FY 2011 FINANCIAL REPORT From April 1, 2011 To   March 31, 2012 JクFUNAI FUNAI ELECTRIC CO., LTD.
1. Summary of Operating Results (Consolidated) 2. Summary of Operating Results (Non-Consolidated) *For the purpose of comparison the Net Income / Loss after Tax before the deduction of Income taxes for 935 million yen for prior periods is recorded. **Supplementary tax assessment based on rectification notice to Funai Electric Co., Ltd. for anti-tax haven system in HK for 935 million yen for the period of March 2008 to March 2010 was posted as a cost of income taxes for prior periods in First Quarter consolidated income statement of FY2011.
(4) May 7, 2012 Funai Electric Co., Ltd. Listed company name: Tokyo Stock Exchange Securities Code: 6839 and Osaka Securities Exchange, First Section (URL http://www.funai.jp/ ) Representative: President and CEO Tomonori Hayashi Inquiries: Associate Officer, Administrative HQ Hisao Fuke TEL: (072) 870-4395 Scheduled date of Annual General Shareholders Meeting; June 22, 2012 Scheduled date of Securities Report to be filed to the Kinki Finance Bureau; June 22, 2012 Scheduled date of Commencement of Annual Dividend Payment; June 14, 2012 Financial Results Supplementation: Yes Financial Results Seminar: Yes 1. Summary of Consolidated Results for the Fiscal Year ended March 2012 (April 1, 2011 – March 31, 2012) (1) Operating Results (Consolidated) (% denotes year on year)
Fiscal Year ended March 31, 2011 130,088 million yen
2. The dividend for FY 2012 has been undecided. The company's dividend policy of DOE is unchanged. Because of the high impact stemmed from the recent fluctuations in exchange rates give to the consolidated net assets, the dividend is to be disclosed at the time of disclosure has become possible to public. 3 Forecast of Consolidated Results for the Fiscal Year ending March 2013 (April 1, 2012 - March 31, 2013)
Note (1) Changes in Consolidated Subsidiaries (Changes in Scope of Consolidation): No (2) Changes in Accounting Practices, Procedures and Presentation Methods for Consolidated Financial Results Changes arising from revision of accounting standards: No Changes arising from other factors: No Changes in accounting estimates: No Restatement: No (3) Number of Shares Outstanding (Ordinary Shares) Number of shares outstanding (including treasury stock) as of March 31, 2012; 36,130,796 shares as of March 31, 2011; 36,123,596 shares Number of shares of treasury stock as of March 31, 2012; 2,011,607 shares as of March 31, 2011; 2,011,607 shares The Average number of outstanding shares on March 31, 2012; 34,114,415 shares on March 31, 2011; 34,099,994 shares (Reference) Summary of Non-consolidated Results for the Fiscal Year ended March 2012 (April 1, 2011– March 31, 2012)
Note: This document contains forward-looking statements and projections regarding business performance which are not historical facts. Please note that these statements are based on the current expectations, assumptions, estimates and projections of the Funai Group in light of the information currently available to it. Actual performance may materially differ from projections included in this document because of the impacts of uncertainty in various factors. For the assumptions and other related matters concerning consolidated results forecast, please refer to " (1)Analysis of Business Performance" of " 1 Business Performance."
1. Business Performance
(1) Analysis of Business Performance
Summary of the consolidated fiscal year under review (Market environment) During the fiscal year ended March 31, 2012, the economy of the United States, which is the Funai Group's principal market, was affected seriously in the first half by a sluggish housing market and a persistently high unemployment rate. In the second half, however, the job situation began to recover, centering on the private sector, and personal consumption showed signs of improvement. Meanwhile, uncertainty remains regarding the impact of rising gasoline prices on personal consumption and the effect of the European debt crisis on global economic conditions. In the consumer electronics market, conditions were problematic. Unexpectedly high yen appreciation and supply chain disruptions stemming from the Great East Japan Earthquake and flooding in Thailand depressed corporate results. Performance in Japan fell off in the wake of the home electronics eco-point system, and in Europe and the United States demand decreased for LCD televisions (one of Funai Electric's main production lines). Also, in emerging markets, a driver of growth, the rate of expansion leveled off. As a result of the above factors, the Group posted net sales of JPY 246,147 million, a 16.8% decrease compared with the same period last year. On the profit front, operating income was JPY 461 million, down 40.2% year on year; ordinary income was JPY 174 million, down 86.5% year on year; and a net loss of JPY 4,629 million (the net loss for the same period last year was JPY 1,169 million).
Segment conditions by location were as follows:
i) Japan Sales of Blu-ray Disc recorders were favorable in the first half. In the second half, however, supply chain disruptions stemming from the flooding in Thailand resulted in component supply issues, affecting sales. Furthermore, reduced orders for printers prompted a major falloff in revenue from sales of information equipment. Also, sales of LCD televisions and antennas and related devices declined, owing to a drop in the wake of the home electronics eco-point system and completion of the transition to digital terrestrial broadcasting. As a result, net sales were JPY 111,870 million, a 27.2% decrease compared with the same period last year. Our operating profit (segment profit) was JPY 4,690 million, down 35.0% year on year.
ii) North America
Revenues from sales of our mainstay LCD televisions fell substantially in the first half, as sluggish market conditions pushed down prices. Revenues were up slightly in the second half of the year, however, owing to favorable results from key customers during year-end sales. Meanwhile, owing to this factor and the growing prevalence of Internet-based content distribution through video on demand (VOD), which caused demand for DVD and Blu-ray Disc players to decline, net sales declined 6.7% year on year, to JPY 124,126 million. Our operating loss (segment loss) was JPY 1,343 million (the operating loss for this segment for the same period last year was JPY 6,663 million).
