NOTICE OF

THE 100TH ORDINARY GENERAL MEETING

OF SHAREHOLDERS

to be held in Osaka, Japan

on June 27, 2007

[This is a translation from the Japanese of a notice circulated to shareholders in Japan.]

Matsushita Electric Industrial Co., Ltd.

Kadoma, Osaka, Japan

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May 29, 2007

Dear Shareholders:

Notice of the 100th Ordinary General Meeting of Shareholders

This is to inform you that the Company’s 100th Ordinary General Meeting of Shareholders will be held as described below. You are cordially invited to attend the meeting.

If it is inconvenient for you to attend the meeting, you are sincerely requested to examine carefully the reference materials contained herein and to either mail, as soon as possible, the voting instruction card duly signed by you after marking “for” or “against” each bill, or to exercise your voting rights via the Internet.

*  *  *  *  *  *  *  *  *  *  *  *  *

 

1.	Date:    10:00 a.m. Wednesday, June 27, 2007

 

2.	Place:   Hotel New Otani Osaka

 

3.

Purposes:

– Matters to be Reported:

 

1.

The business report and statutory report on a consolidated and a parent-alone basis with respect to the 100th fiscal period from April 1, 2006 to March 31, 2007

 

2.

Report of Accounting Auditors and the Board of Corporate Auditors on the consolidated financial statements

– Matters to be Acted Upon:

Bill No. 1: To elect 19 directors

Bill No. 2: To elect 2 corporate auditors

Bill No. 3: To approve changes to remuneration for directors and corporate auditors

 

[Shareholders attending the meeting are requested to hand in the voting instruction card at the reception desk of the meeting venue.]

 

Editor’s notes:
1.		The financial statements and other information included in this Notice are prepared primarily on a consolidated basis in conformity with U.S. generally accepted accounting principles (U.S. GAAP). In some cases where required, however, financial information on a parent company alone basis, which is in conformity with Japanese regulations, is also provided herein. Parent-alone and consolidated financial information should not be confused with each other.
2.		An English translation of explanations for the exercise of voting rights via the Internet is omitted herein. For foreign shareholders who maintain standing proxies in Japan, such explanations (in Japanese) are sent to, and available at, your standing proxies.
3.		For supplemental information regarding the bills on pages 40 to 46, please visit the following Web site: http://ir-site.panasonic.com/shareholder/100th_supplemental_info.html

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[Appendix to the Notice of General Meeting of Shareholders]

Business Report for the 100th Fiscal Period

(Fiscal year from April 1, 2006 to March 31, 2007)

1. Brief Business Review of the Matsushita Group

(1) Progress and Results during the Period

The electronics industry in the fiscal year ended March 31, 2007 faced severe business conditions in Japan and overseas, due mainly to rising prices for crude oil and other raw materials and continued price declines caused by ever-intensified global competition, mainly in digital products. Meanwhile, BRICs (Brazil, Russia, India and China) and other emerging markets expanded, and severe competition in these growing markets continued.

Under these circumstances, during fiscal 2007, the final year of the mid-term management plan Leap Ahead 21, ending March 31, 2007, Matsushita implemented initiatives to accelerate growth strategies and further strengthen management structures, thereby achieving the target of an operating profit to sales ratio of 5%. The achievements of the Leap Ahead 21 plan during the last three years are as follows:

First, a lean and agile management style was firmly established. Matsushita expanded its business, focusing on simultaneous global product introductions by improving R&D efficiency and implementing distribution reforms, as well as by reducing total assets and factory inventories. The Company also made efforts to reduce fixed costs by implementing its comprehensive cost reduction activities, the so-called Corporate Cost Busters Project. Second, Matsushita established robust business pillars to support a strong management structure. The Company implemented initiatives to enhance product competitiveness, whereby V-products were well received by the market and made a significant contribution to an increase in market share. Regarding plasma TVs, in particular, the Company expanded its operations to meet a rapid increase in demand both in Japan and overseas, and succeeded in securing a high market share. In fiscal 2007, Matsushita decided to build a fifth domestic plant to produce plasma display panels (PDPs) to meet a further increase in demand. Third, the collaboration with Matsushita Electric Works, Ltd. (MEW) proved to be successful. Over the three years of the Leap Ahead 21 plan, the Company has endeavored to integrate sales and manufacturing functions with MEW, and implement common brand strategies, as well as reinforce product competitiveness, thereby generating synergies. Through this collaboration, in the two-year period from fiscal 2006 to 2007, the Company achieved an increase in sales of approximately ¥130 billion. Finally, Matsushita implemented shareholder-oriented management in parallel with a solid business recovery. Over the three years of the plan, with the aim of enhancing corporate value, the Company executed own share repurchases of approximately ¥330 billion and proactively increased total dividends per share, as well as introduced a policy toward Large-scale Purchases of its shares called the Enhancement of Shareholder Value (ESV) Plan.

