
P01

P01

M&A, IPO

IT, systems development

Overseas markets (China)

Digital innovation

HRD

AI, robotics

Contact center

Logistics

Finance

BPO

Increasing corporate value (output)

Mid-Range Business Plan
(2020-2022) Targets
P17

Consolidated operating income

7.1

bil. yen

3-year operating cash flow + cash on hand

17

12 bil. yen + 5 bil. yen =Growth Strategies

P11

Corporate Governance

P47

ROE

bil. yen

Corporate Data

Human Capital

Logistics

We contribute to our communities
through consulting services for
mid-scale businesses and SMEs

Governance

Client companies: 10,000+ (groupwide)
Seminars held: 1,377
Management workshop members: 7,018“Shacho Online” platform for businessproprietors: 5,159 subscribers
Seminar participants: 26,197

P21

P19

ESG

52

Real Strengths Forged inExperience

Consulting

Helping to Make the World
More Sustainable

Value Creation Drivers

30,884

Value for the Benefit of Society (Outcomes)

Funai Soken Holdings: The Basics Growth Strategies

Challenges Facing Society

15

+%

10

President's Message

For the Funai Soken Consulting Group, 2021 was(i.e., our 50th birthday celebrations). The wholea year of major transition.

group came together to work hard under thisThe graph below shows our performanceslogan, and that concerted effort resulted in not

between 2011 and 2021. After eight straightjust a return to increased sales and income, but

years of increased sales and income, the impact

our highest ever figures.
Our focus for 2022, the final year of theof Covid-19 in 2020 was severe, leading to aon regrowth, and we are committed to showing

instead it was a trying time.

our stakeholders that the Funai Soken Consulting
Group remains on the track to strong growth

When 2021 dawned, we rallied our workforce

despite the turmoil of the Covid era.

around a determination to regain lost time2020-2021
Net sales growth

15.1%

Business Performance 2011-2021
Annual Sales and Operating Income

A return to record-setting sales forthe first time in two years

28,81325,75225,0272020-2021
Operating income growth

12.9%

27.4%

Corporate Data

Sales: 10-year avg. growth rate

GovernanceFunai Soken Holdings Inc.

be the year we celebrated our 50th anniversary;

ESG

Takayuki Nakatani

President and CEO

current Mid-Range Business Plan (2020-2022), isValue Creation Drivers

On the Cusp ofa New Era ofRegrowth

temporary dip in results. 2020 was supposed to

Funai Soken Holdings: The Basics Growth Strategies

Review of Last Year, Outlook for This Year

8,567

Operating income: 10-year avg. growth rate

12.8%

5,705

6,349
4,982

1,900

2011
Net sales

11

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

Operating Income

12President's Message

The Funai Soken Consulting Group began

harnessing group synergies in an effort to boost

If the Funai Soken Consulting Group is to becomeand SME clients, and our status as Zoho’s solemodestly as a small, sole-proprietor consulting firm.

average client spend and lifetime value.

a substantial presence in the digital transformation

Prime Partner in Japan, a typical vendor deal that

sector, typical IT vendor deals are not enough; weinvolved simply promoting their tools to our clientsneed to pursue our business in a way that suits us

would not have been a good fit for us. But by deftly

as much as the market. Previous collaborations withcombining Zoho with our industry-specific solutions,

From that, the firm grew into a consulting company
focusing on research and marketing for the
distribution and service industries in the 1990s,❷Digital Transformation Consulting Services
for SMEs

Google and Indeed contributed significantly to ourwe are enhancing our ability to provide services thatthe 2000s, before becoming a provider ofprovider of a full line-up of digital transformation

bottom line, and those successes were due in partothers cannot.

comprehensive management consulting services

solutions for SMEs—not just consulting, but also

to those companies’ global presence and top share

Under the partnership, Funai Soken Digitalfor SMEs in the early 2010s. The company

systems development, implementation, operation,of their respective markets. That is why we are truly

becomes the exclusive provider of Zoho’s digital

restructured into a holding-company-and-and maintenance—and we are expanding digital

excited by Zoho, a suite of cloud-based solutions

solutions staff training content in Japan. More thanoperating-companies group structure in the lateofferings to make this happen. In December 2021,

to help businesses digitalize their operations andjust a digital solutions provider, Funai Soken Digital

2010s, and has further developed into thewe announced our partnership with Zoho Japan

improve efficiency. Of course similar tools aboundhas also inherited Funai Consulting’s huge wealthnation’s number one consulting group, a provider

to provide industry-specific digital services andthese days, but Zoho’s CRM solutions for SMEs areof training operations expertise.

of comprehensive management consulting

digital solutions staff training, and in July 2022

genuinely top-class, and are used by more than 75

Our intention is to help society overcome a major

services for mid-scale companies and SMEs.

we launched a new company, Funai Soken Digital,

million people at more than 250,000 organizations

challenge—the current lack of digital solutions staff

Today, we are ideally positioned to offer world-which will further enhance our presence in the digitalworldwide. That close match of Zoho’s client basefor SMEs—by establishing a training and certification

class services in three key areas:

space. By applying the group’s core strengths inand ours is significant, and was one of the factors

system founded on a Zoho-based curriculum.

❶Comprehensive management consulting

management consulting services for SMEs to thebehind our decision to partner with Zoho.

Moreover, we hope that this Zoho certification will

❷Digital transformation consulting for SMEs, anddevelopment of a new source of clients, we hopeto make digital solutions a future growth leader.

services for mid-scale companies.

❸Comprehensive Management Consulting
Services for Mid-Scale Companies❶Comprehensive Management Consulting
Services for SMEs

Although our focus has traditionally been on

help us, the Funai Soken Consulting Group, bridge

our large workforce of expert consultants in all

our own digital solutions staff gap by providing a

industries providing unique solutions to mid-scale

ready supply of trained, certified candidates.

Governance❸Comprehensive management consulting

Nonetheless, given our standing in the industry,ESG

Our aim is to establish ourselves as a one-stop

Value Creation Drivers

expanding to focus on marketing for SMEs inservices for SMEs

consulting for SMEs, the increase in recent years

We are as committed as always to being there forof requests for support from mid-scale

SME proprietors, and we continue to expand ourcompanies has led us to expand our scope torange of solutions to provide solid support forincorporate this untapped market without

those vital decisions. One of our core strengths

compromising our commitment to SME clients.

is the ability to break these solutions down into

From management support for existing clients

specific sectors, which allows us to maintainwanting to grow to mid-scale status, and an

strong ties with clients and sustain profits. This year,

expanded range of IPO consulting solutions now

we are working to add new industries and clients,that we are a certified J-Adviser for the Tokyoand focusing on boosting workshop membership.

Stock Exchange’s Tokyo Pro Market, to day-to-

Other developments include digitalization andday efforts like building stronger ties with local

improvement of existing solutions for offering asbanks, we are expanding our menu of consulting

digital transformation solution models, andsolutions for mid-scale and larger corporations.

Corporate Data

13

How the Zoho Partnership Benefits Us and Our Clients

Funai Soken Holdings: The Basics Growth Strategies

Our Position in the Consulting Industry

14

President's Message

are no longer strange or exotic, but natural

Funai Consulting’s developments and

On July 1, 2022, two group companies merged to

Our aim is to offer digital solutions to mid-scale

Proseed’s long-standing practice of hiring non-parts of the Funai Soken Consulting Group

form Funai Soken Digital.

and SME clients, and Funai Soken Digital will be

Japanese people are indicators of the fact thatexperience.

The main objective of the merger is toestablish an organization to handle all facets ofthe vehicle for that.
The merger, which brings together Funai Soken

digital solutions consulting, a vital addition to

Corporate Relations, which focuses on online

bolster the group’s line-up of consulting services.

marketing and sales support, and Shinwa

Addressing Immediate Challenges
One of the main challenges we face today isof looking after newcomers, we look forward tocompany, is just the start. Moving forward, weboosting employee retention. Last year, attrition

making the necessary adjustments and ongoing

will seek to fill in the organizational and functional

was somewhat high, particularly among younger

improvements, and pursuing better working

gaps and provide a more seamless range of

employees. One factor was our struggle topractices so as to halt employee attrition andservices by hiring more digital solutions staff andcommunicate effectively amid the changes

increase retention.

pursuing M&As where necessary.

wrought by Covid, as hiring was done completely

Hiring is equally important, too, and I am

online and the employees’ initial interaction withconfident that our ongoing recruitment ofpool of talented engineers. The merger andsenior colleagues and clients were all limited toconsultants, coupled with accelerated hiring ofbusiness expansion has set a platform forthe online sphere.

engineers at Funai Soken Digital, will contributeparlay that into ongoing growth.

We are Serious About Diversity and Inclusion

Recognizing that the Covid chaos affected
our ability to maintain our long-standing culture

to healthier workforce numbers throughout thegroup.

In Conclusion
We are currently formulating a new “corporate

proprietors and employees achieve dramaticpresident of HR Force at the end of March 2022,

effect. Prior to Covid, the physically grueling work

purpose,” which we plan to unveil together with the

improvements in quality of life has a significant

she became the second female president of aof consulting for clients all around the country

new Mid-Range Business Plan in 2023. Beyondsocial influence, contributing to positive changes

Funai Soken Consulting Group company, following

meant there was a higher burnout rate among

our well-documented devotion to helping each

within companies, in communities, and acrossLang Luyuan of Funai Consulting Shanghai.

women, which left the impression that consulting

client improve their bottom-line performance andsocieties.

I think the appointment of Ms. Murata, who

was a “man’s job.” But the increasing normalcy andachieve positive management outcomes, our growing

For now, our focus is on accomplishing the goals

began as a consultant with Funai Consulting,

acceptance of online consulting has reduced thepresence has led to a general curiosity about ourfor the final year of the current Mid-Range Businessbrings a solid balance to management. It is also inneed for travel, meaning that women can function

greater purpose in society, and the roles we playPlan, and on designing something even better for

keeping with our targets for increasing female

as consultants without overdoing it too much.

within society and the economy at large. As I see

the future. We are grateful to all our stakeholders

it, our work of helping mid-scale and SME clients’for your ongoing understanding and support.

We are also widening recruitment to include

overall: we hope that by 2030, at least 30% of

more non-Japanese talent. In October 2021,

management positions will be held by women, andFunai Consulting welcomed two new employeesthat women will make up at least 40% of ourfrom India, one man and one woman, and theworkforce and 30% of consultants.

company is eager to do the same again in 2022.

Making adjustments to our working styles toThis is significant to our global strategy, as India

be a better fit for female consultants is nothingis the second most populous nation after China,

new for us, but the sudden move to online work

and we are laying the foundations today for a

Corporate Data

during the Covid-19 pandemic has amplified theGovernance

When Yasuko Murata was appointed the newparticipation in management and our workforce

ESG

aggressive hiring and training, and we hope to

Value Creation Drivers

Computer Service, a systems development

Success depends on our ability to secure a15

female executives and a multinational workforce

ten-year strategy.

Funai Soken Holdings: The Basics Growth Strategies

High Hopes for Funai Soken Digital

16Mid-Range Business Plan

Human Resource Strategy

Our goal for FY2022 is sustainable growth of at least 10%; our targets are sales of 25.3 billion yen (under theCreate an environment that allows a diverse workforce to harness its individual strengths in the post-Covid era,

Accounting Standard for Revenue Recognition) and a new record for operating income of 7.1 billion yen.

and start a cycle of hiring, professional development, and empowerment to generate sustained growth.

■ Net Sales and Operating Income 2020–2022: Performance & Targets
Net sales

Operating Income

Human Resource Strategy:
Mid-Range Business Plan（2020-2022）

1
HiringAiming for a new income record

Groupwide workforce of 1,500 by 2022(increase by approx. 300)

BeforeAccounting Standard for Revenue Recognition

35,000

BeforeAfter25,02725,000After

33,000After

28,81330,000After*

training programs expanding・Groupwide rollout of consultant enablement (a program to develop
the skills needed to help clients improve business performance) is
accelerating skill uptake and improvement among young employees

7,100

6,358

4,982
2021

・Development of a digital training curriculum is adding momentum
to digital transformation staff development and reskilling

Target ・In 2021: Promotion to chief-level position: 4 years 1 months
tracks have been diversified and the previous title “teamachieved *Career
leader” has been split into four positions eligible for accelerated
development (target: promotion within 5 years): leader, chief
consultant, chief expert, chief professional2022

A rewarding environment for a diverse workforce*We adopted the Accounting Standards Board of Japan’s Accounting Standard for Revenue Recognition beginning in FY2022. The main impact of this has been a decrease in net sales of
7,700 million yen as only the portion of ad listing agency sales comprising the company’s fees can be listed as sales. The eﬀects of this change on operating income are minor.

Underway ・ New career courses introduced to encourage a① Consultant development course② Business development course③ Corporate professional course④ Management course（2）Flexible working arrangements for improved efficiency
Expand remote support services to reduce the need for
consultants to travel

Business Strategy: Our Vision for the Funai Soken Consulting Group

Amid residual impact from Covid-19 in 2021, we undertook a share buy-back. By acquiring treasury shares, we aimed toscale companies.

improve capital efficiency to a consolidated ROE of at least 15% and raise the return-to-shareholders ratio to at least 60%.
Ultimately, we achieved those goals, with a consolidated ROE of 18.2% and a return-to-shareholders ratio of 60.1%.

Industry-specific, solution-category-specific support

Digital transformation support[[

Attentive consulting to help clients survive
amid state-of-emergency restrictions[

SME

Our greatest
strength since thegroup’s inception[[[Post-Covid “new normal” support*][

Digitalization
support[Support for
improved
productivity[

Support for digitaltransformationin sales

15.9%

18.2%

16.4%

10 % +

7.7%

5%
4.4%

0%

17.4%

2017-2019 target

10%■ Industry-specific digital solutions designed to achieve clear outcomes■ Support for digital shift aimed at raising SME productivity■ Digital transformation support focusing on sales processes toimprove sales*Aimed at helping clients shape the “new normal” of the post-Covid era from a business management standpoint.

4,000

ROE

13.8%

DX consulting services for SMEs[[

Support for
improved corporate
value

20%

15%

[

[

Talentdevelopment
support

Total Dividend and Return-to-Shareholders Ratio:
Outcomes and Targets

Cost of capital■ Solutions to issues that clients face at different stages of their journeys ■ Solutions tailored by experts in specific industries and solution■ Calling on industry-specific expertise to assist with M&A andcategories
restructuring■ Digital transformation solutions for rebuilding core systems:
productivity, sales, labor

GrowthsupportConsolidated ROE and Cost of Capital: Outcomes and Targets

2016

3,500

15.3%

Total dividends (mil. yen)
Share buy-back(mil. yen)
Return-to-shareholders
ratio (%)

3,000

2020-2022 target

15 % +

8.2%
6.8%

2,500

1,000

5.5%

85.0%

60% +

1,500

739

999

60.1%

2017

2018

2019

Previous Mid-Range
Business Plan

2020

2021

2022
(forecast)

Current Mid-Range
Business Plan

70%

50%
40%

1,771

2,003

2,233

2,370

30%
20%

500
0

90%

60%

260

47.3%

1,520

100%

80%

2,000
1,500

7.8%

78.1%

2020-2022 target

90.6%

Corporate Data

Comprehensive management consulting services for mid-scale companies

Comprehensive management
consulting services for SMEs

We remain committed to achieving the targets of 2022, the final year of the current Mid-Range Business Plan.

Strategies

Major

Company
size

GovernanceStep up digital transformation consulting for SMEs and comprehensive management consulting services for mid-

■ Ideally Positioned to Capture Consulting Needs

17・Increasing delivery of support services online (morethan 50% in 2021) has given rise to a hybrid style ofmore frequent visits, combining in-person and online.

Financial Strategy: Capital Policy, Shareholder Returns Policy

Attentive support to help existing clients adjust to the “new normal” of the post-Covid era.

ESG

more diverse workforce. Establishment of systems
enabling employees to change career courses,
take up in-group job offers, or transit between
departments has led to better placement of theright people in the right positions (transits were up
from 8 in 2020 to 26 in 2021)

3（1）Establish and embed a new assessment system based onfour major career paths
Empowerment

Value Creation Drivers

10,0002020

Underway Talent Development Center opened; consultant

maximize consultants’ employee lifetime value（2）Continued accelerated development of team leaders(target: promotion to team leader within 5 years)
In 2019: 3 years 8 months

15,0000Consulting in 2020-2021
・58 non-Japanese hired throughout the group in
2020-2021（1）Establish a Talent Development Center
2
Swift development of digital transformation staff,
Development

20,0005,000

Underway ・32 digital transformation staff hired by Funai

Rebuild accelerated development programs for an
expanding workforce

25,30022,816

Progress ・Employees: 1,317 (groupwide; up 108 from 2019)（1）Ongoing aggressive hiring of consultants(200–250 per year)（2）Expand hiring of digital transformation staff（3）Step up hiring of non-Japanese (esp. in Shanghai)（4）Hire more qualified professionals

Accounting Standard for Revenue Recognition（Million yen）

Human Resource Strategy:2021 Outcomes and Plan Progress

Funai Soken Holdings: The Basics Growth Strategies

Targets

10%
2017

2018

2019

Previous Mid-Range
Business Plan

2020

2021

2022
(forecast)0%

Current Mid-Range
Business Plan

18

What We Do: Our Three Business Segments at a Glance
To better concentrate our resources on businesses that can generate sustained returns in excess ofBusiness Management Climate & Mid-to-long-term Strategies

cost of capital over the mid-to-long term, our portfolio is configured around businesses with earning

During the current Mid-Range Business Plan period, 2020–2022, we intend to generate more momentum for ourpotential and growth potential.

core consulting segment, and particularly pertaining to digital transformation consulting services for SMEs.
range of management consulting solutions for mid-sized companies.

Consulting
Funai Consulting Inc.

Management consulting■ Growth support for SMEs: Industry-specific, category-specific consulting■ Digital transformation consulting■ Comprehensive management consulting services for mid-scale companies

Funai Soken Digital Inc.