iii)Asia
Net sales were JPY 4,717 million, an increase of 75.0% year on year. Our operating profit (segment profit) was JPY 425 million, down 79.6% year on year.
iv)Europe
Sales of DVD-related equipment increased, but revenues fell due to the effects of the weak market for LCD televisions. As a result, net sales down 16.2% year on year, to JPY 5,432 million, and an operating loss (segment loss) of JPY 1,530 million (operating loss for the same period last year was JPY 1,748 million).
Sales by Product Segment were as follows:
i)  Audio-Visual Equipment In audio-visual equipment, revenues from sales in Japan of LCD televisions were down substantially, owing to the falloff in the wake of the home electronics eco-point system and completion of the transition to digital terrestrial broadcasting. In DVD-related equipment as well, although revenues from sales of Blu-ray Disc recorders were up, revenues from sales of DVD players and Blu-ray Disc players declined year on year. As a result, net sales of this equipment were JPY 183,507 million, a decrease of 7.6% year on year.
ii) Information Equipment
In the information equipment sector, decreases in orders for printers resulted in net sales of this equipment were JPY 30,013 million, a decrease of 46.8% year on year. iii)Others Products Sales of other products that are not included in the above categories amounted to JPY 32,627 million, a decrease of 20.3% year on year, as sales of antennas and related devices fell, reflecting the conclusion of the transition to digital terrestrial broadcasting. Outlook for the next consolidated fiscal year For the fiscal year ending March 31, 2013, the Funai Group expects the operating climate to remain problematic, plagued by ongoing uncertainty in its operating environment. To this end, we will further cultivate the Funai Production System (FPS), entrench cost reductions, promote the use of information technologies, improve operations and reinforce risk management. The outlook for the next consolidated fiscal year is provided below.
For its earnings estimates, the Company has assumed an exchange rate of JPY80 = US$1.00. The operating results outlook is a forward-looking statement about the future performance of the Company and is based on management's assumptions and beliefs in light of information currently available, and involves known and unknown risks and uncertainties. Various factors such as changes in economic conditions overseas, especially in the main U.S. market, and severe price fluctuations may cause actual events and results to differ materially from those anticipated in these statements.
(2) Analysis of Financial Position
Condition of total assets, total liabilities and net assets Total assets decreased by JPY 17,303 million as compared to the end of the previous consolidated fiscal year. This was mainly due to a decrease of JPY 4,071 million and JPY 8,472 million for notes receivable – trade and accounts receivable-trade, raw materials and inventories Total liabilities decreased by JPY 9,918 million as compared to the end of the previous consolidated fiscal year. This was mainly due to a decrease of JPY 5,513 million and JPY 1,746 million for short-term loans payable and income taxes payable. Net assets decrease by JPY 7,384 million as compared to the end of the previous consolidated fiscal year. This was mainly due to a decrease of JPY 5,354 million and JPY 1,430 million in the retained earnings and foreign currency translation adjustment account.
Condition of cash flow
With regard to consolidated cash flow for the consolidated fiscal year under review, net cash provided by operating activities was JPY 16,416 million. Net cash used in investing activities was JPY 6,434 million. Net cash used in financing activities was JPY 6,717 million. The balance of cash and cash equivalents at end of the consolidated fiscal year under review was JPY 36,567 million.
Shareholders' equity ratio: Equity capital/total assets Shareholders' equity ratio on a market capitalization basis: Total market capitalization/Total assets Ratio of cash flow to interest-bearing debt: Interest-bearing debt/Operating cash flow Interest coverage ratio: Operating cash flow/Interest payments * All indicators are calculated using financial values on a consolidated basis. * Total market capitalization is calculated by multiplying the closing share price at the end of the consolidated fiscal year by the number of shares outstanding (after deducting treasury stock) at the end of the consolidated fiscal year. *  Net cash provided by (used in) operating activities shown on the Consolidated Statements of Cash Flows is used as operating cash flow. Interest-bearing liabilities include all liabilities on which the Company pays interest that are accounted for on the Consolidated Balance Sheets. The amounts shown as interest expense on the Consolidated Statements of Cash Flows are used as interest payments. * The ratio of cash flow to interest-bearing debt and the interest coverage ratio for the fiscal years ended March 2008, March 2009 and March 2011 have been omitted because cash flow from operating activities was negative. (3) Basic Policy Concerning Distribution of Earnings and Dividends for the Consolidated Fiscal Year under Review and Next Fiscal Year With regard to the distribution of earnings, the Company recognizes the return of earnings to shareholders is an important management issue, and considers the maintenance of stable dividends while taking steps to strengthen the Company's management base to be a fundamental policy. The Company implements a positive dividend policy, which takes into consideration factors such as the operating environment, based on a dividend ratio of 1.0% of consolidated net assets as a specific standard. Based on this policy, for the fiscal year ended March 31, 2012, the Group plans to award a year-end dividend of JPY 50 per share. This includes a ordinary dividend of JPY 40 per share of common stock, as well as a JPY 10 dividend commemorating the Company's 50th anniversary of establishment. The dividend of the next fiscal year has been undecided. The Company plans to implement dividend payments as a year-end dividend (once a year). (4) Business and Other Risks Risks that may have a significant impact on the Group's financial situation and operating results are outlined below.