Through these efforts, consolidated group sales for fiscal 2007 increased 2.4%, to ¥9,108.2 billion, from ¥8,894.3 billion in the previous fiscal year. Explaining fiscal 2007 results, the Company cited sales gains due mainly to an increase in sales of digital products such as flat-panel TVs in Japan and overseas.

Regarding earnings, negative factors, such as rising raw materials prices and ever-intensified price competition worldwide, were offset by cost rationalization efforts which were centered on reducing materials costs as well as fixed costs. Gains on the sale of investments, and the effects of a weaker yen, also contributed to an increase in earnings. These factors resulted in income before income taxes of ¥439.1 billion yen, an increase of 18.3% from the previous year’s ¥371.3 billion. Net income for the full fiscal year totaled ¥217.2 billion, an increase of 40.7% from ¥154.4 billion in the previous year.

 

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AVC Networks

Sales in this category increased 1.7% to ¥3,749.4 billion compared with ¥3,688.3 billion in the previous fiscal year.

Video and audio equipment

Sales of video and audio equipment rose 5.9% to ¥1,670.3 billion compared with ¥1,576.5 billion in the previous fiscal year. In fiscal 2007, overall sales increased, due mainly to significant growth in sales of digital audio visual (AV) products including flat-panel TVs and digital cameras.

Regarding TVs, the VIERA series recorded a significant increase in sales from the previous year, due primarily to expanding demand for flat-panel TVs in Japan and overseas amid the progress of digital broadcasting. In plasma TVs in particular, the Company accelerated the introduction of larger-sized, full high-definition (HD)*¹ models, thereby maintaining a leading market share in Japan, the United States and Europe.

Sales of the LUMIX series of digital cameras increased, due mainly to the launch of unique products featuring a wide-angle 28mm lens and 10-times optical zoom in a compact body, and new digital SLR cameras with an interchangeable lens system.

The DIGA series of DVD recorders maintained a leading global market share, due mainly to favorable sales of new models compatible with HD broadcasting and other products. Blu-ray compatible DVD recorders, which were introduced at the end of 2006, were also well received in Japan.

In the future, Matsushita will further expand the home networking business, centered on flat-panel TVs, and actively promote the digital AV business on a global scale.

 

*1

Full high definition: 2.07 million pixels (Horizontal 1,920 x Vertical 1,080 pixels)

Information and communications equipment

Sales of information and communications equipment decreased 1.5% to ¥2,079.1 billion, compared with ¥2,111.8 billion in the previous fiscal year.

In fiscal 2007, sluggish sales of mobile phones led to a drop in overall sales in this segment, despite steady sales in automotive electronics equipment.

In information equipment, strong sales were recorded in the Strada series of car navigation systems compatible with digital terrestrial broadcasting in Japan. In-vehicle Electronic Toll Collection (ETC) terminals continued to be well received in the market, ensuring the leading market share in Japan.

In communications equipment, sales of mobile phones decreased from a year ago as a result of ever-intensified competition, though models compatible with “One Segment” broadcasting were well received in the market. In fixed-line communications equipment, including telephones and facsimile machines, sales gains were recorded in video intercom products featuring wireless handsets with color monitors.

Going forward, Matsushita will continue to develop new products, services and solutions that provide safety and security, comfort and convenience in the home, office, car and outdoors.