BPO & consulting■ Online marketing, sales support■ System integration■ Systems development services, digital solutions staff training

Funai Consulting Shanghai Inc.

Management consulting■ Primarily China

Business Strategy
We will expand our line-up of comprehensive management consulting solutions and cement ourpresence as the go-to solutions platform for mid-scale and SME proprietors, for instance by offering
existing clients attentive post-Covid "new normal" support to help them cope amid the related upheaval,
strengthening digital points of customer contact through digital innovation, and furthering the digital
shift in consulting.

Consulting

81.4%

Forecast share of
total sales in 2022

Funai Soken Logistics Inc.

Business Strategy

Logistics consulting, operations, and trading

We aim to build Japan’s most extensive logistics foundation around consulting, community, networks,
and databases, enhancing operations in existing domains to cement our position as a comprehensive
provider of logistics solutions.

Logistics

12.7%

ESG

Forecast share of
total sales in 2022

Value Creation Drivers

Logistics

Funai Soken Holdings: The Basics Growth Strategies

Moreover, we will endeavor to leverage intra-group alliances to better enable ourselves to offer a comprehensive

Other Businesses
Business Strategy

IT consulting

Proseed Corporation

Contact center management services

HR Force Inc.

Direct recruiting

We aim to expand our client base in the contract center management business, and maintain our highrate of direct recruiting contract renewals, thus striving to move beyond sales growth toward solid
improvements in profit margins. To this end, we will continue to invest resources in growth areas withthe potential to become the group’s future core businesses.

Otherbusinesses

5.9%

Forecast share of
total sales in 2022

Performance by Segment (FY2021 Actual; FY2022 Target)
Net Sales

Operating Income(Million yen)
30,000(Million yen)
8,000
7,000
6,153
6,000
338
5,000
4,000
3,000
5,904
2,000
1,000
0
-89
2021
-1,000(actual)

25,00020,00015,00010,00022,924
1,481
2,922
18,52125,3001,500
3,200

20,600

5,000
0
2021
(actual)Consulting2022(target)Logistics

Other businesses● Reporting segments have been revised:

Direct recruiting was previously a separate
7,100
100
370

6,630

Human Resource Strategy
Use the core values shared throughout the whole group as a solid base for an environment that allows a diverse workforce to harness
its individual strengths, and start a cycle of hiring, professional development, and empowerment to generate sustained growth.

Corporate Data

*Figures are shown for new segment configuration adopted in FY2022. In the performance by segment shown below, the new configuration has been applied retroactively to
p. 34 for more details on segments.
FY2021. See*We adopted the Accounting Standards Board of Japan’s Accounting Standard for Revenue Recognition (ASBJ Statement No. 29) beginning in FY2022.
Net sales and operating income for FY2021 are estimates to which that standard has been applied.

GovernanceFunai Soken IT Solutions Inc.

segment, but has been incorporated into
the other businesses segment startingin FY2022.
● Shinwa Computer Service, whose

contribution was previously included
under “other businesses,” was merged2022(target)with Funai Soken Corporate Relations(now Funai Soken Digital) on July 1, 2022.
Therefore, its contribution is now shownin the consulting segment.

19

20

Consulting

Creating Value: Our Consulting Business

Growth and digital transformation to
help clients thrive in the post-Covid

Funai Soken Holdings: The Basics Growth Strategies“new normal”

Our Consulting Business Model

Daisuke Shingai

Those Who Take a Different Approach Find Untapped Potential

President and CEO, Funai Consulting Inc.

In the digital transformation consulting market, the typical vendors̶major system integration companies̶have so far
avoided the SME and mid-scale segment because of its supposed low proﬁt potential. But we see it as very promising.
We believe that a client’s successful digital transformation begins pre-DX with “analog transformation”:
assessing their business as it is, and making improvements to operating, marketing, and work processes, andadministrative methods. Funai Consulting’s solutions let clients immediately see and feel the beneﬁts of DX inmarketing (i.e., sales calls) by providing broad-deﬁnition digital transformation tools tailored to the client’s speciﬁc

1Marketconditionsindustry and sector. This is followed by support in the form of easy-to-use SaaS tools and low-code development tools.
Our aim is to create new value as a digital transformation accelerator for client companies.

Funai Consulting’s Ideal Digital Transformation Consulting

2

Sales calls

1. Solutions Requiring Substantial Budget Reallocation
Digitalization of current…

Funai
Consulting■ Comprehensive management consulting services for mid-scale companies:
Helping promising local SMEs grow to mid-scale

2. Solutions Requiring Minimal Costs

Currently
offeredsolutions

Digitalization of marketing activities overall
Industry-speciﬁc modules: MA, SFA, CRM
For SMEs: Zoho; for smaller-scale: Kintone, etc.

Our rivals: “Use this existing software package designed
for your industry”;“Use this existing accounting software package”

High costMarket: Conditions & Demand for Industry-Specific Consulting
Despite the lingering effects of Covid-19, sales of monthly(Million yen)support contracts, one of our core offerings, increased 8.2%

25,000

year-on-year in 2021 as the shift to online seminars proved

20,000fruitful and referrals from existing clients and direct sales

15,000activity resulted in a solid increase in orders.
In particular, sales returned to pre-Covid 2019 levels in Funai

10,000Consulting’s main market segments, up 12.7% year-on-year in the

5,000

housing and real estate segment, and 13.0% in healthcare, nursing

0

22,256
19,592of consultants with industry-specific expertise and other specialists

5

Helping promisinglocal SMEs growto mid-scalefrom inside and outside the group. There has been a sharp uptickin demand for digital transformation from the manufacturingindustry, and results were also solid in the funeral services industry
following our advance rollout of digital transformation modules.

7

Group
synergies

Amusement 2.5%

Dining 3.7%
Education, childcare,schools

Environment, energy
Mobility

Risks andopportunities

Specialist services

2020

Operating income

6,630(6,680)

5,846

2021

2022
(target)*2

20
10
0

Operating margin(Excl. intra-group & whole-group transactions)

1. Due to the company’s adoption of the Accounting Standards Board of Japan’s AccountingStandard for Revenue Recognition starting in FY2022, consolidated net sales have reduced
6,150 million yen compared with pre-adoption ﬁgures.
2. The Accounting Standard for Revenue Recognition has been applied to 2022 forecasts.
Forecast ﬁgures to which the standard has not been applied are shown in parentheses.
Shinwa Computer Service, whose contribution was previously included under“otherbusinesses,”was merged with Funai Soken Corporate Relations (now Funai Soken Digital)on July 1, 2022. Therefore, its contribution is now shown in the consulting segment.

OthersOnline ad listing
Housing, real estate

Food 3.2%

Manufacturing

8

Others

5.4%(25.0)

30

Main Service Categories of
Our Consulting Business (Amts. and Share of External Sales)

Industries Served by
Our Consulting Business (by Share of Sales)
HR business 2.8%

32.2

524 mil. yen
2.3%

5,478 mil. yen
24.6%

Corporate Data

6

4,801

2019

Net sales

26.3

25.2

5,395

40

(26,750)*1

Governancebusiness, we continue to meet clients’ DX needs with a combination

19,05827.5

care, and welfare. Meanwhile, in the digital transformation consulting

Our consulting
business and its
strengths

21（%）

20,600ESG

Low cost

Digitaltransformation
strategy

Broad-deﬁnition ・Customer acquisition (e.g., via online consulting)・Marketing (e.g., via online ad listing)digitaltransformation ・Recruiting (e.g., via direct recruiting)
Other consulting,systems
integration ﬁrms

Competition

4■ Digital transformation consulting: A team of specialists offering an expandingline-up of industry-specific modules

Begin with marketing solutions to let clients get a taste of the beneﬁts

Back ofﬁce

3■ Growth support for SMEs: Industry-specific, category-specific consulting

Value Creation Drivers

Changes inclients’ businessclimateThree Core Categories of Support

29.9%
3.7%

Open seminars

3.8%

301 mil. yen
1.4%

3.8%
6.1%
19.2%

6.3%

Certiﬁed professional services

9.6%

Healthcare,nursing care,welfare*Figures show sales of consulting contracts, management workshop subscriptions, and open seminar revenues,
grouped in accordance with the company’s industry classiﬁcations, for the January through December 2021.

22,256 mil. yen(up 16.8% y-o-y)Management
workshopsubscriptions
2,045 mil. yen
9.2%

Monthlysupport
12,778 mil. yen
57.4%

Projects
1,128 mil. yen
5.1%

22

Consulting

Changes in Clients’ Business Climate

Competition

Covid-era SME Business Performance Diffusion Index
Sales Diffusion Index

Proﬁt Diffusion Index
44.1

50

50

40

40

30

30

20

Widening
gap

6

10
0

2020

-10

2021

-20

20
10

Ideally Positioned to Capture Consulting Needs
Widening
gap

2

0

2020

-10

2021

This diagram shows our consulting categories and the kinds of clients we offer them to. Simplified for easy viewing, it is designed togive a general overview rather than a detailed examination.

■ Client Consulting Needs and Consulting Firm Positioning
Industry-specific, solution-category-specific support

-20

-29.3

-30

-30

-40

-40
-54.7

-50

38.1

-33.6

Major

Digital transformation support
IT consulting firms-49.4

Strategies
Foreign-owned
consulting firms

-50

-60

-60
・Whole-year average figures calculated by Funai Consulting based on chronological data from the SMRJ
Survey of SME Business Conditions (https://www.smrj.go.jp/research_case/research/survey/index.html)(Japanese only)・Funai Consulting client numbers compiled from Funai Consulting's survey of clients (conducted
Oct.–Nov. every year)

Comprehensive management consulting services for mid-scale companies

Strategic consulting firms
Think tanks
Consulting firms

Value Creation Drivers

Funai Consulting clients
Figures from SMRJ Survey of SME Business Conditions

Mid-scale

Find and focus on unoccupied niches in untapped markets

SME

Comprehensive management consulting services for SMEs

Digital transformation consulting for SMEs

● The diffusion index shows a large gap between Funai Consulting clients and SMEs overall as reported in the Organizationfor Small and Medium Enterprises and Regional Innovation’s (SMRJ) Survey of SME Business Conditions.
● The gap widened from 2020 to 2021 as Funai Consulting clients’ business conditions improved.
In contrast, the SMRJ’s Survey of SME Businessclients on the impact of Covid-19, and compares these

Conditions (grey line) shows that, on average,

with a government survey of Japanese SMEs. Although

Japanese SMEs managed to somewhat reduce thethe sample size was modest—2,300 companies,

negative effects of the Covid dip.
gap between our clients and the average Japaneseindex of our client companies’ results; it shows a trend

SME actually increased from about 50–60 points in

toward recovery in 2021, despite the lingering effects

FY2020 to 70+ points in FY2021. I hesitate to drawof Covid. Some of this can be attributed to ourmajor conclusions from such a short survey duration,

consulting solutions, and the fact that our clients tend

but it does seem to support the popular theory of an

toward high motivation and energy in the first place.

acceleration in the divergence of economic fortunes.

Financing

Digital Transformation Solutions: Tailored to Clients’ Businesses, Delivered by Industry Experts
Our support for client companies is constantly evolving to ensure they canright stage from early strategy planning to final implementation. By focusing

stay abreast of digital advancements. Clients know that when they come toon a unique brand of high-value, industry-specific services, we can establish

us for digital transformation help, we can provide the practical, industry-a strong position in the digital transformation consulting market for SMEs,

specific solutions that apply the right strengths and characteristics at thea space where Japanese SaaS vendors are struggling to gain a footing.

■ Support Services Evolving Together with Digital Advancement
TalentFinding talent can be harder than customers;companies must be attractive to workers

Procurement

Differences in purchasing power build up over time,making strong companies even stronger

Growth Support

Digital Transformation Consulting Focused on Growth Support

Monthly support, management workshops,
content-based services

Demand for funding to invest in strengthening management resources

Diverging
Customeracquisition

Struggling
companies

23

Industry A
TalentProcurement

Changes in the business climate always have a negative impact; many go out of business, sell out, or struggle to survive

Financing

Current clients
5,461 companies

The more severe the outlook, the more support is required

We swiftly identify success stories in specific sectors and industries,
and use these to develop business models and solutions to propel
client companies to growth by opening up new and expanded
demand in blue ocean sectors.
Client testimonials (in Japanese) at https://www.funaisoken.co.jp/voice

E.g.: Industry A

A typical SaaS vendor’s services are devised for fee-based
monetization; our digital transformation support services are built
to grow the client’s bottom line. Our strategy is to beat thecompetition by offering what they can’t: a full spectrum of support
for clients covering everything from initial design to final
implementation and utilizing the benefits of business applications
and modules made by our partner platforms like Zoho and Kintone.

Corporate Data

Diverging Fortunes of SMEs in the Covid Era

Consumers gravitate to top brands they
can rely on in tough economic times

We offer consulting services tailored to each company’s current stage of growth, work closely withbusiness proprietors throughout the process to ensure digital transformation solutions are properly
formulated, implemented, and embedded in the quest for improved performance and productivity.

3.67 mil. companies
in Japan

Governancestill significant. The blue line represents the diffusion

Thriving
companies■ 3.67 million companies in Japan (per 2021 Economic Census)

Comparing the blue and grey lines shows that theroughly 40% of our total client base—the figures are

Customeracquisition*Consulting businesses: Funai Consulting, Funai Consulting Shanghai, Funai Soken Digital*Logistics business: Funai Soken Logistics*Other businesses: Funai Soken IT Solutions, Proseed, HR ForceESG

The diagrams above depict the result of a survey of our

Funai Soken Holdings: The Basics Growth Strategies

Our consulting style is different from that of the foreign-owned “strategic” consulting firms andthink tanks in that we specialize in practical, coalface-ready solutions for mid-scale businesses
and SMEs, and in our focus on digital transformation consulting to grow market share.

Diverging Fortunes of SMEs in the Covid Era

Partner with leading platform developers offeringsuperior business applications
Package these into design industry-specificmodules for quicker client applicability
Insights from business-savvy consultants

24Consulting

Digital Transformation Strategy
A team of specialists offering an expanding line-up of industry-specific modules

Using Zoho to Help Mid-scale Companies and SMEs Boost Business Performance and Productivity

with our extensive line-up of templates for specific

At Funai Consulting, Zoho is one of the main digital tools

work processes with Zoho. In other words, Zoho is ideal

improved bottom-line performance and productivity),

industries, they can simply choose the module with thethat we recommend to clients. We have a lot of tools at ourfor people who are not highly trained experts in digitalour digital transformation support is designed to help

right templates to realize the appropriate businessdisposal these days, but Zoho stands out among the crowd,

technologies, and means that even smaller-scale enterprises

clients meet digitalization requirements and overcome

model in accordance with insightful advice from ournot just because it is practical for businesses in all industries,

can have digitalized systems without being tied to specificbusiness management challenges. This year, we areexpert consultants.

but also because of its affordability (it was, after all, originallystaff or outside experts.

working hard in partnership with leading platform

designed with SMEs in mind). Moreover, it is highly versatiledevelopers to increase our range of business—its no-code or low-code nature making it easilyclients install and makecustomizable—meaning clients can digitalize most of theirfull use of Zoho products.

Digital transformation
support* sales

application modules tailored to specific industries.
Those “DX modules” are all-in-one packages

1.3

containing the software templates they need toApprox.

successfully digitalize specific work processes. No
need for the client to build something from scratch;bil. yen per year

Up 32.7%
year-on-year*Sales of digital transformation consulting services

Our digital transformation consultants are already helping■ Zoho’s Extensive Coverage
Marketing

CRM, marketing automation, chat bots, email newsletter distribution, integrated social media
management, forms, heat maps, e-commerce sites, event management, etc.

Sales, customer support

Sales force automation, online contract execution, survey management, simple chat, in-house messaging, etc.

Funai Soken Holdings: The Basics Growth Strategies

With its tight focus on promoting growth (e.g., through

KPI and management data administration Business intelligence systems
General affairs, personnel, payroll, labor Personnel and labor management, workplace management, hiring management, etc.

DigitalRemote work

Accounting, finance,
settlement, debt management

Cloud computing
SaaS
System installation

Marketing innovation

Funai Fast Systems

Improved performance
Improved productivity
Improved added value

Website & online marketing + MA +SFA + online sales activity

Improvements and innovation inwork operations and processes

API integration, RPA, AI & robotics +work process innovationInadministration

Improvements andinnovation in admin work

Core system unification & ERP +BI + admin process innovation

Industryspecificmodules

Funai Fast Systems are packages containing applications built

improving clients’ business performance and the applications

using Kintone by Cybozu. No programming is required, so

focusing on KPIs and sales management data needed to raise

users can build their own apps, customize them, and add all

the bottom lines is what sets it apart from the typical customer

sorts of functions.

information databases offered by other companies.

Below is one example of a Funai Fast System. Funai
Consulting offers this as part of its consulting for more than
100 clients in the funeral services industry. The focus on

Here is a must-read for business proprietors considering digital

this is a handy “digital solutions buyer’s

Customizableapps

manual,” and a great way to understandthe ideal path to digital transformation.

Ranked1No.
Signing the partnership agreement. From left: Kazuhiro Oyama, vice president ofZoho Japan; Manikandan Thangaraj, CEO of Zoho Japan (on screen); Takayuki
Nakatani, president & CEO of Funai Soken Holdings.

Kinokuniya Shinjuku
business category(May 9–15, 2022)

Amazon SME
management category(May 25, 2022)

Funai Soken Holdings entered into a partnership agreement with Zoho Japan on December 28, 2021, under which the Funai
Soken Consulting Group becomes the exclusive Japanese provider of digital solutions staff training services using Zoho products.