(Funai Group management policy)
The Group has adopted a policy of providing high-quality, low-cost products to consumers based upon optimized production and sales systems on a global scale. We manufacture and sell our principal products, such as audiovisual equipment (DVD-related products, LCD TVs, etc.) and information equipment (printers, etc.), in addition to other products (antennas and related devices, etc.). Price competition in these product areas is intense. Additionally, the life cycle of digital products is short and the competition to develop new technologies and functions is also growing more severe. Accordingly, these factors may affect the Group's financial situation and operating results.
Product cost and market prices
The Group's primary target is customers of mass merchandisers such as Walmart and therefore we must deliver low prices. Consequently, the Group is working to cut costs through measures such as establishing production systems in optimal locations, pursuing further application of the Funai Production System (FPS), the unique productivity improvement system developed by Funai, and utilizing internal production of parts and centralized purchasing. However, competition in the home electronic appliance industry is intense and when the cost of parts and raw materials rise, cost pressures may affect the Group's financial situation and operating results regardless of the fact that we have implemented these measures.
Product supply through OEM (producing partner brands)
As part of our effort to collaborate with distributors and electronic appliance manufacturers, particularly overseas, OEM accounted for 33.0% of the Group's production supply during the fiscal year under review. While our OEM strategy is to efficiently increase our market share and improve productivity through mass production, entrusting the sales strategy to our partners may also result in unforeseen changes. Additionally, individual OEM contracts are relatively short in duration and Funai must be able to accurately respond to the needs of its partners. We must strengthen our OEM strategy and, at the same time, strengthen marketing in order to complement that strategy from a long-term perspective, and create a proposal-based sales strategy through the establishment of the Funai brand. The progress of these measures may affect the Group's financial situation and operating results.
New technologies
As the number of digital products in the home electronic appliance industry increases and the needs of the market become more diverse, Funai must improve the quality, volume and speed of its new product development. The Group must be able to respond to such issues and we will improve our technical capabilities, primarily in the digital product area, by collaborating with other companies, industry and academia, and through personnel training. We also will consider mergers and acquisitions among our options. However, a diversification of market needs or technological innovation beyond our expectations may affect the Group's financial situation and operating results.
Defects relating to products and services
The Group efforts to increase quality are centered on the departments that are responsible for quality management and technologies. In addition, a service platform consisting of service companies in both domestic and international markets has been established. However, if there is a defect in a product that requires the Group to respond by repairing or replacing such product, the impact of the warranty and/or the resultant decrease in corporate reputation may have negative implications for the Group's financial situation and operating results.
Intellectual Property Rights
Recent years have seen an increase in activity by so-called "patent trolls." These are entities that sell no products of their own, but that attempt to generate income from patent royalties by filing lawsuits using intellectual property rights acquired from third parties. This is a worrisome trend for all companies involved in manufacturing and sales. In the United States, legislation to limit trolls' activities has been submitted and is under deliberation. However, as a result of this trend we could be compelled to make high compensation payments that may affect the Group's financial situation and operating results. (Impact of overseas market trends) Dependence on the North American market A large portion of the Group's net sales originates in overseas markets. The North American market in particular accounted for 54.5% of net sales in the current consolidated fiscal year. Should the North American economy rapidly enter a recession, this may affect the Group's financial situation and operating results.
Dependence on Chinese production
The Group is working to improve the cost competitiveness of its products by concentrating production in positive cost-benefit regions and purchasing parts in bulk. In the current consolidated fiscal year 98.4% of our products were produced overseas, with 87.6% produced under consignment fabrication in China. Changes in the Chinese government, the outbreak of conflict or natural disasters or other unforeseen circumstances may affect the Group's financial situation and operating results.
Foreign currency risk
