Chapter-1 Introduction

Panasonic Panasonic was founded in 1918 by Konosuke Matsushita as a vendor of duplex lamp sockets.[2] It has grown to become one of the largest Japanese electronics producers, alongside Sony, Toshiba and Canon. In addition to electronics, it offers non-electronic products and services such as home renovation services. Panasonic is the world's fifth-largest television manufacturer and is among the world's 20 largest semiconductor vendors.

Company profile Panasonic is one of the largest and leading electronic product manufacturers in the world and a well-known brand name. It stands for the depth and diversity of its research capabilities, manufacturing expertise, high quality and sophisticated products since 1918.

Our Panasonic brand and its slogan "Panasonic ideas for life" represents the advanced technology and the wide range of products which we cover. This brand slogan is our commitment in providing products and services based on ideas that will enrich people's lives around the world through innovative thinking. Our focus isn't just on products, it's also on ideas. Ideas that will enhance your life and broaden your horizons.

In Europe, we show this commitment by more than 10.000 employees working in sales and service organizations, modern well equipped research and development centres and modern manufacturing plants. Throughout all our activities we believe that the customer comes always first. Panasonic is an energetic, creative and proactive organization that consistently aims to exceed the customer's expectations, to translate its vision into enriching products and solutions and to make Panasonic the name customers rely upon and believe in.

Today, Panasonic Corporation globally comprises of over 680 companies and almost 390,000 employees in manufacturing and marketing with over 15,000 products supplying our customer needs. We aim to be a ''Customer Value Creation Company'' that provides safety, security, comfort and convenience in line with our visions of contributing to a ubiquitous networking society and coexisting with the global environment.

As a result, our business success is built on our people's strong commitment to these values, to our customer first principles and to generating ''ideas for life''.

How it began As the youngest of eight children, Konosuke Matsushita was born 27th November 1894 in Wakayama a village south of Osaka. He started his career as an apprentice in a bicycle shop before moving to the Osaka Electric Light Company. Few years later he left his well-paid job in order to start up his own small company with less than a months money to support him.

The history of Panasonic Corporation starts when Konosuke Matsushita founded Matsushita Electric Devices Manufacturing Works in 1918 with his wife and his brother-in-law. The first products were insulating plates and electric lamp sockets. The company expanded its activities continuously, not just in Japan, but also overseas to China and America. In the 1960s the company expanded into Europe and established a number of sales & service, manufacturing and research and development companies.

Konosuke Matsushita resigned as president aged 66 and supported the company as chairman. 12 years later he retired, assumed the post of Senior Advisor and spent years writing inspirational and entrepreneurial best-sellers. On 27th April 1989 Konosuke Matsushita passed away. During his lifetime, Konosuke and his employees all over the world developed and marketed innovative products and solutions that added value to their customer's lives.

Vision Panasonic's vision of the digital future is driven by the needs and aspirations of our business customers and millions of consumers around the world who use our products every day. We share their dream to live a fuller life by providing ways of working smarter and enjoying the

rewards

of

technological

advances.

As we move forward together with our customers into the uncharted future of the 21st century with the prospect of future technologies and systems, Panasonic's standards are still firmly grounded in the philosophy of company founder Konosuke Matsushita. As he built Matsushita Electric Industrial Co., Ltd., he never lost sight of the importance of putting the needs of his customers and the public first. Panasonic will continue its Customer First tradition of creating new products that resolve the challenges in business and personal life, helping us all enjoy more of what life has to offer. The name Panasonic is synonymous with innovation, quality, performance and ease of use. We look forward to a bright technological future, and to playing a leading role in the digitally networked society, propelled by the creativity and dedication of our employees around the world.

Values & Culture Since it's establishment in 1918, Panasonic has been guided by its Basic Management Philosophy, which states that the mission of an enterprise is to contribute to the progress and development of society and the well-being of people worldwide through its business activities.

"If you set a challenging goal for yourself and make constant efforts to achieve it, you will surely develop and grow. Repeat the efforts every day until the goal is so deeply imbedded in your mind that it becomes your belief. It is with this thought in mind that I have created the Seven Principles. In essence, these principles embody my great wish for achieving this challenging goal by making step-by-step approaches in everyday life." (Konosuke Matsushita, 1935)

SWOT ANALYSIS he Panasonic Corporation - SWOT Analysis company profile is the essential source for top-level company data and information. Panasonic Corporation - SWOT Analysis examines the companys key business structure and operations, history and products, and provides summary analysis of its key revenue lines and strategy.