25

Management of basic customer data (e.g., name, address, customer category)Partiallycustomizable
apps

Funeral information management

Management of information e.g., schedules, meetings, staff assignments, venues

Follow-up management

Track progress of post-funeral products and services, e.g., purchase of home altar
and accoutrements, memorial services, disposal of property

Event participation management

Management of event participation information

Funeral service billing

Pre-funeral cost estimates, price quotes, post-funeral invoices

Flower and offering billingManage invoices and receipts for flowers and offerings, track orders

Funeral service billing

Order forms for MC, buses, taxis, catering, etc.; track orders

Memorial service billing

Cost estimates and invoices for memorial services

Incoming payment management

Management of incoming payment data from billing apps

Funeral venue calendar

Track funeral venues’ status

Fleet management

Manage vehicle inspection and refueling schedules

Woodland burial management

Manage provisional and final plot purchase agreements

Daily report management

Track daily reports from staff

In-house FAQManage in-house FAQ data

Phone call management

Manage information regarding call center inquiries and responses

Leaflet distribution management

Track leaflets distributed per staff member, per area

Corporate Datatransformation for their enterprises, or those in planning or other
More than just an outline of Zoho,

Client management

Pre-funeral consultation management Management of information e.g., survey responses, consultation, materials distributed■ Further Reading

departments who need to learn the basics of digitalization.

https://fastsystem.funaisoken.co.jp/■ Funai Fast System (Tailored for the Needs of Funeral Services Industry Clients)
Standard apps

■ Funai Partners with Zoho Japan on Digital
Solutions Staff Training Services

Tailored Systems Using Digital Technologies to Help Clients Get a Competitive Advantage

GovernanceIn operations& processes

Management of accounts, inventory, subscriptions, billing, and expenses; online payments, etc.

ESG

In salesactivity▲

Industry-specific,
category-specificsolutionsDX▲

Digital shift

Paper
Commuting to officeGroupware, workflow and progress management, system linking, etc.

Value Creation Drivers

Collaborations

Our Digital Transformation Support Includes…

26

Consulting

Helping Promising Local SMEs Grow to Mid-scale■ How We Would Help a Client Work Backwards from Their Goal (￥2 bil. → ￥10 bil.)Our roadmaps are unlike typical mid-range business plans; they give business owners the big picture to help themscan the business horizon and take the early initiative needed to achieve sustained growth.
FY

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

billion yen in turnover, drawing on our long experience andNet sales (billion yen)

2.0

2.6

3.4

4.3

5.6

7.2

9.5

12.5

15.8

20.0

propel client companies to the 10-billion-yen turnoverexpertise to formulate strategies for sustained mid-term

mark. Not only is this a natural extension of our quest to

growth and suggest ways they can strengthen their

Consolidated workforce
at end of year

30

40

55

70

90

120

160

200

250

300

help clients overcome customer acquisition, recruiting,frameworks and functions. With our partner financial

procurement, and funding challenges, but turning more

institutions, we are striving to build a platform to extend

SMEs into mid-scale companies will also drive demandneeded funding to local companies without a main bank.

for comprehensive management consulting services for

Working with local banks in this way to draw up

Amid a widening gap in the diverging fortunes of SMEs,

We have the client work backwards from a goal of ten

we at Funai Consulting work with financial institutions to

mid-scale companies, which are a major focus of ourroad maps for SMEs to upscale, we endeavor to

Mid-Range Business Plan.

nurture those companies into powerful drivers of theirregional economies. Similarly, we hope that working

plateau for SMEs, where growth seems to stop. A

with those banks’ consulting departments, which arecommon plea for help is that all their work is reliant onseen as major revenue earners of the future, will

the president and they are struggling to develop staff

contribute to local economies bycapable of shouldering the burden, or that they havebroadening the range of industries

identified a second core line of business but cannot getthey can consult for and thereby

it off the ground. The solutions to these problems

invigorate the business

depend largely on the company’s vision for the future.

community.

Tokyo Pro Market Listing Support

Proprietors’ focus

Mgmt plan

Mgmt plan

3. People &organization

4. Finance,accounting,
M&A

Mgmt plan

Primary focus on hiring,
cashflow

Mgmt planMid-range business plan (business, org., finance)
Mgmt plan

Mgmt plan

Management team, compliance,
diversity & inclusion

Pay-per click ads, digital client acquisition

Business support (3)Bew business ideas

Bew business ideas

New productdevelopment

Mgmt plan

Corporate value, SDGs

Business support (2)Store opening, developing upper management

Business support (1)Products, customer acquisition, sales

Store manager
development(2) Developing
new businesslines

5. Digitaltransformation

2nd core business (start-up, build-up, chain-stores)
New business (start-up, build-up, establish as 3rd core business)

Futureorg. chart

Get on the “most popular employer” ranking→rebranding

Shake-up hiring(specialist positions forrecent-graduate recruits)

Evaluation
systemDiversity &inclusion

Better hiring (find management candidates; RPO)

Professional
development
system

Optimize staff assignments,
promotions, demotions

Fundraising, better cashflow visibility, bank formation

Form management teamRestructure into holdings and operating co. set-up,
intragroup transactions, increased budgets

M&A (1)

Digital shift (1) Business improvements & efficiencies

PurposeM&A (3)

M&A (2)

IPO preparations (choose securities co., regulations, terms, IR, PR)

Listing

Digital shift (2) Management improvements & efficiencies

In sales activity (1)In sales activity (2)In business model

Governanceprofessional investors on April 11, 2022.

Mgmt planTop-down, growth oriented

2. Business planning(1) Invigorating
current
businesses

Funai Consulting was granted “J-Adviser” status byTokyo Stock Exchange, Inc., for its Tokyo Pro Market for

Mgmt planMid-range business plan (business, org., finance)

ESG

New Service

Mid-range business plan (business, org., finance)

Why Did We Seek J-Adviser Certification?
In the course of Funai Consulting’s IPO support services, there■ Team-based Consulting Framework

was an increase in companies interested in the Tokyo Pro Market.
For our part, becoming a J-Adviser not only boosts our ability tohelp more companies list on the Tokyo Pro Market, but it also
management consulting services for mid-scale companies.

of market listing, and that has led to increased interest in
market listing. Indeed, Tokyo Pro Market listings are increasing
ever year, with ten in 2020, and 13 in 2021. It is also noteworthy

Tokyo Pro Market

that more than half of the companies listed are headquartered

Tokyo Pro Market is one of the markets on the Tokyo Stockoutside of Tokyo.

Exchange, but it is different from TSE’s Prime, Standard, andFeedback has been positive, too, with one executive saying

Growth markets. Most significantly, the Tokyo Pro Market isthat listing on the Tokyo Pro Market was the most effective

restricted to professional investors, and has less stringent

investment the company had ever made, and another saying

listing criteria (e.g., number of shareholders, amount of profits)that listing had led to a huge improvement in the quantity andthan the other markets demand. The audit period is shorter, too

quality of mid-career applicants responding to job openings.

—one year compared to two on the other markets—indicating a27

Under this comprehensive, start-to-finish approach, multiple consultants

Being a certified J-Adviser adds depth to our IPO support

trend toward shorter time from kick-off to listing. Even so,

services, and enables us to serve as a one-stop provider ofcompanies can achieve some of the recognition and credibility

comprehensive solutions.

cooperate to offer—via an account partner as a single point of contact—solutions that contribute to growth in the shortest possible time, andensures we can adapt when clients progress to a new growth phase.

Proprietor consulting
Director

Marketingconsultant

Digitaltransformation
consultant

Team-based consulting

Director

Consultants cooperate,
Proprietor

Account
partner

New businessconsultant

Corporate Data

helps us in our strategy of strengthening comprehensive

Value Creation Drivers

Annual turnover of two billion yen is a common

Support offered
1. Management

Funai Soken Holdings: The Basics Growth Strategies

In partnership with community banks, we offer team-based consulting to help
promising local SMEs grow to mid-scale, from an annual turnover of two billion
yen to ten billion.

share information
IPO
consultant

Dept. head Dept. headHR, org.
consultant

Financialconsultant

28

Consulting

Our Consulting Business and Its Strengths
Our Strengths

Growth Support

Our Developments
comprehensive expertise needed to offer advice onin specific industries and solution categories, we canweighty management issues, and can help bridge thecompile project teams perfectly equipped to provide

gap between the C-suite and employees. Each issue isprecisely the solutions that each client needs. Thus,

subjected to thorough analysis to elicit the scenarios

project-based consulting goes beyond mere strategizing

most likely to ensure resolution.

beyond industry norms and are optimized for the times. We
call these On-the-Mark Solutions. They are fresh business

Add second
core business

Major & listed companies (workforce: 1,000+)

Product A■

Product B■

Product C

Improved
performanceOn-the-Mark
Solutions
Actionable ideas
for solid outcomesmodels that, if implemented in the intended industries (orUpdate ﬁnancial andorganization strategy

Various management challenges, e.g., second core businessdevelopment, digital transformation, work process improvement,
strengthen franchise HQ.
Company size

Focus on productswith growthpotential

adjacent sectors), will enable the client to improve theirperformance dramatically. As the name suggests, each On-

Update business model

the-Mark Solution is designed to enable the client to ridemarket trends by delivering the right thing at the right time.

Update ﬁnancial andorganization strategy

Sample On-the-Mark Solution for the
Housing & Real Estate Industry

Update business modelDon’t waste timeand resources on
products with nogrowth potential

Super low-cost housing targeting people looking for houses on a

SMEs (workforce: 1‒99)

budget akin to renting an apartment. Clients can pursue higher-

Business model for immediate
performance improvement

yield products, and their customers will be happy to findaffordable houses

Growth trajectory

Time

ESG

Our Strategy

Industry-specific, Category-specific Consulting Structure
Unique consulting style focused on nurturing ties with business proprietor clients

Expertise in a Broad Range of Fields
Our approach combines long experience of success andspecialist consultants offer clients solutions that are informed

on-the-spot agility, and our clients love the value this approachby expert knowledge of clients’ characteristics and positioning

realizes for them.

within their industries, and that take advantage of our huge

Consultants:

wealth of insights, information, and skills.

873(groupwide)

Industries Served

Management workshops

1,377

7,018

25,000+ businessproprietors and executives
attend each year

Industry-specific, category-specificmanagement workshops for businessproprietors and executives(Point of contact, information source)(Members-only organization)

Monthly support(Contract-based consulting services)client companies in Japan
Monthly support for clients whoenter into consulting contracts

Information tailored for SME proprietors

Assess business, create
image of successShacho Online
Your 5-Minute Morning Business Innovation

5,159

Members-only online
platform full of informationfor SME proprietors

Actionable solutions offered througha team structure for a fixed period

Generate business
ideas(Point of contact, information source)(as of Dec. 31, 2021)(Project-based consulting)

5,461

Online memberships

Expert in
specific
industries,
solutioncategories

Projects

At the Funai Soken Consulting Group,
management workshops are one of ourmain strengths. Every month, we hold avariety of workshops providing businessproprietors with access to a wealth ofpractical, applicable expertise and relevant
information. Workshops are facilitatedby experts in the relevant industry or
solution category, who know what it’s
like to walk the participants’ shoes.

Monthly support services aredesigned to help clients overcome
their company’s challenges to reachspecific goals. Our consultants work
closely with clients to implement
solutions. In some cases, depending
on a client’s stage of growth, we form
dedicated teams to help propel thecompany toward growth targets.
When required, we form teams tooffer the right solutions to suit theclient company’s growth stage.

Formulation ofbusiness plans

Corporate Data

Local government

Freight, logistics,
transport

Advertising, printing,softwareFinance

General distribution

Tourism,
accommodation

Hair, beauty, fitness

HR business

g
n
i
c
r
u
o
s
t
u
o
,
O
P
B

Manufacturing

Amusement

Dining, delivery, food

Education, childcare,schools

Environment, energy

Mobility

Recruiting, personnel, staff training
Management philosophy,
management planning

Specialist services

Globalization, international strategies
Finance, IPOs, M&A, profit
improvement, restructuring
IT, work process improvement

Certified professional
services

Surveying, research

Healthcare, nursing
care, welfare

Sales channel development

Property rentals,
construction

Solution Categories

29

Store development
Business model construction,
launch into new industry
E-commerce, direct sales

Housing, renovation, realestateDigital transformation, digital marketing

Management seminars

Governance

The Funai Soken Consulting Group’s approximately 900

Funai
Consulting’s
consultants areexperts in…

Value Creation Drivers

E.g., mid-range business plan,
adding new businesses,
restructuring into holdings andoperating co. set-up, M&A, IPO

A Business Model Designed to
Improve Results Quickly

At Funai Consulting, we offer clients business models that go

to include practical, actionable solutions. We have theMid-scale companies (workforce: 100‒999)

228 Solutions a Year■

Funai Soken Holdings: The Basics Growth Strategies

Because we have a broad stable of consultants expert

Funai Consulting’s Problem-solving Business Models

Launch business

Carry out business30

Consulting

Group Synergies

Risks and Opportunities

Funai Soken Digital Inc.

The Funai Soken Consulting Group offers clients a full spectrum(consulting)of digital services and digital transformation solutions seamlessly

Merged on July 1, 2022
Surviving company renamed:

Funai Soken Corporate Relations Inc.

Stronger promotional and sales
support capabilities

Shinwa Computer Service Co., Ltd.
Strengths

Strengths

Funai Soken Digital Inc.

・Online marketing, sales support
・BPO, BPO consulting

2

Deploying a common method for acquiring and training digital solutions
staff will help the group enhance its digital services workforce

・Solid track record of reliable
systems development
・Hiring, training digital solutions staff

Leveraging promotional functionality and the group’s support structure will
enhance the merged company’s ability to pursue new outsourced orders■ Risks to Our Business● The impact of Covid-19 in Japan and China, as well as increasing pressure on procurement from risingmaterial costs, are leading to demand for major changes in SME business models. We predict that this will
intensify competition in our industry, leading to mergers and other restructuring.

● Deterioration in the effective functioning of our activities and methods for client acquisition may have an

impact on our business performance.

● Loss of ability to secure talent capable of satisfying ever-changing, ever-diversifying client needs in an IT

industry of rapid technological advancement and intense competition between companies.

■ Opportunities● Increased sales from new services that meet new client needs

Funai Soken Digital Launched to Handle Digital Transformation Operations● Opportunities arising from clients’ increased productivity achieved by harnessing the strengths of ourindustry-specific digital transformation solutions, and from an expanded client base underpinning development
Value Creation Drivers

On July 1, 2022, Funai Soken Corporate Relations and Shinwa Computer Service merged to become Funai Soken Digital. As part of theFunai Soken Consulting Group’s business strategy under its Mid-Range Business Plan, the group has expanded its services to include digitaltransformation consulting and comprehensive management consulting for mid-scale clients. As a result, the group faces an urgent need tostrengthen its platform for hiring and developing talent able to provide digital solutions. Combining the strengths of Funai Soken Corporate
Relations (online marketing and BPO consulting) with those of Shinwa Computer Service (digital HR hiring and development, computer
systems development) enables the Funai Soken Consulting Group to offer clients a full spectrum of digital services more seamlessly.

The Funai Soken Consulting Group entered into a partnership agreement with Zoho Japan in December 2021 with the aim of helping
Japan alleviate its current lack of digital solutions staff for SMEs and replenish the nation’s pool of digital skills. Funai Soken Digital seeks
uses its wealth of training expertise built up over long years of experience to provide Zoho training, increase student numbers, and build
up a pool of skilled graduates. In addition to conventional sales support, the company can also provide steadfast support for Funai
Consulting’s Zoho-based digital transformation consulting services, as well as operational support for management workshops with Zoho
specific needs, such as using Zoho’s advanced API to develop apps, or call center systems that link Zoho Desk and Amazon Connect.

Funai Consulting Shanghai Inc.

Adapting the Funai Soken Group’s expertise to provide(consulting)consulting services in the growing Chinese market.

Business Strategy Under the Mid-Range Business Plan

Digital transformation solutions: tailored to clients’ businesses, delivered by industry experts

DX strategy

Focus on digital transformation consulting

P25

Enhance Growth Support Services
Offer solutions that combine the strengths of our industry-specific, category-specific consulting structure
and clients’ industries’ characteristics

Strengths

Expanding portfolio

P29

Support Structures Tailored to Clients’ Growth Stage
New strategy

Helping SMEs upscale

P27

Areas of Particular Strength•Specialized support aimed at boosting growth

Opening new restaurants, turning around unprofitable restaurants, seeking growth,
improving productivity, management, talent development•Category-specific management workshops and QSC improvement●

31

Strengthening

Funai Consulting Shanghai’s management workshops are tailored to specific categories
For

Stronger platform for hiring and training digital solutions staff
Hiring, training digital solutions staff

Corporate Data

Having just celebrated Funai Consulting Shanghai’s tenth birthday in January 2022, we remain committed to establishing
the company as one of China’s foremost management consulting firms in the near future by expanding a business model
already proven in the dining industry to incorporate other sectors.

Focus Efforts on Digital Transformation Consulting

Governancemodules. Beyond that, Funai Soken Digital intends to build a framework conducive to customer success, developing solutions to meet

Our Strategy for the Consulting Business

ESG

Hiring and Training Digital Solutions Staff; Promotional and Sales Support

Funai Soken Holdings: The Basics Growth Strategies

Stronger platform for hiring
1
and training digital solutions staff

Increasingly Severe Competition in the Industry is Forcing Restructuring

P31

Products and services

Top-brand
workshops

Major
corporations

Opening up new business categories,
organization development

Specialized Support for the China Market

Funai dining
industry workshops

Management
employees

Customer experience, new QSC standards, store
operation and management, digital transformation

New categories Expanding into new business categories

SMEs

Online customer acquisition,On-the-Mark Solutions

P31

Clients attend a dining industry management workshop in November 2021.