The Funai Group selects production sites for its principal products after giving consideration to optimal production sites and sales systems. DVD-related products, LCD TVs, and printers are produced in China, LCD TVs are produced in Poland, and LCD TVs are produced in Thailand. Funai purchases products from overseas subsidiaries in these countries and sells them in overseas markets, particularly North America, either through Funai's overseas sales subsidiaries or through direct sales to OEM supply partners. Domestic sales are also conducted through direct sales and sales subsidiaries. Purchases from overseas subsidiaries in these countries accounted for 85.9% of gross purchases during the current consolidated fiscal year. Likewise, overseas net sales accounted for 67.0% of net sales. The majority of our purchasing and sales are conducted in U.S. dollars. We believe this reduces the risks that accompany currency fluctuations. However, it is impossible to completely eliminate foreign currency risk, and large currency fluctuations may affect the Group's financial situation and operating results.
2. Current Conditions of the Company's Group
The Company has omitted disclosure of this item because there are no material changes from the information reported in "Diagram of Operating Business Relationships (Business Contents)" and "Affiliated Companies" in the most recent financial statements (submitted on June 22, 2011).
3. Management Policies
(1) Basic Management Policy of the Company As its basic management policy, Funai Electric Co., Ltd. will pursue its business activities by building strong trust and seeking the mutual prosperity of all parties related to the Company as its basic policy, by creating the most efficient development, manufacturing and sales organization possible and stably supplying high quality and fairly priced products to global markets, based on a corporate creed of continual product improvements, promotion of deeper trust and further harmony and mutual prosperity. (2) Management Indicators Established as Objectives As a management indicator for the Funai Group, the Company places the greatest emphasis on operating income margin, and will seek to achieve an operating income margin of at least 5% at all companies over the medium term. (3) Medium to Long-term Management Strategy and Issues to be addressed The consumer electronics market is globalizing with unprecedented speed. Amid such changes as business restructuring efforts that transcend traditional business borders, Internet proliferation and a growing societal focus on environmental issues, leading companies are undergoing a process of selection and focus, posting net losses or near-losses on an annual basis as the industry undergoes major structural reforms. Operating in this difficult environment, the Funai Group faces such issues as raising management speed while ensuring quality and price levels to predominate against rival firms and at the same time expanding sales and recovering profitability by offering products that will sell. We will also embark on the development of new businesses, centered on eco-products, which have a bright future. In this environment, we will endeavor to enhance the Group's corporate value by implementing the policies outlined below. Increasing net sales and returning to profitability The Funai Group has positioned the increase of net sales and improvement of earnings as its highest priority issue. (Product strategy) In audio-visual equipment, revenues from sales of LCD televisions were down during the year. This stemmed from a sluggish Japanese market, reflecting a falloff in the wake of the home electronics eco-point system and completion of the transition to digital terrestrial broadcasting. Our inventory levels improved from the preceding fiscal year, as we maintained appropriate inventories of both products and LCD backlight panels, a mainstay component. We are enhancing our PSI management (PSI standing for "purchase, sales and inventory"). We will continue to make our products more competitive pricewise through redesigns and by restructuring our component sourcing system, with a view to recovering profitability. In products related to Blu-ray Discs, sales of players dropped off owing to the growing popularity of video on demand (VOD), where content is distributed via the Internet, but sales of recorders rose, centered on provision in Japan under OEM agreements. Going forward, we aim to boost sales by further strengthening our relationships with OEM customers. During the year, we extended our brand licensing agreements with Royal Philips Electronics through December 31, 2015, maintaining responsibility for the sourcing, distribution, marketing and sales activities of Philips consumer televisions and video products in the United States, Canada, Mexico and select South American countries. We plan to increase sales by fostering demand for Philips brand products. In addition, during the fiscal year we purchased from IPG Electronics 503 Limited a portfolio of 360 patents applicable to its television and related businesses, augmenting our audio-visual segment's patent portfolio. This acquisition should aid our efforts to respond to competitors' patent claims. In information equipment as well, orders of conventional products from OEM customers were down, lowering revenues during the fiscal year under review. In the future, we will strive to provide higher-value-added products to OEM customers by leveraging our base of expertise in mechatronics, as well as by commercializing printers developed in-house. We have also embarked on the new business of providing LED lighting in the Chinese market. We expect to commence full-fledged production and sales activities in the upcoming fiscal year, and will work to develop cost-competitive products.
(Market strategy)