Panasonic Corporation (Panasonic or the company) manufactures and markets audio and video equipment, information and communications equipment; home appliances and components and devices. The company primarily operates in Japan. It is headquartered in Osaka, Japan and employs about 292,250 people. The company recorded revenues of JPY7,765,507 million (approximately $77,655.1 million) during the financial year ended March 2009 (FY2009), a decrease of 14.4% as compared to FY2008. The operating profit of the company was JPY72,873 million (approximately $728.7 million) during FY2009, a decrease of 86% as compared to FY2008. The net loss was JPY378,961 million (approximately $3,789.6 million) in FY2009, as compared to a net profit of JPY281,877 million (approximately $2,818.7 million) in FY2008. S- Strengths 1. Diversified business operations 2. Strong brand name 3. Constant focus on research and development 4. Strong balance sheet

W-Weaknesses 1. Weak financial performance 2. Employee productivity 3. Unfunded employee post retirement benefits

O-Opportunities 1. Growing global consumer and industrial electronics market 2. Growing Indian household appliances market

T-Threats 1. Economic slowdown 2. Government regulations 3. Intense competition

Chapter-2

Research methodology

Objective of the study The objective of study is to study the financial analysis of the company via: 1. Liquidity ratios 2. Solvency ratios of the company 3. Cash flow statements

Scope of study 1. The scope of the study is it is related to Panasonic limited 2. The study is based on the ratio analysis only

Chapter-3 Findings and analysis

Ratios: Profitability

April-march 2012

April-march 2011

Return on Sales

Gross profit margin Operating profit margin Net profit margin

25.26% -10.35% -9.84%

26.50% 0.02% 0.85%

Return on Investment

Return on equity (ROE)

-40.01%

2.89%

Return on assets (ROA)

-11.70%

0.95%

Gross Profit Margin

gross profit margin=100gross profitnet sales April-March 31,2012=1007846216-58645157846216 =25.26% April-March,31, 2011=1008692672-63891808692672 =26.50%

April-march 2012

April-march 2011

Selected Financial Data (USD $ in millions, translated from JPY )

Gross profit Net sales

1981701 95,464

2303492 104,542

Gross profit margin1

25.26%

26.50%

Operating Profit Margin Operating profit margin=100 income(loss)before interest and income taxesnet sales April-March,31, 2012= 100 8128447846216 =-10.35%

April-March 31,2011= 1001788078692672=0.02%

April-march 2012

April-march 2011

Selected Financial Data (USD $ in millions, translated from JPY )

Income (loss) before interest and income taxes Net sales

812844 7846216

178807 8692672

Operating Profit Margin, Comparison to Industry Panasonic Corp.1 Industry, Consumer Goods

-10.35% %

0.02% 11.69%

Net Profit Margin

Net profit margin=100 net income(loss) attributable to Panasonic corporationnet sales April- March 31,2012=1007721727846216 =-9.84% April-March 31,2011=100740178692672 =0.85%

Mar 31, 2012

Mar 31, 2011

Selected Financial Data (USD $ in millions, translated from JPY )

Net income (loss) attributable to Panasonic Corporation Net sales

772172 7846216

74017 8692672

Net Profit Margin, Comparison to Industry Panasonic Corp.1 Industry, Consumer Goods

-9.84% %

0.85% 8.48%

Return on Equity (ROE)

Return on Equity=100 net income(loss) attributable to Panasonic corporation Panasonic corporation shareholder April-March 31,2012=1007721721929786 =-40.01% April-March 31,2011=10089030776 =2.89%

April-march 2012

April-march2011

Selected Financial Data (USD $ in millions, translated from JPY ) Net income (loss) attributable to Panasonic Corporation Panasonic Corporation shareholders equity 772172 1929786 74017 2558992

ROE, Comparison to Industry

Panasonic Corp.1 Industry, Consumer Goods

-40.01% %

2.89% 18.57%

ROA = 100 Net income (loss) attributable to Panasonic Corporation Total assets

March 31,2012=100 X 772172 6601055 =-11.70% March 31,2011=100740177822870 =0.95%

Return on Assets (ROA)

April-march2012

April-march2011

Selected Financial Data (USD $ in millions, translated from JPY ) Net income (loss) attributable to Panasonic Corporation Total assets 772172 6601055 74017 7822870

ROA, Comparison to Industry Panasonic Corp.1 Industry, Consumer Goods -11.70% % 0.95% 6.50%

Solvency ratios:
April-march 2012 Debt to equity Debt to capital Interest coverage 0.82 0.45 -27.39 April-march 2011 0.62 0.38 7.85

Debt to Equity Debt to equity=total debt Panasonic corporation shareholders equity April-March 31,2012=15756151929786= 0.82 April-March 31,2011=15952692558992=0.62

April-march 2012

April-march2011

Selected Financial Data (USD $ in millions, translated from JPY )

Short-term debt, including current portion of long-term debt Long-term debt, excluding current portion Total debt Panasonic Corporation shareholders equity

633847 941768 1575615 1929786

432982 1162287 1595269 2558992

Debt to capital Debt to capital= total debt total capital April-March 31,2012=15756153505401 April-March 31,2012=15952694154261

April-march 2012

April-march 2011

Selected Financial Data (USD $ in millions, translated from JPY ) Short-term debt, including current portion of long-term debt Long-term debt, excluding current portion Total debt Panasonic Corporation shareholders equity Total capital 633847 941768 1575615 1929786 3505401 432982 1162287 1595269 2558992 4154261

Debt to Capital, Comparison to Industry Panasonic Corp.1 Industry, Consumer Goods 0.45 0.38 0.50