32

Logistics

Other Businesses

To Be Japan’s Best Logistics Consulting and BPO Solutions Provider

A Variety of Services Including IT and Direct Recruiting Solutions
Our “other businesses” segment is truly diverse and always growing. Operations include:

through ESG management and digital transformation. From comprehensive logistics consulting solutions to●

IT consulting: optimized solutions for IT system construction, operation, and everything in between

practical, effective outsourcing of back-end processes, we help clients identify and remove the roadblocks to●Contact center consulting: helping clients in many different industries improve customer service quality throughcontact center management solutions; andsmooth business operation.
●(Million yen)
3,500

3,309

3,000
2,500

2,441

3,200

（%）

(3,600）*1

2,638

40
30

Main Service Categories of Our Logistics Business(Amts. and Share of External Sales)
Logistics consulting

Logistics trading

20.8%

15.7%

2,000
14.1

1,500

11.6
11.8

10.2

1,000
500
0

2019

Net sales(10.3)

370

311
2020

2021

Operating income

3,309 mil. yen

10

(370)

338

2022
(target)*2(up 25.5% y-o-y)0Logistics operations

Operating margin

975

6.5
2.0
23
2019

82

-88
-9.0
2020

Operating income

2021

1,272 mil. yen(up 30.4% y-o-y)Operating margin(Excl. intra-group & whole-group transactions)

ESG■ Consulting

Building Japan’s most extensive logistics foundation

We offer effective consulting solutions that enable both companies that

Changes in Business Segments
Change No.1

than simply planning and strategizing, we offer outsourcing and other

Systems development, which was previously part of

support to make sure clients can carry out back-end processes properly.

the “other businesses,” segment, was merged into the■ Networks

new company, Funai Soken Digital, and is now included

With some 300 logistics-industry partners nationwide and a material

in the consulting segment.

Before (2021)

After (from 2022)
Change No.1

Consulting

Consulting

Logistics

Logistics

Governancesend cargo and those that transport it to transform their logistics. MoreManagement workshops for logistics
companies● Digital transformation logistics workshops● Partner meetings

1,272

External Sales in the Other Businesses Segment

2. The Accounting Standard for Revenue Recognition has been applied to 2022 forecasts.
Forecast ﬁgures to which the standard has not been applied are shown in parentheses.

Consulting, community, networks, and databases:

●

（%）
40
35
30
25
20
6.7
15
（1.9）100
10
（50）
5
0
-5
-10
2022
(target)*2

1,500（2,650）*1

1. Due to the company’s adoption of the Accounting Standards Board of Japan’s
Accounting Standard for Revenue Recognition starting in FY2022, net sales have
reduced 1,150 million yen compared with pre-adoption ﬁgures.

Business Strategy Under the Mid-Range Business Plan

Consulting for logistics companies
Consulting for shippers● Solution-based consulting

1,000
800
600
400
200
0
-200
-400

Net sales

2. The Accounting Standard for Revenue Recognition has been applied to 2022 forecasts.
Forecast ﬁgures to which the standard has not been applied are shown in parentheses.

●(Million yen)
1,600
1,400
1,130
1,200

63.5%

(Excl. intra-group & whole-group transactions)

1. Due to the company’s adoption of the Accounting Standards Board of Japan’s
Accounting Standard for Revenue Recognition starting in FY2022, net sales have
reduced 400 million yen compared with pre-adoption ﬁgures.

●data- and AI-powered ad platform dedicated to “help wanted” ads.

Value Creation Drivers

344

20

Direct recruiting: helping clients achieve better talent recruiting results through Recruiting Cloud, Japan’s first

Funai Soken Holdings: The Basics Growth Strategies

The movement of goods is a vital social infrastructure, and we strive to eliminate waste and bring improvements

procurement network, we are ideally positioned to offer clients all
Community

kinds of solutions, from manual tasks like material handling tohigh-tech applications like IT, AI, and robotics.

■ Community
From management workshops for logistics company executives to
a community for shippers’ chief logistics officers, we offer a variety
of forums for people involved in the logistics industry to acquire andshare knowledge.
Networks
Warehouse and transport network● Joint purchasing network● IT, AI, logistics, material handling●

Databases
Logiiiii! (e-zine)● Current market for logistics costs● Expertise and case studies● Logistics trend information●

Change No.2

We adopted the Accounting Standards Board ofJapan’s Accounting Standard for Revenue Recognition
starting in FY2022. The direct recruiting segment’s
share of total sales fell below 10%, so direct recruiting
is now included in “other businesses.”

Direct recruiting

Change No.2

Other businesses
Other businesses
IT consulting
Contact center consulting

IT consulting
Contact center consulting
Direct recruiting

Corporate Data

Consulting

Systems development■ Databases
Market prices, expertise and case studies, trends, and much more: Any
useful information we compile into a database for our consulting workand to offer clients. Our e-zine, Logiiiii!, is aimed at boosting the whole
logistics industry and providing unique insights, know-how, and trend
information for the benefit of those inside and outside the industry.

33

34

Dedicated to ESG in Management
Creating Value Together to Help Address Today’s Challenges:
Our Basic Policy Regarding ESG Management23

We offer supportand solutions to help
clients implement ESG
management

ESG and proactive
information disclosure areat the core of our groupcompany management

Key challenges in the quest for sustainable growth

1

8

2

9

3

1

We contribute to our communities
through consulting services
for mid-scale businesses and SMEs

2

We offer support andsolutions to help clients
implement ESG management

5

11

6

7 Crisis response, BCP

succession

9 Sustainable management

High

Importance to us

environmental responsibility, but also to boost thosecontribute to the greater good. Since 2010, the Great

companies’ visibility and recognition. We hope that theCompany Awards have functioned not only to reward

awards serve as a means of enriching society by bringing

companies that combine profitability and growthbroad attention to worthy companies and proprietors.

■ What Is a Great Company?

■ What Makes a Great Company Great?

3

A “great company” is founded on a philosophy of high

1. Sustainable growth.
2. Ardent, fiercely loyal fans.
3. High employee satisfaction; employees and theirfamilies are proud to be a part of it.
4. Pride in its unique company character.
5. Generous contribution to the community, which sees
the company as indispensable.

ESG and proactive information
disclosure are at the core of
our group company management
4 Education, training

5 Rewarding, employee-friendly

value to the community, perfects its own unique businessmodel and, through these, achieves sustainable growth. It isan organization whose unique culture earns it recognition
from employees and customers alike as a great company.

workplaces

6 Diversity
10 Rules and policies■ Recipients of the 2021 Great Company Awards

11 Climate change

For the 2021 awards, 17 companies from a variety of

governing trading
partners

industries were nominated from around 9,000 potential

Regardless of current shortcomings, a great company
is forward-looking and wants to be Number One inJapan and in the world.

Governance

8 Business ownership

Lowpotential with social responsibility, education, andwe at the Funai Soken Consulting Group endeavor to

ESG

2 Information Security

4

10

The Great Company Awards are just one of the ways

1 People and trustworthiness3 Consulting services: quality and quantity

Low

Improving Ourselves, Our Companies, and Our Communities
Value Creation Drivers

Importance to society, our stakeholders

High

7

Issues ofhighestcommonconcern

Funai Soken Holdings: The Basics Growth Strategies

1

We contribute to ourcommunities throughconsulting services for
mid-scale businesses and SMEs

Contributing to Society by Rewarding Outstanding Businesses

candidates. From these, the following seven companies

Key Tasks in 2022 for Increased Disclosure of Non-Financial Capital
Brand
2022
key task

2022
key task

Human Capital

KPIs and investment to boost human capital

Sustainability and ESG

Corporate Governance

35

Technical competencies

Further expansion of integrated report, TCFD compliance

Address uncertainties, bolster governance framework

Company

Industry; region

Great Company Award

Watanabe Pipe Co., Ltd.

Construction material distributor; agricultural equipment
manufacturer; Tokyo

Customer Appreciation Award

Nihon Itomic Co., Ltd.

Electric hot water equipment manufacturer; Tokyo

Work Smile Labo

Creator of smile-inducing work styles; Okayama

Tanaka Denshi Co., Ltd.

Mobile phone sales; Chiba

Unique Business Model Award

Eat & Holdings Co., Ltd.

Dining, food production and sale; Tokyo

Philanthropy Award

Sendai Gastrointestinal Endoscopy Clinic

Internal medicine, gastroenterological clinic; Miyagi

Better Performance Award

Liberty Co., Ltd.

Used car, kei car sales and repairs; Kyoto

Employee Pride Award

Corporate Data

were recognized for their achievements.

36

Environment

Environment

Reducing Environmental Impact in Business Processes

Previous Initiatives■ By the Numbers: Our Environmental Initiatives■ Seminars on new business models for the
decarbonization market age■ Seminar: Carbon Neutrality in Logistics

Funai Consulting holds industry-specific seminars to help

shippers and logistics-industry subsidiaries to promote

SMEs achieve a carbon-free business. Attendees hearcarbon-free business in the logistics industry. Attendees

up-to-date information on industry trends arising fromhear about the main challenges to carbon neutrality inthe shift toward a low-carbon society, and highly detailed

logistics, and ways to achieve progress toward it.

Funai Soken Logistics holds seminars for freightcase studies of successful implementation of solutions.

■ Other Initiatives
・ESG diagnosis for SMEs
・Energy-efficiency solutions for manufacturing SMEs

（t-CO2）
660

2018

2019

2020

2021

(1) Electricity used (kWh)

1,220

1,204

1,099

1,128

(2) CO2 emitted through use ofelectricity (tons)

590.6

577.5

524.8

502.1

(3) Avg. CO2 emitted per employee
through use of electricity (tons)

0.53

0.48

0.40

0.38

(4) Office paper purchased(converted to sheets of A4)

10,098

8,871

2,622

2,025

540

(5) General waste emissions (tons)

65.4

59.0

27.8

26.7

(6) Industrial waste emissions (tons)

4.3

4.5

3.1

3.2

510

Business sites incl. in calculations:(1)(2)(3) All group sites; (4) Osaka HQ, Tokyo HQ, Gotanda Office, Fushimimachi
Office, Shiba Office; (5)(6) Osaka HQ, Tokyo HQ, Gotanda Office, Shiba Office（t-CO2）
0.6

0.53
0.48

630
600

0.40
590.6

0.38

577.5

0.4
0.3

570

480

0.5

0.2

524.8

502.1
2018

2019

CO2 emissions

2020

2021

0.1
0.0

Avg. emissions per employee■ Efforts So Far to Reduce Our Environmental Impact
Reducing avg. CO2 emitted per employee
through use of electricity
LEDs installed at Osaka Headquarters
Nighttime automatic shut-off of lights at Osaka andTokyo Headquarters

Purchasing less office paper

Reducing waste

Seminar and workshop materials
are increasingly paperless

Remote work
Increasingly paperless operations

ESG

・Solar power generation and other renewable energy solutions

consumption, and waste emitted across the whole group over the past four years.

Value Creation Drivers

Seminar: Carbon Neutrality in Logistics
What You Should Be Doing to Decarbonize in 2022

The table and graph below show electricity consumption, carbon dioxide emitted as a result of that electricity

Funai Soken Holdings: The Basics Growth Strategies

Environmental Impact Reduction Initiatives

・Net-zero energy housing and other solutions tailored
For electrics & equipment
installation businesses

For fuel retail businesses

for clients’ industries

Upcoming Initiatives

We disclose information relating to the environmental impact of climate change on our business and our efforts to tackle environmental
based on an emissions database and setting out real workplace actions.

clients’ industries, we are working with financial institutions to offer aAlso, as part of our management workshops, we intend to establish adecarbonization diagnosis service as a means of helping SMEs achieve

new membership-based organization for carbon-free business.

carbon-free business. We aim to use decarbonization diagnosis as a

At present, the road to carbon-free business is a long and arduous

launch pad for further solutions, such as measurement of greenhouse

one for mid-scale companies and SMEs, but we are convinced thatgas emissions (in accordance with the Greenhouse Gas Protocol’s

encouraging them to make this contribution to the public good will

three-scope system) and creating a roadmap to carbon-free businesssurely lead to increased profitability and corporate value.

■ Funai Consulting■ Funai Soken Logistics

・Decarbonization diagnosis

・ESG Logistics Diagnosis

・Greenhouse gas emission measurement (as per the・Distribute handbook for logistics industry clients on

・Roadmaps to carbon-free business and support forworkplace action
・Partnering with 110+ manufacturers to help clients
install renewable energy and energy-efficient facilities

Funai Soken Holdings’ ESG Promotion Office leads a working
group to facilitate efforts to reduce our footprint through dialogue
with the group’s various companies.
Receiving regular data from group companies on key
indicators for environmental impact, we evaluate and analyze theeffects on our business activities, and keep abreast of the risks
and opportunities relating to climate change.

Disclosure and Dialogue Structure
Sustainability Committee
Proactive dialogue
ESG Promotion OfficeEnvironmental Management Group(General Affairs Department)■ Eliminating adverse effects on clientsand society■ Implement measures for reducing

environmental impact, etc.

Proactive dialogue
Group companies

37

The Sustainability Committee is an advisory organ of the Board of
Directors. Its role is to oversee the ongoing implementation of policies
groupwide. Based on reports from the ESG Promotion Office, thecommittee sets targets, monitors progress, and evaluatesachievements, and advises the board and the ESG Promotion
Office as necessary.

Risk Management

Board of Directors
Executive Committee

Governance

The Sustainability Committee receives reports regarding theresults of environmental risk assessments and other risk analyses
carried out by working groups led by the ESG Promotion Office,and makes recommendations to the Board of Directors regarding
those risks requiring action. The board then decides on action to
be taken regarding these and other risks.

Identify

Evaluate

Manage･Risk assessment ･Risk analysis (e.g., ･Consider, decide on, and implement
frequency, impact) measures to manage (e.g., mitigate,
avoid, impute, accept) risks
BusinessrisksGroup companies

Risk Management Committee

Environmental
risks

ESG Promotion OfficeSustainability Committee

Board ofDirectors

・New business models for the decarbonization market age

implementing ESG■ Climate Change Initiatives, Risk Management Structure

Corporate Data

Solutions to Help Clients Achieve Carbon-free Businesschallenges in accordance with the Task Force on Climate-related Financial Disclosures (TCFD) established by the Financial Stability Board of Japan.
GovernanceIn addition to net-zero energy housing and other solutions tailored forGreenhouse Gas Protocol’s three-scope system)

Disclosure and Dialogue in Accordance with the TCFD

38

SocialSocialWe are serious about achieving a balance between sustainable growth and asustainable society. To that end, we work hard to recruit and develop talented

HiringEmpowerment

Pick Up

Funai Soken Holdings

people, and to maintain workplaces where all employees are empowered to make themost of their strengths. The result has been a positive cycle leading to increased

I’m Grateful to Have Such Supportive Colleagues

Data

The Finance Department’s staff is 70% women, and everyone works

Female employees

in a way that suits their stage of life. I have taken (and returned

corporate value.

Funai Soken HoldingsChildcare uptake by womenfrom) childcare leave twice, and returning was made much easierthrough options such as remote work, staggered start times, sharing
Akiko Nishimura

Diversity in business management—not the least of

creation, and improved productivity are founded. We

which is empowering women to forge meaningfulendeavor to maintain rewarding, diverse, inclusive

careers—is the bedrock on which inclusivity, value

workplaces.

Manager, General
Planning Section
Finance Department
Director, HR Force

Pick Uptargets for women in our workforce and women in
management.

Women Blazing a Trail in New Business Areas
Femaleemployees

37.4% in 2021

Women inmanagement
positions

23.5% in 2021

At Funai Soken Digital, women make up almost 80% of management

Goal for 2030: 40%

positions and the workforce in general. That means we are active in avariety of fields, such as:

Goal for 2030: 30%

Better workplace environment andsystems

・ HR framework and career enhancement
program designed to increase women in
management

・Projects to help women forge meaningful careers
・Workshops and forums for female consultants
・Training for managers to encourage better
empowerment of female staff

400

0

Putting in-house admin expertise to use for customer-facing departments. 10,000

Point 3Harnessing the business’s uniquecharacteristics

・Assignments and development that take advantageof the business’s characteristics

in streamlining and making improvements has led to the creation of back-officeconsulting services to help users extract greater value from workplace operations.

（%）
38■ From RPA operator to back-office consultant

Some 9,000 hours of robotic process automation (RPA) over four years yielded

433

473

493

2018

2019

2020

2021

Women in Management Positions

16.2

15.8

（%）
25

23.5

20
15

9.7

43

41

21
2017

Women

186

215
20.4

150

0

218

195

200

223

Men

2018

2019

55

57

2020

2021

10
5

%age of management positions held by women

（%）
100
80
60

100.0

81.8

100.0

93.3

90.0

84.2

40
20
0

5.3
2018

3.9
2019

Childcare leave uptake: women
Return from childcare leave: women

4.8
2020

17.2
2021

Childcare leave uptake: men

2020

2021

Development Department managers to discuss concerns andpointers for career development.
■ Workshops and Discussion Forums

We hold workshops, discussions, and training to help mid-career hires learn

hit the ground running.

more about the company and its work, and forge stronger ties with colleagues.

■ Post-hire 1-on-1 Meetings

New hires have one-on-one meetings with Human Resources

Mid-career hires inmanagement positions:

48.1% in 2021

Goal for 2030: 50％■ Career Opportunities for People with Disabilities■ Funai Consulting Diversity & Inclusion Office

We are constantly looking for ways to be more inclusive in hiring andwork opportunities. For instance, in 2015, we established a team toformed in 2020 to provide assistance for consultants in Ehime.

100.0

2019

2018

ensure they can join us with confidence in their direction and■ A Rewarding Workplace for All

100.0

0

■ Career Opportunities for Mid-career Hires

handle cleaning duties for our Osaka Office, and a second team wasChildcare Leave: Uptake and Return2,500

employees). One of the RPA has graduated to back-office consulting work.

■ Pre-hire Support

Women as a %age of our workforce

5,000

far more output than achievable by human staff (typically female, non-technical

36

32

7,500

We strive to maintain workplaces that allow people with disabilities
to work in a way that suits their abilities and career vision.
Working with colleagues in different departments and achieving
outcomes, they have quickly become indispensable and ensured
the system has become firmly established.
■ Leading the Way on ESG

The Diversity & Inclusion Office is leading the way on ESG initiatives,with staff speaking at all-in morning meetings and conferences
about rewarding workplace and promoting diverse working styles.

