Press Release
April 26, 2016
To Whom It May Concern:

Funai Electric Co., Ltd.
Representative Director
President & CEO: Tomonori Hayashi(Code No.: 6839 First Section of TSE)
Notice regarding arbitral award
Osaka, Japan— Funai confirms that it has received an arbitral award from the ICC International Court ofArbitration on April 26, 2016 regarding the previously announced arbitration between Funai Electric Co.,
Ltd. (headquarters: Daito, Osaka; hereinafter, “Funai”) and Koninklijke Philips N.V. (hereinafter, “Philips”).
Details
1. Background and details of filing for arbitration
On January 29, 2013, Funai and Philips announced the signing of a share purchase agreement (the“Agreement”) under which Funai would acquire all the shares in a new company to be incorporated thatwould hold the Lifestyle Entertainment Business of Philips (the “Business”). In its previous press releases,Funai announced that after signing Philips was unable to timely complete the spin‐off of the Businessdespite several postponements of the completion date, and that the Business Philips intended to transferto Funai differed markedly from what Philips had presented to Funai prior to the signing of the Agreement.
On October 25, 2013, Philips announced its termination of the Agreement. On that same day, Philips
initiated arbitration proceedings before the ICC International Court of Arbitration alleging that Funai had
breached the Agreement by not accepting the transfer of the Business in October 2013. As a result of thistermination, the completion of the transaction did not occur and Funai never took control of the Businessor its management. Funai has set out in previous press releases that it strongly rejects Philips’ claim fordamages and maintains that it was Philips and not Funai who breached the Agreement. Funai filed acounterclaim against Philips for the damages it incurred as a result of the Business not being transferred.
2. Summary of arbitral award(1)

The arbitral tribunal has found partially in favor of Philips regarding its claim. The arbitral tribunal has
ordered Funai to pay compensatory damages to Philips in the sum of EUR 134.8M (approximately
equivalent to JPY 16.9B when converted at EUR 1 to JPY 125), arbitration costs in the sum of USD
1.35M (approximately equivalent to JPY 150M when converted at USD 1 to JPY 111), and Philips’slegal fees in the sum of EUR 2.5M (approximately equivalent to JPY 300M when converted at EUR 1 toJPY 125) plus interest (2%) for them.

(2)

The arbitral tribunal has dismissed the counterclaim by Funai.

3. Future outlook
Funai is disappointed with this outcome. It will carefully review the written award from the arbitral tribunal
and consider its further options.
Funai will record compensatory damages, arbitration cost, Philips’s legal fees and interest for them that wasdetermined by this arbitral award in extraordinary loss in the 4th quarter for the fiscal year ending March31, 2016.
The consolidated financial results forecast for the fiscal year ending March 31, 2016 is currently underexamination. If revising its forecast arises is ready, Funai will promptly announce it.
For further information, please contact:
Funai Corporate Communications
E‐mail: investor_relations@funai.co.jp