Dear Shareholders:

We would like to express our appreciation for your continued support and patronage.

From April 2016, the SANYO DENKI Group has been undertaking its five-year eighth Medium-Term Management Plan.

We have been implementing specific measures aimed at the following four management targets:

(1) Continue to develop world-leading products in terms of quality, performance, and reliability.

(2) Establish a borderless sales system in which all Group companies operate under the same management policy to deliver products and services that boast uniform high quality to customers around the world.

(3) Enable real time viewing of information regarding our corporate activities from anywhere in the world.

(4) Build factory automation to improve production efficiency and quality as well as contribute to effective inventory reduction and production management.

For the fiscal year under review, we worked toward full automation all plants in Ueda City, Nagano Prefecture, and assembly processes for servo motor, servo amplifier, and cooling system products are now on the latest automated lines.

Furthermore, our plant in Subic, the Philippines was expanded significantly, and our production capacity in servo motor, servo amplifier, and power system products has greatly increased.

Dividends at the end of the fiscal year under review will be 55 yen per share.

We look forward to your continued support.