Home Appliances

Sales in this category increased 3.7% to ¥1,227.4 billion compared with ¥1,183.1 billion in the previous fiscal year. In the fiscal year under review, unique products such as tilted-drum washer/dryers and air conditioners equipped with automatic filter cleaning and dust removal functions received market acclaim due to proprietary technologies, and sales gains were recorded in induction-heating (IH) cooking equipment, water heating systems and other products, mainly as a result of the growing number of all-electric homes, contributing to increased sales overall.

In home appliances, Matsushita recorded higher sales of tilted-drum washer/dryers, which realize the industry’s highest level of energy efficiency, as well as of combination steamer/microwave ovens, which enable new cooking methods with high-temperature steam. Both these product categories contributed to the increase in overall sales.

In air conditioners and refrigerators, models with automatic cleaning functions that require no cleaning of the internal filter or replacement of the heat exchanger for ten years and also generate ideal air flows both in cooling and heating, were well received by the market, contributing to a significant increase in sales of air conditioners. Sales of refrigerators increased as a result of favorable sales of new products with thinner casings and increased storage capacity, which was achieved with Matsushita’s proprietary insulation technology.

 

3

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Looking forward, Matsushita will continue to create high-value-added products based on environmentally friendly technologies and a universal design concept, and implement initiatives on quality as the top priority to ensure product safety. Matsushita will also strengthen its overseas production bases, mainly in China and other Asian countries, thereby ensuring growth and enhancing profitability.

Components and Devices

Sales in this category increased 3.7% to ¥1,126.9 billion compared with ¥1,086.6 billion in the previous fiscal year. Sales of components for digital equipment and automotive electronics equipment were favorable as a result of the development and supply of competitive products that meet ever-diversified customer needs, thereby contributing to an overall increase in sales.

In general electronic components, significant sales gains were recorded for components used in digital equipment such as digital TV tuners, angular rate sensors, which increase the accuracy of car navigation systems, and condensers used in hybrid automobiles, thereby contributing to a significant increase in overall sales.

As a result of strong demand for digital AV products, Matsushita recorded sales growth in system LSIs for flat-panel TVs and image sensors for digital cameras. Overall semiconductor sales declined, however, due to a downturn in demand for mobile phones.

In batteries, sales of Oxyride dry batteries were favorable in Japan and overseas, and lithium-ion batteries, mainly those for use in mobile communications equipment, recorded steady growth in sales, thereby contributing to an overall increase in sales.

Going forward, Matsushita will contribute to the differentiation of its finished products by developing and enhancing the range of competitive products at the core of the devices business. Furthermore, the Company will actively strive to expand its sales to external electronics manufacturers to achieve higher profitability while maintaining growth.

MEW and PanaHome

Sales in this category increased 8.1% to ¥1,698.1 billion compared with ¥1,570.8 billion in the previous fiscal year.

MEW recorded sales gains in electrical construction products, mainly high-performance wiring equipment and lighting equipment that puts emphasis on excellent design. MEW also reported strong sales of semiconductor encapsulation materials in the electronic and plastic materials business. In building products, there were increased sales of water-related products such as modular kitchen systems and toilet models featuring fully-automatic cleaning functions that employ new materials and a new washing method. In the automation controls business, MEW saw robust sales of devices for IT infrastructure and automobiles, while in the home appliances business, fitness machines and aesthetic products were well received by the market.

MEW will continue to strengthen its devices for digital AV products and automotive electronics and launch attractive products that meet demand for energy-efficiency, security and all-electric homes.

PanaHome recorded overall sales gains, due mainly to favorable sales in detached housing. Looking forward, with product strategies based on its “Eco-Life” concept, which promotes safety, security, health, comfort and energy efficiency, PanaHome will secure sustainable growth by offering living environments in tune with customer lifestyles.

JVC

Sales in this category decreased 8.6% to ¥638.6 billion compared with ¥699.0 billion in the previous fiscal year.

In the fiscal year under review, JVC launched a new camcorder that realizes approximately five hours of recording in full-HD format, a world first. This product was well received in the market, leading to higher sales of the EVERIO series of HD camcorders. Overall sales fell below the previous year’s level, however, due mainly to a reduction in the lineup of DVD recorders and weak sales of audio equipment in Japan, as well as a sharp decrease in overseas sales of rear-projection TVs and other products.

