Member, Financial Accounting Standards Foundation

Consolidated Financial Results for the Second Quarter Ended September 30, 2016
November 14, 2016
Listed company name
Funai Electric Co., Ltd.
Stock exchange listing
Tokyo First Section
Securities code
6839
URL http://www.funai.jp/en
Representative
President and CEO
Tetsuhiro Maeda
Inquiries
General Manager
Keiichi Ikegami
TEL: (072) 870-4395
Scheduled date of Quarterly Report
November 14, 2016
Scheduled date of Commencement of Annual Dividend Payment －Quarterly Financial Results Supplementation
Yes
Quarterly Financial Results SeminarYes
1. Consolidated Financial Results for the Second Quarter Ended September 30, 2016 (April 1, 2016 – September 30, 2016)(1) Consolidated Operating Results(% shows year on year rates)
Net Sales

Net Income(Loss)

Operating

Ordinary

Income(Loss)

Income(Loss)

Net Assets

Equityattributable to ownersof parent
Million yen %Million yen%
Million yen%
Million yen%
nd66,104 (23.6)(3,606)(7,490)(7,648)－－－2 Quarter FY2016
nd
86,570 (25.2)(5,815)(7,093)(7,996)－－－2 Quarter FY2015
rd(Reference) Comprehensive Income 2 Quarter FY 2016 ended September 30, 2016 (9,866) million yen (－%)
nd
2 Quarter FY 2015 ended September 30, 2015 (8,756) million yen(－%)
Net Income(loss)
Net Income(loss) Per SharePer Shareon a Fully Diluted Basis
Yen
Yen
nd
(224.18)－
2 Quarter FY2016
nd(234.36)－
2 Quarter FY2015(2) Consolidated Financial Position

As of September 30,2016
As of March 31,2016

Total Assets
Million yen
117,899
154,191

Million yen
73,35984,439Equity Ratio

Million yen
72,74983,328

%
61.7
54.0

2. Dividends
Dividend per Sharestnd

1 Quarteryen
Fiscal Year 2015－

Fiscal Year 2016－rd

2 Quarter

3 Quarteryen

Year-End

yen

0.00

Fiscal Year 2016
(Forecast)

Annual
yen

yen

－

30.00

30.00

－

－

－

rd

(Note) Revision of Annual Dividends Forecast in this 2 Quarter: No
The dividend for FY 2016 has been undecided. The company’s dividend policy of DOE is unchanged. Because of the highimpact stemmed from the recent fluctuations in exchange rates give to the consolidated net assets, the dividend is to bedisclosed at the time disclosure has become possible to public.

3. Consolidated Financial Forecast for the Fiscal 2016 (April 1, 2016 - March 31, 2017)
Operating
Income(loss)

Net Sales
Million yen

Full Year%

134,500 (20.9)

Million yen% Million yen△4,000 －(Note) Revision to consolidated financial forecast: No

Ordinary
Income(loss)%△8,000 －(% shows year on year rates)Net
Net Income(loss)
Income(loss)
Attributable toowners of parent
Per Share
Million yen %Yen△8,200 －△240.33

*Note(1) Changes in Consolidated Subsidiaries (Changes in Scope of Consolidation): No
In (Company name: －)Out (Company name: －)(2) Adoption of special accounting methods of Quarterly consolidated financial statements: Yes(3) Changes in accounting policies and estimates
1. Changes in accounting policies from revision of accounting standards: Yes
2. Changes in accounting policies from other reason: No
3. Changes in accounting estimates: No
4. Restatement: No(4) Number of Shares Outstanding (Ordinary Shares)
1. Number of shares outstanding (including treasury stock)
2. Number of shares of treasury stock
3. The Average number of outstanding shares

As of September 30, 2016
As of March 31, 2016
As of September 30, 2016
As of March 31, 2016
On September 30, 2016
On September 31, 2015

36,130,796
36,130,796
2,011,687
2,011,687
34,119,109
34,119,129* The Recording of Implementation Conditions Regarding Quarterly Review ProceduresThis quarterly financial summary does not fall within the scope of the Quarterly Review Procedures referenced in the
Financial Instruments and Exchange Act. At the time of disclosure of the quarterly financial summary, the Group was in
the process of implementing the quarterly review procedures for its quarterly financial statements.

