UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934

PIONEER CORPORATION

(Translation of registrant’s name into English)

4-1, MEGURO 1-CHOME, MEGURO-KU, TOKYO 153-8654, JAPAN
(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

Form 20-F þ Form 40-F o

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): o

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): o

Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes o No þ

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-

 

 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

				PIONEER CORPORATION (Registrant)
Date: June 7, 2006
		By		/s/ Tamihiko Sudo   Tamihiko Sudo
				President and Representative Director

This report on Form 6-K contains the following:

1.

The English-translated Convocation Notice of the 60th Ordinary General Meeting of Shareholders of common stock of the Company to be held on June 29, 2006.

(Summarized Translation)

Convocation Notice

of the 60th Ordinary General Meeting of Shareholders

PIONEER CORPORATION

TOKYO, JAPAN

(Stock code: 6773, ISIN: JP3780200006)

Note: This is a summarized translation of the original convocation notice written in the Japanese language.

June 7, 2006

To Shareholders:

Convocation Notice of the 60th Ordinary General Meeting of Shareholders

Notice is hereby given that the 60th Ordinary General Meeting of Shareholders of the Company will be held as described hereunder and your attendance is cordially requested.

You are entitled to vote in writing if you are unable to attend the meeting in person. In this regard, we cordially request that you study the reference document annexed hereto, and indicate your approval or disapproval of the proposal on the enclosed voting directive form, impress your seal thereon, and return it to us no later than June 28, 2006, Japan time.

If you attend the meeting in person, please submit the enclosed voting directive form at the reception desk of the meeting.

		Very truly yours,
		Tamihiko Sudo
		President and Representative Director
		Pioneer Corporation
		4-1, Meguro 1-chome, Meguro-ku, Tokyo

Description

1. Date and time:		10:00 a.m. on Thursday, June 29, 2006, Japan time
2. Place:		MEGURO GAJOEN
		8-1, Shimomeguro 1-chome, Meguro-ku, Tokyo
3. Matters constituting the object of the meeting:

     Matters to be reported on:

	1.		Reports on the Business Report, Balance Sheet and Statement of Operations for the 60th Accounting Period (from April 1, 2005, to March 31, 2006)
	2.		Reports on Consolidated Balance Sheet and Consolidated Statement of Operations for the 60th Accounting Period, and Audit Reports on Consolidated Financial Statements by the Accounting Auditor and the Board of Corporate Auditors

     Matters to be acted on:

	Agenda Item No. 1.		Approval of Proposal of Appropriation of Unappropriated Retained Earnings for the 60th Accounting Period
	Agenda Item No. 2.		Amendment to a Portion of the Articles of Incorporation
	Agenda Item No. 3.		Election of Eight (8) Individuals as Directors
	Agenda Item No. 4.		Election of One (1) Individual as Substitute Auditor in Case of a Vacancy
	Agenda Item No. 5.		Presentation of Retirement Allowance to Retiring Directors

ATTACHED DOCUMENT TO THE CONVOCATION NOTICE
OF THE GENERAL MEETING OF SHAREHOLDERS

BUSINESS REPORT (from April 1, 2005, to March 31, 2006)

1.		OUTLINE OF BUSINESS OPERATIONS
(1)		Principal Substance of Business
		The Company engages primarily in the manufacture and sales of home electronics and car electronics products, and all businesses incidental and related to the businesses mentioned above.
		Effective from the 60th accounting period, the Company changed business segment classification for certain businesses. Results related to plasma displays for business use and DJ equipment have been moved from “Others” to “Home Electronics.” Corresponding figures for the previously reported operating revenue by segment and segment information have been reclassified accordingly.
		The following table sets forth the principal products of the Company and the ratio of operating revenue by segment to total operating revenue:

		Principal Products		Ratio of Sales by Segment
Segment		in Each Segment		to Total Sales
				60th				59th Accounting
				Accounting Period				Period
Home Electronics		Plasma displays, DVD recorders, DVD players, DVD drives, stereo systems, individual stereo components, DJ equipment, telephones and equipment for cable-TV systems			47.0	%			45.4	%
Car Electronics		Car navigation systems, Car stereos, car AV systems and car speakers			43.8	%			42.7	%
Patent Licensing		Licensing of patents related to laser optical disc technologies			1.1	%			1.4	%
Others		Organic light-emitting diode (OLED) display panels, factory automation systems, electronics devices and parts and business-use AV systems			8.1	%			10.5	%

(2)

Result of Business Operations and Addressing Current Challenges

(a)

Result of Business Operations:

Operating Revenue by Segment

		Accounting Period								% to
		60th				59th				prior year
		(In millions of yen)
Domestic			81,998				90,838				90.3
Overseas			272,692				231,933				117.6
Home Electronics			354,690				322,771				109.9
Domestic			117,560				120,260				97.8
Overseas			212,962				183,150				116.3
Car Electronics			330,522				303,410				108.9
Domestic			—				—				—
Overseas			8,540				10,237				83.4
Patent Licensing			8,540				10,237				83.4
Domestic			33,208				37,653				88.2
Overseas			28,004				36,971				75.7
Others			61,212				74,624				82.0
Domestic			232,766				248,751				93.6
Overseas			522,198				462,291				113.0
Total			754,964				711,042				106.2

Notes			1.			The Company’s consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP).
			2.			Operating revenue in the Patent Licensing segment consists of royalty revenue of the Company’s U.S. subsidiary.
			3.			In the 60th accounting period, the Company sold a subsidiary engaged in the development of cable TV software, and reached a preliminary agreement on the sale of subsidiaries involved in the electronic components business. As a result, the operating results of these subsidiaries, and the gain on the sale are presented as income from discontinued operations. Corresponding figures for the previous accounting period have been reclassified accordingly.

In the 60th accounting period, the year ended March 31, 2006, consolidated operating revenue rose 6.2% year on year to 754,964 million yen. However, the Company posted a net loss of 84,986 million yen, compared with a net loss of 8,789 million yen in the 59th accounting period. During the period under review, the average value of the Japanese yen was weaker against the U.S. dollar and the euro by 5.1% and 1.9%, respectively, compared with the 59th accounting period.

Home Electronics sales increased 9.9% year on year to 354,690 million yen. Plasma display sales rose by approximately 30%. Sales of own–brand plasma displays fell in Japan but grew overseas. Rising sales overseas were driven by an expanding market for high-resolution models in North America and Europe. Although OEM (original equipment manufacturer) sales increased, this mainly reflects the September 30, 2004 acquisition of a plasma display production subsidiary. Pioneer reported higher sales of DJ equipment, but sales of DVD recorders, DVD players, and stereo systems declined.

Car Electronics sales climbed 8.9% year on year to 330,522 million yen. Sales of car audio products were higher both in consumer markets and on an OEM basis. Consumer-market sales expanded primarily in Central and South America, as well as North America and Russia, while OEM sales rose primarily in North America and Japan. Sales of car navigation systems increased in consumer markets, with sales growth coming mainly from Japan and North America. OEM sales increased in North America due to the start of new OEM transactions, but dropped in Japan as the effect of demand generated by the roll out of new models in the previous period diminished. OEM sales represented 35% of total Car Electronics sales in the 60th accounting period, down from 36% in the previous period.