Interest Coverage Interest coverage=EBIT interest expense. April-March 31,2012=85431528404=-27.39%

April-March 31,2011=21613127524=7.85%

April-march 2012

April-march2011

Selected Financial Data (USD $ in millions, translated from JPY ) Net income (loss) attributable to Panasonic Corporation Add: Net (income) loss attributable to noncontrolling interests Add: Interest expense Add: Income tax expense (benefit) Earnings before interest and tax (EBIT) 772172 43972 (28404) 9767 (854315) 74017 11580 27524 103010 216131

Interest Coverage, Comparison to Industry Panasonic Corp.1 Industry, Consumer Goods -27.39 7.85 14.76

Liquidity ratios:
April-march2012 Current ratio Quick ratio Cash ratio 1.01 0.56 0.21 April-march2011 1.23 0.74 0.37

Current Ratio

Current ratio = Current assets Current liabilities

April-March 31,2012=29060402879504=1.01% April-March 31,2011=34898492847050=1.23%

April-march 2012

April-march2011

Selected Financial Data (USD $ in millions, translated from JPY ) Current assets Current liabilities 2906040 2879504 3489849 2847050

Current Ratio, Comparison to Industry Panasonic Corp.1 Industry, Consumer Goods 1.01 1.23 1.10

Quick Ratio
Quick ratio = Total quick assets Current liabilities

April-March 31, 2012=16211112879504=0.56% April-March 31,2011=21038242847050=0.74%

April-march 2012

April-march 2011

Selected Financial Data (USD $ in millions, translated from JPY ) Cash and cash equivalents Time deposits Short-term investments Net trade receivables Total quick assets Current liabilities 574411 36575 483 1009642 1621111 2879504 974826 69897 1059101 2103824 2847050

Quick Ratio, Comparison to Industry Panasonic Corp.1 Industry, Consumer Goods 0.56 0.74 0.75

Cash Ratio
Cash ratio = Total cash assets Current liabilities April-March 31, 2012=6114691044723=0.21% April-March 31, 2011=10447232847050=0.37%

April-march 2012

April-march 2011

Selected Financial Data (USD $ in millions, translated from JPY ) Cash and cash equivalents Time deposits Short-term investments Total cash assets Current liabilities 574411 36575 483 611469 2879504 974826 69897 1044723 2847050

Cash Ratio, Comparison to Industry Panasonic Corp.1 Industry, Consumer Goods 0.21 0.37 0.33

Corporate governance structure Directors and Senior Management The Articles of Incorporation of the Company provide that the number of Directors of the Company shall be three or more and that of Corporate Auditors shall be three or more. Directors and Corporate Auditors shall be elected at the general meeting of shareholders. The Board of Directors has ultimate responsibility for administration of the Companys affairs and monitoring of the execution of business by Directors. Directors may, by resolution of the Board of Directors, appoint a Chairman of the Board of Directors, a Vice Chairman of the Board of Directors, a President and Director, and one or more Executive Vice Presidents and Directors, Senior Managing Directors and Managing Directors. The Chairman of the Board of Directors, Vice Chairman of the Board of Directors, President and Director, Executive Vice Presidents and Directors, and Senior Managing Directors are Representative Directors and severally represent

the Company. A Japanese joint stock corporation with corporate auditors, such as Panasonic, is not obliged under the Company Law of Japan and related laws and ordinances (collectively, the Company Law), to have any outside directors on its board of directors. However, Panasonic has two (2) outside Directors. An outside director is defined as a director of the company who does not engage or has not engaged in the execution of business of the company or its subsidiaries as a director of any of these corporations, and who does not serve or has not served as an executive officer, manager or in any other capacity as an employee of the company or its subsidiaries. Outside Directors directly or indirectly cooperate with the internal audit, audit by Corporate Auditors and external audit, receive reports from the Internal Auditing Group and conduct an effective monitoring through reports on financial results at meetings of the Board of Directors and through reviews of the basic policy regarding the development of internal control systems and other methods. The term of office of Directors shall, under the Articles of Incorporation of the Company, expire at the conclusion of the ordinary general meeting of shareholders with respect to the last business year ending within one year from their election. Corporate Auditors of the Company are not required to be, and are not, certified public accountants. Corporate Auditors may not at the same time be Directors, accounting counselors, executive officers, managers or any other capacity as employees of the Company or any of its subsidiaries. Under the Company Law, at least half of the Corporate Auditors shall be outside corporate auditors. An outside corporate auditor is defined as a corporate auditor of the company who has never been a director, accounting counselor, executive officer, manager or in any other capacity as an employee of the company or any of its subsidiaries. Outside Corporate Auditors directly or indirectly cooperate with the internal audit, audit by Corporate Auditors and accounting audit, receive reports from the Internal Auditing Group and conduct an effective monitoring through reports on financial results at meetings of the Board of Directors, through reviews of the basic policy regarding the development of internal control systems and through exchanges of opinions and information at meetings of the Board of Corporate Auditors and other methods. Each Corporate Auditor has the statutory duty to audit the non-consolidated and consolidated financial statements and business reports to be submitted by a Director to the general meeting of shareholders and, based on such audit and a report of an Accounting Auditor referred to below, to respectively prepare his or her audit report. Each Corporate Auditor also has the statutory duty to supervise Directors execution of their duties. The Corporate Auditors are