Disclaimer;This document contains forward-looking statements and projections regarding business performance
which are not historical facts. Please note that these statements are based on information relating to factorsthat may impact future business performance that was available for analysis at the time this document was
printed. These factors include industry trends relating to the business areas of Funai Electric Co., Ltd. or
the Funai Group, such as audio-visual devices and information communication equipment, the economic
conditions of both domestic and international markets, and fluctuations in currency exchange rates. Actual
performance may greatly differ from projections included in this document because of the impacts ofuncertainty in such areas as the competitive conditions of the electronics industry, market trends, currency
exchange rate, introduction and success of new products, and various other global conditions that may
affect the tax system and other systems.

1.Qualitative Information(1) Consolidated Financial Results
In the first half of the fiscal year ended September 30, 2016, the United States the Company’s main market
experienced a steady increase in employment as well as relatively robust personal consumption. Europe continued
on a moderate economic recovery track, although its economic outlook became increasingly uncertain. In China,
compensation of employees (CE) grew, although it was likely supported by government initiatives.
In Japan, personal consumption bottomed out on the back of steady employment. Production and service activities
also recovered, although the situation remained unpredictable due to foreign exchange fluctuations.
Under these circumstances, our net sales for the reported period stood at ¥66,104 million (down 23.6% from thesame period of the previous year). Combined with a fall in sales, the continued rise in LCD panel prices, adjustments
to our inventory of older LCD-TV models, and the intensifying price competition in Mexico resulted in an operating
loss of ¥3,606 million (compared to an operating loss of 5,815 million in the same period of the previous year). In
addition, due to foreign exchange losses (¥3,868 million) incurred due to the rise of the Mexican peso and theJapanese yen against the US dollar, we posted an ordinary loss of ¥7,490 million (compared to an ordinary loss of
7,093 million in the same period of the previous year). As a result, we posted ¥7,648 million in net loss which is
attributable to the parent (compared to a loss of ¥7,996 million which is attributable to the parent in the same
period of the previous year).
Results by regioni) JapanBlue-ray disc players enjoyed strong sales and an increase in revenue, while revenues from LCD-TVs andelectronic reception devices declined. As a result, net sales amounted to ¥13,755 million, down 17.6% year on
year, and segment loss (operating loss) amounted to ¥2,326 million (a segment loss of ¥1,352 million in thesame quarter of the last fiscal year).
ii) Americas
Blue-ray disc players posted strong sales and a resultant growth in revenues, while revenue from LCD-TVs sales
shrank reflecting poor sales in regional mass merchandise stores in the North American market and intensifying
price competition in the Mexican market. As a result, net sales amounted to ¥51,938 million, down 22.9% year
on year, and segment loss amounted to ¥1,337 million (a segment loss of ¥2,860 million in the same quarter ofthe last fiscal year).
iii) Asia
Net sales amounted to ¥142 million, down 91.7% year on year due to decrease of ink cartridges. Segment profit(operating profit) amounted to ¥148 million (down 79.5% compared to the same quarter of the last fiscal year ).
iv) Europe
Despite an increase in revenue from the sale of ink-jet printers which we launched in the previous term, overall
revenue contracted as we stopped selling LCD-TVs. Net sales amounted ¥268 million, down 64.7% year on year,
and segment loss (operating loss) amounted to ¥9 million, (a segment loss of ¥193 million in the same quarterof the last fiscal year).
Results by product Segmenti) Audiovisual Equipment
For audio visual equipment, blue-ray disc players had strong sales and an increase in revenue, while LCD-TVs
had lower revenue for reasons such as poor sales in regional mass merchandise stores in the North American
market and intensifying price competition in the Mexican market. As a result net sales amounted to ¥57,461
million, down 22.8% year on year.
ii) Information Equipment
Overall, revenue from information equipment shrank despite ink-jet printers’ contribution to sales as we wereunable to make up for a drop in sales caused by lower sales of ink cartridges to OEMs. As a result, net sales of
information Equipment amounted to ¥2,113 million, down 29.8% year on year.

1iii) Other Products
In addition to the above, we lost sales from audio accessories as their contracts were terminated in the previous
term. As a result, net sales stood at ¥6,529 million, down 28.7% year on year.