Looking forward, JVC will strive to increase sales by supplying products incorporating its renowned technologies that deliver high picture and sound quality.

Other

Sales in this category increased 0.2% to ¥667.8 billion compared with ¥666.5 billion in the previous fiscal year.

In the factory automation business, Matsushita introduced high-speed die bonders and other products equipped with highly precise mounting systems and capable of high productivity, while expanding its lineup of high-speed modular mounting machines. The Company’s new Integrated Process Assembly Cell (IPAC), a modular line that combines electronic component and semiconductor mounting into one platform, was well received by the market.

In the future, Matsushita aims to maintain its leading position in the global electronic component mounting field and outstrip its competitors with its three strengths of hardware, processes and solutions, thereby securing growth in the FA business.

 

4

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Sales Breakdown

 

Category		Sales (billions of yen)		Percentage vs. previous year			Percentage of total sales
AVC Networks		3,749.4		101.7	%		41.2	%
Video and audio equipment		1,670.3		105.9			18.4
Information and communications equipment		2,079.1		98.5			22.8
Home Appliances		1,227.4		103.7			13.5
Components and Devices		1,126.9		103.7			12.4
MEW and PanaHome		1,698.1		108.1			18.6
JVC		638.6		91.4			7.0
Other		667.8		100.2			7.3
Total		9,108.2		102.4			100.0
Domestic Sales		4,616.5		100.1			50.7
Overseas Sales		4,491.7		104.9			49.3

(Note)		Amounts less than one-tenth of a billion yen have been rounded to the nearest whole one-tenth of a billion yen.

(2) Research and Development

Matsushita executed initiatives to accelerate R&D focused on key development themes, and to enhance R&D efficiency mainly by creating a common platform for technologies in different product segments and categories.

The key development themes during the fiscal year were as follows:

 

(1)

Full HD 42-inch PDPs

Matsushita realized a picture quality with definition over 2.6 times as high as existing models while maintaining the current high level of brightness, by miniaturizing the partitions between illuminant cells to enlarge the illuminated area and utilizing a 1080p HD high-speed pixel drive to ensure stable light emission from all pixels.

 

(2)

World’s first dual-layer Blu-ray disc and recorder

Using a high-density recording technique of creating dual layers on each side of the disc, Matsushita realized a large recording capacity of up to 6 hours of HD digital terrestrial broadcasting and a high transfer speed of approximately twice that of existing products.

 

(3)

Second-generation Integrated Platform

Matsushita developed AV processing technology with low power consumption in a single system LSI, thereby realizing over 50 hours of music playback and over 5 hours viewing of “One Segment” broadcasting on a mobile phone.

 

(4)

New “Compact BiG” series of refrigerators featuring top-unit compressors

By downsizing the compressor installed in the upper part of the refrigerator and the vapor generating unit in the bottom part, Matsushita realized a storage capacity of 525 liters in the same dimensions as its existing 450-liter model.

 

(5)

Industry’s first high-capacity lithium-ion battery

The Company has significantly improved the safety of lithium-ion batteries with technology that prevents an increase in energy that could cause the battery to overheat or catch fire in the case of short-circuit. The Company has established a lithium-ion battery mass-production system with the industry’s highest capacity, while incorporating the above-mentioned technology to ensure safety.

 

(6)

Unique high picture quality technology PEAKS

Matsushita incorporated high picture quality platform technology PEAKS into terrestrial digital tuners for Strada car navigation systems and the P903iTV mobile phone compatible with “One Segment” broadcasting, thereby realizing crisp picture quality and contributing to R&D efficiency.

As a result, R&D expenditures during the year totaled ¥578.1 billion.

 

5

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(3) Capital Investment*

During the fiscal year under review, Matsushita primarily implemented capital investment to increase production capacity in strategic business areas such as semiconductors and digital AV equipment, particularly plasma TVs. Capital investment (excluding intangibles) totaled ¥418.3 billion in fiscal 2007.

Principal capital investment consisted of PDP manufacturing facilities for Plant No. 3 and Plant No. 4 of Matsushita Plasma Display Panel Company Ltd. in Amagasaki, Japan, and semiconductor manufacturing facilities for the Uozu Factory of the Semiconductor Company, located in Toyama, Japan.