required to attend meetings of the Board of Directors and express opinions, if necessary, at such meetings, but they are not entitled to vote. In addition, Corporate Auditors receive monthly reports regarding the status of the internal control system, the audit results, etc. from the Internal Audit Group or from other sections. Corporate Auditors may request the Internal Audit Group or the Accounting Auditor to conduct an investigation, if necessary. The terms of office shall expire at the conclusion of the ordinary general meeting of shareholders with respect to the last business year ending within four years from their election. However, they may serve any number of consecutive terms if re-elected. Corporate Auditors constitute the Board of Corporate Auditors. The Board of Corporate Auditors has a statutory duty to, based on the reports prepared by respective Corporate Auditors, prepare and submit its audit report to Accounting Auditors and certain Directors designated to receive such report (if such Directors are not designated, the Directors who prepared the financial statements and the business report). A Corporate Auditor may note his or her opinion in the audit report if his or her opinion expressed in his or her audit report is different from the opinion expressed in the audit report of the Board of Corporate Auditors. The Board of Corporate Auditors shall elect one or more full-time Corporate Auditors from among its members. The Board of Corporate Auditors is empowered to establish auditing policies, the manner of investigation of the status of the corporate affairs and assets of the Company, and any other matters relating to the execution of the duties of Corporate Auditors. However, the Board of Corporate Auditors may not prevent each Corporate Auditor from exercising his or her powers. Pursuant to amendments to the regulations of the Japanese stock exchanges in fiscal 2010, the Company is required to have one or more independent director(s)/corporate auditor(s) which terms are defined under the relevant regulations of the Japanese stock exchanges as outside directors or outside corporate auditors (each of which terms is defined under the Company Law) who are unlikely to have any conflict of interests with shareholders of the Company. All five (5) outside directors and corporate auditors satisfy the requirements for the independent director/corporate auditor under the regulations of the Japanese stock exchanges, respectively. The definition of the independent director/corporate auditor is different from that of the independent directors under the corporate governance standard of the New York Stock Exchange or under Rule 10A-3 under the U.S. Securities Exchange Act of 1934.

In addition to Corporate Auditors, an independent certified public accountant or an independent audit corporation must be appointed by general meetings of shareholders as Accounting Auditor of the Company. Such Accounting Auditor has the duties to audit the consolidated and nonconsolidated financial statements proposed to be submitted by a Director at general meetings of shareholders and to report their opinion thereon to certain Corporate Auditors designated by the Board of Corporate Auditors to receive such report (if such Corporate Auditors are not designated, all Corporate Auditors) and certain Directors designated to receive such report (if such Directors are not designated, the Directors who prepared the financial statements). The consolidated financial statement is prepared in conformity with U.S. generally accepted accounting principles (U.S. GAAP) and financial information on a non-consolidated (a parent company alone) basis is in conformity with Japanese regulations. Under the Company Law and the Articles of Incorporation of the Company, the Company may, by a resolution of the Board of Directors, exempt Directors or Corporate Auditors, acting in good faith and without significant negligence, from their liabilities owed to the Company arising in connection with their failure to perform their duties to the extent permitted by the Company Law. In addition, the Company has entered into liability limitation agreements with each of the outside Directors and outside Corporate Auditors, acting in good faith and without significant negligence, which limit the maximum amount of their liabilities owed to the Company arising in connection with their failure to perform their duties to the extent permitted by the Company Law. The Company implemented in fiscal 2004 a reform of its corporate management and governance structure by (1) reorganizing the role of the Board of Directors, (2) introducing Panasonics own Executive Officer system* in its Group and (3) strengthening its Corporate Auditor system, all tailored to the Groups new business domain-based, autonomous management structure.

* Panasonics Executive Officer (Yakuin) system is a non-statutory system and different from the corporate executive officer (Shikkoyaku) system that Japanese corporations with board of directors and an accounting auditor may adopt at their option under the statutory corporate governance system referred to as joint stock corporation with specified committees system stipulated in the Company Law. Panasonics Executive Officer system was introduced to address the diversity of business operations over the entire Group through delegation of authority and to help integrate the