In Patent Licensing, royalty revenue decreased 16.6% year on year to 8,540 million yen. This decrease was mainly attributable to the impact of the expiration of some patents licensed to the optical disc industry.

In the Others segment, sales declined 18.0% year on year to 61,212 million yen. This mainly reflected falling sales of factory automation systems, despite higher sales of compact speaker units for cellular phones.

The Company posted a net loss of 84,986 million yen, compared with a net loss of 8,789 million yen in the previous period, mainly due to a decreased gross profit margin resulting from falling prices for our major products, retirement charges related to the incentive-based early retirement plan, impairment losses on property, plant and equipment mainly for plasma displays, and losses related to the dissolution of equity-method affiliate ELDis, Inc., in connection with the Company’s business restructuring plans.

	(b)		Research and Development
			Amid rapid technological innovation in the electronics industry, Pioneer conducts research and development (R&D) with the aim of creating and quickly commercializing new technologies. Our efforts are focused on technologies spanning flat panel displays, high-density recording and playback, digital audio/video (AV) products and information technology (IT), as well as broadcasting and communications.
			Pioneer’s main R&D activities and accomplishments in the 60th accounting period were as follows:
			FEA Image Sensor with HEED Cold Cathodes and HARP Target
			In May 2005, Pioneer and Japan Broadcasting Corporation (NHK) succeeded in jointly developing a compact, ultra-sensitive imaging device called a Field Emitter Array (FEA) image sensor with HEED*1 cold cathodes and HARP*2 target.
			This device consists of an active-matrix HEED cold cathode array developed by Pioneer facing an ultra-sensitive HARP photoconductive film. The whole device is only 10mm thick, roughly one-tenth the thickness of imaging tubes used in conventional ultra-sensitive cameras (around 100mm), making it ideal for compact cameras. Pioneer and NHK paved the way for this highly sensitive image sensor by combining a HEED cold cathode array, which consists of a micro-HEED-element matrix and stably emits electrons at low operating voltage, with an active-matrix circuitry, which enables the least wiring for assembly and high drive speeds.
			This breakthrough represents a major step toward commercializing energy-efficient, compact, and ultra-sensitive cameras that can pick up high-quality images in poor light conditions. The technology not only lays the groundwork for highly versatile and ultra-sensitive cameras needed at the frontlines of news reporting but also promises a wide range

			of applications in consumer products such as camcorders, night-vision cameras for automobiles, and security cameras.
			The prototype image sensor developed by Pioneer and NHK consists of 256 x 192 pixels, with a pixel size of 50 x 50 micrometers. Going forward, Pioneer and NHK aim to rapidly commercialize this technology by increasing the pixel number by further reducing the pixel size.
			*1 High-efficiency Electron Emission Device: Pioneer’s original electron emission device with superior emission efficiency as a cold cathode; it employs the emission of high-energy electrons generated in solids.
			*2 High-gain Avalanche Rushing amorphous Photoconductor: A film developed principally by NHK that converts light into electric charges. Because the electric charge is amplified without increasing noise, the film offers much higher sensitivity than conventional CCD image sensors.
	(c)		Addressing Current Challenges:
			The global economy is experiencing an overall recovery, supported by robust consumer spending, despite some concerns over surging materials prices, including crude oil. However, Pioneer faces an extremely challenging business environment, due to ongoing price-based competition involving its core products.
			In this climate, we will work to rebuild our brand and improve our operating results by focusing on the innovative, high-quality, and value-added products that define Pioneer. To achieve this, Pioneer will recapture the essence of its group philosophy—“Move the Heart and Touch the Soul” of more people around the world.
			In the plasma display business, our production output is increasing in step with surging overall market demand. With a forecast of further growth in demand, Pioneer expects to see an increase in the capacity utilization rates of some production lines year on year, but will suspend or shut down the operation of certain production lines incompatible with new products. Our efforts are also focused on improving profitability by continuing to reduce costs, while reducing OEM sales of panel modules and focusing instead on own-brand plasma display products. In addition, Pioneer will bring more innovative products to market, including 1080p plasma displays, aiming to improve its brand value and expand its business.
			In the DVD product business, the market for these products is growing, but prices are rapidly falling. In response, Pioneer will reduce costs through production in China and collaborations with other companies, and raise the return on product development investments through external sales of key components. Meanwhile, product development and design processes will be reviewed thoroughly to raise the efficiency and speed of development. In DVD drives for personal computers (PCs), Pioneer plans to offer new value-added proposals by shifting the main thrust of product development to Blu-ray Disc drives, a promising next-generation product. We will narrow down our DVD recorder lineup to products in areas of expertise as part of efforts to propose value-added products that are embraced by customers. Furthermore, through economies of scale generated by volume production of DVD drives for PCs that share key components, Pioneer aims to improve profitability in the DVD recorder business.
			In the car electronics business, Pioneer is targeting fast-growing consumer markets of Central and South America, Russia and elsewhere, in order to retain its position of leadership in car audio products. In addition, amid the uptake and growth of music content distribution and digital broadcasting, the Company will work to drive earnings growth in the car electronics business by offering products that stand apart from those of other companies through the creation of new value and functions.

			In car navigation systems, Pioneer will actively press ahead with business expansion in Europe and North America, where full-fledged consumer markets are emerging, as well as in Japan’s consumer market, where Pioneer’s car navigation systems have always enjoyed a strong reputation. Aiming to reduce burgeoning software development costs accompanying product advancements, Pioneer is reforming product development processes and raising their efficiency through standardization.
			In the OEM car navigation system business, Pioneer is redoubling efforts in the growing market for car navigation systems offered as dealer options in Japan. In parallel, the Company aims to capture new orders by offering new proposals to OEM customers that leverage our own product planning capabilities, which have been proven in consumer markets, and the advantages of conducting map-related content production within the group. Meanwhile, in the OEM car audio products business too, Pioneer aims to make the most of its strengths in consumer markets to drive further business expansion.
			Turning to structural reforms, Pioneer has implemented an incentive-based early retirement plan to reduce personnel levels. Meanwhile, the Company has been identifying issues and exploring concrete initiatives in connection with the following five management innovation projects.

	•		Formulate a new corporate vision that acts as medium-term guidelines under Pioneer’s new management framework.
	•		Revise and reinforce all core processes for developing, manufacturing and selling products, aiming to create products that customers enjoy.
	•		Change the corporate culture to foster an open and relaxed atmosphere, as well as effectively implement Plan, Do, Check, Action (PDCA) cycles.
	•		Revitalize the audio business, with the goal of rebuilding Pioneer’s brand image by reviewing Company-wide initiatives.
	•		Optimally allocate head office strategy formulation and administrative functions on a consolidated basis, aiming to raise efficiency by reviewing head office functions and organizations group-wide.