Corporate Data

・Post-childcare-leave Reboarding Programs(ensuring staff on childcare leave are get back up
to speed by the time they return)Consultant

34

380

Men

In the typically female-majority field of back-office operations, our experience

Vision Map before committing to a final interview so as to50・Female Talent Empowerment Committee (training
by department heads on strategies to help womenforge meaningful careers)

37.4■ Back-office consulting

Prospective hires work with managers to create a Career・“L-Star” certified as a proactive provider of career
opportunities for womenmerged into Funai Soken Digital]3 stars)

33.6
2017

Women

100

(Funai Consulting 2 stars; Funai Soken Corporate Relations [now

35.8

36.3

34.4

316

200

Promoting and embedding diversity

Point 2

39

600

776

725

625

824

(Hours saved)
12,500Governance・We encourage flexible working arrangements tosuit different lifestyles, e.g., remote work, flex-time,career track changes

800

830

Work Hours Saved through Approx.
9,000 Hours of RPA Over 4 Years

ESG

Point 1

Female employee numbers & %age of total workforce

Source: Toyo Keizai Inc. CSR
Company Hand Book 2021

■ Business process outsourcing (e.g., list-based sales calling, seminar operations)

Yuko Tasaka■ Evening Up the Gender Balance

after my childcare leave meant I could rejoin the fray with confidence.

Value Creation Drivers

variety of initiatives in place to help us reach ourmobile phones). Most of all, the support of my colleagues during andFunai Soken Digital■ Helping Women Forge Meaningful Careers
At the Funai Soken Consulting Group, we have a

10 0 %

2021 Women In
Management Rankings:
We ranked 28th

information with those on leave (e.g., through loans of computers andDiversity & Inclusion

70％

Funai Soken Holdings: The Basics Growth Strategies

Development

Working Hard Behind the Scenes
Making productivity improvements
to boost work outcomes(transcribing output almost tripled,
direct mail numbers almost doubled)
and working with consultants tocreate solutions, every day we areworking to help behind the scenes.

Online Award Ceremony
A special event to share thepositive feedback received by
the Diversity & Inclusion Office.

Employees with Disabilities(Groupwide)

25

21

23

20
15
10

12

13

8

5
0

2017 2018 2019 2020 2021

40

SocialSocialHuman Rights

At the Funai Soken Consulting Group, we believe thatand retain good people by strengthening our talent

At the Funai Soken Consulting Group, respect for

the Funai Soken Consulting Group Basic Policy on

a diverse workforce is key to sustained growth.

management. Initiatives include aggressive hiring andhuman rights is not just an obligation but a

Human Rights to ensure that people’s basic rights are

Knowing the importance of securing sufficient talenttraining to maximize employees’ skills.

fundamental precept of our consulting and otherprotected and respected in all areas of the group’s

and worker mobility, we are working hard to attract

business operations. To that end, we have establishedactivities.

■ Hiring■ Basic Policy on Human Rights■ Mid-career

We seek to secure more talent through broader
recruitment channels and streamlined screening processes.
Hiring professionals is a particular focus; for instance,

Independent
recruitment
eventsReferrals
Company
websitegiven that our ability to attract digital transformation staff
has a direct bearing on the bottom line, we have launchedInternships■ Recent Graduates

In addition to industry-specific recruiting, we also hold wholegroup digital transformation hiring events and offer digitaltransformation internships (featuring workshops and forums)
to approach students early on. In doing so, we identify thepool of available talent, differentiate ourselves from rival

Directrecruiting

hires, experienced staff, and upper management); others

career enhancement programs is a positive way for us toare designed to develop specific skills or address specificdevelop every employee’s skills and steadily develop a poolproblems. Our focus is on having the right skills at the rightof staff with digital transformation skills.

time, instilled through practical work based on real examples

Some employees undergo training that incorporates

rather than theory alone. In the consulting segment, we list

external content in order to acquire more specialized skills.

Experienced
staff

Upper
management

New employee training

Career enhancement
programUpper management
training

Follow-up training

New manager
training

Committees,
workshops

DX staff category

Definition

Digital marketing
consultant

Achieving outcomesthrough operations

Harnessing thecompany’s expertise

and will not tolerate human trafficking and other forms ofslave labor, forced labor, or child labor.

■ Due Diligence
To ensure consideration and respect for human rights incomply with the UN’s Guiding Principles on Business and

All group employees undergo periodic training aimed ateliminating all forms of harassment in the workplace. In
addition, officers and employees undergo training thatencourages them to reflect this policy in all areas of thegroup’s business.

6 Transparency Regarding Human Rights
Initiatives
We will disclose, via our website, information regarding the
progress of initiatives implemented under this policy.

Identify & evaluate factors
harmful to human rights

Measures to prevent,mitigate harmful factors

Share information

Monitor and evaluate
effectiveness

Human Rights, as shown to the right.
■ Basic Policy on Human Rights

For new recruits■ Responding to calls for help

For existing
employees■ Human rights education and training

DX enablement
Digital transformation
consultant

Achieving outcomesthrough sales, planning,project management■ Human Rights Education

Information security training

Through education programs covering issues such as
External training
content

Helping women forge meaningful careers

41

we recognize the right to collective bargaining. We reject

have established a framework of due diligence to ensure we

Instruction in Funai philosophy

Workshops, forums for non-Japaneseemployees, mid-career hires

Moreover, our people have the freedom of association, and5 Education

an age when people and working styles are diversifying, we

Systems training

Human rights training (e.g., compliance)

Learning programand keeping working hours within reasonable levels.

swiftly and appropriately to correct the situation effectively.

Digital transformationengineerAchieving outcomesthrough building andutilizing DX systems

Corporate Data

Department-specific training

Department-specific training

We prohibit discrimination in any form, or harassment thatsuch adverse impact is deemed to have arisen, we will act

Governanceand devise training content for each skill. Linking these with

Digital transformation training

3 Respect for Human Rights

prevent and mitigate the occurrence of such effects. If any

ESG

to different levels of employees (e.g., new hires, mid-career

Skillstraining

This policy applies to all officers and employees of the Funai

including ensuring safe workplaces, paying decent wages,
up the digital transformation skills needed to get results,

Problemspecifictraining

2 Scope of Application

We are committed to responsible employment practices,

We offer a variety of training programs. Some are tailored

Levelspecificstaff
training

conduct periodic risk assessments and take action toundermines human dignity.

■ Professional Development Programs

Mid-careerhiresbusiness activities may have on human rights, and will

Business and Human Rights.

business partners to abide by this policy.

employers, and lock in potential employees.

New recruits

We will strive to identify any adverse impact the group’s

rights stipulated in the United Nations’ Guiding Principles for

Soken Consulting Group. We will also encourage ourMedia ads
External
recruitment
events4 Due Diligence

We strive to embody and practice the respect for human

Value Creation Drivers

a dedicated recruitment webpage for this purpose.

Staffing
agencies

1 Guiding Principles

Funai Soken Holdings: The Basics Growth Strategies

Human Resources Management■ e-Learning

preventing discrimination and harassment, we seek not only to

We provide anti-harassment e-learning programs designed to

instill an understanding of the basics and highlight the signs

create a corporate culture in which all employees can respectthat might help prevent harassment

and spur each other on to success.

and human rights violations, but also
to develop a mindset conducive tomaintaining a workplace in whichthese are unlikely to occur.

■ Manager Training

Managers with staff undergo training to learn what they
can do to ensure workplace compliance and prevent
harassment.

42

SocialSocial■ Wellbeing: For a Healthy and Happy Workforce■ Initiatives to Prevent the Spread of Covid-19
1 Workplace Vaccinations
The companies of the Funai Soken Consulting Group held a collective workplace vaccination drive to give
employees, their families, and our clients a little extra reassurance. Extending the scope to include

Wellbeing is more than just physical health; it speaks

rewarding work helps improve employee retention.

of a broader happiness that also includes mental

Proseed is the prime example of how the Funai Soken

health and social satisfaction. Employees’ wellbeing

Consulting Group is working hard on employee

leads to improved performance, individually andwellbeing and healthy management.

collectively, and that feeling of being engaged in

employees’ families was designed to prevent the risk of a mass infection in our workplace.

2 New Workplace Systems in Response to Covid-19

Proseed’s Wellbeing Initiatives

We moved swiftly to implement in-house systems in accordance with government policy. In addition to
department-specific work-from-home arrangements, these included studying where and how people moved in

1 Wellbeing Diagnosis

the workplace and devising ways to manage contact.

Proseed offers clients a diagnostic test to measure employees’ happiness. It consists of 56 questions on seven

Covid can have long-lasting aftereffects, and follow-up care for employees who catch the virus is essential.
We provide ample opportunity for anyone who needs follow-up care to consult an industrial physician.

■ Promoting Physical and Mental Wellbeing

Greater cooperation between
industrial physicians, workplacesupervisors, and group companies’
personnel departments enables
us to ensure that any employee
professional medical help promptly.

health early and helping those people
get proper care, we can minimize
work time lost and help those whotake leave recover and return to work
earlier.

With the help of workplaceenvironments and establishing work
procedures that enable people tocontinue working.

■ Subsidizing Follow-up Exams

Work-life
cycle

Not taking follow-up exams can lead to health issues thataged 35 or over who undergo the procedure as part of theirimpact work and private life.
When an employee’s annual health check-up results
contain an advisory from the testing physician, we encourage
the employee to undergo follow-up exams by subsidizing the

You are able to takepleasure in work thatyou feel leads topersonal growth.

Learning
andgrowthHealthworkplace

Team

Work goals and targets
strength
are shared by all teamRoom tomembers, who feel secure
apply
in each other and feel theskillsbonds of cooperation
among colleagues.
You know your role, and feelCompanyemployee
trust

satisfaction in carrying out thatrole based on your own
observation and initiative.

A positive cycle ofrewarding lifestyle→productivity at work→
rewarding lifestyle→productivity at work
has emerged.

The company maintains
worker-friendly
workplaces and provides
rest opportunities, suchthat employees also want
to help keep theworkplace comfortable.

The company has measures inplace to ensure employees arecared for, and employees feelthey are contributing to thebusiness.

cost.

Corporate Data

We subsidize the cost of gastrocamera exams for employees
annual health check-up.

Well-being

Mutualrecognition

supervisors, we are improving work

2 Review of Annual Health Check-up “Optionals,” Encouragement of Follow-up Examinations■ Subsidizing Gastroscopic Exams

When you arerecognized as avalid member of theworkplace, yourecognize others as
such, and you feel
you are making a
difference.

Governancestruggling with mental health can seek

By detecting the signs of poor mental

so that both may seek happiness and satisfaction in a workplace climate of trust and worthwhile work.

ESG

1 Mental Health Caremake improvements where needed in order to encourage greater awareness among companies and employees,

Value Creation Drivers

factors that contribute to wellbeing. The test is followed by action in the form of briefings and workshops to

3 Follow-up Care for Infected Employees

Funai Soken Holdings: The Basics Growth Strategies

Promoting Health and Wellbeing

2 The Wellbeing Customer Center Awards
The Wellbeing Customer Center Awards recognize companies who implement the
Wellbeing Diagnosis and show outstanding performance. It focuses on the value androles of customer service—the most human of occupations—and seeks to instill prideand boost happiness among the customer service workforce.

43

44

Governance

Information Security
We work closely with mid-scale businesses and SMEs as they seek to negotiate the “new normal” of the
post-Covid era, helping them seek growth, improved productivity, and development. The data we receivefrom clients as part of these efforts to bring joy to people and businesses is part of our huge wealth of
security is a high-materiality issue, and a vital element of our ESG management.

1. Constant Strengthening of theInformation Security Framework

Information Security Initiatives

Surveying the level of information security of all Funai

Our information security platform is founded on the

Information security management

formulated to suit our business domains andmanagement practice instilled throughout our workforce.

Soken Consulting Group companies—with an updated

Information assets

Basic Policy on Information Security, with rules
contemporary trends, as well as solid information security

Information Security Initiatives Since 2021

Funai Soken Holdings: The Basics Growth Strategies

information assets, which must be safeguarded from leaks and falsification. As such, information

Rules

Moreover, we constantly strive to bolster that platform

Workforce

Training

Information security staff

and maintain a well-trained information security team.

Information security platform—and analyzing the results allows us to identify
apparent and underlying issues, and to run the PDCA
cycle to work on resolving them. To the right is an
example of the radar chart used to plot the survey
results.

2. Conducted Information Security Training
Our officers and employees handle a broad range of information. Knowing that a disciplined approach emphasizing

Today, data usage is increasingly digitalized and there are so many ways for using it, from core systems to software andstrong individual awareness of the rules and of the relevance of information security to each of us is vital for

cloud computing. The risk to the group’s information assets—including information received from clients—increases as

ensuring secure, efficient use of information, employees of all ranks are required to undergo information security

more organizations become involved, as the volume of information expands, and as more systems are used.

training every year.

2. Insufficient Access Procedures

Information Security e-Learning Overview

As laws become more stringent and ever-advancing customer support means the data we hold is more confidential, any failure

1. Information securityof rules or system access permissions to keep up with evolving security demands increases the risk of unauthorized access.

5. Information Security Manual

2. Privacy protection

ESG

1. Information Asset Leaks

Value Creation Drivers

Information Security Risks

test to cover areas relevant to digital transformation

3. Cyber attacks

4. Compliance

3. Damage to Vital Data, System Outages
sophisticated external attacks poses a risk to our systems and organizations dedicated to maintaining the confidentiality,
reliability, usability, integrity, and security of information, and increase the risk of compromising business continuity.

3. Stronger Security within the Information Systems Platform1

・Steadfast systems for safer digital transformation
The faster the digital transformation of the ways we use the group’s information assets—including information received from clients—the greater the risks. We have a groupwide framework in place to counter those risks, including thorough information security training
for all ranks and enhanced systems for confirming the safety of software and cloud-based applications.

Information Security Framework
1. Information Security Section
information security groupwide. The Information Security
Section reports directly to the president, and offers objective,
expert advice on info-security regarding all group companies,
as well as incident response support, research, and assessment
so as to raise the bar for security throughout the whole group.

2. Information Security Council
We have established a groupwide Information Security Council,
which functions in cooperation with the Risk Management
Committee and the Sustainability Committee to work withgroup companies’ key info-security staff in a concerted effort
to maintain and strengthen our information security structure.

45

・Risk assessments of systems
To avoid the emergence of “shadow IT,” Funai Consulting has established an Information Security Committee to perform pre-emptive
risk assessments of information systems.

Board of Directors
Sustainability
Committee

Proactive
dialogue

Risk Management
Committee
Executive
Committee

Delegates
authority related
to information
security

Information
Security Council

ESG Promotion OfficeInformation Security
Section■ Build framework foradministering information assets■ Education and training for all
officers and employees■ Information Security Council
operations■ Oversight of information security
incidents

・More Secure Remote Work Platforms
We endeavor to maintain systems that ensure information security without compromising our efforts to improve working practices, forinstance by upgrading the authentication infrastructure of our remote work platforms.
2

Corporate Data

We have established a dedicated section to administer

Preventing Information Asset Leaks

GovernanceDisruption to the upkeep and succession of skills acquired by IT staff, and failure to stay ahead of potential for increasingly

Addressing Faults in Personal Information Access Procedures

Our legal departments work closely with group companies to ensure that procedures for handling personal information are up to date.
3

Preventing Damage to Vital Data, System Outages

To ensure uninterrupted, safe use of reliable systems, those systems are subjected to testing upon installation and major updates, as wellas periodic tests for the most vital systems, and even retesting by experts.

Proactive dialogue & involvement

Group companies’ information security staff(incl. Funai Soken Holdings information systems depts.)

46

Corporate GovernanceDirectors

Audit and Supervisory Committee Members
Director and member Director and member Director and member ofof the Audit andof the Audit andthe Audit andSupervisory Committee Supervisory Committee Supervisory Committee

Chairman &group CEOPresident &CEO

Director andexecutive vicepresident

Sakae
Takashima

Takayuki
Nakatani

TatsuroOno

Nobuyuki
Isagawa

Miki
Mitsunari

Masahiro
Hyakumura

Atsushi
Nakao

AkihiroKobayashi

Board meetings
Mtgs. attended / mtgs.
held (attendance rate)

13/13(100%)

13/13(100%)

13/13(100%)

13/13(100%)

13/13(100%)

13/13(100%)

13/13(100%)

13/13(100%)

Audit and Supervisory
Committee meetings
Mtgs. attended / mtgs.
held (attendance rate)

ー

ー

ー

ー

ー

13/13(100%)

13/13(100%)

13/13(100%)

〇

●

〇

〇

〇

●

〇

〇

〇

〇

〇

●

〇

〇

〇

●

〇

●

●

●

●

●

●

Director

Director

Outside, independent Outside, independent

Outside, independent Outside, independent

AttendanceNominating Committee●Chairperson 〇Member

Successor Nominating
Committee●Chairperson 〇Member

Compensation Committee●Chairperson 〇Member

Governance Committee●Chairperson 〇Member

Sustainability Committee〇●Chairperson 〇Member

Funai Soken Holdings: The Basics Growth Strategies

Officers

Skills●●●Sales, marketing

●

●

●

●

Finance, accounting●

Capital markets, fundraising

●
●

Law
Risk management

●

●
●

●

Social and environmental issues

●

●

●

●

Auditing and internal oversight

●

●

●

●

ESG

GovernanceValue Creation Drivers

Corporate management

As of Apr. 1, 2022
Board meeting numbers exclude three written-resolution votes.

Diversity and Expertise in Management

2

Takayuki Nakatani

34

Chairman & group CEO

President & CEO

Tatsuro Ono

Director and executive vice president

Nobuyuki Isagawa
Outside director

5

Miki Mitsunari

6

Masahiro Hyakumura

78Outside director

Director and member of the Audit and Supervisory Committee

Atsushi Nakao

Outside director and member of the Audit and Supervisory Committee

Akihiro Kobayashi

Outside director and member of the Audit and Supervisory Committee

bolster corporate governance by making sure at least aour selection policy for directorship candidates focuses on

third of our directors are outside directors so as to ensure

ability to carry out those duties and responsibilities rather

the objectivity and validity of the board.

