• June 4, 2012

The JVCKENWOOD Group established in October 2008 through the management integration of the former Victor Company of Japan, Ltd. (“JVC”) and Kenwood Corporation (“Kenwood”).

Prior to this, the two companies formed capital and business alliance in July 2007 with the aim of surviving competition in the global market as the world's leading specialist in electronics manufacturers. It has been almost five years since the two companies started to strive for the integration of car electronics business, etc.

The so-called Lehman shock occurred right before the establishment of the new company group in October 2008, and the Group subsequently implemented JVC’s financial restatement in the past years. In a bid to overcome such difficulties, we made the utmost effort toward group-wide structural reforms. As a result, the Group returned to profitability on an ordinary income level for the fiscal year ended March 2011 and achieved positive net income for the fiscal year ended March 2012 in accordance with the targets set in the mid-term business plan, and we were able to resume distribution of dividends.

During this period, the Group made efforts for strengthening and stabilizing its each funding and capital bases. We owe very much to all interested parties for giving support in financing and modifying maturity date of straight bonds last year, as well as refinancing bank loans completely this year.

In October 2011, three years after its establishment, JVCKENWOOD Corporation, the Group’s holding company, carried out merger of operating companies JVC, Kenwood and J&K Car Electronics Corporation, to achieve the unification of management organization and the centralization of cash management to complete its five-year efforts for integration.

I would like to take this opportunity to express my sincere and deepest appreciation for your support that the Group was able to overcome the multitude of difficulties in the past, set a course for profitable growth and turn around its earnings successfully.

JVCKENWOOD Group has finally entered the stage for accelerating profitable growth by following through with the original intentions.

On this occasion, the Group will channel new management resources in businesses in which it has advantages, including the world-leading car electronics business, land mobile radio equipment business and camcorder business, etc. In addition, the Group will implement a new business execution system with a younger management who have long years of experience in each business in a bid to accelerate growth.

For this year’s general meeting of shareholders we have made the following proposal, which details are described in the notice of convocation dated June 1,

In electing all nine Directors, I, very familiar with the whole group, will become Chairman of the Board of Directors. Four Directors including myself and the three External Directors (plus one newly added External Director) will be contributed mainly to corporate governance. At the same time, the five younger Directors, headed by President Mr. Shoichiro Eguchi will create the foundation of the business execution framework, assuming the position of Director and Executive Officer. We will enhance the roles of our business execution and governance in this way.

As for candidates for External Directors, the Group has added one candidate who has ample experience and knowledge in technology and management in electronics industry, in addition to two candidates who have abundant experience and knowledge in legal affairs and financial and tax issues.

The Group established the auditor system with two Corporate Auditors and three External Auditors since the time of integration of JVC and Kenwood in October 2008. The Group has built the base of an integrated auditor system through the execution of the above-mentioned merger in October 2011. In electing all the Auditors this year, we have proposed a new auditor system comprised of two External Auditors and one Corporate Auditor who has held positions as a person charged with responsibility in finance and accounting in both JVC and Kenwood with the agreement of the Board of Auditors.

Two candidates for External Auditors have rich experience and knowledge in business administration, as well as technology and management, in the electronics industry.

The Group plans to designate all External Directors and External Auditors as independent directors in accordance with rules stipulated by the Tokyo Stock Exchange.

We have achieved turnaround through our previous efforts. And now, we are going to start a new business execution system with energetic younger management team taking off toward a big leap forward.

We would be truly grateful for your understanding and support for the Group.