Pioneer is currently formulating a concrete action plan incorporating proposals for each project. Pursuant to the above project to optimally allocate head office strategy formulation and administrative functions, the Company implemented organizational reforms centering on administrative and back office divisions on April 1 this year. In addition, Pioneer has changed its operating processes in light of project recommendations and has begun business activities based on these new processes as part of the above project to revise and reinforce core processes.

Going forward, Pioneer will raise management efficiency and speed up management processes to improve earnings by reducing the number of directors/executive officers, while reforming additional operating processes under its new organization and management framework.

(3)		Capital Expenditures
		The total amount of capital expenditures during the period under review was 40,325 million yen, the principal of which was invested in land and buildings, as well as facilities and molds for production.
(4)		Financing
		There was no stock or bond issuance during the period under review.

(5)

Summary of Business Operations

(a)

Consolidated Basis

		Year Ended March 31
		2003				2004				2005				2006
		57th				58th				59th				60th
		Accounting				Accounting				Accounting				Accounting
		Period				Period				Period				Period
		(In millions of yen except per share information)
Operating revenue			664,828				684,749				711,042				754,964
Net income (loss)			16,078				24,838				(8,789	)			(84,986	)
Net income (loss) per share			90.24				141.58				(50.11	)			(487.23	)
Total assets			647,029				722,542				725,167				678,046
Total shareholders’ equity			318,393				332,938				332,239				273,250
Total shareholders’ equity per share			1,814.88				1,897.83				1,904.73				1,566.60

Notes:			1.			The Company’s consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP).
			2.			As for the 57th accounting period, net income increased, reflecting a large increase in sales in Home Electronics, Car Electronics and Others, despite a decrease in royalty revenue in Patent Licensing. As for the 58th accounting period, net income increased mainly as a result of increased sales and improved gross profit margin as well as decreased selling, general and administrative expenses. Lower average value of the yen against the euro during the year compared to the previous year affected gross profit margin favorably. Total assets increased due to the issuance of convertible bonds of 60,000 million yen in aggregate principal amount, net proceeds of which were planned to be applied mainly toward investment in the plasma display business. As for the 59th accounting period, the Company posted a net loss, reflecting a decreased gross profit margin resulting from intensified price competition for our major products, despite the increased operating revenue. In addition, impairment losses of carrying value of certain production facilities and losses in connection with withdrawal from North American cable TV set-top box business were recognized. The business results for this 60th accounting period are as described under the caption “1. OUTLINE OF BUSINESS OPERATIONS — (2) Result of Business Operations and Addressing Current Challenges” in this report.
			3.			Net income per share has been computed by dividing net income available to holders of common stock by the weighted-average number of shares of common stock outstanding during each year. Total shareholders’ equity per share is based on the number of shares of common stock outstanding at the end of each period.
			4.			In the 60th accounting period, the Company sold a subsidiary engaged in the development of cable TV software, and reached a preliminary agreement on the sale of subsidiaries involved in the electronic components business. As a result, the operating results of these subsidiaries, and the gain on the sale are presented as income from discontinued operations in the consolidated statements of operations in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets.” Corresponding figures for the previous fiscal year have been reclassified accordingly.

(b)

Parent-only Basis

		Year Ended March 31
		2003				2004				2005				2006
		57th				58th				59th				60th
		Accounting				Accounting				Accounting				Accounting
		Period				Period				Period				Period
		(In millions of yen except per share information)
Sales			450,950				469,010				485,530				515,792
Ordinary income (loss)			10,769				16,419				(4,991	)			(31,546	)
Net income (loss)			4,243				6,774				(360	)			(47,757	)
Net income (loss) per share			23.40				38.04				(2.06	)			(273.79	)
Total assets			384,685				461,564				458,745				452,730
Total shareholders’ equity			270,552				277,425				269,005				221,500
Total shareholders’ equity per share			1,541.78				1,580.82				1,542.21				1,269.91

Notes:			1.			As for the 57th accounting period, due to a worsening gross profit margin and increases of selling, general and administrative expenses, ordinary income increased, thanks to the increase of non-operating income that was brought about by a gain in dividend income and other factors. As a result, net income during the period increased, despite a decrease in extraordinary gains, because extraordinary losses diminished as well due to a decrease in losses related to business reorganization. As for the 58th accounting period, ordinary income increased due to increased sales and a decrease in selling, general and administrative expenses. As a result, net income also increased. Total assets increased due to the issuance of convertible bonds of 60,000 million yen in aggregate principal amount, net proceeds of which were planned to be applied mainly toward investment in the plasma display business. As for the 59th accounting period, although sales increased, an ordinary loss was posted due to a decreased gross profit margin and an increase in selling, general and administrative expenses. Net loss was posted, reflecting expenses incurred in connection with withdrawal from certain businesses facing unfavorable prospects, despite an extraordinary gain recorded in conjunction with the transfer of the substitutional portion of our employee welfare pension plan to the Japanese government. As for the 60th accounting period, although sales increased, an ordinary loss was posted due to a decreased gross profit margin, an increase in selling, general and administrative expenses and a decrease in dividend income. Net loss was posted, reflecting losses related to business reorganization.
			2.			Except per share information, all amounts less than one million yen are disregarded.
			3.			Net income per share is based on the weighted average number of shares of common stock outstanding during each period. Total shareholders’ equity per share is based on the number of shares of common stock outstanding at the end of each period. All per share amounts less than the second decimal place are disregarded.

2.		OUTLINE OF THE COMPANY (as of March 31, 2005)
(1)		Information on Shares

		(a)		Number of Shares the Company May Issue:		400,000,000 shares
		(b)		Number of Shares Issued:		180,063,836 shares
				Note: 5,641,946 shares of treasury stock held by the Company are included.
		(c)		Number of Shareholders of Common Stock:		40,950 shareholders (a decrease of 2,667 from the end of the previous period)
		(d)		Distribution of Share Ownership:

										Percentage of
		Number of				Number of				Shareholdings to
		Shareholders				Shares Held				Total Issued Shares
Financial institutions			89				63,477	thousand			35.25	%
Securities companies			39				3,243				1.80
Other Japanese business corporations			352				4,911				2.73
Foreign corporations and individuals			392				68,231				37.89
Japanese individuals and others			40,078				40,199				22.33
Total			40,950				180,063	thousand			100.00	%

Notes:			1.			All numbers of shares less than one thousand are disregarded.
			2.			Japanese individuals and others include 5,641 thousand shares (3.13%) as treasury stock held by the Company.