(2) Consolidated Financial Position
Total assets decreased by ¥36,291 million compared to the end of the last fiscal year. The primary components of thechange were as follows:
Decrease of ¥20,706 million in cash and deposits, ¥6,342 million in notes and accounts receivable, ¥2,921 million inmerchandise and finished goods, and ¥4,297 million in raw materials and supplies.
Total liabilities decreased by ¥25,211 million compared to the end of the last fiscal year. The primary components ofthe change were as follows:
Increase of ¥3,591 million in note and accounts payable-trade, Decrease of ¥1,531 million in short-term loans
payable, ¥24,730 million in accounts payable and ¥1,992 million in long- term loans.
Net assets decreased by ¥11,079 million compared to the end of the last fiscal year. The primary components of thechange were decrease of ¥8,672 million in retained earnings and ¥2,159 million in the foreign currency translation
adjustment.

(3) Consolidated Financial Forecast
As stated in the Notice of Conclusion of Basic Agreement on Transfer of Subsidiary Shares which we released on
November 7, 2016, we are currently investigating the impact of this signing on our financial results for the term
ending March 2017. We therefore did not make any revisions to our consolidated financial forecasts that weannounced on October 17, 2016.
Note: The above forecasts are based on information currently available to the Group and contain risk and uncertainty. Actual
results may differ from these forecasts due to various factors including changes in the economic conditions of overseas markets
such as the United States, and significant fluctuations in product prices and foreign exchange.

2.Summary Information(1) Change in important subsidiaries.
Nothing to be reported.
Although not corresponding to changes in specified subsidiaries, Funai Trading Corp. and Funai Manufacturing
S.A.DE C.V. have been included in the scope of consolidation from the First Quarter Ended June 30, 2016, due totheir increased significance. Furthermore, HIGH DEFINITION COMMERCIAL SOLUTIONS has been excluded from thescope of consolidation due to the completion of liquidation.

(2) Adoption of special accounting methods of Quarterly consolidated financial statements
Tax expenses are calculated by multiplying income before income taxes by a reasonably estimated effective tax rate
for income before income taxes after application of deferred tax accounting.

(3) Change in the accounting policy(Application of the Practical Solution on a Change in Depreciation Method Due to Tax Reform 2016)
Following a revision to the Corporation Tax Act, the Company has applied the Practical Solution on a Change inDepreciation Method Due to Tax Reform 2016 (PITF No.32, June 17, 2016) for the First Quarter Ended June 30, 2016,
and changed its depreciation method for equipment attached to buildings and structures acquired after April 1, 2016
from the fixed-rate method to the straight-line method.
Profits and losses will not be affected by this change.

(4) Additional Information(About anti-tax haven law)
The Group received a reassessment notice from the Osaka Regional Taxation Bureau on June 29, 2011. The Bureau
determined that our Hong Kong subsidiary does not meet the requirements for exemption under the anti-tax havenrules. In addition, they imposed a tax on us adding up with the Hong Kong subsidiary’s income for the three fiscal
years ended March 31, 2008 through 2010, which deems as our income.
We objected to this reassessment of income taxes, and filed a request for examination to the Osaka National Tax
Tribunal on August 25, 2011. However, we received written verdicts that reject our petition on July18, 2012. The
Group filed a suit for cancellation of reassessment to the Tokyo District Court on January 17, 2013.
The additional tax amount is totally ¥825 million including corporate, enterprise and residence taxes (¥935 million

2including incidental taxes). We recorded this additional tax as “prior year’s taxes” in the fiscal year ended March 31,
2012. Also, the financial impact, when applying this tax rules has been recorded in the fiscal year ended March 31,
2011 when tax investigation was completed.
(Application of the Implementation Guidance on Recoverability of Deferred Tax Assets)
The Implementation Guidance on Recoverability of Deferred Tax Assets (ASBJ Guidance No.26, March 28, 2016) has
been applied from the First Quarter Ended June 30, 2016.

3.Important Information about Going Concern Assumption
Since the Group recorded a significant operating loss, ordinary loss, net loss attributable to owners of the parent,
and negative operating cash flow during the first quarter ended June 30, 2016, events or circumstances that castsignificant doubt on the going concern assumption exist now.
Since the Group’s balance of cash and deposits is sufficient to cover working capital, repayment of borrowings, andother requirements for some time, there is no significant concern about fundraising.
Since the Group is already implementing the following countermeasures in stages, the Group believes that a
resolution of the matter can be achieved.
i) Sales expansion
Increase sales and obtain orders for LCD-TVs for the year-end sales season mainly in U.S. market by offering UHD
models and multiple models developed for individual customers. Begin selling a multi-model line of inkjet printersand open up new customers.
ii) Securing of profits from the LCD-TVs business
Reduce inventory through rigorous control of purchasing, sales, and inventories (PSI) between production
subsidiaries, sales subsidiaries, and corporate divisions and reduce expenses through integration of U.S.
subsidiaries.
iii) Improvement of the rate of return from the Information Equipment Business
Improve the rate of return by reducing R&D expenses through selection and concentration in productdevelopment, improve plant utilization rates through sales expansion, and sell high-value-added products.
Accordingly, Funai judges that there is no significant uncertainty related to the going concern assumption as of June30, 2016 and has omitted the Notes on Going Concern Assumption from the consolidated financial statements.