comprehensive strengths of all Group companies in Japan and overseas. The Board of Directors appoints Executive Officers mainly from senior management personnel of business domain companies as well as from management personnel responsible for overseas subsidiaries and certain senior corporate staff. The Executive Officers assume responsibility as the Groups executives regarding execution of business. The Executive Officers may be given such titles as Vice President Executive Officer, Senior Managing Executive Officer, Managing Executive Officer and Executive Officer, depending on the extent of responsibility and achievement of each individual. The terms of office of the Executive Officers shall expire at the conclusion of the ordinary general meeting of shareholders with respect to the last business year of the Company ending within one year from their election. Each of the Executive Officers has the authority to operate businesses for which such Executive Officer is responsible, under the supervision of the Board of Directors and in accordance with the Board of Directors decisions on the management of corporate affairs. The Board of Directors has, at the same time, been reformed in order to concentrate on establishing corporate strategies and supervising the implementation thereof by the Executive Officers. The Company has limited the number of Directors to facilitate more effective decisionmaking, and shortened their term of office to one year in order to clarify their responsibilities. Taking into consideration the diversified scope of the Companys business operations, the Company has chosen to continue its policy of having management personnel, who are wellversed in day-to-day operations at operational fronts, be members of the Board of Directors, while outside Directors continue to fully participate in Board meetings. Meanwhile, the non-statutory full-time senior auditors were appointed to strengthen auditing functions at each business domain company. In addition, the Company has also launched the Panasonic Group Auditor Meeting chaired by the Senior Corporate Auditors of the Company in order to promote collaboration among the Companys Corporate Auditors, the non-statutory full-time senior auditors of the business domain companies and the corporate auditors of the Companys subsidiaries and affiliates. Moreover, as a part of their audit duties, Corporate Auditors maintain a close working relationship with the Internal Audit Group of the Company to ensure effective audits. Furthermore, in order to enhance the effectiveness of audits conducted by Corporate Auditors and ensure the smooth implementation of audits, the Company has

established a Corporate Auditors Office with full-time staff under the direct control of the Board of Corporate Auditors. Compensation The aggregate amount of remuneration, including equity compensation such as stock options, bonuses, and other financial benefits given in consideration of performance of duties (collectively, the remunerations), paid by the Company during fiscal 2012 to 21 Directors (other than Outside Directors) and 3 Corporate Auditors (other than Outside Corporate Auditors) for services in all capacities was 1,081 million yen and 69 million yen, respectively. The amount of remunerations for 2 Outside Directors and 3 Outside Corporate Auditors was 28 million yen and 42 million yen, respectively, in fiscal 2012. The amount of remunerations for Mr. Kunio Nakamura, Executive Adviser, and Mr. Fumio Ohtsubo, Chairman of the Board of Director, was 133 million yen and 113 million yen, respectively, in fiscal 2012. Under the Company Law, the maximum amounts of remuneration of directors and corporate auditors of Japanese joint stock corporations, except for a joint stock corporation with specified committees, must be approved at a general meeting of shareholders if the articles of incorporation of the company do not provide items about remuneration of directors and corporate auditors. Companies must also obtain the approval at a general meeting of shareholders to change such maximum amounts. Therefore, the remuneration of the directors and corporate auditors are subject to the approval of shareholders if the articles of incorporation of the company do not prescribe such items. The maximum total amounts of remunerations for Directors and Corporate Auditors of the Company are therefore determined by a resolution at a general meeting of shareholders, because the Articles of Incorporation of the Company do not provide such items, and thus remuneration of Directors and Corporate Auditors of the Company is under the oversight of shareholders. The remuneration amount for each Director is determined by the Companys Representative Directors who are delegated to do so by the Board of Directors, and the amount of remuneration for each Corporate Auditor is determined upon discussions amongst the Corporate Auditors. The amounts of the remuneration and bonuses of Directors are linked to individual performance based on Capital Cost Management (CCM), sales and CO2 emissions (an environmental

management indicator). By implementing this new performance evaluation criteria based on shareholder interests, the Company intends to promote continuous growth and enhance profitability on a long-term basis for the Panasonic Group as a whole.

Policy on control of Panasonic corporation Basic Policy Since the Companys establishment in 1918, Panasonic has operated its businesses under its basic management philosophy, which sets forth that the mission as a business enterprise is to contribute to the progress and development of society and the well-being of people through its business activities, thereby offering better quality of life throughout the world. To become a global excellent company that contributes to the resolution of global environment issues, Panasonic will work to sustainably grow its corporate value to satisfy its shareholders, investors, customers, business partners, employees and all other stakeholders. Panasonic has a basic policy that shareholders should make final decisions in the event of a Large-scale Purchase of the Companys shares, regarding whether or not the Large-scale Purchase should be accepted. However, there is a possibility that such Large-scale Purchaser may not provide shareholders to make appropriate decisions. There is also concern that any Large-scale Purchase may damage corporate value and shareholder interest. In this event, the Company may take countermeasures in order to protect the interests of all shareholders. Measures to Realize Basic Policy

1) Specific Measures to Realize Basic Policy In engaging in activities that help enrich peoples lives, Panasonic aims to become a company that is capable of taking the lead in solving global environment issues, the worlds common challenge. Leading up to its 100th anniversary in 2018, Panasonic has set a vision of becoming the No.1 Green Innovation Company in the Electronics Industry. In this context, Panasonic has positioned its three-year midterm management plan, Green Transformation 2012 (GT12), as a first step along this path. Under the guidance of this plan, the Company will closely integrate its environment contribution with business growth as highlighted by the two central themes of the plan: Paradigm shift for growth and Laying a foundation to be a green innovation company.