(e)

Top Ten Largest Shareholders:

		Number of
Name of Shareholder		Shares Held				*1				*2				*3
The Master Trust Bank of Japan, Ltd. (Trust Account)			11,980	thousand			6.65	%			—				—
Japan Trustee Services Bank, Ltd. (Trust Account)			11,020				6.12				—				—
The Chase Manhattan Bank, N. A. London			6,838				3.79
Societe Generale Paris SGOP/DAI Paris 6Z			6,680				3.71				—				—
The Bank of Tokyo-Mitsubishi UFJ, Ltd.			6,490				3.60				—				—
Mizuho Bank, Ltd.			4,000				2.22				—				—
Trust & Custody Services Bank, Ltd. as trustee for Mizuho Bank, Ltd. Retirement Trust Account re-entrusted by Mizuho Trust & Banking Co., Ltd.			3,955				2.19				—				—
The Sumitomo Trust & Banking Co., Ltd. (Trust Account B)			3,554				1.97				—				—
Morgan Stanley & Co. International Limited			2,876				1.59				—				—
Barclays Bank PLC Sub-account Barclays Capital Securities Limited SBL/PB			2,779				1.54				—				—

Notes:			1.			*1 indicates percentage of shareholdings to the total number of the Company’s issued shares.
			2.			*2 indicates the number of shares of each shareholder held by the Company.
			3.			*3 indicates percentage of the Company’s shareholdings to the total number of each shareholder’s issued shares.
			4.			All numbers of shares less than one thousand are disregarded.
			5.			All percentage figures less than the second decimal place are disregarded.
			6.			The Company holds 5,641 thousand shares as treasury stock.

(f)

Share Acquisition Rights Issued and Outstanding:

Number of Share

Acquisition Rights

*1

*2

*3

Share acquisition rights issued on July 8, 2002 *4

5,638

563,800 shares of common stock of the Company

null

2,477 yen

Share acquisition rights issued on July 8, 2003 *5

3,126

312,600 shares of common stock of the Company

null

2,951 yen

Stock acquisition rights issued on March 5, 2004 *6

12,000

15,067,130 shares of common stock of the Company

null

4,022 yen

Stock acquisition rights issued on July 8, 2004 *7

3,159

315,900 shares of common stock of the Company

null

2,944 yen

Stock acquisition rights issued on July 8, 2005 *8

3,151

315,100 shares of common stock of the Company

null

1,828 yen

Notes:			1.			*1 indicates class and number of shares to be issued (or transferred from the Company’s own shares held by the Company in lieu thereof) upon exercise of share acquisition rights.
			2.			*2 indicates issue price of share acquisition rights.
			3.			*3 indicates amount to be paid in per share upon exercise (exercise price) of share acquisition rights.
			4.			*4 were issued for the purpose of granting stock options, pursuant to the special resolution at the 56th Ordinary General Meeting of Shareholders held on June 27, 2002.
			5.			*5 were issued for the purpose of granting stock options, pursuant to the special resolution at the 57th Ordinary General Meeting of Shareholders held on June 27, 2003.
			6.			*6 were issued as a portion of convertible bonds (bonds with stock acquisition rights, tenkanshasaigata shinkabu yoyakuken-tsuki shasai), pursuant to the resolution by the Board of Directors on February 16, 2004.
			7.			*7 were issued for the purpose of granting stock options, pursuant to the special resolution at the 58th Ordinary General Meeting of Shareholders held on June 29, 2004.
			8.			*8 were issued for the purpose of granting stock options, pursuant to the special resolution at the 59th Ordinary General Meeting of Shareholders held on June 29, 2005.

(2)

Acquisition, Disposition and Holding of the Company’s Own Shares

	(a)		The Company’s Own Shares Purchased for the 60th Accounting Period
			Number of shares of common stock: 7,192 shares
			Aggregate amount of purchase price: 12,141,619 yen
	(b)		The Company’s Own Shares Disposed for the 60th Accounting Period
			Number of shares of common stock: 436 shares
			Aggregate amount of disposal price: 712,042 yen
	(c)		Treasury Stock at the End of the 60th Accounting Period
			Number of shares of common stock: 5,641,946 shares

(3)

Employees (Consolidated bases)

Number of Employees		Change from the Previous Period’s End
38,826		Increase of 5,417

Note: Above number of employees includes 777 employees who retired as of March 31, 2006, by the incentive-based early retirement plan.

(4)

Principal Offices and Plants

(a)

Pioneer Corporation (Parent Company)

Headquarters (Tokyo)
Omori Plant (Tokyo)
Tokorozawa Plant (Saitama)
Kawagoe Plant (Saitama)
Corporate Research & Development Laboratories (Saitama)

	(b)		Principal Sales and Manufacturing Subsidiaries
			Sales Subsidiaries

Pioneer Marketing Corporation (Tokyo)
Pioneer Electronics (USA) Inc. (USA)
Pioneer Europe NV (Belgium)
Pioneer GB Ltd. (U.K.)
Pioneer Electronics Deutschland GmbH (Germany)
Pioneer France SA (France)
Pioneer China Holding Co., Ltd. (China)
Pioneer High Fidelity Taiwan Co., Ltd. (Taiwan)

Manufacturing Subsidiaries

Tohoku Pioneer Corporation (Yamagata)
Pioneer Display Products Corporation (Shizuoka)
Pioneer Plasma Display Corporation (Kagoshima)
Pioneer Electronics Asiacentre Pte. Ltd. (Singapore)
Pioneer Technology (Shanghai) Co., Ltd. (China)
Pioneer Technology (Dongguan) Co., Ltd. (China)
Pioneer Manufacturing (Thailand) Co., Ltd. (Thailand)
Pioneer Technology (Malaysia) Sdn. Bhd. (Malaysia)

	(c)		Research and Development Subsidiaries
			Pioneer Research Center USA, Inc. (USA) Pioneer Digital Design Centre Ltd. (U.K.)

(5)

Present State of the Company’s Group

(a)

Status of the Company’s Major Subsidiaries:

Name		Location		Capital		*1				Principal Business
Tohoku Pioneer Corporation		Yamagata		10,800 million yen			67.0	%		Manufacture of car electronics products
Pioneer Display Products Corporation		Shizuoka		5,000 million yen			100.0	%		Manufacture of plasma displays
Pioneer Plasma Display Corporation		Kagoshima		10,000 million yen			100.0 (100.0	% %)		Manufacture of plasma displays
Pioneer North America, Inc.		U.S.A.		$474,631 thousand			100.0	%		Coordination of the activities of the Company’s North American local subsidiaries and affiliates
Pioneer Europe NV		Belgium		50,513 thousand euro			100.0 (18.5	% %)		Coordination of the activities of the Company’s European local subsidiaries and affiliates, and distribution of the Company’s products
Pioneer Electronics Asiacentre Pte. Ltd.		Singapore		$28,055 thousand			100.0	%		Coordination of the activities of the Company’s Asian local subsidiaries and affiliates, and manufacture and distribution of the Company’s products
Pioneer China Holding Co., Ltd.		China		473,833 thousand yuan			100.0	%		Coordination of the activities of the Company’s Chinese local subsidiaries and affiliates, and distribution of the Company’s products

	(b)		New Development in the Company’s Group:
			In the 60th accounting period, the Company sold Pioneer Digital Technologies Inc., a subsidiary engaged in the development of cable TV software in North America, to its management, and reached a preliminary agreement with OMRON Corporation on the sale of Pioneer Precision Machinery Corporation, which is involved in the electronic components business.