3

4. Consolidated Financial Statements(1) Consolidated Statement of Financial Position(Units : Million Yen)

Fiscal year 2015
(As of March 31, 2016)

2rd Quarter FY2016(As of September 30, 2016)

ASSETS;
Current Assets
Cash and deposits

57,60936,902

Notes and accounts receivable - trade

24,092

17,749Merchandise and finished goods

22,768

19,847Work in process

1,196

1,142

Raw materials and supplies

13,212

8,914

Other

4,735

4,605

Allowance for doubtful accounts

(400)

(707)

123,21488,455

Property, plant and equipment

18,203

17,171Intangible assets

4,860

4,229

Net defined benefit asset

1,555

1,552

Other

6,627

6,560

Allowance for doubtful accounts

(271)

(70)

Total current assets
Noncurrent Assets

Investments and other assets

Total investments and other assets

7,912

8,042

30,97629,444

154,191

117,899

Notes and accounts payable - trade

15,60419,196

Short-term loans payable

5,118

3,586

Accounts payable included in other34,149

9,419

Income taxes payable

783

874

Provision

925

778

Total noncurrent assets
TOTAL ASSETSLIABILITIES;Current Liabilities

Other

3,241

2,921

Total current liabilities

59,82336,776Long-term loans payable

6,009

4,017

Provision

1,106

1,042

Noncurrent Liabilities

Net defined benefit liability

395

476

Other

2,416

2,227

Total noncurrent liabilities

9,927

7,763

69,75144,540TOTAL LIABILITIES

4

Fiscal year 2015
(As of March 31, 2016)

2rd Quarter FY2016(As of September 30, 2016)

NET ASSETS;
Shareholders' equity
Capital stock

31,30731,307

Capital surplus

33,30133,603Retained earnings

54,78946,117

Treasury shares(24,341)(24,341)

Total shareholders' equity

95,05886,686160

131

Foreign currency translation adjustment(12,204)(14,364)

Remeasurements of defined benefit plans

314

296

(11,729)(13,936)

Subscription rights to shares

145

145

Minority interests

965

463

Accumulated other comprehensive income
Valuation difference on available-for-sale securities

Total accumulated other comprehensive income

Total net asset
TOTAL LIABILITIES AND NET ASSETS

584,43973,359154,191

117,899

(2) Consolidated Quarterly Statements of Income(Units : Million Yen)
2rd Quarter FY2015

2rd Quarter FY2016( from April 1, 2015
to September 30, 2015)
86,570( from April 1, 2016
to September 30, 2016)
66,104

Cost of sales

71,76856,109Gross profit

14,801

9,995

Selling, general and administrative expenses

20,617

13,601

Operating income (loss)(5,815)(3,606)

Interest income

107

102

Dividends income

20

16

Fixed assets rent income

117

62

Other

30

22

Total non-operating income

276

204

Interest expenses

99

80

Equity in losses of affiliates

3

1

1,311

3,868

140

137

1,554

4,088

(7,093)(7,490)Gain on sales of non-current assets－

184

Gain on sales of investment securities

50

31

Loss on sales of stocks of subsidiaries and affiliates

41－

Gain on liquidation of subsidiaries and affiliates

46

－

Other

－

14

137

230

121

46

Net sales

Non-operating income

Non-operating expenses

Foreign exchange loss
Other
Total non-operating expenses
Ordinary income (loss)
Extraordinary income

Total extraordinary income
Extraordinary loss
Loss on disposal of noncurrent assets－

Impairment loss

Notes.1

59

434

－

Other

10

－

Total extraordinary loss

566

105

(7,522)(7,364)485

284(8,007)(7,649)(11)

0(7,996)(7,648)Loss on liquidation of subsidiaries and associates

Notes.2

Income (loss) before income taxes
Income taxes
Income (loss) before minority interests
Minority interests in income (loss)
Net income (loss) attributable to owners of parent