Director Training
1. For Inside Directors and Executive Officers
The company invites outside lecturers to conduct training based on real examples, such as violations of laws and regulations that
we may be susceptible to, illegal conduct that may arise at the company, selection of M&A targets, as well as points to consider
for management decision-making and management approaches for subsidiary companies, including overseas transactions.

Corporate Data

1

Sakae Takashima

than on age, gender, or nationality. Moreover, we strive tomanage the company and its business on their behalf, andGovernance

7 6 8 1 5 2 4 3

We believe that directors are entrusted by shareholders to

2. For Outside Directors
The company improves the effectiveness of outside directors’ supervisory capabilities through better understanding of thebusiness, based on deepening their knowledge of the group and its business. This includes outside directors’ participationin “group company presentations on management policy” and group company board meetings as appropriate.

3. For Newly Appointed Inside Directors and Executive Officers
The company offers opportunities for training at external organizations to gain the minimum knowledge required for
directors on matters such as laws, compliance and corporate governance.

47

48

Corporate GovernanceAt Funai Soken Holdings, we strive to strengthen ouroutside directors, thus ensuring the board’s objectivity

In light of changes in the environment relating to theother hand, those stocks that are acknowledged to becorporate governance with a focus on ensuring

and validity. The company audits the legality andCorporate Governance Code and the risk that theof strategic significance to the company are retained.

effective legal compliance and maximizing shareholder

validity of the Board of Directors by means of thecompany’s financial situation could be significantly

We exercise voting rights to approve or reject thereturns. In order to enhance corporate governance, at

Audit and Supervisory Committee (comprising three

impacted by share price fluctuations, the company’s

stockholding company’s proposals, taking account of

least one third of the directors of the company are

members, including two outside directors).

basic policy on cross-shareholdings is to reduce cross-whether there is an appropriate governance system inholdings and to not acquire new shares unless theplace, and whether the stockholding company makes

holding is deemed to be strategically significant. Eachappropriate decisions that will enhance corporate value

year, the company’s stockholdings are reviewed on anover the medium- to long-term, based on whether it

individual basis, and the economic rationale of theseenhances the corporate value of the group. With regard

holdings is assessed. The medium- to long-term

to proposals that could have an impact on corporate

objectives for the holdings are examined and returns,

value and shareholder returns (such as takeover defense

such as dividends, are taken into account. As a result

initiatives or business restructuring measures), weof this review, those stockholdings that are deemed toengage in dialogue with the stockholding company tohave limited strategic significance or economic rationale

assess its aims and objectives for the improvement ofare sold, while taking the impact of the disposal on thecorporate value. Based on this, we evaluate the merits

market and other considerations into account. On theand disadvantages of the proposals concerned.

■ Funai Soken Holdings Corporate Governance Structure

Shareholders
Appointments & dismissals

Appointments & dismissals

Board of Directors

Appointments & dismissals

Audit and Supervisory
Committee

AuditsGovernanceCommittee■ Cross-holdings

Successor
Nominating
Committee

Risk Management
Committee
Oversight

Internal Oversight
OfficeCompany A

Cross-holding review criteria

Company B

Review of eachcompany’s shares

Comprehensive decision･Check the holding’s
significance to our group･Is the company’s decision-making conducive to mid-to-long-term growth in corporate value?

Company C

Internal Control
Committee･Consider returns, e.g.,
dividends

Sustainability
Committee

Executive Committee

Accounting
audits

Accounting auditors･Does the company have a proper governance structure?
･Is the holding conducive to our group’s corporate value?
･With regard to proposals that could have an impact on corporate value and shareholder
returns (such as takeover defense initiatives or business restructuring measures), we
engage in dialogue with the share-issuing company to assess its aims and objectives forthe improvement of corporate value. Based on this, the company evaluates the merits
and disadvantages of the proposals concerned.

Oversight and Evaluation of Strategic Decision Making

GovernanceCompensation
Committee

Final decision criteria

ESG

Nominating
Committee

Value Creation Drivers

Approach to Cross-Shareholdings

Funai Soken Holdings: The Basics Growth Strategies

Board of Directors Basic View on Corporate Governance Relating to Sustainability■ Advisory Committees
Nominating Committee

remuneration is an incentive for the improvement of businesscandidates for director positions, deliberates on appointment criteria

proposals for remuneration to the Board of Directors for

performance over the medium- to long- term. It submits

Ensures the transparency and objectivity of the process for selecting

submission to the General Meeting of Shareholders andfor directors and executive officers, assists candidates through the●

Basic Approach to Capital Policy
We recognize that our approach to capital policy is

49

●

●

the group from a mid-to-long-term perspective, improves

Aim for return-to-shareholders ratio of 60+%, with afocus on methods such as acquisition of treasury

the business, while building shareholders’ equity to an

shares and increasing total dividend (dividend per share)

corporate governance.

representative director, and ensures the process is fair and highly(consolidated ROE 15+%)●

fairness and transparency of management, and strengthens

appointment and development of the group CEO andSteady increase in ROE above cost of capitaltransparent.
●

Compensation Committee

Seeks to improve the group’s corporate value by ensuring thetransparency and objectivity of the process for determining
executive compensation. Ensures that executives’ and directors’

Governance Committee

Reviews various issues related to the corporate governance of

appointing and dismissing the president. Advises regarding theseek profit growth driven by proactive investment inappropriate level and increasing returns to shareholders.

Successor Nominating Committee

Ensures the transparency and objectivity of the process for

extremely important for enhancing shareholder value
over the mid- to long-term. Our basic approach is to

discusses the policy and details of individual remuneration.

selection process, and ensures the validity of the selection process.

Major Corporate Governance Initiatives

Corporate Data●●

Sustainability Committee

Ensures sustainability is incorporated into management
throughout the whole group, monitors and evaluates KPIs,
ensures governance functions properly, and oversees consistent
implementation of policies.

50

Corporate GovernanceWe recognize the vital importance of prudent capitaland return-to-shareholders ratio at 60+%, while

policy for mid-to-long-term increases in shareholder

keeping a watchful eye on cost of capital.

value. To that end, we strive to sustain ROE at 15+%

Remuneration Levels andMethods of Determining
Remuneration Amounts

Executive Compensation System: Design and Outcomes■ Matters Pertaining to Policy on Determining Directors’ Remuneration Amounts and Calculation Methods
amounts and calculation methods recognizes that directors’of Directors’ and Compensation Committee’s role is toremuneration is a vital part of corporate governance asdeliberate multiple times on the policy on determining officers’

relates to the pursuit of sustainable growth for the Funai

remuneration, and to deliberate multiple times on the

Soken Consulting Group and mid-to-long-term growth incompensation packages of each of the company’s directors

corporate value, as well as sharing value with shareholders.

(excluding those who are members of the Audit and

The policy is configured to allow directors’ remuneration to

Supervisory Committee). Compensation is determined based

function as a healthy incentive for directors to strive to

on factors such as each directors’ duties, responsibilities,

achieve those objectives. It is intended to help us secure,performance, and degree of contribution. Based on theretain, educate, and reward talented people, and holds thatcommittee’s decisions, the CEO made submissions to thethe process of determining remuneration should be highlyboard of directors, which made a decision.

transparent and objective. The compensation of directors●

Remuneration Structure and Performance-BasedRemuneration

is discussed by the Compensation Committee, after which the

The remuneration structure of directors (excluding outside

CEO submits the matter to the Board of Directors, which

directors) who are not members of the Audit and Supervisory

makes a final decision. The remuneration of directors who

Committee contains the items listed below, and remuneration

are members of the Audit and Supervisory Committee isis apportioned based on rank and duties. Compensation

determined through discussions by the Audit and Supervisory

comprises a fixed portion as well as performance-based

Committee. As pertains the process of determining the amountremuneration and performance-based stock-as-compensation.

A fixed monthly amount comprising the following.
Monetary compensation, which is not linked to performance, and the amount of which isdetermined in accordance with rank and duties.

Performance-based
remuneration

Monetary compensation linked to consolidated sales, operating income, and ordinary incomein the most recently completed business year
A personal assessment score (from best to worst: S, A, B, C, and D) based on eachindividual’s degree of achievement of criteria (incl. performance of duties, responsibilities,business performance, and degree of contribution) and personal KPIs.

Stock options are offered by shareholders in accordance with rank, roles, and achievementswith the aim of increasing motivation and morale relating to the sharing of value withshareholders and achieving mid-to-long-term improvements in business performance, on
the condition that the options can only be exercised upon resignation. The remuneration
structure of outside directors and those directors who are members of the Audit andSupervisory Committee comprises only fixed compensation (i.e., the fixed monthly amount).

Fixed Compensation
Basic remuneration

Performance-based remuneration

Monetary compensation, which is not
linked to performance, and the amount of
which is determined in accordance withrank and duties.

Performance-linked floatingcompensation
Stock options as compensation

Monetary compensation linked to consolidated sales,
operating income, and ordinary income in the most recently
completed business year.
A five-level personal assessment score based on eachindividual’s degree of achievement of the criteria (incl.
*Calculated with reference to executive
performance of duties, responsibilities, business performance,compensation packages paid by other companies
and degree of contribution) and personal KPIs.

Stock options are offered by shareholders inaccordance with rank, roles, and achievementswith the aim of increasing motivation and morale
relating to the sharing of value with shareholders
and achieving mid-to-long-term improvements inbusiness performance, on the condition that theoptions can only be exercised upon resignation.

8

2in the industry.

Corporate Data

Basic remuneration［Performance-Based Stock-as-Compensation］

51

Grounds for the Board’s
Finding that Individual
Directors’ Compensation
Packages Were in Line with
PolicyThe Board of Directors determined that individual directors’ compensation packages werein line with official policy after receiving a report to that effect from the Compensation
Committee, which carried out exhaustive, multifaceted examination of the proposed
packages to check their compliance with policy.
Authority for determining the amount and calculation methods of officers’
remuneration rests with the Board of Directors. We have, in addition to our Audit andSupervisory Committee, a voluntary Compensation Committee. To ensure objectivity andtransparency, the committee is chaired by an outside director and a majority (i.e., three) of
the committee’s members are outside directors. The committee’s role is to deliberate on
the compensation packages of each of the company’s directors (excluding those who aremembers of the Audit and Supervisory Committee). Compensation is determined basedon factors such as each directors’ duties, responsibilities, performance, and degree ofcontribution, and bound by the maximum amounts approved at a shareholders’ meeting.
Based on the committee’s decisions, the CEO makes submissions to the board of directors,
which deliberates on each individual case and makes a final decision. The amount ofcompensation paid to directors who are members of the Audit and Supervisory Committee
is determined through discussions by the Audit and Supervisory Committee.

［Compensation Paid to Directors’ (Excluding Those Who Are Members of the Audit and Supervisory Committee)］［Fixed Compensation］

Stock options ascompensation

When calculating compensation, these factors are evaluated: the group’s achievement of targets(i.e., for consolidated net sales, operating income, and ordinary income) in the most recently
completed business year; qualitative evaluation of the individual’s progress toward achieving
targets relating to his/her duties, responsibilities, performance, and degree of contribution; andthe group’s progress toward achieving the targets of the Mid-Range Business Plan. Indicators
relating to achievement of performance targets are used to gauge earning capability.

Governance

who are not members of the Audit and Supervisory Committee

KPIs for Performance-Based
Compensation and PerformanceLinked Floating Compensation;
Reasons for Choosing Those
KPIs; and Methods of Calculating
the Compensation

ESG

of directors’ remuneration for this business year, the Board

Policy for Determining the Ratio
At Funai Soken Holdings, performance-based stock-as-compensation generally makesof Performance-Based Stock-asup 20% of total compensation, and this ratio changes in accordance with performance
Compensation to Compensation
outcomes.
not Linked to Performance

Value Creation Drivers

Our policy pertaining on determining directors’ remuneration

The Compensation Committee deliberates to ensure appropriate remuneration levels
and structures in accordance with each individual’s duties, and takes into consideration
the compensations paid by other companies in our industry so as to ensure that
remuneration amounts are in keeping with the company’s performance and scale ofbusiness. The Compensation Committee sets officers’ remuneration policy, monitors thesystem, and deliberates on specific calculation methods. Based on the conclusions theyreach, the compensation paid to directors who are not members of the Audit and Supervisory
Committee is then determined by a Board of Directors resolution, and the compensation paid
to directors who are members of the Audit and Supervisory Committee is determined throughdiscussions by the directors who are members of the Audit and Supervisory Committee.

Funai Soken Holdings: The Basics Growth Strategies

Policy Regarding Distribution of Earnings［Compensation Paid to Outside Directors and Members of the Audit and Supervisory Committee］
Fixed Compensation
Basic remuneration (fixed monthly payment)
Compensation for outside directors comprises only fixed remuneration in light of their independence from execution ofoperations; compensation for directors who are members of the Audit and Supervisory Committee comprises only fixed
remuneration in light of their independent status as auditors.

52

Corporate GovernanceConstructive Dialogue with Shareholders, Investors, Analysts, and Others

The effectiveness of the Board of Directors is evaluated once a year, covering all directors, including Audit andPart of our efforts to realize the Funai Soken Consulting

organically with the pertinent departments to collect

Supervisory Committee members, through a self-assessment questionnaire. The Board of Directors deliberates theGroup vision, “Trusted and respected by society for

information and exchange views based on expert insight.

results of this evaluation to improve the effectiveness of the Board of Directors.

bringing joy to people and businesses through our work,”■ 2021 in Review

1

Reviewing which items get tabled at board
meetings and which do not has resulted in
improvements. We will continue with thesereviews.

3

Progress toward achieving the targets of the5

Mid-Range Business Plan is being monitored

clarification of the range of skills needed for the

6

Board of Directors.

matters to be tabled at board meetings so as topromote more substantial debate and improvethrough reporting from internal oversighttools such as the summary of financial results andintegrated report.

identified as having high materiality has begun,

promoting a deeper understanding of the Funai Soken

but further action is required next year andConsulting Group.

Increased involvement of outside directors: Alladvisory committees to the board are chaired byoutside directors, and outside directors make upof risks within the group.

Dialogue with shareholders, investors, and securities
analysts is overseen by the director in charge of the IR &PR Office, who works with the president and appropriate

reviews.
In stakeholder dialogue as elsewhere, we strive toofficers to determine the right approach in each case.

maintain the accuracy and fairness of information

The IR & PR Office functions to support the company’s

disclosure, as well as proper administration of

dialogue with shareholders and investors, working

international information.

■ Major IR Activities

4
5

Improve the substance of matters tabled at

2019

2020

2021

Individual meetings with analysts and institutional investors

115

108

132

Results briefings for analysts and institutional investors

2

2

2

Further increase teamwork between the Board

Conferences arranged by securities companies

0

0

5

of Directors and its various advisory committees

Briefings for individual investors

3

0

1

2019
(50th AGM)

2020
(51st AGM)

2021
(52nd AGM)

Shareholders

10,49010,994

13,342

AGM at tendees

104

19

21

board meetings so as to promote more in-depth
debate regarding high-materiality issues.

in order to boost the committees’ functional
effectiveness.

*These have mainly been held online since February 2020 due to Covid-19.

*Held at a limited scale due to concerns regarding the spread of Covid-19.

strategies pursued by the group’s corecompanies in order to boost the quality ofdeliberations regarding Mid-Range Business
Plan strategies.

Results briefing for analysts andinstitutional investors (Feb. 8, 2022)

Please visit group company websites
for briefing script.
https://hd.funaisoken.co.jp/en/ir/report.html

53internal use, for instance in management strategy

Annual general meeting ofshareholders (Mar. 26, 2022)

Company information session for
individual investors (Jun. 30, 2021)

Corporate Data

Improve progress monitoring and analysis of

Opinions received through stakeholder dialogue areshared with the board of directors and put to good

departments to the Board of Directors so as toenable swifter identification and understanding

3

working to enhance the contents of major disclosure

Governance2communication of risk management information

proactive in disclosing information, and are constantly

disclosure obligations stipulated by law, but also as partof unbiased information that we believe is conducive toa majority of advisory committee membership.

the board’s decision-making quality.
Establish a framework for optimal

the company website, not only to meet information

ESG

1

as well as results briefings and small meetings. We try to beof our proactive dissemination (to the extent possible)■ 2022 Tasks
Prepare materials outlining the main points ofin-person meetings, phone calls, and online conferencing,company compiles a disclosure policy and posts it on

Monitoring of progress in dealing with issues

beyond.

and analyzed, but further effort is required.
Engaged in debate regarding assessment andand progress was monitored.

is to provide information to all stakeholders. The

Value Creation Drivers

2

4More items were tabled relating to sustainability,

We engage in dialogue in a variety of ways, including

Funai Soken Holdings: The Basics Growth Strategies

Evaluation Process and Identifying Areas for Improvement

Starting this year, questions can be submitted inadvance online.

54

Director Dialogue
Nobuyuki Isagawa

dynamic capabilities to stay abreast of the ever-changing

Professor, Graduate School of Management, Kyoto University

we seek to maintain a board composition that ensures eachbusiness climate, and with clear criteria for evaluating skills

Independent outside director

Tatsuro Ono

Ono Right now, digitalization is an area of major focus forour group, and we are working to acquire people with the

Director and executive vice president

skills to boost our skill base in that field.