(c)	Business Performance of the Company’s Group:
	The number of consolidated subsidiaries was 124, and the Company’s investments in three affiliated companies were accounted for on an equity basis. Please refer to “1. OUTLINE OF BUSINESS OPERATIONS (2) Result of Business Operations and Addressing Current Challenges” concerning the consolidated business results.

(6)		Major Lenders
		None
(7)		Directors, Corporate Auditors and Executive Officers

(a)

Directors and Corporate Auditors

Position in
the Company		Name		Proper or Principal Occupation
*President		Tamihiko Sudo
*Senior Managing Director		Akira Niijima		In charge of Japanese domestic subsidiaries
*Senior Managing Director		Hajime Ishizuka		In charge of Corporate Management Group, export management in general, and Procurement Group
Senior Managing  Director		Osamu Yamada		General Manager of Research & Development Group and General Manager of Corporate Research & Development Laboratories
Managing Director		Tadahiro Yamaguchi		In charge of Production Management and Coordination Division, and quality control in general
Managing Director		Satoshi Matsumoto		General Manager of Environmental Preservation Division and General Manager of Environmental Preservation Group
Managing Director		Koichi Shimizu		Chairman of Pioneer China Holding Co., Ltd.
Managing Director		Yoichi Sato		Deputy General Manager of Research & Development Group, General Manager of PDP Development Center, and in charge of Plasma Panel Engineering Division of Home Entertainment Business Group
Managing Director		Akira Haeno		General Manager of Mobile Entertainment Business Group
Director and Advisor		Kanya Matsumoto
Director and Advisor		Kaneo Ito

Position in
the Company		Name		Proper or Principal Occupation
Director		Tatsuhiro Ishikawa		Attorney-at-Law and Professor at Asia University
Director		Shunichi Sato
Corporate Auditor (full time)		Makoto Koshiba
Corporate Auditor		Terumichi Tsuchida		Senior Advisor of Meiji Yasuda Life Insurance Company
Corporate Auditor		Isao Moriya		Certified Public Accountant
Corporate Auditor		Keiichi Nishikido		Attorney-at-Law

Position in
the Company		Name		Proper or Principal Occupation
Managing Director		Tadahiro Yamaguchi		In charge of Engineering & Production Management Division
Managing Director		Satoshi Matsumoto		In charge of Quality Control Division

(b)

Executive Officers

Position in
the Company		Name		Proper or Principal Occupation
Senior Managing Executive Officer		Kazunori Yamamoto		General Manager of International Business Group
Senior Executive Officer		Seiichiro Kurihara		General Manager of Intellectual Property Division
Senior Executive Officer		Masao Kawabata		General Manager of Corporate Branding and Communications Division
Senior Executive Officer		Yoshio Taniyama		General Manager of Corporate Planning Division
Senior Executive Officer		Hideki Okayasu		General Manager of Finance and Accounting Division
Senior Executive Officer		Shinji Yasuda		General Manager of Home Entertainment Business Group and General Manager of Omori Plant
Executive Officer		Buntarou Nishikawa		General Manager of OEM Sales Division of Mobile Entertainment Business Group
Executive Officer		Osamu Takada		General Manager of Personnel Division
Executive Officer		Sumitaka Matsumura		Deputy General Manager of Research & Development Group and in charge of Optical Disk & Systems Development Center
Executive Officer		Chojuro Yamamitsu		Deputy General Manager of Environment Preservation Group (in charge of Eco Products)
Executive Officer		Kenji Sato		General Manager of General Administration Division
Executive Officer		Susumu Kotani		Chairman and Managing Director of Pioneer Europe NV
Executive Officer		Tsutomu Haga		President of Pioneer North America, Inc.
Executive Officer		Kaoru Sato		General Manager of Tokorozawa Plant of Home Entertainment Business Group
Executive Officer		Keiichi Yamauchi		General Manager of Mobile Systems Development Center of Research & Development Group and in charge of software and platform development of Home Entertainment Business Group

Position in
the Company		Name		Proper or Principal Occupation
Executive Officer		Kazumi Kuriyama		Deputy General Manager of Corporate Research & Development Laboratories of Research & Development Group

Position in
the Company		Name		Proper or Principal Occupation
Senior Managing Executive Officer		Kazunori Yamamoto		In charge of International Business Division
Senior Executive Officer		Seiichiro Kurihara		In charge of Intellectual Property Division
Executive Officer		Sumitaka Matsumura		Deputy General Manager of Research & Development Group, General Manager of Optical Disk & Systems Development Center and in charge of Standards & Copyright Management Center
Executive Officer		Chojuro Yamamitsu		In charge of Quality Control Division (Eco Products)
Executive Officer		Kazumi Kuriyama		General Manager of Intellectual Property Division

(8)

Share Acquisition Rights Issued in the 60th Accounting Period for the Purpose of Granting Stock Options

	(a)		Aggregate Number of Share Acquisition Rights Issued:
			3,151

Note:

The number of shares to be issued (or transferred from the Company’s own shares held by the Company in lieu thereof; hereinafter the same shall apply) upon exercise of each share acquisition right shall be 100.

	(b)		Class and Number of Shares to be Issued:
			315,100 shares of common stock
	(c)		Issue Price of Share Acquisition Rights:
			No consideration shall be paid.
	(d)		Amount to be Paid in per Share upon Exercise of Share Acquisition Rights:
			1,828 yen
	(e)		Period during which Share Acquisition Rights May be Exercised:
			From and including July 2, 2007, to and including June 30, 2010
	(f)		Conditions for Exercise of Share Acquisition Rights:

	(i)		Each share acquisition right may not be exercised in part.
	(ii)		The qualified persons for share acquisition rights (hereinafter referred to as the “Qualified Persons”) shall be required to hold a post in the Company or any subsidiary of the Company at the time of exercise of share acquisition rights, unless such Qualified Persons have resigned upon expiration of the term of office, have retired at retirement age provided for in the rules of employment of the Company or of such subsidiary, or have retired for reasons determined by the Company, or unless the Company exceptionally allows such Qualified Persons to exercise share acquisition rights.
	(iii)		Other conditions for exercise of share acquisition rights shall be determined by the board of directors of the Company.

	(g)		Cancellation of Share Acquisition Rights:
			The Company may at any time purchase or acquire share acquisition rights and cancel them without any consideration.
	(h)		Substantially Favorable Terms:
			The Company issued share acquisition rights to Qualified Persons, i.e. directors, executive officers and a number of employees of the Company as well as a number of directors of domestic or overseas subsidiaries of the Company, without being paid any consideration therefor.