From a paradigm shift to growth perspective, Panasonic is working diligently to shift its activities from (1) existing businesses to new businesses - such as energy; (2) Japanoriented to globally-oriented, and (3) individual product-oriented to solutions & systems business-oriented. The Company will adopt bold and unconventional measures over the three years of the plan in its efforts to become a group filled with strong growth potential. In completing the conversion of Panasonic Electric Works Co., Ltd. (PEW) and SANYO Electric Co., Ltd. (SANYO) to whollyowned subsidiaries in April 2011, and putting in place a new structure through Group-wide business reorganization, Panasonic will accelerate these initiatives under the plan.

2) Measures Based on the Basic Policy to Prevent Control by Inappropriate Parties On April 28, 2005, the Board of Directors resolved to adopt a policy related to a Large-scale Purchase of the Companys shares called the Enhancement of Shareholder Value (ESV) Plan. The ESV Plan has been approved at every Board of Directors meeting held in April since then. On April 28, 2011, the Board of Directors resolved to continue the ESV Plan. The Board of Directors meeting to be held in May 2012 decided to continue the ESV Plan again. With respect to a Large-scale Purchaser who intends to acquire 20% or more of all voting rights of the Company, this policy requires that (1) a Large-scale Purchaser provide sufficient information, such as its outline, purposes and conditions, the basis for determination of the purchase price and funds for purchase, and management policies and business plans which the Large-scale Purchaser intends to adopt after the completion of the Large-scale Purchase, to the Board of Directors before a Large-scale Purchase is to be conducted and (2) after all required information is provided, the Board of Directors should be allowed a sufficient period of time (a sixty-day period or a ninety-day period) for consideration. The Board of Directors intends to assess and examine any proposed Large-scale Purchase after the information on such purchase is provided, and subsequently to disclose the opinion of the Board of Directors and any other information needed to assist shareholders in making their decisions. The Board of Directors may negotiate with the Large-scale Purchaser regarding purchase conditions or suggest alternative plans to shareholders, if it is deemed necessary. If a Large-scale Purchaser does not comply with the rules laid out in the ESV Plan, the Companys Board of Directors may take countermeasures against the Large-scale Purchaser to protect the interests of all shareholders. Countermeasures include the implementation of share

splits, issuance of stock acquisition rights (including allotment of share options without contribution) or any other measures that the Board of Directors is permitted to take under the Company Law of Japan, other laws and the Companys Articles of Incorporation. If a Large scale Purchaser complies with the Large-scale Purchase rules, the Board of Directors does not intend to prevent the Large-scale Purchase at its own discretion, unless it is clear that such Large-scale Purchase will cause irreparable damage or loss to the Company. The Board of Directors will make decisions relating to countermeasures by referring to advice from outside professionals, such as lawyers and financial advisers, and fully respect the opinions of Outside Directors and statutory corporate auditors. When invoking the aforementioned countermeasures, if the Companys Board of Directors decides that it is appropriate to confirm the will of shareholders from the perspective of the interest of all shareholders, a general meeting of shareholders will be held. If the Companys Board of Directors decides to hold a general meeting of shareholders, it will give notice to that effect as well as the reasons for such a meeting at that time. The Board of Directors will adopt specific countermeasures which it deems appropriate at that time. If the Board of Directors elects to make a stock split for shareholders as of a certain record date, the maximum ratio of the stock split shall be five-for-one. If the Board of Directors elects to issue stock acquisition rights to shareholders, the Company will issue one stock acquisition right for every share held by shareholders on a specified record date. One share shall be issued on the exercise of each stock acquisition right. If the Board of Directors elects to issue stock acquisition rights as a countermeasure, it may determine the exercise period and exercise conditions of the stock acquisition rights, as well as the conditions that allow the Company to acquire share options by swapping Company stock with a party other than the Large-scale Purchaser, in consideration of the effectiveness thereof as a countermeasure, such as the condition that shareholders do not belong to a specific group of shareholders including a Largescale Purchaser. The Company recognizes that the aforementioned countermeasures may cause damage or loss, economic or otherwise, to a prospective Large-scale Purchaser who does not comply with the Large-scale Purchase Rules. The Company does not anticipate that taking such countermeasures will cause shareholders, other than the Large-scale Purchaser, economic damage or loss of any

rights. However, in the event that the Board of Directors determines to take a specific countermeasure, the Board of Directors will disclose such countermeasure in a timely and appropriate manner, pursuant to relevant laws and financial instrument exchange regulations. The term of office for all Directors is one year, and Directors are elected at the Ordinary General Meeting of Shareholders held in June every year. The Companys Board of Directors intends to review the Large-scale Purchase Rules, as necessary, for reasons including amendments to applicable legislation. Any such review would be conducted in the interests of all shareholders. The Companys Board of Directors resolved to continue the ESV Plan at a meeting held on May 11, 2012. Evaluation of Measures by the Board of Directors and Rationale for Evaluation Panasonics mid-term management plan was formulated as a specific measure to increase the Companys corporate value in a sustained manner. The ESV Plan was formulated from the perspective of protecting shareholder value, and is aimed at ensuring shareholders receive sufficient information to make decisions on share purchase proposals by allowing those responsible for the management of the Company, the Board of Directors, to provide their evaluation of any proposed Large-scale Purchase, and providing the opportunity for alternative proposals to be submitted. Consequently, these measures, in accordance with Basic Policy, are intended to protect the interests of all the Companys shareholders.

