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The fiscal year, ended March 31, 2007 (fiscal 2007), was a key year that brought our three-year management plan Leap Ahead 21, launched in fiscal 2005, to a close. Amid a challenging operating environment characterized by surging raw materials prices and intensifying global competition, we worked to reinforce our manufacturing capabilities in plasma TVs and other product categories. And we actively invested in growth fields to cultivate new businesses that will drive future earnings. In parallel, we focused on strengthening the Company’s operations by raising management efficiency in a range of areas and by pursuing further cost reductions. As a result of these efforts, we achieved our Leap Ahead 21 goals for fiscal 2007—operating profit^*1 to sales ratio of 5% or more and a positive Capital Cost Management (CCM^*2) index on a consolidated basis.

Fiscal 2008 is the first year of our new three-year management plan, GP3^*3. The plan incorporates a host of measures to accelerate the Company’s growth. In terms of V-products, which are the core of our growth strategies, we are targeting sales of approximately ¥2 trillion across a total of 73 product categories. In overseas businesses, we aim to grow sales in emerging markets as well as the U.S. and Europe. We are already building a framework to increase sales in Russia, Brazil and India, and our strategy is to put greater emphasis on cutting-edge products in these markets. Another goal of the GP3 plan is to use Groupwide innovation activities to transform Matsushita into a manufacturing-oriented company— one that combines all the business activities of the Group toward the launch of products, thereby contributing to the creation of customer value. To achieve this, we will extend our most successful initiatives to every corner of the Company to generate even greater benefits. At the same time, we will promote wider collaboration across business fields and operating regions in order to reinforce product design and quality, procurement, logistics, overseas sales and other areas of our operations.

Supported by these initiatives, we will launch Matsushita into a new phase of growth, aiming to achieve sales of ¥10 trillion and ROE of 10% in fiscal 2010 by achieving steady growth with profitability. We will also continue our ongoing initiatives to achieve global excellence.

In addition, Matsushita will take further steps to realize shareholder-oriented management in the years ahead. Through the GP3 plan, we will increase corporate value, and at the same time, actively return profits generated by the plan’s initiatives to all shareholders.

We will also continue to take all possible measures to ensure the quality and safety of our products. Matsushita is committed to the idea that safety and quality, as the cornerstones of a manufacturing-oriented company, must begin from the product design stage. We will thus strengthen ongoing efforts in areas such as the analysis of product age-related degradation and user environments.

Thank you for your continued support.

June 2007

*1	For information about operating profit, see Note 4 of the five-year summary in the financial section of Annual Report 2007.
*2	CCM is an indicator created by Matsushita to evaluate return on capital. A positive CCM indicates that the return on invested capital meets the minimum return expected by capital markets.

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