	(i)		Name of Qualified Persons and Number of Share Acquisition Rights Allocated:
			Directors and Executive Officers (total: 1,088 share acquisition rights to 30 persons):

		Number of Share								Number of Share
		Acquisition Rights								Acquisition Rights
Name		Allocated						Name		Allocated
Kanya Matsumoto			80					Seiichiro Kurihara			30
Kaneo Ito			80					Masao Kawabata			30
Tamihiko Sudo			68					Yoshio Taniyama			30
Akira Niijima			60					Hideki Okayasu			30
Hajime Ishizuka			60					Buntarou Nishikawa			20
Osamu Yamada			52					Osamu Takada			20
Tadahiro Yamaguchi			44					Sumitaka Matsumura			20
Satoshi Matsumoto			44					Chojuro Yamamitsu			20
Koichi Shimizu			44					Kenji Sato			20
Yoichi Sato			44					Susumu Kotani			20
Akira Haeno			44					Tsutomu Haga			20
Tatsuhiro Ishikawa			32					Kenji Tokuyama			20
Shunichi Sato			32					Kaoru Sato			20
Masaru Saotome			32					Keiichi Yamauchi			20
Kazunori Yamamoto			32					Kazumi Kuriyama			20

(9)

Payment Amount as Fees for the Accounting Auditor

	(a)		Total amount of payment by the Company as fees for the accounting auditor: 139 million yen
	(b)		Of the above amount (a), the amount of payment as fees for auditing services: 113 million yen
	(c)		Of the above amount (b), the amount of payment by Pioneer Corporation: 63 million yen

3.		MATERIAL FACTS IN RELATION TO THE BUSINESS CONDITIONS OF THE COMPANY HAVING OCCURRED AFTER THE TERM FOR SETTLEMENT OF ACCOUNTS
		There is nothing particular to report hereunder.
4.		OTHER IMPORTANT MATTERS CONCERNING BUSINESS CONDITIONS OF THE COMPANY
		There is nothing particular to report hereunder.

CONSOLIDATED BALANCE SHEET

		(In millions of yen)
		March 31, 2006
ASSETS
Current assets:
Cash and cash equivalents			121,680
Trade receivables—
Notes			1,729
Accounts			108,893
Allowance for doubtful notes and accounts			(3,059	)
Inventories			104,226
Deferred income taxes			27,802
Assets held for sale			25,577
Prepaid expenses and other current assets			41,824
Total current assets			428,672
Investments and long-term receivables:
Available-for-sale securities			24,733
Investments in and advances to affiliated companies			1,705
Sundry investments			3,189
Long-term receivables, less allowance for doubtful accounts of 106 million yen			145
Total investments and long-term receivables			29,772
Property, plant and equipment:
Land			30,611
Buildings			119,312
Machinery and equipment			243,811
Construction in progress			1,999
Accumulated depreciation			(235,502	)
Total property, plant and equipment			160,231
Other assets:
Intangible assets			20,576
Deferred income taxes			28,933
Other			9,862
Total other assets			59,371
Total assets			678,046

		(In millions of yen)
		March 31, 2006
LIABILITIES
Current liabilities:
Short-term borrowings			23,205
Current portion of long-term debt			7,165
Trade payables			102,082
Accrued liabilities—
Tax on income			6,987
Payroll			16,640
Royalty			17,579
Other			56,656
Warranty reserve			6,603
Dividends payable			436
Liabilities held for sale			17,863
Other current liabilities			17,076
Total current liabilities			272,292
Long-term liabilities:
Long-term debt			92,970
Accrued pension and severance cost			23,475
Deferred income taxes			1,718
Other long-term liabilities			232
Total long-term liabilities			118,395
Total liabilities			390,687
MINORITY INTERESTS			14,109
SHAREHOLDERS’ EQUITY
Common stock			49,049
Capital surplus			82,910
Retained earnings			173,826
Accumulated other comprehensive loss			(20,092	)
Treasury stock			(12,443	)
Total shareholders’ equity			273,250
Total liabilities and shareholders’ equity			678,046

CONSOLIDATED STATEMENT OF OPERATIONS

		(In millions of yen)
		Year ended
		March 31, 2006
Revenues:
Operating revenue:
Net sales			746,424
Royalty revenue			8,540
Total operating revenue			754,964
Interest income			2,658
Other income			6,789
Total revenues			764,411
Cost and expenses:
Cost of sales			593,238
Selling, general and administrative expenses			178,135
Interest expenses			1,479
Loss on sale and disposal of fixed assets			2,704
Other deductions			60,020
Total cost and expenses			835,576
Loss from continuing operations before income taxes			(71,165	)
Income taxes:
Current			8,074
Deferred			(12,734	)
Total Income taxes			(4,660	)
Loss from continuing operations before minority interest and equity in losses			(66,505	)
Minority interest in losses (earnings) of subsidiaries			4,774
Equity in losses of affiliated companies			(24,027	)
Loss from continuing operations			(85,758	)
Income from discontinued operations, net of tax			772
Net loss			(84,986	)

AUDIT REPORT BY ACCOUNTING AUDITOR
ON CONSOLIDATED FINANCIAL STATEMENTS
(COPY)

INDEPENDENT ACCOUNTANTS’ REPORT

May 11, 2006

To the Board of Directors of Pioneer Corporation
		Tohmatsu & Co.
		Toshihiko Matsumiya, C.P.A.		(seal)
		Designated partner and Engagement partner
		Eisuke Hirokawa, C.P.A.		(seal)
		Designated partner and Engagement partner
		Seiji Harada, C.P.A.		(seal)
		Designated partner and Engagement partner

     Pursuant to Article 19-2, Paragraph 3 of the “Law Concerning Special Measures under the Commercial Code with Respect to Audit, etc. of Corporations (Kabushiki Kaisha)” of Japan, we have audited the consolidated financial statements, namely, the consolidated balance sheet and the consolidated statement of operations of Pioneer Corporation for the 60th accounting period from April 1, 2005 to March 31, 2006. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit from an independent position.

     We conducted our audit in accordance with auditing standards generally accepted in Japan. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statements presentation. We believe that our audit provides a reasonable basis for our opinion. Our audit includes auditing procedures applied to subsidiaries as considered necessary.

     As a result of our audits, in our opinion, the above-mentioned consolidated financial statements present fairly the financial position and the results of operations of the Company and subsidiaries in conformity with the applicable laws and regulations of Japan and the Company’s Articles of Incorporation.

     Our firm and the engagement partners do not have any financial interest in the Company for which disclosure is required under the provisions of the Certified Public Accountants Law of Japan.

- END -

AUDIT REPORT BY THE BOARD OF CORPORATE AUDITORS
ON CONSOLIDATED FINANCIAL STATEMENTS (COPY)

AUDIT REPORT

May 12, 2006

		The Board of Corporate Auditors of Pioneer Corporation
		Corporate Auditor (full time)		Makoto Koshiba		(seal)
		Corporate Auditor		Terumichi Tsuchida		(seal)
		Corporate Auditor		Isao Moriya		(seal)
		Corporate Auditor		Keiichi Nishikido		(seal)

     The Board of Corporate Auditors has prepared this audit report as follows, upon deliberation after being reported by each Corporate Auditor on the methods and results of auditing with respect to the consolidated financial statements (the consolidated balance sheet and statement of operations) for the 60th accounting period from April 1, 2005 to March 31, 2006.