6

(3) Consolidated Quarterly Statement of Comprehensive Income

Income (loss) before minority interest adjustment(Units : Million Yen)

2rd Quarter FY2015

2rd Quarter FY2016( from April 1, 2015
to September 30, 2015)( from April 1, 2016
to September 30, 2016)(8,007)(7,649)Valuation difference on avaiable-for-sale securities

(60)

(31)

Foreign currency translation adjustment(692)(2,135)

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

(17)

(24)

Remeasurements of defined benefit plans, net of tax

20

(25)

(749)

(2,216)(8,756)(9,866)Comprehensive income attributable to owners of parent(8,743)(9,855)Comprehensive income attributable to minority interests

(12)

(10)

Other comprehensive Income

Total other comprehensive Income
Comprehensive income(Comprehensive income attributable to)7(4) Consolidated quartely statements of cash flows(Million Yen)
2rd Quarter FY2015

2rd Quarter FY2016( from April 1, 2015
to September 30, 2015)( from April 1, 2016
to September 30, 2016)

Cash flows from operating activities
Income (Loss) before income taxes and minority interests(7,522)(7,364)

Depreciation

2,389

1,967

150

345

Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in net defined benefit liability

(52)

(16)

Interest and dividend income

(127)

(118)

Interest expenses

99

80

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

3

1

121

46

Loss on retirement of property, plant and equipment

-

(184)

(50)

(31)

Decrease (increase) in notes and accounts receivable - trade(5,500)4,419

Decrease (increase) in inventories(18,010)

3,609

Increase (decrease) in notes and accounts payable - trade(5,620)3,605

Increase (decrease) in notes and accounts payable - other

2,469(23,506)

Other, net(1,166)(1,233)

Subtotal(32,820)(18,380)

Interest and dividend income received

120

121

Interest expenses paid

(98)

(80)

Income taxes paid

(242)

(36)

Income taxes refund

28

49(33,012)(18,326)

Payments into time deposits(4,756)(4,399)Proceeds from withdrawal of time deposits

14,092

8,747

Purchase of property, plant and equipment(772)(1,534)15

187

Purchase of intangible assets

(116)

(51)

Purchase of investment securities

(61)

(5)

Proceeds from sales of investment securities

127

54

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

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

Proceeds from sales of property, plant and equipment

17

8

8,545

3,006

11,798(2,556)-(188)(1,194)(1,023)

267

(109)

10,871(3,876)

114

3,168

Net increase (decrease) in cash and cash equivalents(13,481)(16,027)

Cash and cash equivalents at beginning of period

42,991

47,116

Other, net
Net cash provided by (used in) investment activities
Cash flows from financing activities
Net increase (decrease) in short-term loans payable
Purchase of treasury shares
Cash dividends paid
Other, net
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents

Increase in cash and cash equivalents from newly consolidated subsidiary

Cash and cash equivalents at end of period

8

51

-

29,56031,088(5) Consolidated Quarterly Statements of Income(Notes for Continuing Enterprises)
Not Applicable(Notes of remarkable changes in Shareholders Equity)
Not Applicable(Consolidated quarterly statements of income)*Notes.1 Impairment loss
The Group recorded losses on impairment in the following asset groups
In principle, the Group groups business assets on the basis of legal units that strive to maintain an ongoingunderstanding of income and expenses. The idle assets are grouped by individual asset.
First half of this fiscal year (April 1, 2016 to September 30, 2016)
Use
Location
Retirement Assets

Funai Electric Cebu, Inc.
(Philippine Cebu)

Type
Machinery, equipment and vehicles

Since acquiring the shares of a manufacturing subsidiary of Lexmark International, Inc. (now Funai Electric Cebu,Inc.), the Group has engaged in contract production of inkjet cartridges through the acquired company. Although
we previously grouped assets scheduled for retirement in connection with the end of production of some models
as business assets, we wrote down the book value to the recoverable amount and recorded the reduction (¥59
million) in extraordinary loss.
The recoverable amount of the assets has been calculated using net selling price based on disposal value.
*Notes.2 Expenses incurred on business restructuring Settlement received
First half of last fiscal year (April 1, 2015 to September 30, 2015)
The Group has recorded the estimated losses connected with the liquidation of Funai India Private Limited, aconsolidated subsidiary of the Group.
(Information by Segment)[Segment Information]
I.

