Press Release
September 12, 2016
To Whom It May Concern:
Funai Electric Co., Ltd.
Representative Director
President and CEO: Tetsuhiro Maeda(Code No.: 6839 First Section of TSE)

Notice of Transitional Matters concerning the Discovery of Inappropriate Accounting
in Prior Results and the Decision to Apply for Approval of Postponement(Re‐postponement) of Submission Deadline for the 1Q FY2016 Report
Funai Electric Co., Ltd. (“Funai” or the “Company”) hereby announces the current progress concerning the“Notice of Discovery of Inappropriate Accounting in Prior Results and the Postponement of Announcement ofResults for 1Q FY2016” that it disclosed on August 4, 2016, and that it has today decided to apply for approval ofpostponement (re‐postponement) of the submission deadline for the 1Q FY2016 report as stipulated in paragraph
1, Article 17‐15‐2 of the Cabinet Office Ordinance on Disclosure of Corporate Affairs, etc.

1. Securities report in question
1Q FY2016 report

2. Submission deadline
September 15, 2016
*The postponement of the original statutory deadline of August 15, 2016 was approved by the Kanto Finance Bureau
on August 10, 2016.

3. Submission deadline if postponement is approved
October 17, 2016

4. Report on progress and reason for postponing (re‐postponing) the submission deadline
It was discovered that there was inappropriate accounting in prior results at Funai’s consolidated subsidiaries.
On August 10, 2016, the postponement of the submission deadline for the 1Q FY2016 report to September 15,
2016 was approved by the Kanto Finance Bureau. Funai commenced an investigation by an internal investigationcommittee on August 4, proceeded with the amendment of past securities reports, and requested the auditor tocarry out audit procedures concurrently.
However, in the process of the internal investigation, additional matters that should be amended werediscovered in addition to the matters that were already identified at the start of the investigation. Major items areas follows:(1) Comparison of items to be amended

①
②
③

④

⑤

Inappropriate item identified at the start of the investigation
Company in question
Item to be amended
Amendment of unpaid taxes due toP&F USA, Inc
tax inquiries in Canada in the past
Amendment of transportation costs
P&F USA, Inc
incurred in the past
Neglected the recording of sales
P&F USA, Incallowance
Neglected the recording of tax in
P&F USA, Incarrears due to failure to make sales
tax payment
P&F MEXICANA, S.A. DE Neglected the recording of sales
C.V.
allowance

Newly discovered inappropriate item
Increase in unpaid tax amount, expansionof period subject to amendment
N.A.
Increase in the amount that was notrecorded
N.A.

N.A.

(2) Comparison of the amount and period subject to amendment

Amount subject toamendment
Period subject toamendment

Expectation at the start of investigation(Disclosed on Aug. 4, 2016)

Current expectation

Approx. 1.63 billion yen

Approx. 2.41 billion yen*1

From FY2013 to FY2015

From FY2010 to FY2015*1 Of the amount subject to amendment of approximately 2.41 billion yen, approximately 830 million yen wasdue to a discrepancy in the recorded period (costs that were recorded in the wrong period) andapproximately 1.58 billion yen was due to neglect in recording certain costs (costs that should have been
additionally recorded). Therefore, the actual impact on cumulative profit/loss will be approximately 1.58billion yen.

As stated above, primarily at P&F USA, Inc., Funai’s overseas subsidiary, the amount of unpaid Canadian taxes
and failure to record sales allowance that occurred in past years are expected to increase from the initialassumption. Moreover, it has been discovered that some items should have been recorded before the period thatwas initially assumed to be subject to amendment (from FY2013 to FY2015). In light of this, the periods subject toinvestigation by the internal investigation committee have been expanded in order to thoroughly uncover the fullscope of the inappropriate accounting that has been discovered. It has also turned out that local audit proceduresfor past financial statements of P&F USA, Inc. would take longer than initially expected.
It is much to our regret that due to such reasons, it is no longer expected that all audit procedures will becompleted and the amended securities reports of past years and 1Q FY2016 report will be submitted by
September 15, which is the postponed deadline. Funai expects that it will take another month until all audit

procedures are completed and the amended securities reports of past years as well as the 1Q FY2016 report canbe submitted.
The ongoing internal investigation has not found any sign of fraud at present.
We sincerely apologize to our shareholders, clients and other stakeholders for causing considerable
inconvenience and concern.

5. Responses to be madeThe Company will promptly announce when the application for postponement has been accepted.
Furthermore, the specific disclosure timing of the announcement of results for 1Q FY2016 will be announced assoon as it is confirmed.
For further information, please contact
Investors and Public Relations
E‐mail: investor_relations@funai.co.jp