A More Effective Board for Sustainable
Creation of Corporate Value

As far as diversity is concerned, we will continue with ourpolicy of appointing female directors who are a match forour business strategy and help improve corporate value. It is

The revision of the Japan Exchange Group’s Corporate Governance Codevital that we harness the strengths of our female workforce

meant 2021 was a year of new questions about sustained effectivenessif we are to improve productivity as part of our quest toof governance. We asked two of our directors, Nobuyuki Isagawa andachieve sustained growth in corporate value. Women in the

Tatsuro Ono, about the director’s role and the importance of diversity.

boardroom are motivational role models for our whole

the Compensation Committee three times. If you countpre-meeting consultations, there were actually more meetings
than that. The committees’ findings are reported to the Boardof Directors, where they are analyzed and debated. Naturally,
the representative directors and internal directors respect thecommittees’ findings. In this way, the advisory committees andIsagawa We have three advisory committees: the Nominating

the Board of Directors function as a single entity.

With the diversity of boards of directors
now a clear focus of the JPX Corporate
Governance Code, what discussions
have their been about diversifying thegroup’s board while ensuring the rightskill mix, and what action can we expect?

ESG

At a company like ours, which already has
an Audit and Supervisory Committee, what
functions do voluntary advisory committees
perform for the Board of Directors?

Value Creation Drivers

workforce and help us show clear career paths for women.

Funai Soken Holdings: The Basics Growth Strategies

skill is covered by multiple directors.

Committee, the Successor Nominating Committee, and theCompensation Committee. All of them are chaired by

Isagawa We need a diverse Board of Directors if we are toachieve our vision for the future and apply our businessof outside directors as members, meaning they are highlycommittees by requiring a majority of members be outside

strategies. There has been an increased environmental andindependent. Their deliberations on matters are substantial anddirectors. As for specific activities, one comes to mind: thesocial focus in recent years from a sustainability standpoint,

carry weight in keeping with their independence and objectivity.

further clarification of the candidate selection process by theand companies are now required to consider the ecological

The Nominating Committee’s role is to evaluate candidates

Nominating Committee. The establishment of a set of sevenand social impact of their businesses—and those of theirfor director positions (including obtaining third-party opinion)

Isagawa I am determined to add momentum to theattributes as a quantitative means of judging new directorshipclients and business partners. This trend will only become

development of our digital consulting business, and I lookto ensure they have the skills and attributes needed to be a

candidates, and the requirement for group director candidates

more pronounced, and I think we will need directors withforward to managing, supervising, and providing advice todirector. The Compensation Committee makes proposals

to make presentations to the Nominating Committee so as toexperience and insights relevant to these areas, or who canhelp overcome the challenges surrounding sustainability. In

regarding executives’ compensation based on the group’s

judge their character, views, and capabilities, have made theacquire the necessary knowledge and skills. It’s no accident

this way, I hope to meet the expectations of our clients,

Compensation Regulations and the previous year’s businessprocess more objective.

that our skill matrix for executives now includes ESG.

employees, and other stakeholders by contributing to growth

results, while taking into account factors such as providing
incentive to help achieve long-term growth in corporate value.
The Nominating Committee met five times in 2021, and

The Compensation Committee has also sought to make thein corporate value. To that end, I will uphold the transparency

objectivity of the compensation decision process and thefemale workforce drives the creation of new value. The Funai

and objectivity of the advisory committees while speaking

acceptability of compensation packages among executives clearer.

Soken Consulting Group benefits greatly from Funai Soken

frankly to the board as a part of constructive debate.

Specific initiatives include use of KPIs and KGIs for assessments,

Holdings’s female outside director and the multiple womenand a report-debate-feedback cycle where group company

appointed to the boards of its operating companies, and

Ono Information disclosure will become more importantpresidents report their compensation amounts to the committee,

each one of them earned her appointment fair and square

than ever. The Nominating Committee and the Compensation

which then debates and responds. Moreover, in light of the shift

through an objective, transparent selection process.

Committee must discuss individual matters such as the

Our executives are chosen for their expertise anddisclosure of management decision-making processes andis a new emphasis on compensation (stock-based) linked toexperience in light of the mix of skills we need for thethe disclosure of human capital, with greater transparency

mid-to-long-term business performance. We are also consideringtransition to the Tokyo Stock Exchange’s new Prime Market

foremost in mind. We will strive for transparent, objective

increasing evaluations from once a year to twice a year.

and for our own business strategies. Naturally, we need theinformation while remaining open to various opinions.

in recent years toward focus on improving corporate value, there

55

Japan is now learning that harnessing the power of its

What are you looking forward to
tackling next?

Corporate Data

Ono The Funai Soken Consulting Group adopted a system in
2021 that upholds the objectivity and fairness of the advisory

Governanceindependent outside directors, and all of them have a majority

56

Business Risks

Over-reliance on consultants

We have established a Risk Management Committee

It consists mainly of directors, executive officers
and employees who manage major departments. It

including management of the risk of losses. The Risk

collects information from both inside and outside

Management Committee recognizes the importancethe company, conducts risk analysis from variousof identifying, evaluating, and managing risks thatperspectives and deliberates on and implements

have a significant impact on corporate management

measures in response to risks. We have also

and business continuity, and appropriately manages

established other advisory organizations as deemed

the risks surrounding the group and seeks toappropriate, including a Sustainability Committee

prevent risks from arising, for instance by identifying

and a Governance Committee, thus helping torisks that require a priority response andbolster group governance with access to advice

implementing specific measures to deal with them.

from broadly experienced outside directors.

Risk

・We seek to secure high-potential talent by hiring aggressively, not just recent graduates
but also among those with career experience in other fields.

Preventive
measures

Risks we face in other businesses

Risk

Preparation & response
measures・Our direct recruiting business operates in a crowded industry susceptible to sudden declines
in competitive strength on price and service quality, and to national economic trends.
・We will develop a talent pool for our logistics business with the skills to stay abreast ofindustry trends regarding ESG requirements.
・We will expand our share of the direct recruiting market through marketing and pursue
client acquisition in a way that is not susceptible to the whims of the economy.
Information security risks

Risk Management Committee
Identify high-priority
risks

・While our logistics business contributes to clients’ improved business performance, thissegment is susceptible to demands for prompt roll-out of environmentally-considerate
solutions for entire supply chains in the name of ESG management.

Unforeseen circumstances may lead to incidents such as confidential information leaks,

Riskviolations of law relating to incorrect procedures for acquiring or handling personal

Oversee risk readinessPreventive
measures
Departments, group companies

・We have a framework that ensures in-house rules are followed through thoroughoversight of information security regulations and their implementation.
・The importance of information management is ingrained in employees and officers
through instilling our Five Principles of Information Security, adherence to the
Information Security Manual, and e-training.

Worsening business performance among our core clientele, Japanese SMEs, may have
Risks we face in the consulting business

Risk

increasing gap between firms that can and cannot keep up with clients’ needs, including

Preventive
measures57

In addition to helping stop the spread of infections, both inside and outside the group, we

new demands such as help with digital transformation, raises the possibility of anindustry shake-up, including new alliances and splits.
We strive to ensure a high degree of client satisfaction by collating insights gained
during day-to-day operations and using these to formulate new methodologies foranalyzing clients’ businesses and finding innovations.

for new orders caused by restrictions on client acquisition and in-person sales activities
may impact the group’s business performance.

In an industry already predicted to become even more intensely competitive, theRisk

an adverse effect on our ability to attract new consulting orders, while lost opportunities

Corporate Data

Risks of longer, more widespread Covid

Governanceinformation, destruction or falsification of important data, and system disruptions.
Report

ESG

Internal Oversight Office

Preventive
measuresReport・We are revising our assessment systems so that compensation reflects individuals’
achievements more accurately.
・We strive to help women forge meaningful careers, e.g., by introducing frameworks
that make it easier to balance work with needs such as childcare.

Board of Directors
Report・The most talented consultants often have a desire to set up their own businesses. Losing
some of our most important talent may have a temporary impact on business performance.

Value Creation Drivers

as a groupwide organization to manage crises

・Failure to secure and develop the human resources we need may have an impact on
our operations and business performance.

Funai Soken Holdings: The Basics Growth Strategies

Our Risk Management Framework

have established a framework that enabled us to continue business operations despite

Preventive
measuresthe pandemic, including online seminars, remote consulting services, and working fromhome. We are also striving to restore clients’ business performance by supporting theirefforts to ready themselves for the “new normal” of the post-Covid era and stepping up
digital transformation consulting services.

58

Financial Review

Performance by Segment

In 2021, we sought to balance Covid safety with the pursuit of

I. Consulting

ad placements kept downward pressure on sales, but optimized

million yen at the end of FY2021. Major factors included anbusiness operations: on the one hand, a thorough regime of

Online seminars and management workshops provided a steadyad operations and a revision of advertising expenses and otherincrease in net income attributable to owners of the parent, aanti-Covid measures and holding workplace vaccinations; on thestream of new orders, while referrals from existing clients andcosts enabled us to reduce the size of the net operating loss.

decrease in net assets due to purchase of treasury shares, andother hand, a nimble combination of in-person and online

direct sales also contributed to a robust increase in orders, thus

consulting services to meet clients’ needs. The Funai Soken

propelling sales and income above 2020 levels.

million yen, and operating losses were 115 million yen, compareda decrease in retained earnings as these were appropriated.
Consequently, the shareholders’ equity ratio decreased 1.7

Consulting Group’s ability to work cohesively and provide clients

Performance in our principal sectors—housing and realwith solutions to the variety of challenges they face, including

estate, and healthcare, nursing care and welfare—was steady,diversifying work styles (e.g., remote work) and adopting ESG aswith another year-on-year increase in net sales. By solution

IV. Other Businesses

part of the collective drive toward sustainability, ensured ourcategory, we achieved significant growth in online marketing

Contact center consulting sales and income increased

Cash and cash equivalents increased 2,458 million year-on-year

bottom-line figures returned to record-high levels last seen in

consulting, business model consulting, and finance consulting.

significantly year-on-year, buoyed by widespread acceptanceto 14,675 million yen at the end of FY2021. Trends in cash

There has been noticeable growth in the uptake of ourand uptake of online training and support services, as well as

flow by activity are described below.

pre-Covid 2019.

with an operating loss of 174 million yen in the preceding year.

points to 80.7%.

Cash Flowrecurring income from major clients. In the systems development

year-on-year), operating income was 6,349 million yen (upincluding marketing DX (centered on online sales) for

business, a recovery in orders from our main clients and otherCash Flows from Operating Activities

27.4%), ordinary income was 6,439 million yen (up 26.5%), andmanufacturing clients, and DX to help clients in the housing, real

new orders resulted in an increase in sales and income.

Cash flows from operating activities ended on a net gain of

net income attributable to owners of the parent was 4,373

estate, manufacturing, and other sectors harness AI, robotics,

million yen (up 25.0%). Net income attributable to owners of theand RPA to increase the efficiency of work processes.
Conversely, subdued demand among companies for hiring

time of the 2Q results by 73 million yen, and ROE blew past thesaw yet another tough year for the recruiting support services

target of 15.0% (identified as a core financial strategy goal inmarket. Despite this, the overall increase in sales, and thethe Mid-Range Business Plan) to 18.2%.

decrease in travel and venue costs caused by from the

Revenues and Profits

5,214 million yen this year compared to a net gain of 3,515
million yen in the preceding year. Major factors included net

compared with an operating loss of 88 million yen in theincome before income taxes and other adjustments of 6,415

preceding year.

million yen; 1,610 million yen in income taxes paid, and 540

Assets, Liabilities, Capitalmillion yen in income tax refunds.

widespread uptake of online seminars, online workshops, andAssetsCash Flows from Investing Activities

remote support services resulted in increased profit.

Total assets increased 2,932 million yen year-on-year to 30,884

Cash flows from investing activities ended on a net loss of 219

Consequently, net sales increased 16.8% year-on-year to

million yen this year compared to a net gain of 263 million yen

22,256 million yen, and operating income increased 21.8%

2,692 million yen from the end of the preceding year to 18,996

in the preceding year. This was mainly due to expenditure ofin new orders via the web drove increases in sales of monthly

year-on-year to 5,846 million yen.

million yen. Major factors included an increase in cash and

218 million yen on purchase of property, plant, and equipment,

deposits, trade notes and accounts receivable, and a decrease

and intangible assets.

support consulting and logistics operations. Consequently, net
sales increased 15.1% year-on-year to 28,813 million yen. Cost of

II. Logistics

sales increased to 19,512 million yen from 17,027 million yen in theSales of logistics operations were up over the preceding year,

preceding year, and SG&A expenses fell from 2,951 million yen fromboosted by an increase in new orders via the web, which resultedof the preceding year to 11,888 million yen. Major factors

Cash flows from financing activities ended on a net loss of

3,018 million yen. Although there was an increase in costs related

from new client development and proactive efforts to invigorate

included an increase in investment securities.

2,547 million yen this year compared to a net loss of 3,194

to online advertisement agency services, there was also a large

sales among existing clients. Logistics consulting sales were also

decrease in travel and venue costs incurred in consulting operations.

up amid a return by clients to investment activities and solid

Liabilities

expenditure of 265 million yen on sale and purchase of treasury

Consequently, operating income rose 27.4% year-on-year to 6,349

management workshop sales. Logistics trading sales were affected

Total liabilities increased 934 million yen year-on-year to 5,197

shares, and 2,272 million yen distributed as dividends.

million yen, and operating margin increased 2.1 points to 22.0%.

by a drop in fuel sales volumes caused by restrictions on corporate

million yen at the end of FY2021.

Non-operating income was 131 million yen, compared withand personal movement, but rising prices meant that sales wereCapital Policy and Shareholder Returns

in short-term investment securities.
Noncurrent assets increased 240 million yen from the end

Cash Flows from Financing Activities

million yen in the preceding year. Major factors included a net

up year-on-year. The solid performance of the logistics operationsof the preceding year to 5,037 million yen. Major factors

We recognize the vital importance of prudent capital policy forgains on sales of investment securities acquired by investing

segment led to growth in operating income.

included increases in trade notes and accounts payable, themid-to-long-term increases in shareholder value. Our basic

current portion of bonds, and income taxes payable.

approach is to seek higher capital efficiency through profit

Consequently, net sales increased 25.5% year-on-year tocompared with 38 million yen in the preceding year. Consequently,

3,309 million yen, and operating income increased 8.7% year-on-

ordinary income increased 26.5% year-on-year to 6,439 million yen.

year to 338 million yen.

Income taxes totaled 2,041 million yen this year, compared

Noncurrent liabilities decreased 105 million yen from thegrowth driven by proactive investment in the business, while

end of the preceding year to 160 million yen. Major factors

building shareholders’ equity to an appropriate level andincluded a decrease in long-term loans payable.

increasing returns to shareholders.

with 1,677 million yen in the preceding year, resulting in an

III. Direct Recruiting

increase in net income attributable to owners of the parent of

The ongoing effects of Covid-19 continue to depress corporate

Net Assets

25.0% year-on-year to 4,373 million yen.

demand for new staff, and the resulting in a drop in recruitment

Total net assets increased 1,998 million year-on-year to 25,687

Corporate Data

Current liabilities increased 1,039 million yen from the end

147 million yen in the preceding year, due to factors such as
surplus funds, while non-operating expenses were 40 million yen,

Governancemillion yen at the end of FY2021. Current assets increased

increase in online advertisement agency services, while an uptick

Net sales were up in the consulting segment, driven by a sharp

ESG

parent exceeded the upwardly revised forecast published at theConsequently, net sales increased 30.4% year-on-year to
1,272 million yen, and operating income was 82 million yen,

Value Creation Drivers

diverse array of digital transformation consulting services,

In 2021, net sales were 28,813 million yen (up 15.1%

59

Consequently, net sales decreased 16.2% year-on-year to 1,953

Funai Soken Holdings: The Basics Growth Strategies

Consolidated Results of Operations

・Basic approach to capital efficiency: Strive for ROE of 15+%
・Basic approach to shareholder returns: Strive for a returnto-shareholders ratio of 60+%

60

Consolidated Financial KPIs 2011–2021
Key Performance Indicators

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

(Million yen)

(Million yen)

Net sales

8,567

9,038

10,065

12,485

14,717

16,433

18,685

21,69725,75225,027

28,813Gross profit

3,010

3,290

3,630

4,340

5,092

5,743

6,888

7,654

8,780

8,000

9,301

SG&A expenses

1,110

1,035

1,004

1,348

1,595

1,883

2,256

2,708

3,075

3,018

2,951

Operating income

1,900

2,255

2,625

2,992

3,497

3,859

4,631

4,946

5,705

4,982

6,349

Net income attributable toowners of the parent*

1,196

1,325

1,984

1,766

2,426

2,558

3,206

3,549

3,868

3,498

4,373

*Net income figures are used for 2015 and before.
(Million yen)

At end of fiscal
year(Million yen)

Total assets

16,54917,347

18,602

20,43722,26022,86225,65026,732

28,41927,95130,884

Net assets

13,77014,456

15,912

16,653

18,217

19,272

21,624

22,37023,16523,68825,687(Million yen)

(Million yen)

2,240

1,753

1,975

2,889

2,008

2,813

3,950

3,554

4,522

3,515

5,214

Net cash provided by (usedin) investments（317）（1,631）（1,136）

（142）

671

412

（982）

（222）

（500）

263

（219）

Net cash provided by (usedin) financing

（736）

（690）

（698）

（1,058）（1,181）（1,689）（1,176）（2,762）（3,411）（3,194）（2,547）

Cash and cash equivalents at
end of fiscal year

4,357

3,790

3,936

5,626

7,125

8,663

10,455

11,022

11,63012,216

14,675
(Yen)

(Yen)

Per-share
Information

Earnings per share

23.64

26.18

39.13

34.77

47.83

50.41

63.37

69.95

76.67

70.32

88.57

Dividend per share

13.3

14.4

16.1

17.8

20.0

24.0

30.0

35.0

40.0

45.0

48.0

271.43285.17312.41

325.25356.05378.44421.29435.56453.48465.60505.04

Net assets per share

(%)

24.9

26.1

24.0

23.8

23.5

24.8

22.8

22.2

19.9

22.0

8.9

9.4

13.1

10.9

14.0

13.8

15.9

16.4

17.4

15.3

18.2

Ratio of ordinary income tototal assets (ROA)

11.8

13.1

15.0

15.5

17.3

17.1

19.3

19.1

21.3

18.1

21.9

Equity ratio

83.1

83.2

85.3

81.1

81.3

83.5

83.3

82.2

79.4

82.4

80.7

Dividend payout ratio

56.4

55.2

41.2

51.1

41.8

47.6

47.3

50.0

52.2

64.0

54.2

Closing share price at end of
fiscal year* (yen)

292

298

467

549

1,152

1,224

2,524

1,642

2,481

2,521

2,616

Price earnings ratio (PER)

12.7

11.4

11.9

15.8

24.1

24.3

39.8

23.5

32.4

35.9

29.5

Return on equity (ROE)

Stockinformation

Corporate Data

22.2

Operating margin

Financial KPIs(%)

Governance*Common shares in Funai Soken Holdings were split twice in recent years: at a ratio of 1.2-for-one on January 1, 2016, and at a ratio of
1.5-for-one on January 1, 2018. For the purposes of this section, per-share information is calculated as if the stock splits had been
conducted at the beginning of FY2011.