Chapter-4 Limitations 1. Some figures might not be accurate since data used is secondary in nature. 2. Mismatch of units of measure. 3. Internal data may be maintained at a level of aggregation too extreme be useful as inputs. 4. Census geographic areas not the same geographic areas of interest to the companyoften too aggregated.

5. Mismatch between purpose collected and purpose used.

Chapter-5 Consolidated balance sheets: March31, 2011 and 2012

Assets Current assets: Cash and cash equivalents Time deposits Short-term investments Trade receivables: Related companies Notes Accounts Allowance for doubtful receivables Net trade receivables Inventories Other current assets Total current assets Investments and advances: Associated companies Other investments and advances Total investments and advances Property, plant and equipment: Land Buildings Machinery and equipment Construction in progress

2011

2012

974,826 69,897

574,411 36,575 483

17,202 78,821 984,938 (21,860) 1,059,101 896,424 489,601 3,489,849

14,834 72,952 948,460 (26,604) 1,009,642 830,266 454,663 2,906,040

156,845 412,806 569,651

136,735 315,144 451,879

381,840 1,771,178 2,290,760 96,489 4,540,267

374,855 1,679,665 2,248,137 90,786 4,393,443 2,659,160 1,734,283

Less accumulated depreciation Net property, plant and equipment

2,656,958 01,883,309

Other assets: Goodwill Intangible assets Other assets Total other assets 924,752 542,787 412,522 1,880,061 7,822,870 757,417 345,751 405,685 1,508,853 6,601,055

Liabilities and Equity Current liabilities: Short-term debt, including current portion of long-term debt Trade payables: Related companies Notes Accounts Total trade payables Accrued income taxes Accrued payroll Other accrued expenses Deposits and advances from customers Employees' deposits Other current liabilities Total current liabilities Noncurrent liabilities: Long-term debt Retirement and severance benefits Other liabilities

2011

2012

432,982

633,847

55,102 59,889 886,261 1,001,252 42,415 192,279 747,205 66,473 9,101 355,343 2,847,050

39,941 52,987 758,085 851,013 32,553 204,842 749,495 71,102 7,651 329,001 2,879,504

1,162,287 492,960 374,238

941,768 566,550 235,667

Total noncurrent liabilities Panasonic Corporation shareholders' equity: Common stock: Authorized- 4,950,000,000 shares Issued- 2,453,053,497 shares Capital surplus Legal reserve Retained earnings Accumulated other comprehensive income (loss): Cumulative translation adjustments Unrealized holding gains of available-for-sale securities Unrealized gains (losses) of derivative instruments Pension liability adjustments Total accumulated other comprehensive loss Treasury stock, at cost: 141,351,296 shares (382,760,101 shares in 2011) Total Panasonic Corporation shareholders equity Noncontrolling interests Total equity Commitments and contingent liabilities

2,029,485

1,743,985

258,740 1,100,181 94,198 2,401,909

258,740 1,117,530 94,512 1,441,177

(453,158) 16,835 2,277 (191,254) (625,300)

(482,168) 13,283 (3,728) (262,542) (735,155)

(670,736) 2,558,992 387,343 2,946,335

(247,018) 1,929,786 47,780 1,977,566

7,822,870

6,601,055

Consolidated statements of operations

2011 Revenues, costs and expenses: Net sales: Related companies Other Total net sales 211,589 8,481,083 8,692,672 174,887 7,671,329 7,846,216 2012

Cost of sales

(6,389,180) (1,998,238)

(5,864,515) (1,937,976)

Selling, Interest income Dividends received Other income Interest expense Impairment losses of long-lived assets Goodwill impairment Other deductions Income (loss) before income taxes 11,593 6,323 59,050 (27,524) (34,692) (141,197) 178,807 13,388 6,129 44,124 (28,404) (399,259) (163,902) (328,645) (812,844)

Provision for income taxes: Current Deferred 88,910 14,100 103,010 69,206 (59,439) 9,767

Equity in earnings of associated companies Net income (loss)

9,800 85,597

6,467 (816,144)

Less net income (loss) attributable to noncontrolling interests Net income (loss) attributable to Panasonic Corporation

11,580

(43,972)

74,017

(772,172)

2011 Net income (loss) per share attributable to Panasonic Corporation common shareholders: Basic Diluted 35.75

2012

(333.96)

