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ANNUAL REPORT 2 0 0 220
After being appointed president of Victor Company of Japan, Limited (JVC) in June 2001, my first
priority was to bolster the company’s financial footing by correcting our over-reliance on using invento-
ries to generate profit. I also concluded that realigning our growth strategy to effectively allocate resources
to businesses that highlight JVC’s core competence would be vital in turning round the company. JVC’s
management team was therefore entrusted to focus on our wealth of high-quality audio and visual
technologies while rebuilding the financial structure, growth strategy and organizational framework of
the company from scratch. During the year, we took a number of bold steps to establish a sound base
for our long-term development. We reduced the company’s total assets by ¥73.3 billion. This improvement
was primarily achieved by reducing inventories ¥29.3 billion, cutting interest-bearing debt ¥30.0 billion,
achieved by using Group funds more effectively, and reducing fixed assets ¥12.0 billion. Inventories fell
from ¥155.3 billion at the end of the previous fiscal year, to ¥126.1 billion at the end of fiscal 2002.
Inventory turnover also showed a marked improvement, falling from 60 days to 48 days. Meanwhile,
reserves for the cost of business restructuring to be carried out during fiscal 2003 were set aside, laying
the foundation for a V-shaped recovery in the company’s results.
The numerous reforms we implemented during the past year were painful, but crucial for the revival
of JVC. They are already breathing new life into our company. I am confident that last year’s reforms will
ultimately draw out the unlimited potential inherent in our technologies and people.
BUILDING A CORPORATE STRUCTURE RESILIENT TO M ARKET CHANGE
Despite progress in strengthening our balance sheet during the year, the company still has to address
a number of fundamental issues. On an operating level we were still in the red. Furthermore, our
three-year plan, which we rolled out in April 2001, “ Value Creation 21,” faces some hard realities that
we must tackle.