ESG

Net cash provided by (usedin) operations

Value Creation Drivers

Cash flow

Funai Soken Holdings: The Basics Growth Strategies

For the fiscal
year

2021

*Common shares in Funai Soken Holdings were split twice in recent years: at a ratio of 1.2-for-one on January 1, 2016, and at a ratio of
1.5-for-one on January 1, 2018. For the purposes of this section, closing share price at end of fiscal year is calculated as if the stock splits
had been conducted at the beginning of FY2011.

Other
information

61

Employees
Avg. no. of temporary
employees

489

526

565

682

783

873

941

1,105

1,209

1,303

1,317

64

44

49

56

41

31

37

41

37

68

52

62

Consolidated Financial Statements
Consolidated Balance Sheet
2020(Thousand yen)

Assets2020

Liabilities

Current assets

Current liabilities

Cash and deposits

12,216,419

14,675,155

Trade notes andaccounts payable

406,535

535,623

Trade notes andaccounts receivable

2,741,126

3,191,781

Short-term loans payable

200,000

200,000

Current portion of longterm loans payableー

100,000

Income taxes payable

841,931

1,325,288

Other current liabilities

2,549,217

2,876,104

Total current liabilities

3,997,683

5,037,015

304,771

100,000

Work in process

130,721

184,105

Raw materials andsupplies

9,908

10,986

Other current assets

951,571875,363

Allowance for doubtful
accounts（49,817）（40,657）

16,304,701

18,996,734

Noncurrent assets
Property, plant, andequipment
1,234,799

1,195,629

Land

4,602,643

4,596,717

Other property, plant,
and equipment, net

149,994

124,850

Total property, plant,
and equipment

5,987,438

5,917,197－

Retirement benefit liabilities

68,08869,872

Deferred tax liabilities

56,12843,657

Other noncurrent liabilities

41,67347,050Total noncurrent liabilities

265,891

160,579

4,263,574

5,197,595

Total liabilities

Net Assets

322,400

322,400

Software256,251

298,339

Other intangible assets

96,73584,678

Total intangible
assets675,386

705,418

Investment securities

4,053,809

4,241,507

Assets related toretirement benefits

463,062

540,005

Other investments andother assets

475,851

490,826

Allowance for doubtful
accounts（8,258）（6,929）4,984,465

5,265,410

Total noncurrent assets 11,647,290

11,888,026

27,951,991

30,884,761

3,125,231

3,125,231

Capital surplus

2,946,634

2,946,763

Retained earnings

20,565,065

22,664,750

Treasury stock（3,560,378）（3,826,322）

Total shareholders’ equity 23,076,553
Accumulated othercomprehensive income
Valuation difference on
available-for-sale securities
Foreign currencytranslation adjustments
Accumulated adjustments
for retirement benefits
Total accumulated othercomprehensive income
Subscription rights forshares

21,532
6,997
38,554
2,086
33,76828,250131,191

4,740
3,272
12,00018,07238,084
5,091,590

4,933
2,738
25,5007,717
40,8886,439,508

176
159,912160,089

16－
16－
70,0005,135－
75,1355,176,543
1,640,018
37,8501,677,868
3,498,675
3,498,675

3,576－
10,935
9,339
23,851
6,415,673
2,083,037（41,236）
2,041,800
4,373,872
4,373,872

24,910,422

75,241

76,85917,07423,992（127,122）（72,760）（34,806）

28,090646,669

748,651

23,688,416

25,687,165

Total liabilities and net assets 27,951,991

30,884,761

Total net assets

18,577
8,816
55,245
3,122
33,45528,002
147,219

Consolidated Statement of Comprehensive Income(Thousand yen)

2020
Net income
Other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustments
Adjustments for retirement benefits
Total other comprehensive income
Comprehensive income
Details
Comprehensive income attributable to owners of the parent

3,498,675

2021

4,373,872（136,333）
928（12,167）（147,573）
3,351,101

1,617
6,917
54,36262,897
4,436,770

3,351,101

4,436,770

Corporate Data

Investments & otherassetsCapital28,813,372
19,512,340
9,301,032
2,951,826
6,349,205

GovernanceLeasehold rights

Total assets

100,000

Shareholders' equity

Intangible assets

Total investments
and other assets

Long-term loans payable2021

25,027,840
17,027,136
8,000,704
3,018,249
4,982,455

ESG

Buildings andstructures, net

Noncurrent liabilities

Net sales
Cost of sales
Gross profit
SG&A expenses
Operating income
Non-operating income
Interest income
Dividend income
Gain on sales of investment securities
Gain on valuation of investment securities
Insurance bonus income
Other non-operating income
Total non-operating income
Non-operating expenses
Interest expenses
Investment partnership management expenses
Contributions
Other non-operating expenses
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of noncurrent assets
Gain on sales of investment securities
Total extraordinary income
Extraordinary losses
Loss on sales of noncurrent assets
Impairment losses
Loss on retirement of noncurrent assets
Loss on revision of retirement benefit plan
Total extraordinary losses
Net income before income taxes and other adjustments
Current income taxes
Deferred income taxes
Total income taxes
Net income
Net income attributable to owners of the parent

Value Creation Drivers

Short-term investment
securities

Total current assets

63

2021

2020

(Thousand yen)

Funai Soken Holdings: The Basics Growth Strategies

2021

Consolidated Statement of Income64Consolidated Financial Statements

Consolidated Statement of Changes in Net Assets
FY12/20(Thousand yen)

Shareholders' equity
CapitalBalance at start of fiscal year

3,125,231

Capital surplus Retained earnings Treasury stock

2,947,675

19,731,165

Total shareholders’ equity（3,342,957）

22,461,115

ChangeDividends from surplus
Net income attributable to owners of the parent（2,140,514）（2,140,514）

3,498,675

3,498,675（749,582）（749,582）

4,793

3,105

6,859

（529,055）

529,055

ー

Purchase of treasury shares（1,040）

Disposal of treasury shares
Retirement of treasury shares
Net changes of items other than shareholders’ equity
Balance at end of fiscal year

FY12/20(Jan. 1 – Dec. 31, 2020)

3,125,231（1,040）2,946,634

833,899（217,421）

615,437

20,565,065（3,560,378）

23,076,553

Accumulated other comprehensive income
Subscription
Valuation difference Foreign currency
Accumulated
Total accumulated
rights foron available-for-saletranslation
adjustments for other comprehensive
sharessecurities
adjustments
retirement benefits
income211,575

16,146（114,954）

112,766

591,243

Total net
assets（92,147）

Total changes of items during the fiscal year

（136,333）

928（12,167）（147,573）

55,425523,290

17,074（127,122）（34,806） 646,669

23,688,416

Capital surplus Retained earnings Treasury stock

Total shareholders’ equity

23,076,553（2,274,187）（2,274,187）

4,373,872

4,373,872（266,079）

128

134

（266,079）
263

Net changes of items other than shareholders’ equity

FY12/21(Jan. 1 – Dec. 31, 2021)

Balance at start of fiscal yearー128

2,099,685（265,944）

1,833,869

3,125,231

2,946,763

22,664,750（3,826,322）

24,910,422

Accumulated other comprehensive income
Subscription
Valuation difference Foreign currency
Accumulated
Total accumulated
rights foron available-for-saletranslation
adjustments for other comprehensive
sharessecurities
adjustments
retirement benefits
income75,241

17,074（127,122）

Total net
assets（34,806） 646,669 23,688,416（2,274,187）

Dividends from surplus

4,373,872

Net income attributable to owners of the parent（266,079）

Purchase of treasury shares
Disposal of treasury shares
Net changes of items other than shareholders’ equity
Balance at end of fiscal year

65

263

1,617

6,917

54,36262,897

101,982

76,85923,992（72,760）

28,090748,651 25,687,165

1,617

6,917

54,36262,897

101,982

4,315

（735）

Loss (gain) on sales of investment securities（215,158）（38,554）

Interest and dividend income（27,393）（28,530）

4,740

4,933

Interest expenses
Loss (gain) on exchange

2,708

8,419

128,977（449,762）

Decrease (increase) in other assets（270,965）（489,920）

Increase (decrease) in other liabilities（296,173）

475,826

10,072

5,078

4,995,293

6,272,053

Loss on retirement of intangible assets
Decrease (increase) in trade notes and accounts receivable

Other cash provided by (used in) operations
SubtotalInterest and dividends received

41,47542,901

Interest paid

（4,615）（4,937）（1,958,765）（1,610,671）

Income tax refunds

454,299

540,635

Contributions paid

（12,000）（25,550）

Net cash provided by (used in) operations

3,515,687

5,214,432

Net cash provided by (used in) investments
Proceeds from sale and redemption of short-term investment securities

1,000,000

304,615

Purchase of investment securities（705,550）（724,985）

Proceeds from sale and redemption of investment securities

192,231416,812Purchase of property, plant, and equipment（48,277）（63,237）

Purchase of intangible assets（175,138）（155,336）

Other cash provided by (used in) investments

176

Net cash provided by (used in) investments

263,4412,366（219,766）

Net cash provided by (used in) financing

ChangeTotal changes of items during the fiscal year

Loss (gain) on valuation of investment securities

164,879

1,998,748

Proceeds from short-term loans payable
Redemption of bonds
Repayment of lease obligations
Purchase of treasury shares
Proceeds from sale of treasury shares

200,000（500,000）ーー（9,653）（9,103）（749,988）（266,222）

258

263

Dividends paid

（2,135,581）（2,272,285）

Net cash provided by (used in) financing（3,194,965）（2,547,348）

Effect of exchange rate changes on cash and cash equivalents

Corporate Data

Balance at end of fiscal year

1,783

Governance（3,560,378）

ChangeTotal changes of items during the fiscal year

（22,580）

7,212

Income taxes paid

Shareholders' equity

Disposal of treasury shares（2,033）

Increase (decrease) in retirement benefit liabilities

ESG

55,425Purchase of treasury shares

Decrease (increase) in assets related to retirement benefits

2,516（147,573）

Net income attributable to owners of the parent（10,489）（2,140,514）（12,167）

Dividends from surplus

101,982

10,526

3,559

928

20,565,065

62,026

Increase (decrease) in allowance for doubtful accounts

2,427（136,333）

2,946,634

Share-based compensation expenses（176）

Net changes of items other than shareholders’ equity

3,125,231

23,442

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

ーBalance at start of fiscal year

34,290Loss on retirement of property, plant, and equipment

6,859

Capitalー

Amortization of goodwill

3,307

Disposal of treasury shares(Jan. 1 – Dec. 31, 2021)

70,00025,5503,498,675

FY12/21240,553

Impairment losses

511（749,582）

75,241

6,415,673

280,839

12,000Purchase of treasury shares

Balance at end of fiscal year

5,176,543

Depreciation

Net income before income taxes and other adjustments

Contributions

Net income attributable to owners of the parent

Retirement of treasury shares

Net cash provided by (used in) operations

23,165,126

ChangeDividends from surplus

2021

2020

Value Creation Drivers

Balance at start of fiscal yearー

(Thousand yen)

Funai Soken Holdings: The Basics Growth Strategies(Jan. 1 – Dec. 31, 2020)

Total changes of items during the fiscal year

Consolidated Cash Flow Statement

1,702

11,418

Increase (decrease) in cash and cash equivalents

585,864

2,458,736

Cash and cash equivalents at start of fiscal year

11,630,554

12,216,419

Cash and cash equivalents at end of fiscal year

12,216,419

14,675,155

66

The Funai Soken Consulting Group Network(as of Jul. 1, 2022)

Corporate Overview & Stock Information

Logistics

Corporate Overview

Funai Consulting Inc.

Funai Soken Logistics Inc.

Name

President and CEO: Daisuke Shingai

President: Shigehiro KanManagement consulting

Logistics

Representatives Sakae Takashima, chairman and group CEO
Takayuki Nakatani, president & CEO

Incorporated: Nov. 28, 2013 (founded Mar. 6, 1970)

Incorporated: May. 10, 2000

Capital: 3,000 million yen

Capital: 98 million yen

Osaka HQ: 4-4-10 Kitahama, Chuo-ku, Osaka

Osaka HQ: 4-4-10 Kitahama, Chuo-ku, Osaka

Tokyo HQ: 21st floor, Nihon Seimei Marunouchi Bldg., 1-6-6

Tokyo HQ: 22nd floor, Nihon Seimei Marunouchi Bldg.,

CapitalMarunouchi, Chiyoda-ku, Tokyo

1-6-6 Marunouchi, Chiyoda-ku, Tokyo

Address

Major roles
Incorporated

Gotanda Office

Consolidated subsidiaries 7 (as of Jul. 1, 2022)
Group employees

1,317

To serve as the group holding company, compile
group strategies, and handle group management
March 6, 1970
3,125 million yen
Osaka HQ: 4-4-10 Kitahama, Chuo-ku, Osaka
Tokyo HQ: 21st floor, Nihon Seimei Marunouchi

6-12-1 Nishigotanda, Shinagawa-ku, Tokyo

Bldg., 1-6-6 Marunouchi, Chiyoda-ku, Tokyo

Shiba Seminar Place
Shiba City Bldg., 3-4-11 Shiba, Minato-ku, Tokyo

Funai Soken Holdings Inc.

Funai Soken Holdings: The Basics Growth Strategies

Consulting

Other Businesses

Funai Soken Digital Inc.

President: Naoki Nishiyama

President: Hitoshi Nagira

Incorporated: Feb. 1, 2000

System integration, digital marketing
BPO & consulting
Incorporated: Nov. 28, 2013
Capital: 50 million yen
Tokyo HQ: 21st floor, Nihon Seimei Marunouchi Bldg.,

Stock Information
Stock exchange listing

Capital: 60 million yen

Tokyo Stock Exchange Prime Market(as per TSE's new categories instituted in April 2022)

Shareholder Categories
Financial institutions

Treasury shares

29.59%
（30）

5.94%
（1）

Address: 22nd floor, Nihon Seimei Marunouchi Bldg.,

Stock code

9757

1-6-6 Marunouchi, Chiyoda-ku, Tokyo

Business year

January 1 to December 31

AGM

March

Share unit

100 shares

Number of sharesauthorized for issue

130,000,000

Total number ofshares outstanding

49,379,064 (excl. 3,120,936 treasury shares)

Foreign corporate

Shareholders

13,34218.76%（181）

Record date fordividends

June 30, December 31

Proseed Corporation
President: Naoki Nemoto

Osaka HQ: 6th floor, Shinfushimimachi Bldg., 4-4-10

Contact center consulting

Fushimi-machi, Chuo-ku, Osaka

Incorporated: Jun. 24, 1991

Shiba Office

Capital: 100 million yen

9th floor, Shiba City Bldg., 3-4-11 Shiba, Minato-ku, Tokyo

Address: 22nd floor, Nihon Seimei Marunouchi Bldg.,

Hacchobori Office

1-6-6 Marunouchi, Chiyoda-ku, Tokyo

3rd floor, Nippo Hacchobori Bldg., 2-19-8 Hacchobori,Taiwan Branch: Suite 1, 7th floor, No. 128 Section 3,

Chuo-ku, Tokyo

Minsheng East Road, Songshan District, Taipei

1.33%
（29）

32.75%（13,000）

Other corporate
11.63%（101）

Governance

1-6-6 Marunouchi, Chiyoda-ku, Tokyo

Financial
instrumentbusinesses

Individuals,
othersTop 10 Shareholders
Percentage (%)

The Master Trust Bank of Japan, Ltd. (Trust Account)

5,386

10.91

Funai Honsha Inc.

5,026

10.18

Custody Bank of Japan, Ltd. (Trust account)

3,125

6.33

Address: 21st floor, Nihon Seimei Marunouchi Bldg.,

Sumitomo Mitsui Banking Corporation

1,952

3.95

1-6-6 Marunouchi, Chiyoda-ku, Tokyo

NORTHERN TRUST CO. (AVFC) RE FIDELITY FUNDS

1,526

3.09

Kazuko Funai

1,307

2.65

Nippon Life Insurance Company

1,062

2.15

Katsuhito Funai

1,056

2.14

TAIYO FUND, L.P.

946

1.92

Takahiro Funai

889

1.80

Name

Funai Consulting Shanghai Inc.

President: Yasuko Murata
Direct Recruiting

President: Kyohei Deguchi

Incorporated: Feb. 1, 2018

Representative director: Lang Luyuan

Capital: 64 million yen

China-based consulting
Incorporated: Jan. 13, 2012
Capital invested: 50 million yen

Hamamatsucho Office

Address: Suite 18H, Zhaofeng Trade Building, 369

9th floor, PMO Hamamatsu-cho, 2-5-5 Hamamatsu-cho,

Jiangsu Road, ChangNing District, Shanghai, China

Minato-ku, Tokyo

Corporate Data

Number of Shares Owned(In thousands)

HR Force Inc.

ESG

Systems development

IT consulting

Value Creation Drivers

Funai Soken IT Solutions Inc.

Treasury shares (3,120,000) are excluded when calculating holding percentages.

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