1.

Summary of the methods of auditing by Corporate Auditors

     In accordance with such matters as the policy of auditing and assignment of auditing work determined by the Board of Corporate Auditors, each Corporate Auditor conducted the audit after directors, other personnel and accounting auditors reported and explained the consolidated financial statements.

2.

Results of auditing

     The methods and the results of auditing by Tohmatsu & Co., the independent accountants and the Company’s Accounting Auditor, are appropriate.

- END -

Notes: 1.		Messrs. Terumichi Tsuchida, Isao Moriya and Keiichi Nishikido satisfy the requirements of “outside corporate auditor” under the Japanese law.
2.		Since Mr. Shinji Yasuda retired from the office of Corporate Auditor on November 30, 2005, his signature and seal were not affixed to this audit report.

BALANCE SHEET (Non-Consolidated)

		(In millions of yen)
		March 31, 2006
ASSETS
Current assets:
Cash			50,305
Notes receivable—trade			715
Accounts receivable—trade			45,319
Finished products			14,567
Materials			1,832
Work in process			5,331
Supplies			8,283
Advances			6,456
Prepaid expenses			2,509
Deferred income taxes			14,861
Short-term loans			53
Other current assets			16,269
Less: Allowance for doubtful accounts			(44	)
Total current assets			166,461
Fixed assets:
Tangible assets—
Buildings			27,209
Structures			666
Machinery and equipment			9,213
Transportation equipment			64
Tools, furniture and fixtures			5,471
Land			12,765
Construction in progress			146
Total tangible assets			55,537
Intangible assets—
Patents			6,864
Trademarks			12
Software			16,977
Software in progress			4,455
Other intangibles			442
Total intangible assets			28,752
Investments and others—
Investment securities			19,552
Investments in subsidiaries			161,966
Investments in memberships			197
Equity investments (other than stocks) in subsidiaries			11,080
Long-term loans			93
Guaranty deposits			2,063
Deferred income taxes			46
Prepaid pension cost			873
Long-term prepaid expenses			41
Other investments			6,063
Less: Allowance for doubtful accounts			(0	)
Total investments and others			201,979
Total fixed assets			286,269
Total assets			452,730

		(In millions of yen)
		March 31, 2006
LIABILITIES
Current liabilities:
Notes payable—trade			570
Accounts payable—trade			55,604
Short-term borrowings from subsidiaries			32,667
Other accounts payable			2,142
Accrued expenses			61,190
Accrued corporate income taxes			541
Allowance for products warranty			1,100
Other current liabilities			4,062
Total current liabilities			157,879
Long-term liabilities:
Bonds			70,600
Retirement allowance for employees			953
Retirement allowance for directors and corporate auditors			1,797
Total long-term liabilities			73,351
Total liabilities			231,230
SHAREHOLDERS’ EQUITY
Common stock			49,048
Capital Surplus:
Additional paid-in capital			81,278
Other capital surplus:
Gain on treasury stock			36
Total other capital surplus			36
Total capital surplus			81,315
Retained earnings:
Legal reserve			6,140
Reserve for expropriation of capital assets			27
Reserve for disposition of capital assets in replacement			130
General reserve			136,773
Accumulated deficit			(46,902	)
Total retained earnings			96,169
Unrealized gain on available-for-sale securities			7,409
Treasury stock			(12,442	)
Total shareholders’ equity			221,500
Total liabilities and shareholders’ equity			452,730

STATEMENT OF OPERATIONS (Non-Consolidated)

		(In millions of yen)
		Year ended
		March 31, 2006
ORDINARY INCOME AND LOSS
Operating income and loss:
Operating revenue—
Sales			515,792
Operating expenses—
Cost of sales			451,320
Selling, general and administrative expenses			96,712
			548,032
Operating loss			32,239
Non-operating income and expenses:
Non-operating income—
Interest and dividend income			3,001
Others			162
			3,164
Non-operating expenses—
Interest expense			36
Interest on bonds			395
Foreign exchange loss			1,921
Others			117
			2,471
Ordinary loss			31,546
EXTRAORDINARY GAIN AND LOSS
Extraordinary gain—
Gain on sale of fixed assets			231
Gain on sale of investment securities			659
Restoration of allowance for doubtful accounts			17
Others			12
			919
Extraordinary loss—
Loss on business reorganization			13,495
Loss on sale and disposal of fixed assets			469
Loss on write-down of investment securities			127
Loss on sale of investment securities			9
			14,102
Loss before income taxes			44,730
Income taxes:
Current			613
Deferred			2,414
Net loss for the period			47,757
Unappropriated retained earnings brought forward			2,163
Interim dividends			1,308
Accumulated deficit at the end of the period			46,902

PROPOSAL OF APPROPRIATION OF UNAPPROPRIATED RETAINED EARNINGS

		(In yen)
Accumulated deficit at the end of the period			46,902,133,523
Restoration of general reserves			47,800,000,000
Total			897,866,477
To be appropriated as follows:
Dividends (2.5 yen per share of common stock)			436,054,725
Unappropriated retained earnings carried forward to the next period			461,811,752

AUDIT REPORT BY ACCOUNTING AUDITOR (COPY)

INDEPENDENT ACCOUNTANTS’ REPORT

May 11, 2006

To the Board of Directors of Pioneer Corporation

		Tohmatsu & Co.
		Toshihiko Matsumiya, C.P.A.		(seal)
		Designated partner and Engagement partner
		Eisuke Hirokawa, C.P.A.		(seal)
		Designated partner Engagement partner
		Seiji Harada, C.P.A.		(seal)
		Designated partner and Engagement partner

     Pursuant to Article 2 of the “Law Concerning Special Measures under the Commercial Code with Respect to Audit, etc. of Corporations (Kabushiki Kaisha)” of Japan, we have audited the financial statements, namely, the balance sheet, the statement of income, the business report (with respect to accounting matters only), the proposal of appropriation of unappropriated retained earnings and the supplementary schedules (with respect to accounting matters only) of Pioneer Corporation for the 60th accounting period from April 1, 2005 to March 31, 2006. The accounting matters included in the business report and the supplementary schedules referred to above are based on the Company’s books of account. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit from an independent position.

     We conducted our audit in accordance with auditing standards generally accepted in Japan. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as the evaluating the overall financial statements presentation. We believe that our audit provides a reasonable basis for our opinion. Our audit includes auditing procedures applied to subsidiaries as considered necessary.