 

*

Reconciliation of the Non U.S. GAAP capital investment figures

 

The Company defines capital investment as purchases of property, plant and equipment on an accrual basis which reflects the effects of timing differences between acquisition dates and payment dates. The Company has included the information concerning capital investment because its management uses this indicator to manage its capital expenditures and it believes that such indicator is useful to shareholders to present accrual basis capital investments in addition to the cash basis information in its consolidated statement of cash flows.

 

The following table shows a reconciliation of capital investment to purchases of property, plant and equipment and intangible and other assets.

 

(4) Corporate Financing

Matsushita maintains a basic policy of financing all required funds from internal sources, and practices efficient fund management through internal financing activities.

Victor Company of Japan, Ltd. (JVC) issued ¥20 billion in the sixth series of unsecured bonds (issued September 2006). Matsushita redeemed the outstanding balance of ¥100 billion in the fourth series of unsecured bonds (issued February 2002) and JVC redeemed the outstanding balance of ¥20 billion in the fourth series of unsecured bonds (issued August 2000).

(5) Challenges for the Matsushita Group

In fiscal 2008, ending March 31, 2008, the outlook for the global economy, centered on the United States, remains uncertain due to the continued risk of rising prices for crude oil and other raw materials. In the electronics industry, while significant growth is not expected in major industrialized markets, rapid expansion in emerging markets such as BRICs (Brazil, Russia, India, China) is forecast to continue.

In recent years, the Matsushita Group has been promoting fundamental management reforms. From fiscal 2008, the Group will move into a new phase of promoting full-fledged growth strategies. In line with its twin corporate vision of contributing to realizing a ubiquitous networking society and coexistence with the global environment, Matsushita aims to earn the support of all its stakeholders worldwide by sustaining growth through continued innovation and ensuring sound business activities on a global basis.

To realize these objectives, Matsushita has announced the GP3 plan, a new mid-term management plan to be completed by March 2010. Based on the basic policy of achieving steady growth with profitability, Matsushita will implement a range of concrete initiatives to achieve ¥10 trillion in sales, representing growth, and ROE of 10%, measuring capital efficiency, which have been established as two criteria of the GP3 plan.

Matsushita will place particular emphasis on three priority themes for its mid-term growth strategies: double-digit growth in overseas sales, four strategic businesses, and continuous selection and concentration. First, Matsushita will aim for double-digit growth in overseas sales of consumer products by enhancing marketing tailored to regional characteristics. Second, with regard to four strategic businesses, Matsushita will focus on its digital AV business, automotive electronics business, businesses providing comfortable living, and semiconductors and other devices businesses. Through collaboration between these businesses, the Company will strive to expand synergies, while making every effort to drive steady growth in each business. Finally, Matsushita will work to establish strong businesses through selection and concentration of its management resources on prioritized business areas, taking into consideration the characteristics and growth stages of these businesses. In particular, Matsushita will continue aggressive strategic investment in growing businesses and R&D for prioritized themes.

 

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In addition, Matsushita will implement Groupwide innovation activities toward the realization of a manufacturing-oriented company. Matsushita defines the concept of a manufacturing-oriented company as one that combines all the business activities of the Group toward the launch of products, thereby contributing to the creation of customer value. Accordingly, Matsushita will seek to optimize all elements of its operations, centered on products, and implement innovative measures to enhance the quality of Groupwide management, thereby stimulating and streamlining the efficiency of manufacturing processes.

In fiscal 2008, the first year of the GP3 plan, Matsushita will strengthen measures to accelerate growth. Regarding V-products, which are the core of its growth strategies, Matsushita aims to achieve sales of approximately ¥2 trillion in a total of 73 product categories. In overseas businesses, aiming to increase sales in the above-mentioned emerging markets in addition to North America and Europe, Matsushita will set up the Russia Division, the India Coordination Department, and the Brazil Coordination Department. Matsushita will also provide management resources to implement the marketing of cutting-edge products focused on wealthier consumers. Meanwhile, Matsushita will establish the Manufacturing Innovation Division, which will be responsible for extending its most advanced innovation initiatives across the Group and ensuring the highest level of standardization. The division will also promote cooperation across business fields and operating regions to strengthen competitiveness, including cost performance, in areas such as design and quality, procurement, logistics and overseas sales.