The Funai Group faces the challenges of reducing the risk of overemphasizing the US market, mitigating the effects of seasonality by smoothing production and sales throughout the year, and increasing sales. To address these issues, we are considering ways to develop our business in expansionary emerging markets in the ASEAN and Near and Middle East regions, as well as in our existing markets in Europe, Japan, Mexico and other Latin American countries. In February 2012, we established Funai India Private Limited in Mumbai, India, and we are now preparing to begin sales at this subsidiary in the upcoming fiscal year. Conversely, we have made the comprehensive decision to revise our position that prioritized cultivation of the Brazilian market. We will forego this development for the time being. Through the steady implementation of the above-mentioned strategies, we plan to minimize the time lags between product planning, development, material procurement, production and sales, enabling us to provide products in a timely manner that meet market needs precisely. Reinforcing manufacturing and development systems The Funai Group's manufacturing structure is highly dependent on China, and we recognize this as a risk that must be mitigated. Accordingly, during the year we augmented FUNAI (THAILAND) CO., LTD. a production base that will become core to our provision of products in the Indian market. We also plan to continue looking into production in other regions. To increase groupwide development efficiency, we moved forward with efforts to expand our development facilities in Asian countries, establishing a development facility in China during the year.
Training and appointment of human resources
The Company recognizes that improving each employee's capabilities and being able to link this to bolstering the strength of the Funai Group will be critical for ensuring the Funai Group stays in the lead in the new era of global competition and implementing the Group's medium to long-term business strategy. Therefore the Company's policy is to actively train and assign employees, without regard to whether they are younger employees or mid-career staff, by strengthening and expanding its internal or external training systems.
(7) Notes on Consolidated Financial Statements (Consolidated Balance Sheet) Contingent Liabilities A consolidated subsidiary, FUNAI EUROPE GmbH, is under investigation by the German tax authorities with regard to transfer pricing taxation on transactions with FUNAI ELECTRIC EUROPE Sp.z o.o., which is also a consolidated subsidiary. So far, the results of this investigation are inconclusive. As at present it is not possible to rationally estimate the amount of impact such an investigation could have, this factor has not been reflected in the Group's consolidated financial statements.
(Consolidated Statement of Income)
Impairment Losses During the fiscal year under review, the Funai Electric Group recorded losses on impairment in the following asset
individual asset. During the fiscal year under review, we reduced the book values of structures earmarked for demolition and land scheduled for sale to their recoverable values. These reductions, along with estimated removal costs associated with demolition, were recorded as a loss on impairment (JPY 396 million) and posted as an extraordinary loss. This loss breaks down into JPY 353 million on buildings and structures, and JPY 43 million on land. We reduced to zero the recoverable value of those assets that are slated for demolition. For assets scheduled for sale, we reduced their recoverable value to their net sale value, based on real estate appraisal values. Corrective action implemented based on the application of the Anti-Tax Haven Law 1. On June 28, 2005 and June 16, 2008 we received a notice from the Osaka Regional Taxation Bureau regarding the implementation of corrective action. This notice indicated a decision regarding our subsidiary in Hong Kong, suggesting that it did not satisfy the conditions for exclusion from application of the Anti-Tax Haven Law. The notification furthermore indicated that the Osaka Regional Taxation Bureau decided to incorporate the income generated by our subsidiary in Hong Kong into the income of our company for the duration of three years, from April 1, 2001, to March 31, 2004, from April 1, 2004, to March 31, 2007,or taxation purposes. Because the Company objected to this corrective action, we applied for assessments by the Administrative Review Office of the Osaka Regional Taxation Bureau on July 25, 2006 and again on August 6, 2008. Thereafter, we received written verdicts on this case on July 3, 2008, and again on July 23, 2009, indicating that our assertions had been dismissed. We filed an appeal to have the action cancelled with the Osaka District Court on November 16, 2006 and again on November 14, 2008, and a hearing for consolidation of those actions was filed on November 26, 2008. The court dismissed the claims of our Company on June 24, 2011. Thereafter, as the Company is unable to accept the Osaka District Court's judgment, we filed a notice of appeal at the Osaka Superior Court on July 7, 2011. The additional tax amounts to JPY 16,651 million (JPY 19,184 million including incidental taxes) and JPY 15,038 million (JPY16,838 million including incidental taxes), including corporate, residential, and business taxes. We processed these amounts in the fiscaI term ending March 2007 as "retroactive corporate taxes," since the accounting procedures relating to additional tax amounts have been clarified through the amendment of the "Handling of Audits Relating to Accounting Procedures and Disclosures for Taxes" (Report No. 63 of the Auditing and Guaranteeing Work Committee of the Japanese Institute of Certified Public Accountants) on March 8, 2007. 2. On June 29, 2011 we received a notice from the Osaka Regional Taxation Bureau indicating their decision to incorporate the income generated by our subsidiary in Hong Kong into the income of our company for the duration of three years, from April 1, 2007, to March 31, 2010, for taxation purposes. Because the Company objected to this corrective action, we applied for assessments by the Administrative Review Office of the Osaka Regional Taxation Bureau on August 25, 2011. The additional tax, including corporate, residential, and business taxes, amounts to JPY 825 million (JPY 935 million including incidental taxes). This amount has been processed as expenses under the category of "income taxes for prior periods" in this fiscal year. 3. With regard to the actions the Company filed with the Osaka District Court on June 28, 2005, and June 16, 2008, seeking the rescission of supplementary tax assessments, on June 24, 2011, a decision was reached in which the court dismissed the claims of the Company. Accordingly, the Company treated this amount as an expense during the fiscal year under review, which is the fiscal year following the year to which the assessment was applied.