     As a result of our audits, in our opinion:

	(1)		The balance sheet and the statement of income present fairly the financial position and the results of operations of the Company in conformity with the applicable laws and regulations of Japan and the Company’s Articles of Incorporation.
	(2)		The business report (with respect to accounting matters only) presents fairly the Company’s affairs in conformity with the applicable laws and regulations of Japan and the Company’s Articles of Incorporation.
	(3)		The proposal of appropriation of unappropriated retained earnings is in conformity with the applicable laws and regulations of Japan and the Company’s Articles of Incorporation.
	(4)		The supplementary schedules (with respect to accounting matters only) present fairly the information required to be set forth therein under the Commercial Code of Japan.

     Our firm and the engagement partners do not have any financial interest in the Company for which disclosure is required under the provisions of the Certified Public Accountants Law of Japan.

- END -

AUDIT REPORT BY THE BOARD OF CORPORATE AUDITORS (COPY)

AUDIT REPORT

May 12, 2006

		The Board of Corporate Auditors of Pioneer Corporation
		Corporate Auditor (full time)		Makoto Koshiba		(seal)
		Corporate Auditor		Terumichi Tsuchida		(seal)
		Corporate Auditor		Isao Moriya		(seal)
		Corporate Auditor		Keiichi Nishikido		(seal)

     The Board of Corporate Auditors has prepared this audit report as follows, upon deliberation after being reported by each Corporate Auditor on the methods and results of auditing with respect to the execution of functions by directors during the 60th accounting period from April 1, 2005 to March 31, 2006.

1. Summary of the methods of auditing by Corporate Auditors

     In accordance with such matters as the policy of auditing and assignment of auditing work determined by the Board of Corporate Auditors, each Corporate Auditor attended meetings of the board of directors and other important meetings, called on directors and other personnel for reports of business, inspected important documents, and investigated the condition of operations and property at the head office and the principal places of business. Regarding subsidiaries, each Corporate Auditor requested subsidiaries’ reports on business as considered necessary under the circumstances, visited subsidiaries from time to time, and thus investigated the condition of operations and property. The Board of Corporate Auditors also received a report of the accounting auditor’s audits and examined the accounting documents and the supplementary schedules.

     In addition, regarding such matters as transactions of directors that compete with the Company, transactions in which interests are contrary between directors and the Company, benefits given by the Company free of charge to shareholders, unusual transactions between the Company and subsidiaries or shareholders, and acquisition and disposal of shares of the Company, we called on directors and other personnel for reports and investigated the circumstances, when considered necessary.

2. Results of auditing

	(1)		The methods and the results of auditing by Tohmatsu & Co., the independent accountants and the Company’s Accounting Auditor, are appropriate.
	(2)		The business report presents fairly, in conformity with the applicable laws and regulations of Japan and the Company’s Articles of Incorporation, the status of the Company.
	(3)		The proposal of appropriation of unappropriated retained earnings is proper in view of the financial position of the Company and other circumstances.
	(4)		The supplementary schedules are proper and present fairly matters as are required to be reported therein.
	(5)		Regarding execution of functions by directors, including functions thereby regarding subsidiaries, there exist no unjust acts or serious violation of laws and regulations of Japan or the Company’s Articles of Incorporation therein.

     It is to be added that there are no acts by directors in contravention of their duties regarding their transactions which compete with the Company, transactions in which interests are contrary between directors and the Company, benefits given by the Company free of charge to shareholders, unusual transactions between the Company and subsidiaries or shareholders, and acquisition and disposal of shares of the Company.

- END -

Notes:			1.			Messrs. Terumichi Tsuchida, Isao Moriya and Keiichi Nishikido satisfy the requirements of “outside corporate auditor” under the Japanese law.
			2.			Since Mr. Shinji Yasuda retired from the office of Corporate Auditor on November 30, 2005, his signature and seal were not affixed to this audit report.

REFERENCE DOCUMENT FOR THE EXERCISE OF VOTING RIGHTS

1. NUMBER OF VOTING RIGHTS HELD BY ALL SHAREHOLDERS: 1,742,099

2. AGENDA ITEMS AND REFERENCE MATERIALS THEREOF:

Agenda Item No. 1.		Approval of Proposal of Appropriation of Unappropriated Retained Earnings for the 60th Accounting Period

The board of directors hereby proposes to appropriate the unappropriated retained earnings for the 60th accounting period as described on page 29.

The Company sets dividend payments appropriately in light of its financial position, consolidated operating results, and other factors, but has a basic policy of maintaining stable dividends.

Under this dividend policy, the Board hereby regrettably proposes to reduce the year-end dividend for the 60th accounting period by 10 yen per share of common stock from that for the previous accounting period to 2.5 yen per share of common stock. This proposal reflects the Company’s large losses for the 60th accounting period on both non-consolidated and consolidated bases, amid a continually challenging business environment. Combined with the interim dividend, this payment will bring the total annual cash dividends for the 60th accounting period to 10 yen per share of common stock, as compared to 25 yen per share of common stock for the previous accounting period.

The Board has determined to propose no bonus to Directors and Corporate Auditors for the 60th accounting period.

Agenda Item No. 2.		Partial Amendment to the Articles of Incorporation

Point of the agenda and reasons for amendments:

The present Articles of Incorporation are proposed to be amended partially as follows:

(1) Pursuant to the “Company Law” of Japan and related laws and ordinances, which took effect as of May 1, 2006, it is hereby proposed that the Articles of Incorporation be amended as follows:

	1.		Necessary amendment to the provisions of the present Article 4 (Public Notices) be made in order to adopt electronic public notices utilizing the Internet as the method of giving public notices. This amendment also establishes measures to be taken when an electronic public notice is impracticable for unavoidable reasons.
	2.		In order to clarify the rights that a shareholder holding fractional unit shares is entitled to exercise, the provisions of Article 11 (Rights of Fractional Unit Shares) be newly established.
	3.		In connection with the abolition of the provisions of the Commercial Code of Japan which prescribed the location at which general meetings of shareholders were to be held, Paragraph 2 of the present Article 12 (Time and Place to Hold General Meetings of Shareholders) be deleted.
	4.		In order to enable reference documents and other related documents for general meetings of shareholders to be disclosed through the Internet, the provisions of Article 17 (Disclosure of Reference Documents for General Meetings of Shareholders through the Internet) be newly established.
	5.		In order to enable resolutions of the Board of Directors to be made in writing or digitally for the purpose of achieving flexibility in the management of the Board of Directors, the provisions of Article 28 (Deemed Resolutions of the Board of Directors) be newly established.

(2) In accordance with the “Law for Maintenance, Etc. of Relevant Laws Relating to the Enforcement of the Company Law” which took effect as of May 1, 2006, it is hereby proposed that matters deemed to have been provided for in the Articles of Incorporation upon enforcement of the Company Law be included in the proposed amendments to the Articles of Incorporation.
(3) In connection with the above amendments, it is proposed that the terms used in the Commercial Code be changed to those used in the Company Law and the quoted provisions from the Commercial Code be changed to those from the Company Law. In addition to the above amendments, necessary amendments are proposed throughout the Articles of Incorporation, including renumbering of the Articles, rearrangement of the structure and revision of wording.

The present Articles and the proposed amendments are as follows:

(Changes are indicated by underlines.)