From the perspective of shareholder-oriented management, Matsushita will continue to proactively return profits to shareholders. Specifically, the Company will comprehensively provide shareholder return in the form of cash dividends based on the results of the growth strategies, and its own share repurchases. In terms of product quality issues, in addition to its commitment to the idea that safety and quality come first from the product design stage, Matsushita will continue to take all possible measures, such as the analysis of product age-related degradation and user environments, to ensure the quality and safety of products.

Matsushita thanks all of its shareholders for their continued support.

(6) Financial Summary

Consolidated business results and financial condition

 

		Year ended March 31,
Fiscal period		2004		2005		2006		2007
Net sales (in billions of yen)		7,479.7		8,713.6		8,894.3		9,108.2
Income before Income taxes (in billions of yen)		170.8		246.9		371.3		439.1
Net income (in billions of yen)		42.1		58.5		154.4		217.2
Basic net income per share (in yen)		18.15		25.49		69.48		99.50
Total assets (in billions of yen)		7,438.0		8,056.9		7,964.6		7,897.0
Stockholders’ equity (in billions of yen)		3,451.5		3,544.3		3,787.6		3,916.7
Stockholders’ equity per share (in yen)		1,488.77		1,569.39		1,714.22		1,824.89

(Notes)		1.		The Company’s consolidated financial statements are prepared in conformity with U.S. generally accepted accounting principles (U.S. GAAP). The amounts of stockholders’ equity and stockholders’ equity per share are shown in conformity with U.S. GAAP.
		2.		For fiscal 2004, amounts less than one-tenth of a billion yen were omitted. From fiscal 2005, amounts less than one-tenth of a billion yen are rounded to the nearest whole one-tenth of a billion yen.

 

·

In fiscal 2004, despite the rising Japanese yen and intensifying global competition, the Company recorded increased sales. This was primarily due to the aggressive marketing of V-products. With regard to profits, sales gains and various cost reduction efforts, as well as the return to the Japanese Government of the substitutional portion of the Employees Pension Funds (EPF), more than offset business restructuring charges and a loss on valuation on investment securities. As a result, the Company recorded a significant gain in profit.

 

·

In fiscal 2005, the Company posted increased sales. This was due to sales gains in digital AV equipment and home appliances, especially V-products as well as the addition of MEW, PanaHome and their respective subsidiaries to the Company’s consolidated financial results. Regarding earnings, negative factors such as expenses associated with the implementation of early retirement programs were more than offset mainly by sales gains and comprehensive cost reduction efforts. As a result, the Company recorded a significant gain in profit.

 

·

In fiscal 2006, the Company recorded increased sales due to sales gains both inside and outside Japan for digital products, especially V-products. Regarding earnings, negative factors such as expenses associated with the implementation of early retirement programs and expenses related to the kerosene fan heater recall were more than offset by restructuring effects, comprehensive cost rationalization efforts and a gain related to the liquidation of MEI Holding Inc. As a result, the Company recorded a gain in profit.

 

·

Details of operations for fiscal 2007 (the latest fiscal period) are as described in the preceding pages under “(1) Progress and Results during the Period.”

 

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Parent-alone business results and financial condition

 

		Year ended March 31,
Fiscal period		2004		2005		2006		2007
Net sales (in billions of yen)		4,081.4		4,145.7		4,472.6		4,746.9
Recurring profit (in billions of yen)		105.2		116.3		216.4		141.6
Net income (in billions of yen)		59.4		73.5		20.4		98.8
Net income per share (in yen)		25.52		31.9		9.08		45.26
Total assets (in billions of yen)		5,217.9		4,920.5		4,991.3		4,816.7
Net assets (in billions of yen)		2,839.3		2,779.7		2,738.4		2,664.4
Net assets per share (in yen)		1,224.59		1,230.76		1,239.25		1,241.41