Consolidated statement of equity

2010 Common stock: Balance at beginning of year Balance at end of year Capital surplus: Balance at beginning of year Sale of treasury stock Equity transactions with noncontrolling interests and others Balance at end of year Legal reserve: Balance at beginning of year Transfer from retained earnings Balance at end of year Retained earnings: Balance at beginning of year Sale of treasury stock Net income (loss) attributable to Panasonic Corporation Cash dividends to Panasonic Corporation shareholders Transfer to legal reserve Balance at end of year Accumulated other comprehensive income (loss): Balance at beginning of year (594,377) Equity transactions with noncontrolling interests And others Other comprehensive income (loss), net of tax Balance at end of year 146,145 (448,232) (5,885) (171,183) (625,300) (838) (109,017) (735,155) (448,232) (625,300) 2,479,416 (103,465) (25,883) (581) 2,349,487 2,349,487 74,017 (20,704) (891) 2,401,909 2,401,909 (166,334) (772,172) (21,912) (314) 1,441,177 92,726 581 93,307 93,307 891 94,198 94,198 314 94,512 (8,240) 1,209,516 (109,326) 1,100,181 19,101 1,117,530 1,217,764 (8) 1,209,516 (9) 1,100,181 (1,752) 258,740 258,740 258,740 258,740 258,740 258,740 2011 2012

2010 Treasury stock: Balance at beginning of year Repurchase of common stock (670,289) (72)

2011

2012

(670,330) (432)

(670,736) (436)

Sale of treasury stock Balance at end of year Noncontrolling interests: Balance at beginning of year Cash dividends paid to noncontrolling interest Acquisition transaction Equity transactions with noncontrolling interests and others Net income (loss) attributable to noncontrolling interests Other comprehensive income (loss), net of tax: Translation adjustments Unrealized holding gains (losses) of available-for-sale securities Unrealized gains (losses) of derivative instruments Pension liability adjustments Balance at end of year Disclosure of comprehensive income (loss): Net income (loss)

31 (670,330)

26 (670,736)

424,154 (247,018)

428,601 (14,619) 532,360

887,285 (12,583)

387,343 (11,642)

(2,402) (67,202)

(474,758) 11,580

(283,711) (43,972)

1,238

(21,764)

1,059

2,378 68 6,863 887,285

(1,633) (26) (758) 387,343

(151) (1,146) 47,780

85,597 (170,667)

(816,144)

Other comprehensive income (loss), net of tax Translation adjustments Unrealized holding gains (losses) of available-for-sale securities Unrealized gains (losses) of derivative instruments Pension liability adjustments Comprehensive loss Comprehensive loss attributable to noncontrolling interests Comprehensive income (loss) attributable to Panasonic Corporation 42,680 (97,166) (881,189) (56,655) (12,601) (44,210) 53,641 6,229 106,641 (13,975) (24,422) 962 (64,125) (109,767) (3,476) (6,018) (79,874) (925,399) (9,819) (107,779) (19,887)

Consolidated statements of cash flows

2010 Cash flows from operating activities: 2011 2012

Net income (loss) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization Net gain on sale of investments Provision for doubtful receivables Deffered income taxes Write-down of investment securities

(170,667)

85,597

(816,144)

298,270 (5,137) 10,862 83,686 6,944

367,263 (11,318) 4,392 14,100 27,539

338,112 (5,822) 12,162 (59,439) 16,636

Impairment losses on long-lived assets and goodwill Cash effects of changes in, excluding acquisition Trade receivables

83,004

34,692

563,161

83,333 (119,966)

24,228

Inventories Other current assets Trade payables Accrued income taxes Accrued expenses and other current liabilities Retirement and severance benefits Deposits and advances from customers Other, net Net cash provided by (used in) operating activities

100,576 24,151 83,719 6,706 102,743 (8,655) (7,368) 33,465 522,333

(54,659) (181) (12,826) 13,038 (24,374) (38,400) 607 (19,608) 469,195

38,117 17,130 (103,788) (7,473) (9,089) (29,374) (14,547) (761) (36,891)

Cash flows from investing activities: Proceeds from sale of short-term investments Purchase of short-term investments Proceeds from disposition of investments and advances Increase in investments and advances Capital expenditures Proceeds from disposals of property, plant and equipment Decrease in time deposits, net Purchase of shares of newly consolidated subsidiaries, net of acquired companies cash and cash equivalents Other, net (174,808) (42,854) (32,048) (28,416) 117,857 99,274 152,663 19,005 53,333 30,952 6,442 (6,369) 61,302 (8,855) (375,648) 87,229 (8,873) (420,921) 104,542 (6,945) (456,468)

Net cash used in investing activities

(323,659) 2010

(202,945) 2011

(303,002) 2012

Cash flows from financing activities: Increase (decrease) in short-term debt, net Proceeds from long-term debt Repayments of long-term debt Dividends paid to Panasonic Corporation shareholders Dividends paid to noncontrolling interests Repurchase of common stock Sale of treasury stock Purchase of noncontrolling interests Other, net Net cash used in financing activities (56,973) (14,619) (72) 23 (11,095) (359) (12,583) (432) 17 (589,910) (198) (354,627) (11,642) (436) 73 (10,640) (1,441) (53,094) (3,360) 53,172 (54,780) (25,883) (34,034) 505,123 (201,906) (20,704) 362,128 828 (370,052) (21,912)

Effect of exchange rate changes on cash and cash equivalents (5,656) (46,709) (7,428)

Net increase (decrease) in cash and cash equivalents

136,045

(135,086)

(400,415)

Cash and cash equivalents at beginning of year

973,867

1,109,912

974,826

Cash and cash equivalents at end of year

1,109,912

974,826

574,411