[Segment Information]
1. Summary of Reporting Segments The Group's reporting segments are based on those units within the Group where separate financial information is available and where the Chief Executive Officer (Representative Director, President and Executive Officer) of the Group periodically deliberates over matters such as the distribution of management resources and financial performance of such segments. The Group's main business is to manufacture and sell electrical equipment and devices. Within Japan, such functions are the responsibility of DX Antenna Co., Ltd. Overseas, the areas of the United States, Asia and Europe are managed by Funai Corporation, Inc. (North America), P&F USA, Inc. (North America), Funai Electric (H.K.) Ltd. (Asia), FUNAI ELECTRIC EUROPE Sp.z o.o (Europe), and other locally domiciled entities. Each locally domiciled entity is an independently managed unit that engages in business activities after formulating comprehensive strategies on the products to carry in the region. Consequently, the Group is comprised of location-specific segments that are based on its manufacturing and sales structure and have established "Japan", "North America", "Asia" and "Europe" as its four reporting segments. 2. Measurement of the amount of sales, income/loss, assets and liabilities and other in each reporting segment The accounting policies of the reporting segment are the same as "Basis of presenting consolidated financial statements" Net sales of intersegment are based on sales price to outside customers.
3. Information of the amount of sales, income/loss, assets, liabilities and other in each reporting segment
1. Adjustments were as follows.