(Notes)		1.		For fiscal 2004, amounts less than one-tenth of a billion yen were omitted. From fiscal 2005, amounts less than one-tenth of a billion yen are rounded to the nearest whole one-tenth of a billion yen.
		2.		From fiscal 2006, the Company adopted the new accounting standard for impairment of fixed assets, “Option Concerning Establishment of Accounting Standard for Impairment of Fixed Assets” (Business Accounting Deliberation Council, August 9, 2002), and “Implementation Guidance for the Accounting Standard for Impairment of Fixed Assets” (Financial Accounting Standard Implementation Guidance No. 6, Accounting Standards Board of Japan, October 31, 2003).
		3.		In fiscal 2007, the Company adopted the “Accounting Standard for Presentation of Net Assets on the Balance Sheet” (Accounting Standards Board of Japan (ASBJ) Statement No. 5, December 9, 2005) and “Guidance on Accounting Standard for Presentation of Net Assets on the Balance Sheet” (ASBJ Guidance No. 8, December 9, 2005).

 

·

In fiscal 2004, despite sales growth of V-products, led by digital AV equipment, net sales declined due to the effects of the transfer of certain businesses to subsidiaries upon group-wide business and organizational restructuring. The Company secured an increase in profits, however, due to various cost reduction efforts and increased dividend income.

 

·

In fiscal 2005, Matsushita recorded an increase in sales due mainly to favorable sales in video and audio equipment in AVC Networks, as well as increased sales in Home Appliances. The Company also recorded a gain in profits as a result of sales increases, and various cost reduction initiatives, as well as the positive effects of business restructuring.

 

·

In fiscal 2006, Matsushita achieved increased sales, primarily in the AVC Networks category. Regarding earnings, there was also a significant increase in recurring profit due to increased sales, cost reduction efforts and an increase in dividend income. However, the Company incurred other deductions such as business restructuring expenses and a loss on valuation of securities of subsidiaries, resulting in lower net income year on year.

 

·

In fiscal 2007, Matsushita recorded an increase in sales due mainly to higher sales of digital products. Despite various cost reduction efforts, a decrease in dividend income from affiliates led to lower recurring profit. Net income increased, due mainly to gains from the sale of securities of an affiliated company.

 

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(7) Principal Subsidiaries

1) Principal subsidiaries

(as of March 31, 2007)

(all currency amounts: millions)

 

Company name		Capital stock				% of ownership		Principal business
Matsushita Electric Works, Ltd.		¥		148,513		52.1%		Manufacture and sale of lighting products, information equipment, home appliances, building products, electronic and plastic materials and automation controls
Victor Company of Japan, Ltd.		¥		34,115		52.7*		Manufacture and sale of audio and visual electronic equipment for consumer and professional uses, and magnetic tape, discs and other media
Panasonic Communications Co., Ltd.		¥		29,845		100.0		Manufacture and sale of fixed-line communications equipment including document-related products
PanaHome Corporation		¥		28,375		54.7*		Construction and sale of custom-built houses and sale of land and buildings, with real estate, asset utilization and home remodeling businesses
Matsushita Plasma Display Panel Co., Ltd.		¥		25,600		75.0		Manufacture and sale of plasma TVs and TV modules
Panasonic Electronic Devices Co., Ltd.		¥		23,012		100.0		Manufacture and sale of electric and electronic equipment, electronic components and electronic materials
Panasonic Mobile Communications Co., Ltd.		¥		22,856		100.0		Manufacture and sale of mobile communications terminals, public access network-related equipment, and measuring and memory-related equipment
Panasonic Factory Solutions Co., Ltd.		¥		15,000		100.0		Manufacture and sale of production systems such as circuit manufacturing and parts mounting equipment and systems
Matsushita Ecology Systems Co., Ltd.		¥		12,092		100.0		Manufacture and sale of environment-related equipment and systems
Matsushita Refrigeration Company		¥		11,942		100.0		Manufacture and sale of refrigerators, vending machines, compressors and heating and cooling components
Matsushita Battery Industrial Co., Ltd.		¥		10,500		100.0		Manufacture and sale of primary and rechargeable batteries, chargers, uninterruptible power supply systems, battery-applied products and battery components
Panasonic Shikoku Electronics Co., Ltd.		¥		7,907		100.0		Manufacture and sale of video, information and healthcare equipment, devices and environmental recycling equipment
Panasonic Corporation of North America		US$		537.0		100.0		Manufacture and sale of various electric and electronic products, with regional headquarters functions
Panasonic Europe Ltd.		Stg£		182.7		100.0		Sale of various electric and electronic products, with regional headquarters functions
Panasonic AVC Networks Czech s.r.o.		Czk		2,700.0		100.0*		Manufacture and sale of plasma and LCD TVs, etc.
Panasonic Asia Pacific Pte. Ltd.		Singapore $		40.0		100.0*		Sale of various electric and electronic products, with regional headquarters functions
Panasonic AVC Networks Singapore Pte. Ltd.		Singapore $		196.8		100.0*		Manufacture and sale of audio and home theater equipment
Panasonic Communications Philippines Corporation		Philippine peso		500.0		100.0*		Manufacture and sale of optical disc drives and related equipment
Panasonic Taiwan Co., Ltd.		NT$		3,421.7		69.8		Manufacture and sale of various electric and electronic products
Panasonic Corporation of China		RMB		6,375.3		100.0		Sale of various electric and electronic products, with regional headquarters functions
Panasonic Home Appliances Air-Conditioning (Guangzhou) Co., Ltd.		RMB		282.2		67.8*		Manufacture and sale of air conditioners