First half of the last fiscal year (April 1, 2015 to September 30, 2015)
Information Regarding Net Sales and Profit/Loss Conditions by Reporting Segment
Japan

Americas

Asia

Europe

Total(Units: Million Yen)
Adjustments Consolidated(Note 1)
(Note 2)Net Sales(1) Outside customers(2) Inter-segment sales

16,69175,786

67,396578

1,722
58,292760-

86,570134,658－(134,658)

86,570－Total

92,47867,97560,014760

221,228(134,658)

86,570

Segment Income (Loss)(1,352)(2,860)

725

(193)

(3,680)(2,135)(5,815)Note:
1. ¥-2,135 million adjustment amount under segment income includes items such as ¥ 17 million relating to thecancellation of inter-segment transactions, ¥ -377 million of overall Group expenses that are not apportioned toeach reporting segment, and ¥ 1,775 million adjustment relating to inventory assets. Overall Group expenses arecomprised of general administrative expenses that do not belong to a specific reporting segment.
2. Segment income has been adjusted to operating income noted on the third quarter consolidated income
statement.

9

II.

First half of this fiscal year (April 1, 2016 to September 30, 2016)
Information Regarding Net Sales and Profit/Loss Conditions by Reporting Segment(Units: Million Yen)
Japan

Americas

Asia

Europe

Total

Adjustments Consolidated(Note 1)
(Note 2)Net Sales(1) Outside customers(2) Inter-segment sales

13,75544,86751,938586

142
45,068

268－

66,104
90,521－(90,521)

66,104－

Total

58,62352,52445,210268

156,626(90,521)

66,104

Segment Income (Loss)(2,326)(1,337)148(9)(3,525)(81)(3,606)Note:
1. ¥-81 million adjustment amount under segment income includes items such as the ¥23 million relating to thecancellation of inter-segment transactions, ¥399 million of overall Group expenses that are not apportioned toeach reporting segment, and the ¥294 million adjustments relating to inventory assets. Overall Group expenses
are comprised of general administrative expenses that do not belong to a specific reporting segment.
2. Segment income has been adjusted to operating income noted on the third quarter consolidated income
statement.
(Material subsequent event)(Assignment of shares of a consolidated subsidiary)
Our Board of Directors made a resolution on entering into a basic agreement with ELECOM Co., Ltd. (hereinafter,“ELECOM”) concerning the assignment of shares of our consolidated subsidiary, DX Antenna Co., Ltd. (hereinafter,“DX Antenna”), at the Board meeting held on November 7, 2016. We own 96% of the outstanding shares issued by
DX Antenna. Based on this resolution, we signed a Letter of Intent on the same day.
1. Reason for share assignment
We made DX Antenna our subsidiary in November 2001, and have since developed its domestic business as amanufacturing and sales company of antennas and TV reception equipment in Japan.
The company has had declining sales of LCD-TVs for reasons such as the intensifying price competition withcompetitors in the North American market—the company’s main market. Given this situation, we were looking
for an appropriate buyer for the company so that we could focus the management resources of the Funai ElectricGroup in core areas, and ELECOM offered to purchase all of the DX Antenna shares we held.
The markets for the products manufactured and sold by ELECOM and DX Antenna are geographically close. In
addition, there is no overlap in sales channels. It is therefore expected that ELECOM’s acquisition of DX Antenna
will create synergies in terms of sales. In particular, ELECOM’s sales capabilities, mainly through mass merchanthome appliance stores, are likely to significantly boost DX Antenna’s sales. We therefore decided to assign DX
Antenna shares to ELECOM based on the view that this transaction would benefit both companies.
2. Name of the buyer
ELECOM Co., Ltd.
3. Timing of assignment
November 7, 2016
By January 31, 2017
February 28, 2017

Signed a Letter of Intent
Sign a share assignment agreement (schedule)
Share assignment date (schedule)

4. Subsidiary’s name, business and transactions with Funai Electric
Name:
DX Antenna Co., Ltd.
Business:
Sales of electric machinery and equipment
Transactions with Funai Electric: DX Antenna purchases electric machinery and equipment from us.
5. Number and price of shares to be assigned and shareholding ratio after assignment
The number and price of shares to be assigned and other details will be determined upon discussions with DX
Antenna.
6. Impact on profit/loss
The impact of the above assignment of shares on our consolidated financial results is not clear as its details
including the assignment price are yet to be determined.

10