general & administration expenses that do not correspond to the reporting segments
Total assets that are categorized under adjustments within segment assets mainly comprise excess cash/deposits, long term securities for investment that do not correspond to the reporting segments. 2. Segment income are adjusted with the operating income reported in the consolidated statements of income. (Note)
[Related Information]
Fiscal year 2010 (April 1, 2010 - March 31, 2011)

Information every area
2.

(Units: Million Yen)
(Note) Geographical sales are groupings of nations and regions based on geographical location of customers.
(2) Tangible fixed assets

(Units: Million Yen)
8
Fiscal year 2011 (April 1, 2011- March 31, 2012)

2.
Information every area

(Note) Geographical sales are groupings of nations and regions based on geographical location of customers.
3. Information every main customer (Units: Million Yen)
[Information of impairment loss in each reporting segments] Fiscal year 2010 (April 1, 2010 - March 31, 2011) No Applicable Fiscal year 2011 (April 1, 2011 - March 31, 2012)
(Units: Million Yen)
[Information of goodwill in each reporting segments] Fiscal year 2010 (April 1, 2010 - March 31, 2011)
(Units: Million Yen)
[Information of amortization of negative goodwill in each reporting segments] Fiscal year 2010 (April 1, 2010 - March 31, 2011) No Applicable Fiscal year 2011 (April 1, 2011 - March 31, 2012) Not Applicable
FY 2011 from 2011.4.1 2012.3.31 to 1. Summary of Full Year Financial Statements  Consolidated (1) Operating Results, Financial Conditions (2) Profitability and Per Share Data etc. (3) Capital Expenditures, Depreciation, R&D Expenses (4) Cash Flow 2. Operating Activities (Consolidated) (1) Slaes by Equipment (2) Sales by Area in Equipment (3) Sales by Equipment in Areas 3. Summary of 4Q (January-March) Financial Statements(Consolidated) (1) Operating Results (2) Sales by Equipment 4 4 FUNAI ELECTRIC CO., LTD. Summary of Full Year Financial Statements (Consolidated) (1) Operating Results, Financial Conditions

Yen-Dollars / Exchange rate

(2) Profitability and Per Share Data etc.
(3) Capital Expenditures, Depreciation, R&D Expenses

2   Operating Activities (Consolidated)
(1) Sales by Equipment

(3) Sales by Equipment in Areas

3   Summary of 4Q (January to March) Financial Statements (Consolidated)
(1) Operating Results

Yen-Dollars / Exchange rate

(2) Sales by Equipment

FUNAI   ELECTRIC   CO., LTD. Company FUNAI ELECTRIC CO., LTD. INVESTOR / RELATIONSDEPARTMENT 7-7-1 Nakagaito Daito-city, Osaka 574-0013, Japan TEL 81-72-870-4395    FAX 81-72-870-4613