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(Note) Percentages with an asterisk (*) include indirect ownership.

 

9

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(8) Principal Business

The Company’s main products and services by business segment are as follows:

(as of March 31, 2007)

 

Categories		Main products and services
AVC Networks		Plasma, LCD and CRT TVs, DVD recorders/players, VCRs, camcorders, digital cameras, compact disc (CD), Mini Disc (MD) and Secure Digital (SD) players, other personal and home audio equipment, SD Memory Cards and other recordable media, optical pickup and other electro-optic devices, PCs, optical disc drives, copiers, printers, telephones, mobile phones, facsimile equipment, broadcast- and business-use AV equipment, communications network-related equipment, traffic-related systems, car AVC equipment, etc.
Home Appliances		Refrigerators, room air conditioners, washing machines, clothes dryers, vacuum cleaners, electric irons, microwave ovens, rice cookers, other cooking appliances, dish washer/dryers, electric fans, air purifiers, electric heating equipment, electric hot water supply equipment, sanitary equipment, healthcare equipment, electric lamps, ventilation and air-conditioning equipment, car air conditioners, compressors, vending machines, medical equipment, etc.
Components and Devices		Semiconductors, general components (capacitors, modules, circuit boards, power supply and inductive products, circuit components, electromechanical components, speakers, etc.) electric motors, batteries, etc.
MEW and PanaHome		Lighting fixtures, wiring devices, distribution, panelboards, personal-care products, health enhancing products, water-related products, modular kitchen systems, interior furnishing materials, exterior furnishing materials, electronic and plastic materials, automation controls, detached housing, rental apartment housing, medical and nursing care facilities, home remodeling, residential real estate, etc.
JVC		LCD, rear projection and CRT TVs, VCRs, camcorders, DVD recorders/players, CD/DVD/MD audio systems and other audio equipment, car AV equipment, business-use AV systems, motors and other components for precision equipment, recordable media, AV software for DVD, CD and video tapes, AV furniture, etc.
Other		Electronic-components-mounting machines, industrial robots, welding equipment, bicycles, imported materials and components, etc.

 

10

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(9) Major Business Sites of the Matsushita Group

 

1) Major business sites of the Company		(as of March 31, 2007)
Name		Locations in Japan
Corporate head office		Kadoma
Corporate branch office
Tokyo Branch		Tokyo
Research and development divisions
Advanced Technology Research Laboratories		Kyoto
Corporate Network Development Center		Kadoma
Advanced Devices Development Center		Moriguchi
Strategic Semiconductor Development Center		Moriguchi
Corporate Manufacturing Innovation Division		Kadoma
Sales divisions
Corporate Sales Strategy Division for National/Panasonic Retailers		Tokyo
Corporate Marketing Division for Panasonic Brand		Tokyo
Corporate Marketing Division for National Brand Home Appliances		Tokyo
Corporate Marketing Division for National Brand Wellness Products		Tokyo
Corporate Industrial Marketing & Sales Division		Tokyo
Overseas management divisions
Corporate Regional Management Divis